eCircle, a German Internet-based group communications company, was founded in 1999 with a half-dozen employees and a few hundred thousand users on its new C2C platform. Until early 2001, the founders had built eCircle technology platform, had acquired 4.5 million users and 90 employees, and had raised two rounds of financing. It seemed that the first company to overcome the challenges of a start-up – it had cash, advertisers for its C2C business and two customers for its new B2B … Read more »

eCircle, a German Internet-based group communications company, was founded in 1999 with a half-dozen employees and a few hundred thousand users on its new C2C platform. Until early 2001, the founders had built eCircle technology platform, had acquired 4.5 million users and 90 employees, and had raised two rounds of financing. It seemed that the first company to overcome the challenges of a start-up – it had cash, advertisers for its C2C business and two new customers for its B2B business. But despite their early success, the co-founder faced a number of challenges. Could they use a relatively successful C2C group communication platform into other profitable business, especially B2B offers? They could ward off new competitors in Europe and the United States? And they could manage to survive their cash flows for financing market slump? The difficult economic environment and the struggles and failures of the many Internet start-ups in the spring of 2001 growth strategy made more of a challenge for eCircle. His margin for error in such an environment was smaller than when the company started.
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from
Thomas Hellmann,
Christopher S. Flanagan
Source: Stanford Graduate School of Business
18 pages.
Release Date: 04 June, 2001. Prod #: E92-PDF-ENG
eCircle HBR case solution

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