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07 Feb 2014

John Bates

Alicia Navarro flicked the screen of her battered laptop impatiently. “We’ve got to change the presentation,” she said.

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It was Autumn 2008, and within the hour Alicia and Joe Stepniewski, her friend and colleague, were due to pitch before a panel of seasoned executives and angel investors in the final round of the London Technology Fund (LTF) start-ups competition. Winning meant kudos, a small but extremely welcome amount of prize money, and wider exposure to London’s network of VC and private investors.

Joe looked at Alicia with only mild surprise. Long experience had taught him to expect this kind of adrenaline-fuelled improvisation. Still, given how much was at stake for their cash-starved company, enormous changes at the last minute seemed a somewhat less than optimal strategy.

He said, with more hope than conviction, “You mean there are some slides that need polishing?”

"No, I want to pitch something totally different. And I think we should change our entire business too."

For the past two years—at first on her own, latterly with Joe’s help—Alicia had been developing Skimbit, a social shopping site that enabled users to bookmark products they liked from around the web, and to share these bookmarks with their friends (elevator pitch: “Skimbit is the social decision-making tool that skims the best bits of sites you like so you can make tricky or group decisions easily!”). Skimbit operated as both a B2C and white-label B2Bservice, and in this latter guise had won its first client almost immediately. Despite this initial success, and indications of enthusiasm (but not much else) from investors, Skimbit had not grown at the rate Alicia wanted. This was the business that Alicia and Joe had pitched in the preliminary rounds of the LTF competition.

The Skimbit service included a technology that greatly simplified the process of monetising links to retail sites from user-generated content on publisher sites, making it easier for publishers (“affiliates” in the industry jargon) to earn referral commissions from retailers (or “merchants”). Code they already had, so Alicia’s turn-on-a-dime suggestion didn’t seem— time pressure aside—completely unreasonable. But, Joe wondered, did they have a business model that would withstand scrutiny from the panel and, more importantly, that might serve as the basis for a viable business?

To read the case study in full, email innovation@london.edu.

John Bates

John Bates is a Fellow of Strategy and Entrepreneurship at London Business School.