The Knot

The Knot was formed in December 1995 by David Liu, the co-founder and CEO with a dream of building the country’s number-one wedding resource online. The core management team started with Daivd Liu (CEO), Carley Roney (VP of creative development), Michael Wolfson (VP of new business development) and Rob Fassino (VP of marketing). David Liu and Carley Roney co-founded RunTime, Inc. which was a CD-Rom development company. Wolfson and Fassino were the founders of Digital Media Division and later partnered with RunTime to create a very successful project. This planted the seed for them working together in the future and creating a successful media business based on past experience. The team eventually grew to encompass Russ Casenhiser (Director of operations), Becky Casenhiser (Director of marketing) and Eric Herz (Director of advertising sales). The management team was very well rounded and a strength of The Knot; however they were missing a key component in a financial expert. The management team was looking for a niche market that offered high advertising revenue, stable demand and stagnant competition. After extensive research they came up with a business model that would cater to the niche market of the wedding industry but operate initially online, and then would grow to encompass more traditional means providing comprehensive bridal content and services. The Knot would also later grow to include a gift shop, a registry, a book deal and ultimately a magazine. Initially they were able to become partners with AOL and believed with this strategic move they would be able to dominate the online wedding market. In order to be a successful business model The Knot would have to generate revenues, make profits and produce free cash flows. They felt they could generate revenues based on the fact that there were 2.4 million wedding per year and advertising revenues were very high. Also based on financial projections by their investment banker team they were able