Entrepreneur Analysis- Small Business

Kara Welker Professor Adams MGMT-428 2/10/2014 An Inspiring Failure Mobileation Inc !as a famil" o!ned small b#siness !it$ $#mble be%innin%s At t$e $ei%$t of t$e com&an"'s s#ccess( it $ad "earl" sales into t$e millions of dollars Mobileation !as at t$e c#s& of becomin% a national &la"er in t$e to" ind#str"( b#t sadl" t$e com&an" lost traction )oon after( it fell *ictim to America's intensel" com&etiti*e econom" Alt$o#%$ Mobileation did not s#r*i*e( t$e lessons t$at can be learned from t$e com&an" ma" ser*e as an e+cellent %#ide for an"one t$inkin% abo#t startin% t$eir o!n b#siness Mobileation's ,o#rne" enco#ra%es as&irin% entre&rene#rs to kee& im&ro*in%( &la" to t$eir stren%t$s( and to kee& a close e"e on t$e com&etition It is t$ro#%$ fail#re t$at tr#e kno!led%e can be attained( and t$o#%$ Mobileation Inc did not s#cceed( t$e entre&rene#rs be$ind t$e *ision are far from abandonin% t$eir entre&rene#rial s&irit Great b#sinesses are s$a&ed b" brilliant minds( and Mobileation is no e+ce&tion M" fat$er( Timot$" -'Toole( came #& !it$ t$e idea for Mobileation It $it $im !$ile !atc$in% m" t$ree siblin%s and me &la" on t$e ride on to"s in To"s-.-/s back in 1001 T$ere !as a decent selection( b#t not$in% e+traordinar"( and more im&ortantl" t$ere !as no !a" to test o#t t$e to"s before b#"in% 2ookin% #& at t$e mo#ntain of miniat#re )/3s and 4ee&s $e !as str#ck !it$ an idea for a b#siness Tim belie*ed t$ere !as a lar%e market for c$ildren's ride on to"s( and t$at $e co#ld create a s#ccessf#l retail o&eration in t$is nic$e market Wit$ a ca&ital inf#sion from m" %randfat$er( and a lot of $ard !ork( Mobileation $ad its first store

#& and r#nnin% in Glas%o! 56( ,#st in time for t$e $olida" season T$e &$"sical store !as onl" o&en for aro#nd si+ mont$s( and closed !$en it became clear t$at t$e location !as not o&timal for t$e tar%et market Tim's "o#n%er sister( Grace( $ad ,#st ret#rned from a $iat#s in 6#ro&e( and #&on $earin% abo#t t$e b#siness decided to take t$e idea and transform it into an online onl" retailer Mobileation com !as la#nc$ed in 1007 and became t$e first online to" store T$e com&an" started o#t solel" as a !ebsite for c$ildren's ride on to"s !$ose mission !as to offer free s$i&&in% and an e+cellent selection at a reasonable &rice It !as slo! %oin% for t$e small b#siness !$ic$ did not $a*e a lot of ca&ital in t$e be%innin% Grace !as t$e onl" em&lo"ee for t$e first co#&le of "ears After t$e traffic &icked #&( Grace $ad $er mot$er take o*er t$e c#stomer ser*ice as&ect of t$e b#siness !$ile s$e $andled *endor relations( addin% &rod#cts( marketin% and %eneral !ebsite #&kee& Mobileation !o#ld attend t$e international to" fair eac$ "ear to sco&e o#t t$e best ne! ride on to"s to $it t$e market to kee& t$eir &rod#cts #&-to-date T$e com&an" $ad stead" %ro!t$ !it$ t$eir sales to&&in% o#t at 82 9 million in 2007 )oon Mobileation decided to branc$ o#t into ot$er sections of c$ildren's to"s :" branc$in% o#t( Grace $o&ed to %ain a lar%er market s$are for t$e small com&an" !$ic$ $ad stron% com&etition from To"s-.-/s and Ama;on T$e added &rod#cts ca#sed t$e !ebsite to lose its nic$e market( and t$e !ebsite !as becomin% increasin%l" diffic#lt for c#stomers to na*i%ate )ales be%an to sli& startin% ,#st before t$e Great .ecession( b#t Mobileation $eld o#t #ntil 2012( !$en its debts !ere too $i%$ to o*ercome T$ro#%$ t$e co#rse of its lifetime Mobileation Inc e+&erienced a *ariet" of iss#es !$ic$ are common for small b#sinesses W$en startin% o#t !it$ *er" little ca&ital( it !as necessar" to $a*e m#ltif#nctional ,obs t$at &erformed man" different f#nctions As t$e

