First Case Discussion
Read the cases on Craigslist and Linksys posted in the readings and discussion section under week 2. Please answer the following questions related to the cases. You may comment on the post and use it later for the participation portfolio.
- What is common between the two cases in terms of the recognition of an entrepreneurial opportunity? What is different?
- Do you think there would be a difference in the way the two companies are organized? Why or Why not?
- What is the key source of innovation for the two companies? Do you expect to see this change?
These two business opportunities seem to have one major thing in common. Their ideas evolved into something not previously planned, and when they realized the potential they took a chance and went for it. However they are also very different in ways. Linksys idea came from its suppliers whereas Craiglist evolved out of a more philanthropic cause.
The differences in the way each business plan was executed lead to very different organizations. Linksys is known for frugality and running its business lean, cutting costs wherever possible. Craiglist on the other hand is organized around community service and a simplistic easy to use design.
Linksys continues to use market trends and knowledge gained from suppliers and customers to stay ahead of the curve. By taking calculated risks and being the first in the market Linksys is able to gain an advantage over its competitors. On the other hand Craiglist is very different. Due to the nature of the business their unique “free” setup allows most people to use it for free. This in itself is innovative; however the key to Craiglist is not innovation, but rather staying true to the principals that the company was founded upon. The site remains free, and has stayed true to its values of helping the community and keeping the site simple, something which its users prefer over other companies.
One common aspect between the two cases in that both opportunities provided a services that was only possible because of prior relations with other people and companies. In the Craigslist case, the founder was able to provide a service that did not include the functionality and aesthetes that others provided because it is built on trust. Linksys emerged by providing a product that was not previously available therefore, they created their own market niche.
Both of the founders of the companies have shown desire to be apart of nearly all of the events that occur within their company. In both cases, the owners operate with the most cost effective approach to serving their customer. I think if the two entrepreneurs switched companies, the operation of them would remain similar to what they are now.
In the Linksys case, the key source of innovation was being able to offer new technology that was simple, relatively low cost, and met its objective. The changes that made them successful were expected but they were able to provide them before and better than competitors could. For Craigslist, I think the resulting success was quite unexpected. The product does not work on appeal but simplicity and trust. I would not have expected Craigslist to grow as it has on its bear web design. The power of word of mouth and trust is shown in this case.
I think that Linksys is much more proactive in its recognition of new entrepreneurial opportunity. Through several generations of networking technology, it has managed to stay at the head of its industry by correctly reading markets and inserting itself into the value stream. Craigslist’s growth into new markets seems very much to be an extension of its one original success in connecting people.
Both companies appear to run very lean, one by design and one as a byproduct of philosophy. Because of Linksys’ sheer sales volume I would imagine that there is a much more rigid system of roles and to some extent specialist cultures. Craiglist seems to want to remain an early stage entrepreneurial venture, relying on a culture of philanthropy that is likely to be diluted through growth.
As I see it, Linksys’ source of innovation is in adapting expensive technologies to small business and personal networking solutions. Craigslist’s innovation is really its core belief that good can be done by connecting people. I don’t think it has does anything “new” with regularity, it just finds new ways to apply its system. I don’t see this changing any time soon (unless Craiglist does sell). With the sale of Linksys to Cisco, however, I expect the company to become more focused on R & D, being the first to introduce new technologies.
I think that the main commonality is that they found a way to provide value and trust to people and then took advantage of the opportunities that those people offered. Lynksys was providing a great value to the Taiwanese manufacturers through DEW, and they were rewarded when they offered new ideas to them. Craig was providing info that people wanted to know. When he built his website, people came because he was providing value to them, and they trusted him.
I don’t think that the companies could be more different organizationally. One is complicated with many product lines, an international supply chain, research and engineering groups, etc. The other is a group of computer programmers and some accountants that have one product and sell nothing physical.
If innovation is the intersection of technological possibility and market need, I feel that Linksys gains its innovation from increased technological possibility and Craigslist gains its innovation from listening closely to the market need.
~Joe
The common factor in both the cases is that the respective entrepreneurs identify and solve problems employing some kind of innovation. The difference is in the desires that drive each entrepreneur. Craig’s List and its success is a result of entrepreneurship that is driven by the desire which has its end in meeting peoples need while Linksys is results of entrepreneurship motivated with desire to be financially independent and make money by meeting peoples need. This difference is manifested in business strategies, efforts put in etc. Both entrepreneurs would have a different understanding of ‘success’.
On one hand I think there will be a difference in the way the two companies are organized while on the other I think they may not be. Since the desire that motivates both the entrepreneurs are different, somewhere I expect it to take tangible form in the companies being organized differently, but on the other hand since both companies have a goal of meeting the need or solving the problems of the customers, they may not be necessarily organized differently.
Key source of innovation in the case of linksys would be providing convenient solutions to the customers and improving them with improving technology. I think the innovative aspect of Craigslist would the idea of not being a traditional profit minded business (which probably makes it succeed more than monster.com) .
- Gagan
I think the common thing between two entrepreneurship story is that both Newmark and Tsaos could see the potential in web and networking, respectively as growing markets. As an analogy, they both find the potential in communication technology: Newmark helps people to communicate through web on the other hand, Tsaos make electronic devices to communicate each other through cables and finally through WiFi technology. In both cases, they did not hesitate to go in to market with their ideas. Newmark, found the need to a web service where he can post the advertisements for his contractors by experiencing the difficulty in sharing information among e-mail lists. He immediately reacted to this necessity and created craigslist. Similarly, Tsaos saw the potential to sell the printer networking technology in USA which belongs to the Taiwanese manufacturer that they work with.
I believe that the main difference between two is that Linksys achieved to be a more professional entrepreneurship example compared to craigslists. I believe the main reason behind that was the fact that Newmark did not aim to create a company which makes billions of dollars. He rather wanted to create a company where he can work on things that he enjoys to work for. We can see this fact in his rejection of a big advertisement offer from Microsoft and refusal to sell the company to big firms with high profit. On the other hand, in linksys case Tsaos extent their companies with new technologies, they adopt to market quickly and became a leader in the market in a fairly short time. Finally, believing that it would increase the competition power of the company in the market, they sold the company to Cisco.
I believe that the most critical decision that Newmark has made is rejecting the Microsoft’s advertisement offer. I believe that one of the most important reasons in craigslist is its simple interface as much as the reliability that they gain. Banners and ads cause users to loose their attention to what really they want to. Hence, I believe Newmark made a very critical decision by keeping the site’s web interface simple.
In my opinion, the most critical decision made by Victor Tsao was taking the risk to release the wireless router product which is designed for a wireless standard which is not accepted yet. This example showed me that one of the most important skills in entrepreneurship is to be able take risks as much as finding a potential market. I believe the status of linksys would have been very different by now if they chose to wait to release their product.