Ronald T. Wilcox / Business Administration
During the mid to late 1990's many small firms raised large amounts of capital to invest in Internet-related businesses. The “dot-com bubble” ensued and its deflation bankrupted many of these small businesses, destroying hundreds of billions of dollars in wealth. The financial waves emanating from this collapse are the stuff of history and well-documented in the financial press.
There is little doubt that a second wave of Internet-related investment is now underway. This investment looks much different from its counterpart of mid 90's. Angel investors and venture capitalists are far less willing to fund models that don't show strong potential for near-term profitability. Young companies have been forced to run leaner operations and curtail aggressive expansion plans to satisfy the demands of investors for profits, or at least limited losses.
Few companies that started with cash rich business models of the 90's have successfully retrenched and adapted to the new demands of the capital marketplace.
One such company that has done so successfully is SmartOps (smartops.com). Started with four people and a substantial amount of venture capital during the pre-bust days of 1999, SmartOps now employs over 70 people and turns a profit. SmartOps has adapted from being a website that offered information on some new research in inventory management tools to a suite of sophisticated software products that can be distributed and managed using Internet-based tools. Some of its clients include Hewlett Packard, John Deere, Caterpillar, and Bayer Material Science. It has emerged as a leader in the field of inventory optimization software, successfully retrenching its growth strategy in the face of the capital restrictions that it faced shortly after formation. In many ways, SmartOps is a model for what a firm must do to be successful in this second wave of Internet-based technology investing.
I would like to take three Darden students to Pittsburgh, the home of SmartOps, to write a field case on the company. The case would focus on the aforementioned retrenchment issues and be published through Darden Publishing. Other business schools could use this case as part of their own curriculum. I know the President of SmartOps, Sridhar Tayur, quite well. He and I were colleagues at Carnegie Mellon's Graduate School of Industrial Administration prior to my departure to Darden and his departure to run this company. I have already spoken to him about writing this case and he is enthusiastic.
The award money would be used to cover the cost of travel to and from Pittsburgh for myself and three students as well as possibly some costs associated with production of the case.