Group Project_WCMDMTJT

Monday, November 24th, 2014

Group Project Information Systems and Applications (MIS 311-90)

Group Name: Future CIOs

Wyatt A. Chartrand, Chief Executive Officer and

Chief Administrative Officer (MIS #126)

Meghan DeGennaro, Chief Financial Officer (MIS #128)

Marissa Tarson, Chief Information Officer (MIS #220)

Jessica Teng, Chief Operations Officer (MIS #221)

SUNY Binghamton University School of Management

Chartrand, DeGennaro, Tarson, and Teng 1

Report Abstract:

This report will consist primarily of two parts. The first part will be comprised of

sections 1A, 1B, 1C, 1D, and 1E. These sections will discuss the Dot.com Bubble and Alibaba’s

initial public offering, the Web 2.0 Bubble, Web 2.0 initial public offerings, venture capital

finance and investing, and a short case study example of venture capitalist investing and

subsequent company profile, respectively. The second part of this report will consist of sections

2A, 2B, 2C, and 2X. These sections will present our business start-up concept for our company

MedTech, which specializes in biomedical technology devices for personal uses, including our

groundbreaking implantable wireless contraceptive device. We will present and discuss our

company vision and mission, our product and services, our target market, competition,

financials, and our investment opportunities. A break-even analysis and associated start-up costs

for our company will also be given some consideration. This presentation will consist of a

PowerPoint presentation, a company website (which will include both a business idea page and a

company page, and our logo), a written business document for our pitch, the code for our

website, and suggestions on how this project could provide an improved learning experience for

future students.


Project Part 1:

The Dot.com Bubble and Alibaba’s Initial Public Offering (1A):

In the late 1990’s, the Internet and computer world was growing in popularity and

becoming known as the “information superhighway”, a phenomenon that has affected our lives

by making the world flat and by providing an easier way for people to join the middle class.

Many Internet companies were launched with the purpose of a new way of making profit, paving

way to online commerce and e-business. When investors and capitalist saw the growing

commercial success of internet companies, they jumped aboard and started to invest. Dot.com

companies’ stock prices soared as more people started to invest on the highly overvalued e-

businesses. Their profits lined up not only from investors but also from the Taxpayer Relief Act

of 1997 of tax rate cut on capital gains of real estate sale. However, since most of these investors

are retailers, the belief on the rising value of Internet stocks are from optimistic views rather than

professional and experienced views.

Most of these internet companies have no concentrated business plan and relied on a high

growth strategy by using first mover advantage in entering the Internet market and capturing a

majority share of whatever market was being entered. Because of the high usage of Internet

users, these companies would see them as potential customers, concentrated on attracting visitors

to their website but with no intention of winning them over. They planned on charging their

services and products later by building their customer base and depending on venture capital and


initial public offerings to stay afloat through the network effect (DeGrace, 2011). Because of

this, most dot.com companies sustained major net losses from trying to expand too quickly,

which impacted investors with significant losses. But earlier companies that succeeded were sold

at an early stage that resulted in enormous profits had attracted investors eager to put their money

into dot.coms. At the height of the bubble in 2000, NASDAQ reached 5132.

Most of the dot.coms had spent all of their capital from investors and initial public

offerings and were unsuccessful in generating profit. When companies could not cover the costs,

it triggered a chain reaction through network effect, affecting not only their company, but also

other companies and investors as well. Three days after NASDAQ reached 5132, a large number

of sell orders were processed simultaneously, which caused NASDAQ to drop from 5132 to

4879. NASDAQ eventually lost 78% of its value in 2002. Between 2000 and 2003, the dot.com

crash had lost $5 trillion in stocks. The U.S. economy had experienced post bubble recession,

forcing the Federal Reserve to cut interest rates without losing any more money. Most dot.com

companies filed for bankruptcy with their assets being liquidated and acquired. Some dot.com

companies were charged for accounting fraud and misuse of capital investments. Companies

such as Amazon, eBay, and Yahoo not only survived the crash, but also expanded by having a

solid business plan, solidifying networks with customers and advertisers, and securing capital for

future investments (Kelleher, 2014).

Alibaba is China’s largest e-commerce company that processes many customers and

businesses transactions every day using sites such as Taobao, Tmall, and Alibaba.com. Starting

in 1999, the company has become popular with over $248 billion in transactions occurring in

2013, more than eBay and Amazon combined. Alibaba has become the most valuable tech

company, raising about $25 billion from its U.S. initial public offering (Chu & Wong, 2014).


They generate revenue from charging millions of merchants advertising and transaction fees.

Alibaba’s philosophy is protecting customers rather than putting the interests of merchants and

shareholders first.

