E Ink Case Study Analysis
Bronikowski, Jasinski, Yoder
February 10, 2012
E Ink is an attractive investment for venture capital. The company has a skilled management team that has proven able to overcome the complex technical issues of commercializing an emerging technology. As a result, E Ink’s current film technology is well positioned to become the dominant design in markets where E Ink has large market shares and high revenue potential. E Ink should focus its future development strategies and resources on improving and expanding the capabilities of its existing film technology to achieve dominant design status. In addition, E Ink should secure Intel Capital funding and use it to develop display-manufacturing capabilities to transition from a materials supplier to a display supplier business model.
Venture Capital Funding / E Ink’s Past Performance
In order for E Ink to achieve its end goal of becoming the dominant display design in the industry, they must continue to raise capital, learn from their mistakes, and improve upon their current strengths and strategy. Before a venture capitalist allots money to E Ink, they will need to evaluate the strengths and shortcomings of E Ink’s current and past business structure and decisions.
The founders of E Ink, Joe Jacobson, Russ Wilcox, and Jerry Rubin, each have unique backgrounds and complementary skills creating a balanced mix of technical skill and business experience. Each of the three founders proved to be capable fundraisers, which was essential for the foundation and growth of E Ink. Additionally, E Ink’s initial emphasis on protecting intellectual property enabled them to license patents and protect their first mover advantage in the market. By 1999, E Ink had acquired, licensed, or filed 26 patents (Yoffie 3). Patent protection was essential for E Ink’s sustainability because its main advantage was being a technology leader focusing on R&D.
In addition to making it difficult for other firms to mimic E Ink’s technology, E Ink also sought out strategic partnerships with well-established companies. E Ink partnered with Toppan, a global printing company, to provide coating capabilities as well as Sony to integrate the E Ink technology into eBooks (Yoiffe 6). E Ink was also capable of build strong relationships with investors which proved to be essential for survival in January of 2004, when E Ink was in desperate need of additional funds.
In addition to capital, a strong management team is imperative for a successful business. Over the past few years E Ink has managed to foster a strong management team led by experienced CEOs and surrounded by many experienced researcher, engineering, and process-development teams. This robust management team has allowed E Ink to overcome obstacles and endure downturns. The toughest period for E Ink occurred when the company became overly ambitious, pursuing too many opportunities and markets and spreading itself way too thin. Initially, E Ink attempted to capture three markets: large-area displays, flat-panel displays, and the publishing industry (Yoiffe 4). E Ink learned that the manufacturing process for large signs was much more difficult than expected, and it also faced problems with implementation and the technology was not well received by consumers.
By the middle of 2003, E Ink found itself behind on many of its commitments and incapable of upholding a number of its promises. Therefore, the decision was made to focus solely on the development of paper-like graphical displays for electronic publishing devices. This decision marked the end of E Ink’s early exploratory stage, in which E Ink was exploring several markets and still determining its capabilities and strengths. Focusing on eBooks allowed E Ink to move into the intermediate development stage, where the company could focus more resources and time on...