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Water Babies – Rising to the top of UK Franchises

Photographers mob and tear at the clothes of Paul Thompson and Steve Franks as they leave
a conference they have just presented at in one of China’s major industrial cities. They are not
rock stars, however; they are the founder and CEO respectively of Water Babies, a UK based
franchise that has developed an innovative business model delivering unique swimming and
water leisure activities for babies and parents. Little could Paul have known that when he took
his baby daughter swimming for the first time that the seed of an international franchise had
been sown. Today, 57 franchisees teach 50,000 babies weekly in the UK, with further
franchises operating out of Ireland, the Netherlands, New Zealand, Germany and China. Having
risen to the top of the list of UK franchises, Paul and Steve were beginning to ask questions on
how could they sustain the success of their unique swimming and leisure services model in
what was previously a blue ocean? How could they coordinate an international franchise
network as well as maintain quality of service? What challenges might they encounter when
entering a large and complex market such as China, and potentially even the USA?

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Topics/Industry: business models, growth strategy, Internationalisation Publication date: 05/09/2017 Published by: ELITE Authors: Chris Corbishley, Nelson Phillips Length: 8 pages Geography: UK

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Entrepreneurship, Finance

Korzan Systems: Evaluating Venture Capital Investments

Katie had been working on the deal team at Forward Partners for little over three months. In her role as investor, she was granted a huge amount of autonomy sourcing and executing deals from day one. Forward Partners is a London-based venture capital firm making its primary investments across the pre-Series A spectrum, from solo-founders to late-seed. Being on their deal team required aptitude on a number of axes. VCs have little information to analyse – which can be uncomfortable – and there was a certain amount of skill required in getting to the right reasons to say ‘yes’ to a deal. Katie had identified a potential target in the nascent ‘modelling and simulation as a service’ (MSaaS) space, where Korzan Systems was at the cutting edge. Despite the limited information available, ahead of her next meeting with the partners, Katie was required to research the market and develop her own thesis on Korzan as a potential investment by preparing a memo that could offer a balanced assessment on the opportunity with relatively little information to go on. During the next partners meeting, she would need to be ready to present her thoughts, analysis and findings on whether this was a go or no-go investment.

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Topics/Industry: financial modelling, SaaS, valuations, venture capital Publication date: 25/06/2017 Published by: Imperial Enterprise Lab Authors: Chris Corbishley, Matthew Bradley Length: 14 pages Teaching notes: Available Geography: UK Supplementary materials: Pdf, Excel Spreadsheet

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Entrepreneurship

Postcode Anywhere: Building Ambidextrous Organisations

Guy Mucklow (CEO) and Jamie Turner (CTO) set up Postcode Anywhere (PCA) in 2001. Their data technology has made them one of the leading providers of cloud-based address management services, processing over four million transactions per day through their platform. With over 8,000 customers ranging from government departments and FTSE 500 companies to self-service SMEs, PCA accounts for roughly 50% of all addresses captured through UK ecommerce websites. This case examines the background and rationale for how a business, which has grown at a relatively healthy rate of 30% annually on 30%-plus pre-tax margins, is looking to change its focus to a more aggressive growth target of 50% annual growth over the next 5 years to a £50 million turnover. It will explore the implications for how that might be achieved in a domestic market for the company’s current services which are both competitive and relatively mature, as well as the organisational and strategic challenges to their current business model.

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Topics/Industry: ambidexterity, analytics, capabilities, e-commerce, exploration, innovation Publication date: 01/06/2014 Published by: ELITE Authors: Chris Corbishley, Gerry George Length: 9 pages Geography: UK

