Ruling the Net

D. L. Spar; Jeffrey J. Bussgang

Article | Harvard Business Review | May–June 1996

Ruling the Net

Abstract

The Internet promises a radical new world of business. But for many companies, it has yet to deliver. Although doing business in cyberspace may be novel and exhilarating, it can also be frustrating, confusing, and even unprofitable. Debora Spar and Jeffrey Bussgang argue that the problems companies face have little to do with a lack of technology or imagination. Their problems stem instead from a lack of rules. The authors explain why the informal rules that have developed on the Internet since the 1960s are no longer sufficient. Businesses thinking of allowing millions of dollars of transactions to occur on the wide-open Net need specific assurances. They require clear definitions of property rights, a safe and useful means of exchange, and a way to locate and punish violators of on-line rules.

Keywords: Information Services; Online Technology;

Format: Print

9 pages

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Citation:

Spar, D. L., and Jeffrey J. Bussgang. "Ruling the Net." Harvard Business Review 74, no. 3 (May–June 1996): 125–133.

In summer 2017, Victor Santos, CEO of AirFox, considered whether to pivot his startup towards a new product built with blockchain—a quickly growing technology at the time. AirFox was an early stage startup that sold Software-as-a-Service (SaaS) to small telecom companies. AirFox was generating revenue and had a pipeline of interested customers, but it was running low on cash. In addition, Santos was finding it difficult to secure further venture capital investment. In the meantime, blockchain protocols were growing in popularity in technology circles and many blockchain projects were securing investment via Initial Coin Offerings (ICOs). Santos and his team brainstormed a new business, which would launch a new blockchain currency to facilitate financial services for unbanked and underbanked customers in emerging markets via their smartphone. Santos had to decide whether to go forward with the new plan despite regulatory risk, execution risk, and vocal opposition from some employees and investors.

In late 2016, Paris Wallace, the CEO of Ovia Health, and the rest of the company’s co-founders faced a difficult decision about the best way to grow Ovia Health’s revenue. Founded in 2012, Ovia Health specialized in mobile and web applications in the women’s health space. After building a strong user base with its original app (Ovia Fertility, which helped women conceive by tracking ovulation and other factors), the young company launched a second app, Ovia Pregnancy, which helped women have a healthy pregnancy by tracking various health metrics. Ovia Health’s apps were free to use, and most of the company’s revenue came from charging advertisers to host ads on its native advertising platform. Wallace believed that the family benefits market was a promising growth area, but he was not sure of the best way to enter the market. Recently, a top health benefits provider had offered Ovia Health a multi-million-dollar contract, but Wallace wondered whether Ovia Health could create a better family benefits solution by turning down the contract and selling directly to employers’ HR departments. Participants will need to examine how Ovia Health evolved its strategy over time and decide which growth opportunity was the better choice.

Case | HBS Case Collection | January 2018 (Revised January 2019)

ZappRx

Jeffrey J. Bussgang and Olivia Hull

In October 2015, ZappRx founder Zoe Barry is deciding between two business models for her health technology start-up. Her product, a software application that aims to expedite the prescription fulfillment process for patients with rare diseases, has attracted interest from specialty drug manufacturers who wish to build an exclusive platform for patients taking their medications. But Barry, against the advice of her management team, is considering an alternative business model, which would open the platform up to all manufacturers in a given disease area. Instead of financing product development through individual contracts, the comprehensive platform would be free to doctors and pharma alike and financed via an aggressive fundraising strategy and through the sale of the prescription data collected on the app. Barry is willing to take the risk, but her management team is staunchly opposed. Which path should ZappRx take? The case is a window into the early go-to-market and business model decisions that an entrepreneur must make, in this case in the face of pushback from her own management team. The case also provides a detailed picture of the specialty pharmaceutical industry and challenges students to think about target customer identification and talent management in a start-up environment.

Keywords: Speciality Drugs; Hub Services; Pivot; Speciality Prescriptions; Health Care and Treatment; Customization and Personalization; Online Technology; Business Model; Decision Choices and Conditions; Pharmaceutical Industry; Massachusetts;

Citation:

Bussgang, Jeffrey J., and Olivia Hull. "ZappRx." Harvard Business School Case 818-001, January 2018. (Revised January 2019.) View Details

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Ruling the Net

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