When Alibaba began trading in September 2014, their value was worth $92.70 which is

above the initial price of $68. It was predicted that Alibaba’s market value would outstrip

Amazon’s and eBay’s and is expected to expand their e-commerce empire overseas. Unlike the

dot.com bubble that overvalued their initial public offering, Alibaba is wisely investing their

profits made from their initial public offering by expanding their empire and stabilizing their

business infrastructure. Most of dot.com companies would rather live in the moment of wealth

and luxury rather than thinking of the future because most of them believed that there would be a

payoff sometime in the future. The company is not preoccupied with a high growth strategy

because they are more concerned with customer interests rather than shareholder

interests. Alibaba’s former CEO, Jack Ma, focused on using Alibaba’s initial public offering

money strategically to transform his company into a global powerhouse (Weiner, 2014).


The Web 2.0 Bubble (1B):

1997 was when the advent of the inevitable dot.com bubble occurred. Dot.com

companies had attracted investors and venture capitalists eager to make a profit. Most of these

dot.com companies were half-baked, as they didn’t have a solid business plan or savvy financial

skills. Investors and capitalists were too optimistic and lost millions of dollars. As a result, many

of these companies filed for bankruptcy, which affected our economy, putting it on the verge of a

recession. As the country recovered from the bubble burst, everyone learned a lesson--it isn’t

good to value assets without solid evidence and strong numbers.

Web 2.0 has allowed customers to purchase products easier and have more knowledge

about the things that they want to buy. With many people using the web, companies look for

ways to capitalize on the flow of information. Facebook and Twitter are considered the dominant

social media with more many users visiting the website every day. Companies and social media

sites focused on online collaboration to advertise to users better and realize large profits, but

because of this companies and social media are getting funding based on high valuations in order

to chase after Web 2.0 deals that might not produce profitable results (Bofah, 2014). There are

also few barriers to entry, so just about anyone can enter the market and be part of the crowd.

Because of this, companies will likely not be able to build long-term value and will have greater

competition. Although they are chasing after Web 2.0 deals, there are few customers willing to

pay for social media usage and digital content, so the companies will have to rely on acquisitions

and initial public offerings to survive in the market, as they will ultimately have trouble

monetizing their businesses.


There are some similarities between the dot.com bubble and the Web 2.0 bubble. Most

companies in both bubbles are overvalued in respect to ROI and the optimism of the market,

raising the risk of venture capitalists overpaying. But unlike the dot.com failures, Web 2.0

companies have a market of customers who want their product and services, thereby generating

revenue. Even though risks in Web 2.0 are lower than the previous bubble, companies in Web

2.0 are still ill-suited to evaluate risk and don’t generally take them into account because they

underestimate the consequences (Colombo, 2013). Many of them are trying to chase after the

upside present in the Web 2.0 deals that might not produce profitable results for them. They may

see web traffic and web activity as ROI but not all users that visited the website are loyal or

profitable, making it difficult to monetize their products. Because there is no solid metric to

convert volatile web traffic into ROI, companies are having trouble measuring their social media

activity to yield positive results.

With the increased development and expansion of the World Wide Web, many people

use the web every day. Platforms, software, and other online services have made Web 2.0

appealing to use, meaning an increase of users which also means an increase in customers and e-

businesses. Using the web has become easier with the availability of computer equipment and

mobile devices since they can be used to surf the web and are seen as an everyday tool. Barriers

to entry have decreased, allowing more competitors to enter the market. There are no special

skills required to use the web, as it has become easier to make a website and offer online services

(Platt, 2012). Barriers to entry, such as the skills needed to collect information, have decreased

with the creation of online blogs and wikis that are available to the public. With many

participants entering the online market, the potential for a Web 2.0 bubble has increased.


The recent historical data and activity of tech and social media initial public offerings

suggests that the bubble would be much smaller because of the consequences of the dot.com

bubble. This suggests that companies and investors are taking precautions to avoid another

bubble. Unlike the dot.com bubble, which was tied to the initial public offering market, a Web

2.0 bubble would be linked to the demand of the market and the ability to generate revenue.

Companies today are making an effort to make their product and services more appealing so that

it is less likely that customers will lose interest. With increases in the development of

technology, the potential and opportunities would be high for companies to make a profit. Like

the previous bubbles, this bubble will eventually burst, but it feels like this will last a bit longer

and have a smaller financial impact.


Web 2.0 Initial Public Offerings (1C):

Our first Web 2.0 initial public offering that we’ll be analyzing is LinkedIn. LinkedIn is

a growing, popular career and networking site. It was founded in 2002 and launched in 2003.

The website allows students and prospective employees to showcase themselves to potential

employers. Each individual’s profile includes his or her resume and a picture of themselves.

LinkedIn has made it easier for people to connect with one another globally. LinkedIn went

public in May of 2011. Within its first day, LinkedIn’s shares more than doubled (Woo, Cowan,

& Tam, 2011). LinkedIn’s performance skyrocketed by going public, and it was said that “it was

the biggest Internet initial public offering since Google Inc.” (Woo, Cowan, & Tam, 2011). The

financials for their third quarter of 2014, as of September 30, 2014, include the following:

Revenues: $568,265 (LinkedIn, 2014).

Net Income (loss): ($4,162) (LinkedIn, 2014).

