Kozmo.com - "We'll Be Right Over"

  • Reference: E-164-E

  • Year: 2000

  • Number of pages: 27

  • Geographic Setting: América del Norte

  • Publication Date: Jul 19, 2013

  • Source: IESE (España)

  • Type of Document: Case

  • Company: 30 millones

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Description

Joseph Park, co-founder of Kozmo.com, was euphoric. It was December 23, 1999 and he had just received a phone call about what he called the best Christmas gift of his life. A group of investors led by Amazon had decided to invest more that $100 million in his fledgling start-up. The capital markets were buoyant about all things related to the Internet and the NASDAQ was scaling to new heights every month. A quick IPO, which could help raise the cash needed to fuel Joseph's ambitious growth plans, seemed like a distinct reality for Kozmo in the short term.

Learning Objective

This case can be used in a first-year MBA or EMBA course as an example of a poor business plan. To that effect, it can be used to demonstrate what not to do: there is a poor executive summary (it is just cut and pasted from the body), and a lack of information in various parts, especially the financials. Although it is an inadequate business plan, there is enough information to do a good People-Opportunity-Context-Deal analysis. It effectively demonstrates that business plans are not plans, but rather starting points and, as Sahlman writes in his famous article, "a responsibility of management to fix things in real time." The case also provides the instructor with the opportunity to stress the importance of being prudent and avoiding building businesses that are highly context dependent. Before embarking on ambitious growth, the business model must first be validated, which takes time, effort and learning.

Keywords

Business Plan Failure Growth