This cases describes the founding, rapid expansion, and fall of an online entertainment venture through the Internet boom and bust. After a merger and painful restructuring, the entrepreneur was able to survive the downturn and reach cash flow break-even in 2002. He is now faced with difficult strategic questions about his ability to compete in each of its businesses: a small niche market where the company is the clear leader, and a larger, fast growing market where it faces powerful competitors.
This case can be used to illustrate the start-up process, from the initial vision and fundraising efforts, to rapid growth and subsequent dowturn and restructuring. The case is useful to discuss the issues of identifying new revenue sources as a process of exploration, the identification and exploration of cross-business synergies, and the role of vision and focus in new ventures.