ROA: -0.42% (LinkedIn, 2014).

LinkedIn’s growth has been strong. The November 10th, 2014 New York Stock Exchange,

showed a 2.78% increase. It is likely that LinkedIn’s stock will continue to increase (Albergotti,

2014). LinkedIn’s Market Capitalization as of November 10th 2014 shows $28.45 Billion

(YCharts, 2014). LinkedIn is a very good resource for people all over the world. In addition, this

website is the most popular networking website and therefore has a competitive advantage

compared to other unknown or upcoming networking sites. LinkedIn services millions of people

worldwide. It’s hard to see this website go under because of its increasing popularity among the

general public, making the company a good investment. Their company makes a great business,


and in addition the stocks are continuously climbing. Below is a recent stock price chart for the

company.

Our second Web 2.0 initial public offering company that we’ll be analyzing is Groupon, a

growing, popular coupon website. Customers login looking for deals on items they’re looking for

at a lower price point. In addition, customers can find concerts or other events they want to

attend at a lower rate. Groupon went public in November of 2011 (Barr & Baldwin, 2011).

Unlike LinkedIn, Groupon’s initial public offering success is quite different. This website is

having trouble generating a revenue within the stock market (Lappin, 2013). Groupon has to find

new ways to reach target audiences and investors, as their business plan has seemed flawed

(Lappin, 2013). Financials from their 2013 annual financial report include the following:

Revenues: $2.6 Billion (Shareholder, 2013).

Net Income (loss): (88,946) (Shareholder, 2013).


Financials for their third quarter of 2014, as of September 30, 2014, include the following:

ROA: -7.78% (YCharts, 2014).

Groupon’s potential growth is stagnant. November 11, 2014, the New York Stock Exchange

showed a 4.91% increase. The company is working for innovative ways to make more revenue,

starting by using online deals (Ingram, 2014). Groupon’s Market Capitalization as of November

11, 2014 is $5.237 Billion (YCharts, 2014). Groupon is a wonderful resource that many

customers enjoy. For one thing, the public can now get products at a much lower rate, which is

stimulating the economy by putting more money into their wallets. As far as investing in

Groupon is concerned, now would be a good time to sell, as their share prices are stagnant. Their

cash flow, however, is stable at $155 million (Shareholder, 2013). In the future, if the company

can make more revenue it would be beneficial to invest in them.


Our third Web 2.0 initial public offering company that we’ll be analyzing is Pandora Media, Inc.,

a growing media service. One of their most popular services is online radio. Pandora went

public in mid-June of 2011. (Ovide, 2011). It is interesting to note that the investors are the ones

making the most money on Pandora going IPO, instead of the Founder (Ovide, 2011). The

founder, Tim Westergren owns only 2.3% of the stock (Ovide, 2011). Pandora, initially was

doing better in the market than expected, but then the company lost a lot of revenue in stocks

(Pepitone, 2011). Stocks are down because Pandora isn’t making money based on the listeners

but rather from advertisements. This is due to the licensing fees it must pay to be able to play

any given song on any given day. Pandora, must figure out how to raise capital in ways that

could be fully beneficial to the overall business (Dickey, 2014).

Financials from their 2013 annual financial report include the following:

Revenues: $101.3million (Pandora reports, 2013).

Net Income (loss): (29.47 million) (Pandora media, 2014).

As of September 30th 2014:

ROA: -6.62% (Pandora media returns, 2014)

While more people have started to listen to Pandora, this has increased some profit. However, the

company is still in danger on the NYSE (Shaw, 2014). As of November 21st 2014, Pandora

showed a 1.29% decrease on the NYSE (Pandora Media Inc., 2014). In addition, Pandora’s

market capitalization as of November 21st 2014 is $3.985 Billion.


In terms of investing in this company it would not necessarily be a good idea. Pandora has to

figure out ways to raise revenue in a market where more of the public is resorting to illegal

downloads of music (Gibbs, 2014). Competitive advantage is something Pandora needs to strive

for. Their business plan should be changed to generate more revenue before investing can

become a thought in someone’s mind.


Venture Capital Analysis (1D):

Venture capital financing is money provided by investors to startup firms and small

businesses with perceived long-term growth potential. This is a very important source of funding

for startups that do not have access to capital markets. It typically entails high risk for the

investor, but it has the potential for above-average returns. Most venture capital comes from a

group of wealthy investors, investment banks and other financial institutions that pool such

investments or partnerships. This form of raising capital is popular among new companies or

ventures with limited operating history, which cannot raise funds by issuing debt. The downside

for entrepreneurs is that venture capitalists usually get a say in company decisions, in addition to

a portion of the equity. The difference between venture capital funding and a different form of

funding such as private equity is that in private equity, you start with the numbers, and then you

try to fit everything into the numbers. In venture capital, you start with people, and then you try

to figure out what numbers you can make. In other words, private equity is usually about taking

an existing company with existing products and existing cash flows, then restructuring that

company to optimize its financial performance. There is also angel investing, which differs from

venture capitalism by providing debt financing instead of equity financing and typically being

less involved in the management and consulting side of the business. Another possible form of

funding is a bank loan, but this typically requires a prior relationship with the bank as well as

collateral provided upfront for a loan. Venture capitalists will typically fund a business as its

growth is just taking off quickly or right before it will. This is one of the few points in a

business’s life cycle (very high growth) where venture capital funding is needed and desirable. In

this case, the company may need tens of millions of dollars to enter new markets, expand sales or


add new products. Venture capitalists earn much of their net worth when they invest in a hugely

successful company, which allows them to invest in many more startups that will ultimately fail.

