Introduction to Case Studies in Entrepreneurship
Case studies in
entrepreneurship provide insightful examples of successful and failed ventures, offering lessons that aspiring entrepreneurs can learn from. These case studies typically address various important questions about the entrepreneurial journey, including idea generation, business models, funding, scaling, and overcoming challenges.
Case Study: Airbnb
Airbnb is a prime example of how innovative thinking can disrupt traditional industries. The company transformed the hospitality industry by allowing people to rent out their homes or rooms to travelers. Key questions and answers from this case study include:
1. How did the founders come up with the idea?
The founders, Brian Chesky and Joe Gebbia, came up with the idea when they rented out air mattresses in their apartment to attendees of a design conference who couldn’t find hotel rooms. This showed a clear demand for alternative accommodation options.
2. What business model did Airbnb adopt?
Airbnb operates on a
platform business model, connecting hosts with guests and taking a commission on each booking. This model allows for scalability without owning properties.
3. How did Airbnb secure funding?
Airbnb initially struggled to find investors. They eventually secured seed funding from Y Combinator after demonstrating the viability of their idea. Subsequent rounds of funding came from venture capital firms like Sequoia Capital.
4. What challenges did they face and how were they overcome?
Airbnb faced regulatory and trust issues. They built a reputation system to foster trust between hosts and guests and worked with local governments to address regulatory concerns.
Case Study: Uber
Uber revolutionized the transportation industry with its ride-hailing app. The key questions and answers from this case study include:
1. What was the inspiration behind Uber?
Travis Kalanick and Garrett Camp were inspired to create Uber after experiencing difficulty in hailing a cab on a snowy night in Paris. They saw an opportunity to improve the transportation experience.
2. What business model did Uber use?
Uber uses a
on-demand business model, connecting riders with drivers through a mobile app and taking a commission on each ride. This model leverages technology to match supply with demand efficiently.
3. How did Uber raise capital?
Uber raised its initial funding from angel investors before attracting significant venture capital from firms like Benchmark and Google Ventures. Their ability to scale quickly attracted substantial investment.
4. What obstacles did Uber encounter and how were they addressed?
Uber faced numerous challenges, including regulatory issues, competition, and public relations problems. They navigated these by aggressively lobbying, improving their service, and occasionally rebranding.
Case Study: Spanx
Spanx, founded by Sara Blakely, is a compelling example of bootstrapping and market disruption. Key questions and answers from this case study include:1. How did Sara Blakely come up with the idea for Spanx?
Sara Blakely came up with the idea for Spanx when she cut the feet off her pantyhose to create a smoother look under white pants. She realized there was a market for comfortable, effective shapewear.
2. How did Spanx start without external funding?
Sara Blakely started Spanx with $5,000 in savings, demonstrating the principle of
bootstrapping. She handled everything from product development to marketing herself, keeping costs low.
3. How did Spanx gain traction in the market?
Sara Blakely secured a meeting with a buyer at Neiman Marcus, who decided to carry Spanx in their stores. Further exposure came when Oprah Winfrey endorsed the product on her show, significantly boosting sales.
4. What challenges did Spanx face and how were they overcome?
Spanx faced skepticism from retailers and manufacturers initially. Sara Blakely persisted by demonstrating the product’s value and eventually won them over with her passion and tenacity.
Conclusion
These case studies highlight the diverse paths to entrepreneurial success and the importance of resilience, innovation, and strategic thinking. By studying these examples, aspiring entrepreneurs can gain valuable insights into the complexities of starting and growing a business.