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Entrepreneurship

Failing Fast and Often: Scaling High-Tech Ventures

Flying in from Boston, USA to speak to a group of female entrepreneurs at her alma mater in London UK, Dr Beth Marcus reflected on a long and exciting career as a serial entrepreneur. Beth had worn many hats throughout her lifetime, characterised by investors and media pundits at various points as a ‘tech guru’, ‘SheEO’ and ‘doctor’ of ailing start-ups. Throughout her entrepreneurial journey, Beth had faced a series of inflection points that had nearly brought an end to ventures she had started or advised. Sharing these war stories with a younger generation of entrepreneurs got her thinking: How do technology entrepreneurs monetize and scale their innovations? How do you influence partners, customers or teams to succeed? What is the key to picking a winning start-up team, one that could continually overcome the challenges of a rapidly growing business? Towards the end, a student’s hand shot up to ask the question: ‘What is the single most important advice you could give to a female entrepreneur?’, Beth looked across the faces of so many young, over-achievers and future leaders, no different to herself at that age, and said with a smile, ‘fail fast and often’.

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Topics/Industry: hardware, scale-ups, technology Publication date: 21/03/2017 Published by: Imperial Enterprise Lab Authors: Alice Miksowa, Alice Tang, Chris Corbishley, Stephanie Hodgson, Yaqing Wei Length: 16 pages Geography: USA Supplementary materials: Video

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Entrepreneurship

Plumis (Part A): Customer Discovery

It was late in the autumn of 2010, and William Makant, CEO of Plumis Ltd., was sitting in his cramped London office asking himself what he and his co-founders could do to ramp up sales and reverse a flagging cash position. The company, which had started in 2008 with a £25k prize from a business plan competition and later raised £80k from an incubator programme, now had a cash balance of just £2,365. This would not go far even in the low-rent offices the company had taken, on a decommissioned battleship moored on the River Thames. Since launching its product Automist, a hassle-free fire safety device for the kitchen, onto the market early in the year, Plumis had sold just 3 demonstration units at an average price of £400 for a total revenue of £1,200, as compared with a sales plan of 27 units, in a price range of £500- £800 per unit, targeted for the year. The latter was the sales target announced to a group of angel investors who had agreed two months earlier to invest £100k, but the cash hadn’t yet arrived, and it looked as though more would be needed, sooner than planned.

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Topics/Industry: customer discovery, engineering, market entry Publication date: 01/12/2016 Published by: Imperial College Business School Authors: Sabrina Kiefer Length: 25 pages Teaching notes: Available Geography: UK Supplementary materials: Pdf

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Entrepreneurship

Plumis (Part B): Subsequent Developments

After happening upon a customer whose problem of non-compliance with building regulations could be quickly and economically solved with Automist, Plumis did not completely turn its back on its old target markets, but it did shift its main focus to developing a new one. The company had to find a way to reach its new potential customers and learn about their tastes and needs at the same time.

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Topics/Industry: customer discovery, engineering Publication date: 01/12/2016 Published by: Imperial College Business School Authors: Sabrina Kiefer Length: 6 pages Geography: UK

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Entrepreneurship, Finance

LendInvest: Credibility in a Crowded Market

LendInvest is the UK’s leading online platform for property lending and investing. Founded originally as Montello in 2008 by Christian Faes and Ian Thomas, it provides an online marketplace for people and institutions to invest in short-term loans secured against property to real-estate professionals. Today, LendInvest is a well-capitalised, well-backed and profitable company, and one of the fastest-growing businesses in UK financial services. By adopting a diversified lending model, with a healthy mix of investors, the platform is well positioned to manage the long-term risks associated with peer-to-peer (p2p) lending. Since launching the website in 2013, LendInvest investors have lent more than £640 million to hundreds of borrowers, financing 2,300 new and rebuilt homes, worth over £1 billion.

Looking ahead to the next two years, Christian and Ian had identified three main challenges to scaling up: How could they build-out LendInvest’s institutional investor base – a key component of their capital pool? If they continued expanding into the peer-to-peer lending market, how would they build a credible profile as a mainstream financial services brand, whilst distancing themselves from riskier ‘fintech’ players? Finally, to achieve scale, should they fully embrace the peer-to-peer lending market or rely on their track record to attract high net worth and institutional investors.