Venture Capitalists will also typically take an equity stake in these startups and possibly sell

them for a much higher price than what they paid for them initially if the startup is ultimately

successful. Sometimes venture capitalists may also demand a royalty either in perpetuity or until

they recoup their investment. An angel investor, unlike a venture capitalist, give more favorable

terms than other lenders, as they are usually investing in the person rather than the viability of

the business. They are focused on helping the business succeed, rather than reaping a huge profit

from their investment. Angel investors are essentially the exact opposite of a venture capitalist.

Crowdfunding, is when a request for funds is made on an Internet platform, typically some form

of social media website, the users of which are subsequently engaged to raise the needed funds.

This is done by promoting the cause via creating videos and messages, and some benefit or

reward is sometimes offered to donors. Crowdfunding in particular can be used to support non-

profit organizations, raise funds for artistic endeavors, get cash for companies by offering goods

or services, or to raise equity for a company. Seed money, or seed capital, is the initial capital

used to start a business. Seed capital often comes from the company founders' personal assets or

from friends and family. The amount of money is usually relatively small because the business is

still in the idea or conceptual stage. Such a venture is generally at a pre-revenue stage and seed

capital is needed for research & development, to cover initial operating expenses until a product

or service can start generating revenue, and to attract the attention of venture capitalists. The exit

strategy for a venture capitalist varies. The venture capitalist often hopes to sell its equity (stock,

warrants, options, convertibles, etc.) in a portfolio company in three to seven years, ideally

through an initial public offering of the company. The company becomes liquid through the sale


of its stock to the public and the venture capitalist sells its stock to reap its return. While an

initial public offering may be the most visible and glamorous form of exit, it's not the most

common. Most companies are sold through a merger or acquisition event before an initial public

offering can occur. If the portfolio company is bought out or merges with another company, the

venture capitalist receives stock or cash from the event. Another alternative may be the

reorganization of a portfolio company's debt and equity mixture, called a recapitalization. The

venture capitalist exchanges its equity for cash, the management team gains equity incentives,

and the company is positioned for future growth.

Venture capitalism’s relationship with Silicon Valley has changed dynamically over the

years. At the current time, venture capitalists have started to express alarm over the risk present

in some Silicon Valley startups, as Yoree Koh and Rolfe Winkler The Wall Street Journal

explain: “Silicon Valley is a risk-driven place. But over the past year, it may have taken on more

than it can handle, according to one prominent venture capitalist. ‘I think that Silicon Valley as a

whole, or that the venture-capital community or startup community, is taking on an excessive

amount of risk right now—unprecedented since '99,’ said Bill Gurley, a partner at Benchmark,

referring to the last tech bubble” (Koh and Rolfe, 2014). Concerning venture capitalism’s

involvement with Web 2.0, venture capitalists’ involvement with Web 2.0 companies may be

plateauing, according to Martin LaMonica of CNET: “Silicon Valley remains the hotbed of Web

2.0 activity, but the hipness of start-ups with goofy names is starting to cool in the face of

economic reality. Dow Jones VentureSource on Tuesday released numbers of venture capital

activity in Web 2.0 companies and declared that the ‘investment boom may be peaking.’


Venture capitalists put $1.34 billion into 178 deals in 2007, an 88 percent jump over 2006. But

once you strip out the $300 million that Facebook raised from Microsoft and others, the numbers

don't look as bullish” (LaMonica, 2008). This suggests that Facebook had a disproportionately

large portion of venture capitalist investment and involvement, skewing the numbers and

people’s perception of venture capitalism’s relationship with Silicon Valley. Furthermore, it

looks as if venture capitalism’s relationship with Web 2.0 specifically may be deteriorating,

according to Tom Foremski of the Silicon Valley Watcher: “For example, Kleiner Perkins

Caufield & Byers, Silicon Valley's leading VC firm, has stopped investing in Web 2.0 startups.

‘We have absolutely no interest in funding Web 2.0 companies,’ says Randy Komisar, a partner

at Kleiner Perkins. He mentioned this during an after dinner conversation last week. He said he

had recently told John Battelle, one of the organizers of the rapidly growing Web 2.0 Summit

conference, that the term no longer had the same positive cachet it once had. In the VC

community it clearly has a negative one” (Foremski, 2007).

