Business: Longshot, Ltd
Owners: Ed and Terry
Age of Business: 5 years
Type of Business: Software
Employees: 10ish (largely independent contractors)
Scenario: Ed and Terry had a dream of starting the next industry disrupter in their garage, and they had early success. Enough that they were able to court and convince some relatives, friends, and local community leaders to invest in their startup. While they were great designers, they were pretty lousy businessmen. They often found that they burned through the money they raised faster than they had “planned.” Longshot, Ltd was always on the edge of having no money, and more than a couple times the company had less than $100 to its name. Because of the infrequency of their ability to pay on time, they had a revolving door of independent designers. 4 years into this and Ed is starting to show the strain of constant pressure and Terry is getting fed up with the constant lack of capital. The product is receiving mixed early reviews but they can’t seem to get out of beta testing. The strain and tension are making them angry at each other and their communication is starting to breakdown. One of their investors has stepped in to see if this endeavor is worth saving. She has asked that the three of you sit down and talk to Ed and Terry about Longshot and see if you can give them the advice to heal their relationship, get their business on track, and move towards a full launch of the product. Where do you start?