Wouter Buijze: 6172466
Tijmend de Vries: 5947472
Teacher: Vladimir Vladimirov
Critical success factors
According to Sahlman, the success of entrepreneurial ventures, such as The Knot, is dependent on four critical success factors, namely the people, the opportunity, the deal and the context. Each of these factors is dynamic and the entrepreneur must constantly reevaluate and adjust the four factors to create value.
The category people include the key players of the entrepreneurial venture. Within this category, the strengths and weaknesses and the experience of the people involved is critical. The entrepreneur has to determine if something is missing in the team, thus if people should be added or replaced. The Knot’s management team consists of four ex New York University’s Film School students. All of them are experienced entrepreneurs. First, Liu and Roney are co-founders of the CD-ROM development company RunTime Inc. Pervious, Liu was an experienced manager and Roney spent six years as creative director and editor. Second, Wolfson and Fassino are founders of the Digital Media Division for Margeotes Fertitta + Partners. Before, Wolfson was founder of a creative production company and Fassino has experience in the advertising industry. The two different companies successfully collaborated at the Sotheby’s project. The four partners emphasize the potential of their collective experience and know-how, including management, advertising, the creative industry and production. They found Element Studios in 1995 to capitalize their abilities. After the acquisition of Bridal Search, Russ and Becky Casenhiser were added to the management team. Both of them were successful entrepreneurs as well. Russ developed the industry’s largest, searchable database and Becky procured and maintained relationships with all the manufacturers. Especially their experience in retail was valuable when the business model developed further.
After all, the team of The Knot consists of capable people with experience in multiple disciplines who complement each other. However, when entering the gift registry business, in which inventory management and delivery arrangements would be crucial, there is a need for people with experience in logistics. Experienced people could be recruited as employees or entrepreneurs in this industry could be added to the management team.
The characteristics of the opportunity are critical for the success of the venture as well as for the way the entrepreneur should respond to a certain opportunity. Characteristics of the opportunity include the nature and the possibility to replicate by competitors. The task of the entrepreneur is to determine if the opportunity should be exploited immediately and to set eventually milestones to assess the success of the project. Element was founded with the aim to realize a successful media business, however, there was no focus on a certain opportunity before the company was founded. The management team started looking for an opportunity and was attracted by the high advertising revenue in the wedding industry. They found an opportunity in the lack of a fresh competitor and the possibility to differentiate by building an online business foundation. Besides the possibility to differentiate, the online business foundation required a lower investment. Thus, the initial business model consisted of creating an online medium that attracts visitors and generates advertising revenue. The Knot’s team formulated their initial goals as ‘becoming a full-service online wedding resource and a recognizable brand in the industry’. The initial investment is relatively low compared to the potential revenue with an advertising market of $168 million and a limited number of competitors. Since the idea is easy to copy by potential competitors, it was important to exploit the idea immediately to gain first mover...