Because venture capital funding goes primarily toward startups, it is important for

venture capitalists to know why startups fail. One of the biggest reasons, according to Forbes

writer George Deeb, is that “Investors tend to bias ideas that throw out the largest nets possible,

in terms of potential customers. They would much rather back the next Google, whose product

appeals to everyone and anyone, than a small niche business that only appeals to a very narrow

market (e.g., whitewater rafting business on the Zambezi River). Niche businesses are OK if you

are going to run it as a lifestyle business for yourself, but not to attract professional investors”

(Deeb, 2013). This suggests small or unscalable ideas (such as certain services), will probably

lead to a startup failing. Another big issue, according to Steve Tobak of the website

Entrepreneur, is that “For every founder that manages to bootstrap a startup, there are dozens,


maybe hundreds that run out of cash for any number of reasons: they don’t want to give up a

piece of the pie, they don’t budget properly, they don’t plan for how long it takes to raise rounds

of funding, their burn rate is too high, or some combination thereof” (Tobak, 2014) Therefore,

completely running out of cash will quickly put a startup out of business, and startups that are

prone to burning through cash quickly could be in trouble unless they strategize carefully. A

third major reason why many startups fail, according to Fortune, is also probably the simplest:

The make products no one wants. The writer of the article, Erin Griffith, explains: “When the

founder of a startup company shuts down her or his business, it is customary to pen an essay that

tells the rest of the community what went wrong, called a failure post-mortem. It’s estimated that

nine out of 10 startups fail, which is why the technique has become so common as to be a Silicon

Valley cliché. Some of these essays are honest, enlightening, and brave. Others point fingers or

issue backward non-apologies. Medium, the publishing platform co-founded by Twitter co-

founder Evan Williams, is the preferred medium. The proliferation of the failure post-mortem

has helped create a bizarre cult of failure that seems wrong-headed. Celebrating failure (“Fail

fast” goes the mantra) seems to let people off the hook for bad behavior. Upon closer inspection,

it seems less misguided than necessary. Starting a high-growth business is a roller coaster.

Founder-CEOs feel pressure to keep up the facade of success, even when things are actually

falling apart behind the scenes. Only recently, after the tragic suicide of Jody Sherman, CEO of a

startup called Ecomom, did the technology community begin to publicly acknowledge the

problems with its “entrepreneur as hero” narrative. Publicly admitting to failure, and examining

it, can take guts. It also distills the narrative to a case study from which other entrepreneurs can

learn. CB Insights recently parsed 101 post-mortem essays by startup founders to pinpoint the

reasons they believe their company failed. On Thursday the company crunched the numbers to


reveal that the number-one reason for failure, cited by 42% of polled startups, is the lack of a

market need for their product. That should be self-evident. If no one wants your product, your

company isn’t going to succeed. But many startups build things people don’t want with the

irrational hope that they’ll convince them otherwise” (Griffith, 2014). In other words, many

entrepreneurs incorrectly attribute a need for their product to a market or try to convince people

to want the product, even though the chances of that happening are small. Startup founders

should do substantial research regarding demand for their product or service well before they

start the business.

Despite the reasons startups may fail, there are reasons some of them succeed. According

to Forbes writer Tanya Prive, the first reason a start will succeed is vision: “A well-defined

vision is a skill or gift that every company leader needs in order to cross the finish line. It will be

the major force behind an entrepreneur’s success and will serve as a compass in tough times. A

startup needs to envision how to monetize from the very beginning. The first dollar counts,

especially for potential investors” (Prive, 2013). This suggests that a strong written mission

statement detailing the entrepreneur’s vision for the company is instrumental starting off. A

second highly critical reason a startup succeeds, according to Alejandro Cremades in his

LinkedIn article “5 Reasons Why Startups Succeed,” is execution. He explains: Lastly, having

an idea is just the beginning and really, execution is 98% in determining each business’ success.

For this part, the experience of the team is critical as their backgrounds will help towards making

more good decisions than bad ones” (Cremades, 2014). For this kind of execution to take place,

the talent of the team working on or for the business is crucial. You must have the right people

with the right talent and skillsets working for you competently in order to minimize executional

risk.


A third and final crucial reason a startup will succeed has to do with timing and the

market, as Business Insider writer Alyson Shontell explains: “According to the Harvard paper,

"The industry-year success rate in the first venture is the best predictor of success in the

subsequent venture. Entrepreneurs who succeeded by investing in a good industry and year (e.g.,

computers in 1983) are far more likely to succeed in their subsequent ventures than those who

succeeded by doing better than other firms founded in the same industry and year (e.g.,

succeeding in computers in 1985)” (Shontell, 2012). This indicates that intuition in regards to

market forces such as demand for a new product are instrumental in the success of a startup.


Venture Capital and Company Profile Case Study (1E):

Company Name Business Investment Amount Reasons for Picking Company

Sift Science Detects fraud in

payments. $620,000

Fraud is a serious issue, as it can happen

to nearly anyone. Though it may seem

unlikely, it is best to review all potential

precautions.

