Skip to content

Manzana Inc Failing And Succeeding Case Study

I teach strategy and entrepreneurship at Babson College. Its undergraduate entrepreneurship program has topped the U.S. News & World Report survey every year in the last 20. Babson asked me to create a new course: Foundations of Entrepreneurial Management.

And if a student asked me the most important thing the she had to know by the end of the semester, I’d tell her that to achieve start-up success; you must fail over and over again until you learn what you need to succeed.

Failure: The Cold, Hard Truth

Before getting into the details of why this is so important, consider these statistics. Based more on the collective wisdom of venture capitalists I’ve interviewed, your odds of achieving start-up success on a large scale -- meaning starting a company that is worth at least $1 billion -- are about one in 10,000.

The logic behind this is that I have spoken with many VCs who talk with about 1,000 entrepreneurs for every one or two that they fund. This means that the other 999 or so, either get funded by another VC, find some other way to get capital, or shutter themselves. And out of every 10 companies in a VC’s portfolio, the general thinking is that one of 10 ends up being extremely successful, two or three more do reasonably well, and the rest close down.

Since April 2011 when I started researching my book, Hungry Start-up Strategy, I have interviewed at least 200 start-up CEOs. And one of my favorite recurring themes from those interviews is how so many successful start-ups failed over and over again before figuring out how they could succeed.

Three such stories come to mind-- pay service PayPal, team productivity enhancement app-maker, and recruiting software as a service company Bullhorn.

Case Study: PayPal

The first is PayPal. Surely you have heard of this e-payment service that eBay acquired for $1.5 billion in 2002. What is interesting to me about PayPal is that one of its co-founders, Max Levchin who is now chairman of Yelp, told me that he originally started Confinity -- one of PayPal’s predecessor companies, to provide operating and systems software for the Palm Pilot, a handheld device that was very popular in the 1990s as a place for people to store all their contact information.

One of Confinity’s features was the ability to make payments online. Levchin kept receiving emails from eBay users who asked him to develop that feature to make it easier to pay for items purchase on eBay more securely. But Levchin ignored those emails from users for six months because he wanted Confinity to be a Palm Pilot operating system company.

But ultimately he abandoned his idea and focused solely on the eBay payments technology. In 2000, he merged Confinity with another payments company,, co-founded by Tesla CEO, Elon Musk and eBay bought PayPal two years later.

Case Study:

On July 9, 2013, I heard the story of from Matt Cutler, who started Kibits in January 2011. “We had a general idea that we wanted to create private groupware that would be a Swiss army knife of functions -- Dropbox, social networks, and work-related activities. We were ahead of the market on social but we found pockets of intense use.”

Those pockets were in the area of business collaboration. According to Cutler, “Business teams told us that it was great for collaboration. They said, ’It is organized the right way. Please add these features.’”

Now is booming. As Cutler explained, “We are enjoying triple to quadruple digit growth. Active users, registrations, average purchase price -- all our operating statistics are up and to the right.”

Case Study: Bullhorn

On July 15, I spoke with Art Papas, CEO of Bullhorn, which provides software as a service to employee recruitment firms. Papas started Bullhorn in 1999 but it was not until 2008 that he really figured out what Bullhorn was good at.

He failed in his attempt to make it a platform for connecting freelance workers with employers and at turning Bullhorn into a provider of software to help procure creative services.

But Bullhorn stumbled onto a problem that led to a very successful outcome. Papas met “Mike O’Donnell in Woodbridge, New Jersey who was willing to pay us to build a database for his recruiting firm to keep track of his operations over the Internet. Based on that, we were able to raise $750,000 from our original investors.”

By solving that problem, Bullhorn put itself onto a path to a profitable sale of the company to a private equity firm that leaves Papas still in charge. “We now have 6,000 customers in 34 countries and after raising $26 million in 2008 we reached $40 million in revenues by 2012 and sold our stock to a private equity firm for over $100 million.”

Even after selling out, Bullhorn remains private and Papas is CEO. “I can now get access to the money I need to make acquisitions and add new products. By 2017 we should reach $150 million in revenues and be in a position to go public or be acquired," explained Papas.

These three stories bring to mind the famous saying of GE founder, Thomas Edison, “genius in 1 percent inspiration, 99 percent perspiration.”  For aspiring entrepreneurs this means that if you have an idea for a business, build the product, give it to customers, and see what happens.

If the customers don’t like your idea, try something new. If they like part of the idea, develop that. And if it fails, keep trying until you succeed.

“Apple Inc --- Failing and Succeeding” Essay

965 WordsMar 20th, 20124 Pages

Chapter Seven
(Making Decisions)
Application Case:
“Apple Inc --- Failing and Succeeding”
1) How would you classify each of Apple’s two decisions --- programmed or nonprogrammed? Explain your answer.
The decision regarding Apple’s choice to not license their operating system and software to other computer companies was a non-programmed decision because the decision was made solely on the fact they were the first (pioneer) to introduce an operating system and thought that they were superior with their command in a premium market making their non-programmed decision uncertain of what the outcome would be making the consequences unknown as well.
Apple’s decision to introduce the “iPod” while adding a Window’s version of “I-Tunes” was…show more content…

The decision(s) on not to license their software, may have influenced its success by: Degree of Certainty, Imperfect Resources, Internal Environment, and External Environment. If the “Degree of Certainty” was risky then they would have had a better knowledge of the risks and be sure of the consequences to each alternative. Risk at least provides a certain level of probability that success outweighs the degree of risk that is involved. Allowing that, they had all the ideal resources at such time to collect information about any possible problems, than they might have had the opportunity to make a different choice or allow for one to have alternative solutions. Internal factors that might have influenced the success of Apple’s first decision could have been completely different if they would have had the support from everyone within the organization. I believe instead of leaving the decision to license their software should have been left to management (who also gathered input/suggestions from their subordinates) such as the CEO’s vs. the decision be placed solely on the engineers. Apple would have seen better results working with groups who could have offered input and raised questions allowing; reduction in any uncertainty. In order to better the product or service the external environment plays a huge part in letting business’s know what they expect and even offer suggestions on improvements allowing a company to hear a variety of responses that could have

Show More