Miller and Turner were at a crossroads. Should they take the possibility of €1.9 million in profits or continue to try to build their business as a service proposition?
On a cold winter morning in December 2001, Stuart Miller and Dan Turner, co-founders of ByBox, entered a boardroom in Germany. Sitting around a long, worn-out table, with their chiseled faces and graying blonde hair, were several key executives of a leading European logistics operator, DFX Logistics, smoking cigarettes and uttering unfamiliar words in German. To the UK entrepreneurs, it seemed like they were entering the scene of a 1950s movie rather than a negotiating table.
For the past nine weeks, Miller and Turner had worked night and day on DFX’s trial for consumer delivery solutions. DFX sought to roll out thousands of specially designed locker-banks in the streets of major German cities, to deliver consumers’ purchases to these boxes rather than to their homes. The trial’s objective was to identify a supplier of such boxes and ByBox, with its superior electronic locker-banks technology, won.
At the meeting in Bonn, Turner and Miller were surprised to hear that DFX didn’t want to pay recurring service fees for the locker-banks. They had gone over this before, and ByBox had made it clear that they wanted a continuing relationship with DFX and thus a service agreement. DFX just wanted to buy the locker-banks for a total of €34 million, pay the software license for the first year only, and get exclusivity in Europe. Miller and Turner were at a crossroads. Should they take the possibility of €1.9 million in profits and sell the lockers to DFX? Or should they reject DFX’s offer and continue to try to build their business as a service proposition?
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