Duolingo

A social learning

network for teachers,

students, schools, and

districts.

$420,000

Education is an important factor in

society, being multilingual or even just

bilingual gives any person a stronger

advantage in life.

Funding Circle A marketplace for small

business loans. $960,000

It's difficult for small business to make it

due to organizations being as big as they

are today, and smaller businesses need

assistance in order to have an opportunity

to succeed.

Company Name Business Date Founded Number of Employees Funding Received

Foursquare

A mobile application

that helps users explore

their city.

March 11th, 2009 29 in CrunchBase

$162.4 million in six

rounds from 18

investors.

Gogobot

A mobile application

that offers personalized

recommendations on

the best places to sleep,

eat, or stay during any

adventure.

November 1st, 2010 11 - 50 | Two in

CrunchBase

$39.0 Million in three

rounds from seven

investors.

Etsy

An online marketplace

for creative products

made and sold by

artisanal businesses.

June 18th, 2005 251 - 500 | 11 in

CrunchBase

$97.3 million in eight

rounds from 14

investors.

Zemanta A rich media tool for

bloggers. September 9th, 2007 Five in CrunchBase

$7.4 million in five

rounds from four

investors.

Silk

A network for

individuals to publish

their data on specific

topics.

January 1st, 2010 11 - 50 | Five in

CrunchBase

$3.7 million in three

rounds from nine

investors.

Stack Exchange

A network of question-

and-answer

communities.

September 2009 Ten in CrunchBase

$18.0 million in two

rounds from 12

investors.


References:

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Retrieved November 11, 2014, from http://online.wsj.com/articles/linkedins-revenue-keeps-

climbing-1406837690.

Barr, A., & Baldwin, C. (2011, November 4). Groupon's IPO biggest by U.S. Web company since

Google. Retrieved November 12, 2014, from http://www.reuters.com/article/2011/11/04/us-

groupon-idUSTRE7A352020111104.

Bofah, K. (2014, Feb. 12). Facebook, Twitter, and Web 2.0 Stock Bubble. Wall Street Cheat Sheet.

Retrieved from http://wallstcheatsheet.com/technology/social-media/facebook-twitter-and-the-

web-2-0-stock-bubble.html/?a=viewall.

Chu, K. & Wong, G. (2014, Nov. 4). Alibaba Buffs a Key Business Metric. Wall Street Journal.

Retrieved from http://online.wsj.com/articles/crucial-alibaba-business-day-looms-1415559294.

Colombo, J. (2013, Nov. 7). Twitters IPO is More Proof that Tech is in a Massive Bubble. Forbes.

Retrieved from http://www.forbes.com/sites/jessecolombo/2013/11/07/twitters-initial public

offering-is-more-proof-that-tech-is-in-a-massive-bubble/.

Cremades, A. (2014, May 26). 5 Reasons Why Startups Succeed. In LinkedIn. Retrieved from

https://www.linkedin.com/pulse/article/20140526161047-8190842-5-reasons-why-startups-

succeed.

Deeb, G. (2013, September 18). The Unlucky 13 Reasons Startups Fail. In Forbes. Retrieved from

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Project Part 2:

Company PowerPoint Presentation (2A):

(Attached at the end).


Company Website and Website Code (2B):

Website files submitted separately—soft copy only. Website code presented below.

Website Page 1:

<html>

<head>

<title>MedTech's Business Idea</title>

<meta name="keywords" content="MedTech, medical, hormone, control, technology" >

<meta name="description" content="What MedTech is and what it hopes to accomplish.

Through the use of technology, hormone control is made safer and easier for all individuals.">

</head>

<body>

<center><a href="http://www.image-share.com/ijpg-2763-238.html" target="_blank"><img

src="http://www.image-share.com/upload/2763/238.jpg" border="0" alt="image jpg 2763-

238"></a></center>

<center> <h1>MedTech</h1></center>

<center> MedTech's area of business is to allow individuals to control their hormones that

would help their well-being. 

We provide the product of a hormone chip that will help control the level of hormones needed

for the person to use 

every day and the services of providing information and guidance in using the product.

Because every person is 


different, our product would be customized to their specific needs. Whether the person has

depression or chronic 

illness, MedTech's product would cater to their needs.</center>

<center> Most clinical disorders and chronic illnesses need daily doses of certain

hormones to get through the day 

without being in pain. Our product targets those with clinical disorders, diabetes, and other

illnesses that require 

daily hormone control. Our company is a step forward from traditional medication and therapy

that it will decrease the 

time and pain our consumer experience. We will also try to work with health insurance

companies to make our product 

affordable for those who can't afford it.</center>

<center> The product works by surgically implanting the microchip into the body, the

location of the chip depends on 

the area of concern at the consumer's discretion. Information on the chip such as type of

hormones, schedule, and health 

would be recorded onto the company's database using RFID technology. The company, doctor,

and consumer would then be able 

to access the information online whether to confirm the level dosage of hormone or change it.

