Start A Fire Case Analysis

Start A Fire: Creating Value and Growth” case by Sarit Markovich, Oded Golan, and Charlotte Snyder, Northwestern Kellogg School of Management, available in your Harvard Coursepack under “Required Supplemental Materials” in the syllabus.

General Guidelines
Your analysis should be no longer than 5 pages – double-spaced, 1-inch margins, and 12-size font. You can have up to two pages of exhibits as an appendix and one page for references. You may also include a cover sheet as an additional page if you want. If you do not, include a cover sheet make sure your name is prominently displayed on the submission.

Assume the role of marketing consultant brought in to advise Star a Fire’s Oded Golan and his partners. Your analysis should be addressed to him.

To write your analysis, please follow the steps below:
1. Skim the case quickly to get an overview of the situation it presents.
2. Read the case thoroughly to digest the facts and circumstances.
3. Carefully review all the information presented in the exhibits and take notes if necessary.
4. Decide what are the key issue(s) that Start A Fire is facing.
5. Conduct a situation analysis, secondary market research, buying behavior analysis, marketing strategies, and value offering analysis.
6. Provide your recommendations for the key issue(s) that you identified.
7. Support your diagnosis and opinions with reasons and evidence.
8. Provide an appropriate action plan

The sections of your report should be the following:
1. Executive summary (this comes first, but is written last)
2. Key issue(s)
3. Recommendations and Rationale
4. Action Plan
5. Appendices: SWOT analysis, secondary market research main findings, buying behavior analysis, marketing strategies, and value offering analysis. Any references should be in the current APA format.

To write your analysis, please follow the steps below:
1. Skim the case quickly to get an overview of the situation it presents.
2. Read the case thoroughly to digest the facts and circumstances.
3. Carefully review all the information presented in the exhibits and take notes if necessary.
4. Decide what are the key issue(s) that Start A Fire is facing.
5. Conduct a situation analysis, secondary market research, buying behavior analysis, marketing strategies, and value offering analysis.
6. Provide your recommendations for the key issue(s) that you identified.
7. Support your diagnosis and opinions with reasons and evidence.
8. Provide an appropriate action plan

The sections of your report should be the following:
1. Executive summary (this comes first, but is written last)
2. Key issue(s)
3. Recommendations and Rationale
4. Action Plan
5. Appendices: SWOT analysis, secondary market research main findings, buying behavior analysis, marketing strategies and value offering analysis. Any references should be in current APA format.

Grading
For grading we will be looking for completeness, internal consistency, justification, flow and professionalism. Most important is whether you identify the most critical issues in your analysis and if your proposed plan addressed them in a realistic way. Your written case analysis will contribute 12% to your course grade.

ANSWER

Start A Fire Case Analysis

Executive Summary

Start A Fire has been experiencing issues with its sustainability and growth in business. The company has been facing growth challenges, Funding issues, and creation of value to brands. Start A Fire failed to secure its funding with Venture Capital since its revenue was insufficient to meet the short and long term returns. To create value and achieve growth, Start A Fire will change its Businessbusiness’s direction to create new business services that include full service, marketing, and web development. These will offer marketing solutions to the brand to create more value and facilitate the business’s sustainable growth.

Key Issues

Oded Golan and his startup cofounder changed an idea generated at Golan’s Tel Aviv apartment into a venture that raised more than $3.5 million and served more than 3,000 biggest brands. Start A Fire achieved the goal of sharing great content with tents of thousand influences, brands, bloggers, and individuals who share and distribute great content. Their patent technology has permitted users to modify their websites as well as offered access to enhanced forms. However, from a business standpoint, Start A Fire failed to reach where the brand could be sustainable and independent.

Brands were relying on their innovative distribution of content and their social media management platform that allowed the brands to engage and communicate with their followers. Turning their technology into Business has been a big challenge to entrepreneurs. Ideally, growing a business is challenging due to the cost growth since the owners have to spend money during growth. As a business grows, different opportunities and problems demand a varying solution since what worked a year ago might not be the best approach. Overcoming and recognizing the pitfalls with growth is essential for a business to continue thriving and growing.

Another great challenge was the growth of the business to remain a sustainable and profitable business. Over the four years of investments, they were able to offer several products to varying customer segments, thus being able to chase the business’s sustainable growth and profits. However, they received an email that their second round of financing by venture capital firms had fallen after VC changed their minds. This is because, despite 20 million page views, the investors found that the revenues were insufficient to create long and short term returns. The investors wanted to see at least $100,000 in recurring revenue for Start A fire to secure another round of funding.

Another major issue with Start a fire was funding a consumer software company that has high fixed costs and low monetization opportunities. Start a fire had a funding problem that they needed to solve to save the Business. The company will face challenges if they lack aggressive growth that would cater to their short-term and long-term opportunities. After the withdrawal of VC, start a fire had to look for more opportunities that will meet the funder expectations. Start A fire had to ensure that they create value and have more monetization strategies that will enable them to grow successful.

