Introduction: The case talks about four early stage start-up companies called Rational footwear,

Minova, Apollo health and Fuel-X. These firms have a few business product ideas in mind and

are thinking about the dynamics of the product launch. Rational footwear is as shoe designing

firm that has a patent on specially designed shoe soles that cure and prevent the onset of knee

osteoarthritis. They hope to manufacture sell the shoes in the retail market at a market price of

$250. Minova is a firm that has designed a special non-invasive technique gastric surgery to curb

obesity. The product has to be approved and launched in the market and may take time before it

gets to market. Apollo health is another healthcare startup that aims at opening special service

clinics with annual fee and lower costs of operation due to reduced staffing and IT based

management system. The firm hopes to make higher margins and revenues as compared to the

traditional clinics. The fourth firm Fuel-X is a research based firm that expects to develop

microorganisms that will increase the efficiency and yield of the biofuel production process and

hopes to either sell the technology or biofuels in the future.

Analysis: A few major metrics required to assess which firm has the best chances of success are

as follows:

1. Market size and growth potential – The revenue from sales to target market segment in terms

of volume and pricing decisions

2. Cost of development and launch – The initial cost required to develop the business and return

3. Cost reduction or efficiencies- Improvement in margins or reduction in substitute cost

4. Time to market – The time required from inception to launch in market

5. Marketing strategy- The decision of the firm to publicize the brand and reach target segments

6. Competitive landscape- The number of competitors with similar products

Alternatives considered: I compared all the businesses based on the attributes above and came

up with the following table to analyze which firm made had the best success rate.

Rational footwear Minova Apollo Health Fuel-X

5% penetration (10% of gasoline market)
Expected Revenue 4.1B 3B 2B 28B
Development Costs 350K 70M < 30 M
Launch costs 500K-10M
Timeline 8-10 months 6 years immediate < 10 years
Cost reduction 30000 100000 45% of existing 50B
direct sales force, word-of-mouth business model
viral marketing- publications and and insurance unknown- licesinsing vs
Marketing strategy creating a buzz conferences directory listings manufacturing
moderate to high
competiotion from moderate to high
low- from existing LAP-BAND- competition in
high cost unknown competition form of MD VIP, high- many small
Competition alternatives may spring up minute clinics startup companies
Return Very high high but uncertain moderate too high but uncertain

Recommendations: If I had to be a part of any of these startup ventures, I would definitely

choose Rational footwear as a project to work on. First, it has very high revenues and very small

launch cost making the return attractive. Although Fuel-X has a higher revenue potential than

any other firms, its success is very uncertain. The time for launch for Rational footwear is very

low. Although Apollo seems immediate too, it has a lower revenue potential. Out of all the four

options Rational has the best marketing strategy that is well defined and no similar product is a

competition. The return on investment is too high and it will break even very early. It effectively

reduces cost associated with knee replacement surgery by $30,000. It also has a very attractive

marketing strategy and distribution plan to stores and physicians. If the product gets covered

under insurance, its returns might sore up even further. Thus, Rational footwear makes the best

option for an investment and a startup strategy. However, there are a few cons associated with

the business, i.e. the uncertainty around the IP patent and licensing and it could become easy for

other competitors to copy the technology.