b#siness %re!( onl" a small n#mber of ne! em&lo"ees !ere added As t$e o!ner( Grace fo#nd it diffic#lt to dele%ate $er smaller tasks to ot$er em&lo"ees Instead of $irin% a marketin% mana%er to create and mana%e t$e online marketin% cam&ai%ns( s$e c$ose to $andle t$em $erself Alt$o#%$ Grace !as not entirel" #ns#ccessf#l at &romotin% Mobileation( s$e did e+&erience &roblems !it$ online marketin% at t$e be%innin% :eca#se of $er lack of e+&erience #sin% online marketin% tools( mistakes !ere made t$at cost t$e com&an" se*ent" t$o#sand dollars in one "ear alone It is often said t$at tr#e entre&rene#rs can <do it all= in re%ards to startin% t$eir b#siness( b#t kno!in% "o#r !eaknesses and findin% &artners !$o com&liment "o#r skills is ke" to lon% term s#ccess >om&etition can be a a $el&f#l tool( and also a bitter enem" !$en r#nnin% a b#siness Mobileation !as t$e first online to" store( b#t man" more follo!ed s$ortl" after In t$e be%innin% t$ere !as *er" little com&etition( beca#se t$ere !as not a lar%e market for online retail "et As t$e market %re! so did t$e com&etition( and it &#t &ress#re on Mobileation to kee& im&ro*in%( contin#o#sl" Grace sa! t$e astronomicall" $i%$ s$i&&in% costs t$at !ere added on at t$e last min#te of t$e ot$er bi% online retailers( and decided to incl#de s$i&&in% in $er &rices T$is made it clear to o#r c#stomers t$at t$e" !o#ld not be &a"in% an" added fees !$en t$e" !ent to c$eck o#t T$e com&etition of retailers s#c$ as To"s-.-/s !as a dri*in% force be$ind &ro*idin% c#stomers !it$ t$e most clear &ricin% It also led to $i%$er ?#alit" ima%es( and more detailed descri&tions on &rod#cts :" seein% $o! ot$ers $ad &resented a &rod#ct Mobileation !as able to %a#%e !$ere and $o! t$e" s$o#ld &resent t$e same &rod#ct >om&etition $el&ed a small b#siness !it$ an #nfoc#sed b#siness &lan re%ro#& to im&ro*e and e+&and on ideas T$e same com&etition t$at &#s$ed Mobileation to %ro! also $ad a $and in t$e

