Creating a start-up and developing it into a successful organization is a difficult and risky enterprise, and such companies usually face a high probability of failing (Surowiecki, 2014; Teten, AbdelFattah, Bremer, & Buslig, 2013). The current paper analyzes the case study provided in a given video (“Start-Up Junkies,” n.d.), and supplies several recommendations for the described enterprise.
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The video briefly describes the fifth project of Ron Wheener, an entrepreneur who enjoys creating start-ups (“Start-Up Junkies,” n.d.). It is possible to point out several issues which may be viewed as drawbacks of Earth Class Mail, the business in question. First and foremost, it should the company has purchased or rented very large premises, much larger than what is needed to satisfy the needs of all its current clients. Ron Wheener demonstrates large premises which are to serve his multi-billion company in the future. However, the businessman also points out that the enterprise currently has only approximately 1,000 clients (“Start-Up Junkies,” n.d.). It can also be seen that the space that the entrepreneur demonstrates is not filled with any equipment or personnel; it simply stands idle. Therefore, an apparent major problem is that a large amount of money has already been invested in the premises, even though the organization can currently work inside a much smaller space. The money that has been spent on purchasing or renting this space could instead have been utilized to promote the company via buying advertisement, for example.
Besides, it is possible to criticize the very idea of this startup. Of course, around the world, there exist a large number of individuals engaged in the delivery of paper mail, and it may be profitable to digitalize this mail, scan the letters and send them to customers electronically. However, in many cases, people seem to prefer to send e-mails rather than paper letters if they have access to e-mail anyway (Reiter, 2016). It may also be assumed that in cases when people use the classic paper mail, they often send some items (such as documents) which the addressee needs to receive in the physical form anyway. So there is little reason for individuals to write paper letters and send them to Earth Class Mail so that they would be scanned and digitalized (for additional cost) and then sent by e-mail. This seemingly undermines the prospects of the Earth Class Mail enterprise. Of course, this company may further develop because it probably will not have a large number of rivals; however, the threat of new entry may be rather high, as scanning letters and sending them electronically does not seem to require a very large investment; in fact, the classical post offices may start proposing such a service themselves.
On the whole, Earth Class Mail has several problems that need to be dealt with if the company is to start making profits. Therefore, possible advice to Earth Class Mail may include the recommendation to limit the resources spent on purchasing and maintaining premises. It is also possible to rent the already existing premises to other business, which would be better than letting them stand idle. Besides, it may be advised that the organization diversifies the range of services it provides so that if it does not have many customers purchasing the letter scanning services, it would be able to gain money from selling other services.
Start up junkies. (n.d.). Web.
Surowiecki, J. (2014). Epic fails of the startup world. The New Yorker. Web.
Teten, D., AbdelFattah, A., Bremer, K., & Buslig, G. (2013). The lower-risk startup: How venture capitalists increase the odds of startup success. The Journal of Private Equity, 16(2), 7-19.