This technology can be used 

to deliver just about any drugs or control almost any hormone. Hormone release can be

activated by the user’s remote 

control based on their daily prescription dose.</center>


 

<center><Table border=1 width="700px">

<td><center> <a href="MIS311-1.HTML">Business Idea</a> </center></td>

<td><center> <a href="MIS311-2.HTML">Company Page</a> </center></td>

<td><center> <a href="MIS311-3.HTML">More Information</a> </center></td>

</tr></center>

</body>

</html>


Website Page 2:

<html>

<head>

<meta http-equiv="Content-Type" content="text/html; charset=utf-8" >

<title>MedTech's Company Page</title>

<link rel="canonical" href="MedTech's Company Page">

<meta name="viewport" content="width=device-width, initial-scale=1, maximum-scale=1">

<meta name="keywords" content="MedTech, Chartrand, DeGennaro, Tarson, Teng" >

<meta name="description" content="The CEO, CAO, CFO, CIO, and COO of MedTech.">

</head>

<body>



238"></a></center>

<h2><center>Meet our People!</center></h2> 


<td><center> Name </center></td>

<td><center> Position(s) </center></td>

<td><center> About </center></td>

<td><center> MIS # </center></td>

</tr></center>

<tr>

<td> Chartrand, Wyatt </td>


<td><center> CEO/CAO </center></td>

<td><center> Ultimately responsible for making managerial decisions, responsible for

administrative management of private, public, or governmental corporations, and manages daily

operations at MedTech.</center></td>

<td><center> 126 </center></td>

</tr>

<tr>

<td> DeGennaro, Meghan </td>

<td><center> CFO </center></td>

<td><center> Responsible for the financial affairs of MedTech. </center></td>


</tr>

<tr>

<td> Tarson, Marissa </td>

<td><center> CIO </center></td>

<td><center> Responsible for the information technology and computer systems in MedTech.

</center></td>


</tr>

<tr>

<td> Teng, Jessica </td>

<td><center> COO </center></td>

<td><center> Oversees ongoing business operations within MedTech. </center></td>



</tr>

</tr>

</Table>

 





</tr></center>

</body>

</html>


Website Page 3:

<html>

<head>

<meta http-equiv="Content-Type" content="text/html; charset=utf-8" >

<title>MedTech - More Information</title>

<link rel="canonical" href="MedTech's Business Ideas">

<meta name="viewport" content="width=device-width, initial-scale=1, maximum-scale=1">

<meta name="keywords" content="MedTech, information, hormone, control, technology" >

<meta name="description" content="Additional information in regards to MedTech's product

and service.">

</head>

<body>



238"></a></center>

<center><h3> We appreciate your interest in MedTech! </h3>

Here's some more information in regards to our company. </center>

 

<ul>

<li>As a failsafe, our microchip has sensors that can monitor the levels of hormone the

body may experience to prevent relapse and overdose.</li> 

<li>Our microchip is more reliable on administering medicinal doses.</li> 


<li>Our product reduces the possibility of patients incorrectly using their prescriptions,

such as abusing them and overdosing, issues such as these will be greatly reduced. </li> 

<li>The setup is a onetime procedure and can also be changed with user discretion

advised.</li> 

<li>Our product control hormone level intake and circulation to better monitor our

consumer's health, thus eliminating the need of pills and needles by providing a safer and less

painful alternative.</li> 

<li>The same benefits as those using traditional medicine and therapy will be provided

but our product can save time and money.</li> 

</ul>

 





</tr></center>

</body>

</html>


Company Report and Pitch (2C):

MedTech’s business is to provide individuals with a groundbreaking implantable device

designed to control their hormones in order to act as a contraceptive device that would also track

body metrics and upload and aggregate this data onto a personalized account and database that

the customer and their doctor would have. The device acts partly as a body sensor in order to

track and upload information about your body such as body temperature, heart rate, hormone

levels, stress levels, possible health issues, etc. Our product is a hormone-regulating microchip

that will wirelessly control the level of hormones needed for the person to use the device as a

contraceptive measure (among other things), and provide services regarding information and

guidance in using the product. Because everybody’s body is different, our product would be

available in different versions to suit specific persons. We provide hormone regulation, control,

and inhibition depending on the customer's needs. Whether the person has depression, diabetes,

or needs an effective contraceptive measure, MedTech’s product would meet their needs.

Most clinical disorders and chronic illnesses need daily doses of certain hormones to get

through the day without being in pain. Our product targets those with clinical disorders, diabetes,

and other illnesses that require daily hormone regulation. Our company is a step up from

traditional medication and therapy because it will decrease the time and pain our customers

experience. We will also be working with health insurance companies to make our product

affordable for everyone.

The product (the microchip), is surgically implanted into the body, although the location

of the chip depends upon the customer’s exact need at the doctor’s and customer’s discretion.