Based on the case study findings, there is inadequate consideration of the growth opportunities within the core business at Start a Fire. Another issue with Golan’s team was that despite the company’s success in enlisting the new brands, the traffic that these brands had generated was not as per their expectations. The problem of lower than expected page view volumes added to the challenges of raising new funds for the company. Additionally, after the brand decided to explore monetization through subscriptions, many brands that were using their free service were unwilling to shift into the subscription model. Therefore, the main issues with Start a fire included funding challenges, growth issues, as well as creating more value for the brands.

Recommendation and Rationale

Too many companies have failed to achieve growth targets in profitability and revenue. However, the profitability of gaining profitable growth is strengthened with the organization’s clear execution infrastructure and a strong growth strategy. To generate additional revenue and maintain sustainable growth for Start A Fire, there are many opportunities that the Business can utilize to increase its revenue and profitability to cover the funder expectations and meets the business requirements. Achieving growth and increasing the profitability of Start A Fire will call for various strategies, including strengthening investment in their patent technology, growing the core business, and the sub segmenting consumers and growing the adjacent opportunities.

Growing Core Business

Over the years now, digital publishers have been generating revenue by offering content for brands. The branded content business model has become a vital stream for revenue that has enabled publishers to thrive. The main Business for Start A Fire is to enable the brands to increase their engagement by facilitating more communications with the consumers. Brands have relied on Start A Fire to create webpages that modified the existing websites and then share the links to the followers through various social media platforms such as Pinterest and Facebook. Start a Fire offered analytics services that measured the effectiveness of various media campaigns and enabled brands to prioritize their marketing efforts. Start A fire should think of monetization strategies such as a sponsored content link showing that the sharing was powered by Start A fire and access to the analytics services. Through the shared link, Start A Fire will build awareness to other brands about their patent technology, which will attract more brands, thus gaining more revenue from their core business.

Rather than focusing on supporting the large brands in the core business, Start A fire should enhance its marketing efforts to reach different brands. This will generate more revenue by increasing the number of active brands that entail brands that create and share the links through Start A Fire. For instance, after the brand recruited the first hundred companies, they experienced organic growth due to the content recommendation, which stated that Start A Fire powered the link. Ideally, if the company can achieve a high number of brands, other companies, and marketing managers within the industry will notice their competitors’ advantage and request invitations to utilize Start A fire.

Growing the adjacent opportunities

Identifying the new revenue streams can enable the Business to establish its growth strategies. Start A fire needs to have a powerful approach to tapping new business opportunities. The common reasons for business growth are identifying growth opportunities. The easiest path for growth in Business is expanding adjacent opportunities to increase profitability and revenue. Many businesses have pursued growth by expanding into adjacent opportunities. For instance, Start A Fire can decide to inject short term ads on the publisher’s page. By utilizing their technical abilities, they can manipulate the publisher’s page and generate ad revenues. Start A fire should seek contracts with marketing managers within companies that will benefit from Start A Fire. To generate additional revenue, they can seek contracts and subscription models.

Identifying a new direction for the Business

Considerably, business situations need a cross-examination to identify the sustainability of the Business. Despite the company’s success, the branded content business model has failed in enabling the company to reach a sustainable position. The traffics that the brands have generated failed to reach the expectations. Irrespective of the brand size, the 20 million page views have failed to create satisfactory long and short term returns for Venture capital fund. Therefore, due to the dire circumstances, Start A fire needs to head in a new direction to continue growing. Changing the business direction, in this case, means adding new services to ensure that the company remains profitable and competitive. Start A fire should change its Business to a full service, marketing, and web agency to offer high performing digital marketing solutions. Through its patent technology, Golan and his team can deliver through the leading edge of technology. Ideally, within the content being the main component of marketing and web projects, Start A Fire can succeed in the content creation and marketing service business. Since content marketing is a huge trend, the new business services can add revenue to Start A Fire since businesses are using content marketing rather than interruptive marketing. Therefore, Start A Fire can invest in creating quality content to deepen connections.

Action Plan

To create more value and growth, Start A fire will change the direction of the business by adding new services related to full service, marketing, and web development. Start A Fire will take an experimental approach to the new business model. This will involve testing various features through the integration of new business services to the brands. If this strategy proves to be particularly effective as highlighted, Start A Fire will incorporate the marketing services. The new business services will be used to attract a different audience who might provide financial assistance for the startup to remain afloat. As the customer demands, technology, and market condition change, it is important for Start A Fire as a startup to adapt to remain relevant and growing. Start A fire will offer new marketing services that will be effectively increasing their value to brands and facilitating growth.