RunKeeper

Shikhar  Ghosh; Shweta  Bagai

Case | HBS Case Collection | July 2018

RunKeeper

by Shikhar Ghosh and Shweta Bagai

Abstract

The case examines the focus of an early stage company and how venture capital can distort a founder’s view. It encompasses issues such as financing, understanding the founders’ definition of success/failure, defining and pivoting a business model, and determining the organizational impact of a pivot as well as the role of VCs and boards in outlining company strategy. In 2008, Jason Jacobs, a fitness and technology enthusiast, created RunKeeper—an iPhone app to track a runner’s distance, speed, calories, and route taken. In its initial years, RunKeeper was a fast-growing, profitable company and did not utilize the $1.5 million it raised in its Seed and Series A rounds. As RunKeeper gained momentum, Jacobs created a grand health vision (Health Graph) that would increase the chances of securing VC funding. Heralded as the “Facebook of Fitness,” RunKeeper willed itself to be the one-stop location for all important health information for consumers. Despite raising $10 million, the next few years were turbulent. RunKeeper became allergic to revenue, ramped up its burn, and tried to pursue both the running app and the Health Graph—but did neither well. At the end of the case, the company is almost out of cash, and Jacobs has exhausted his prospects for raising external capital. He needs to revert to his current investors to keep the company afloat. Jacobs’ instinct suggests that refocusing the company on its core product and runner base would be the best way forward. However, the last round was raised on the promise of a big health vision. Jacobs wonders whether his current investors would fund a smaller vision and how onerous the terms would be. Would they push Jacobs to pursue a sale in an over-crowded health app market? Or would they decide that he was not the right person for the company?

Keywords: early stage funding; Pivot; Entrepreneurship; Venture Capital; Business Model; Health Industry;

Language: English

Format: Print

13 pages

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Citation:

Ghosh, Shikhar, and Shweta Bagai. "RunKeeper." Harvard Business School Case 819-020, July 2018.

Case | HBS Case Collection | November 2020

Truebird—An AlleyCorp Venture

Shikhar Ghosh, Shweta Bagai, Shikhar Ghosh and Shweta Bagai

In December 2018, Kevin Ryan and Wendy Tsu faced an important decision – to finalize the CEO candidate for Truebird, an innovative, automated coffee café concept. Like many of AlleyCorp and Ryan’s companies, Truebird started with the observation of an unmet need – an inability to get good coffee at a reasonable price without a wait. Ryan’s track record as a serial entrepreneur included companies such as MongoDB, Gilt Groupe, Zola, and Business Insider. The commonality across AlleyCorp’s diverse businesses was a systematic process to ideation, led by Wendy Tsu, and an emphasis on the early Co-founder/CEO. Over the years, Ryan had refined his process of identifying the most appropriate person to serve as CEO. Two strong candidates had been shortlisted for the CEO position at Truebird. Unlike traditional approaches that used the reference check as a safety net, Ryan and Tsu considered reference check interviews as a stronger indicator of on-the-job performance. How should they structure a reference check process that would allow a complete understanding of each candidate? What questions should they ask when they found people who had worked with, or for, each of the candidates?

Keywords: Startup; hiring; staffing; recruiting; Business Ventures; Finance; Leadership; Management Skills; Management Teams; Jobs and Positions; Job Interviews; Human Resources; Recruitment; Selection and Staffing; Technology Industry; Food and Beverage Industry; United States;