Information on the chip such as the type of health issue, schedule, and body metrics and stats


would be wirelessly recorded in the company’s database using radio-frequency identification

technology. The company, doctor, and customer would be able to access the information online

in order to confirm or change the level of hormones. This technology can be used to deliver

many different types drugs as well as control hormones. Hormone release can be activated by the

user’s remote control based on their prescription by sending a signal to the chip and it would be

released by a small electric pulse. As a failsafe, our microchip has sensors that can monitor the

levels of hormone the body may experience to prevent relapse and overdose. To gain access to

our product, customers will need to register online and get a prescription for the device from

their doctor so there won’t be any potential abuse of the product. We advise our users to visit

their doctor every so often to check and make sure the chip isn’t damaged or in need of

replacement.

One of the most important aspects to get our product up and running are the financial

concerns. Firstly, what is it going to cost to produce and sell? We plan to target hospitals and

healthcare facilities selling our remote to them for $600.00 a unit. We estimate that the surgery to

implant the computer chip will cost around $10,000.00 due to other factors such as anesthesia

and medical tools needed to implant the product. We predict that our product will be

groundbreaking and in demand enough that most major insurance companies will cover most of

the costs of the device and the surgery.

Secondly, MedTech has prepared and calculated basic startup costs to get the product

running, as well as the attendant labor costs. We estimate that our basic startup costs will total

$2,113,000.00 and that our labor costs will be $246.00 per unit. We forecast that we will need at

least 150,000 units for our first year of sales. In addition, MedTech’s Chief Financial Officer


performed a breakeven analysis of when we will reach profitability. It was estimated that we

will break even and make a profit midway through 2018, the second year of sales. We expect to

make $49,787,000.00 of net profit. We have discussed with experts in all areas of business and

we feel that our product will do very well on the market.

Our goal is to make our product widespread so that people will be willing to choose our

product rather than injections and pills. The product will be offered to those who are diagnosed

with clinical illness and to those who need other drugs such as birth control. We will have

clinical testing done to prevent any mishaps before it goes public, as customer safety is a top

priority. We will have to file for a utility and design patent and license to make sure we can

develop the product completely in order to achieve manufacturability and marketability. There

are some that believe that this will ultimately raise ethical issues surrounding our product’s

usage. Some might be concerned about the technological possibility of the device being hacked

or malfunctioning. Our company has prepared for every possible scenario to mitigate the risks

associated with a new device such as this. It is a programmable drug but we believe that our

customers should take control of their own health to help mitigate a variety of potential health

concerns. To prevent the device from being hacked or malfunctioning, our company has

developed security measures, backups, and employed IT professionals on standby to react to

adversity. There are IT companies out there trying to replicate this type of technology and most

customers would prefer traditional medicine because they are used to it. What makes our

company stand out is that we have a strong research and development department that is

continuously improving our products for updates. Our technology is also proprietary. Because

of the above measures, our chip is more reliable on administering hormones and certain

medications than the patients because some patients don’t follow their prescription correctly. Our


technology will follow a schedule and administer the right dose prescribed by the doctor. The

setup will be just one time but it can also be change at the doctor’s and customer’s discretion.

A disadvantage is that our product can’t administer a combination of drugs because of the

possible potency. If someone were to need a dose of more than one substance, our chip would

only contain only the drug that treats the biggest health concern. A possible solution would be

implanting more than one chip containing different drugs at different locations in the body. This

product will revolutionize the field of medicine and make strides in technology. Our microchip

product can control and regulate the levels of hormones to better monitor our customer’s health.

This would eliminate the need of pills and needles by providing a safe and less painful

alternative. It will also provide the same benefits as those using traditional medicine and save the

customer time and money.


Suggestions (2X):

Overall, this project has helped us to gain a better understanding of applying what we

learned in Information Systems and Applications (MIS 311) to the type of work we could all

very well be doing in the future. The purpose of this assignment was valuable because we now

understand what factors have to be considered when developing a business and/or

product/service. Although we learned a lot of practical applications about many of the key

concepts that were taught in this course, there are three suggestions that we have to make this

project even better for future students. First, while Part 1 and Part 2 were both very

informational, and we all learned a lot from it, it was difficult to understand the correlation

between them. Part 1 was seemingly similar to the assignments that were given in class, whereas

Part Two was more of a creative business endeavor. We suggest that in the future you possibly

base Part 2 off of Part 1. In other words, still have us do research, but more effectively tether

that research to the business and company portion of the project. We think that requiring

questions be answered both analytically and creatively would make this assignment more

beneficial by simulating a critical thinking exercise. Secondly, we knew what we wanted to do

with our project but felt that it would have helped us more if we could have seen samples of

projects that got perfect scores in the past. We felt that having a sample to look at would have

given us a better idea of what you wanted from us. Finally, we felt that there should have been

more instructions in class on HTML coding and website creation. While we understood what

was expected of us, it was difficult to build and set up our website based on just one lesson’s

worth of instruction. Overall, however, this project helped each of us gain a better understanding

of management information systems and its applications.

Documents

Group Project_WCMDMTJT