com&an"'s e*ent#al do!nfall W$en sales $it all time $i%$s in 2007 and 2009 t$e com&an" !as &rofitable( and !as forced to take a closer look at $o! to contin#e %ro!in% Ad*ertisin% and marketin% s$o#ld $a*e been Mobileation's to& &riorit"( b#t instead t$e com&an" foc#sed $ea*il" on e+&andin% t$eir &rod#ct lines to com&ete !it$ stores like Ama;on and To"s-.-/s in *ariet" Wit$o#t a marketin% de&artment( or e*en someone to de*ote all of t$eir attention to broadcastin% Mobileation to t$e masses( t$e com&an" !as $a*in% a to#%$ time kee&in% #& !it$ t$eir lar%er com&etitors T$e lack of marketin% ca#%$t #& to t$e com&an" ?#ickl" and sales be%an to di& Wit$ t$e economic crisis of t$e Great .ecession( conf#sion o*er t$e direction of t$e b#siness( and cr#s$in% com&etition from lar%e retailers Mobileation !as not in a &osition to kee& its !ebsite r#nnin% If an as&irin% entre&rene#r !ere to st#d" Mobileation t$e" co#ld learn a %reat deal abo#t t$e tr#e str#%%les of not onl" creatin% a !ort$!$ile b#siness( b#t in scalin% and maintainin% t$eir creation 5#rin% its si+teen "ear lifes&an( Mobileation &ro*ed t$e need for $i%$ ?#alit" to" stores !it$ a !ide *ariet" of ride on to"s -ne lesson t$at &ros&ecti*e entre&rene#rs s$o#ld take a!a" from t$is e+am&le is t$at no matter $o! %ood "o#r idea( or if "o#r b#siness makes it &ast its first fi*e "ears( "o# can ne*er ass#me t$at "o# can contin#e on in t$e same manner As "o# sit idl" b"( someone else !ill take #& t$e torc$ and s#r&ass "o#( &er$a&s e*en sn#ffin% o#t "o#r torc$ on t$e !a" Anot$er misconce&tion t$at ne! b#siness creators $a*e is t$e notion t$at real b#siness %eni#ses do e*er"t$in% t$emsel*es :" lookin% at Grace's e+&eriences !it$ Mobileation( and $er $esitation to %i*in% #& control of $er brain c$ild( "o# can see t$at it is better to &la" to "o#r stren%t$s :" str#%%lin% to #nderstand online marketin% and not sim&l" findin% someone !it$ t$ose skills to &ro&el t$e brand( s$e ended #& losin% not onl" c#stomers( b#t a %ood deal of mone"

T$ose entre&rene#rs !$o $a*e %reat creati*e *ision( b#t !ere ne*er *er" %ood at mat$ s$o#ld &artner !it$ someone n#mericall" inclined to $andle t$eir b#siness' finances T$e final takea!a" is t$at com&etition is al!a"s &ortra"ed to be a disad*anta%e( b#t in tr#t$ "o# can #se t$e com&etition to lift "o#r com&an" to ne! $ei%$ts @ot onl" can "o# #se t$em as a com&arison to "o#r o!n b#siness model( b#t also to decide $o! "o#r com&an" s$o#ld &ro%ress Grace decided to e+&and on $er ori%inal &rod#ct line and to branc$ o#t to com&ete in man" ot$er areas of to"s Aad s$e seen t$e *al#e of sta"in% in a nic$e market solel" foc#sed on .ide--n-To"s instead of %oin% $ead to $ead !it$ m#c$ lar%er com&etitors( t$e com&an" mi%$t $a*e been able to reco*er from its marketin% fail#res Mobileation started o#t !it$ a sim&le idea and modest %oals to create a small income for one &erson -*er its 17 "ear lifes&an t$e com&an" s#r&assed all e+&ectations and %re! too lar%e for Grace and $er small team to mana%e Mobileation mi%$t $a*e failed( b#t t$e c$allen%es $eld *al#able lessons to t$ose !$o stri*e to o!n s#ccessf#l a b#siness of t$eir o!n one da" Partnerin% !it$ kno!led%eable em&lo"ees t$at are foc#sed on contin#o#s im&ro*ement can ele*ate "o#r b#siness to ne! $ei%$ts >om&etition s$o#ld be *ie!ed as a c$allen%e( t$at if con?#ered !ill %reatl" im&ro*e "o#r com&an" Mobileation's creators $a*e taken t$ese lessons to $eart( and instead of %i*in% #&( are f#ll of creati*e b#siness &lans t$at t$e" are c#rrentl" !orkin% to im&lement