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Topics/Industry: analytics, data science, Peer to Peer Publication date: 01/06/2017 Published by: ELITE Authors: Chris Corbishley, Nelson Phillips Length: 10 pages Geography: UK

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Entrepreneurship, Strategy & Leadership

Modus Seabed Intervention: Strategic Dependencies

MODUS is an integrated project service company and technology provider for subsea and seabed intervention based in the North-East of England. It operates a range of unmanned underwater vehicle (UUV) systems, used in surveying, marine trenching, construction support, drilling, and inspection and maintenance services. Since establishing the business in 2008, Jake Tompkins (MD) had acquired a number of lucrative contracts in renewable energy, oil and gas, telecommunications and defence industries. Following the opportunities emerging in North Sea offshore industries in the wake of the financial crisis, the business had grown to over £8million in revenues with a headcount of 52 people.

In 2014-15, the business faced major growth challenges on a number of fronts, which stemmed from: i) the firm’s decision to avoid speculative vessel charter due to oversupply in the North Sea ii) delivery delays on a key build project, and iii) the early curtailment of a trenching contract costing £1.4m in revenue. Reporting a fall in operating profit from £1.2m to a loss of £1.53m, Jake and his team were facing a number of difficult questions: How could the business diversify its customer base and market scope to avoid sector dependence on oil and gas, as well as reduce its geographical focus on the North Sea? Where could they identify opportunities for new market-entry? Was there potential for strategic partnerships to offset their scale disadvantages?

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Topics/Industry: diversification, growth strategy, renewable energy, strategic dependencies Publication date: 01/01/2016 Published by: ELITE Authors: Chris Corbishley, Nelson Phillips Length: 9 pages Geography: UK

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Entrepreneurship

Swoon Editions: Managing Growth by Metrics

Swoon Editions is a luxury furniture designer ‘with a rebellious spirit and a lofty ambition: To offer beautifully hand-crafted furniture at revolutionary prices’. It was founded in 2012 by Brian Harrison and Debbie Williamson, who set out with the premise that well-made furniture is too expensive. Whilst renovating their own homes, they had found that prices for the most coveted designs were unjustifiably high due to the industry’s unnecessary overheads, such as shops, warehouses and middlemen. As a new e-commerce entrant, Swoon had managed to flatten this out, by building a transparent business model, which gathered feedback from insiders whose interactions on the site could forecast long-term demand projections. By reducing the sales cycle and forecasting demand accurately, they had a winning formula, which was reflected in their growth figures. As the business scaled however, Brian had concerns as they moved past the 50-person mark. For instance, how would they continue matching more extensive resources to value-generating activities? And recognising the need to implement new processes and structures to manage an enlarged organization, how would he preserve the output-orientated culture he had worked so tirelessly to create?

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Topics/Industry: e-commerce, KPIs, organisational performance Publication date: 01/06/2015 Published by: ELITE Authors: Chris Corbishley, Sean Phelan Length: 9 pages Geography: UK

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Entrepreneurship, Finance

Abundance Generation: Is Crowdfunding Ready for the Big Leagues?

In just a few years, a small but growing number of online platforms have established themselves as intermediaries for relatively small retail investors seeking long-term, stable investment returns. This case study looks in depth at the historical growth and strategic choices facing a crowd- lending platform focused on matching investors with clean energy infrastructure investments in the United Kingdom. Abundance Generation, co-founded by Karl Harder, Bruce David and Louise Wilson, has facilitated more than £7million of investment in 8 wind and solar projects from 1,500 people in just 2 years. Meanwhile more broadly, crowdfunding has emerged as a global phenomenon with the potential to disrupt the existing ways in which modern finance is transacted. Despite these growing trends, a number of questions still remain: What is the potential for crowdfunding as an alternative source of capital for making scalable investments in renewable energy infrastructure? Over the next 5-10 years, what are the different factors – such as regulatory policy, capital constraints and the evolution of crowdfunding platforms – that will influence key decisions to be taken by senior management as it seeks to compete with mainstream banking?

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Topics/Industry: cleantech, crowdfunding, renewable energy Publication date: 01/02/2015 Published by: Centre for Climate Finance and Investment Authors: Charles Donovan, Chris Corbishley Length: 17 pages Teaching notes: Available Geography: UK

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