Thomas R. Eisenmann

The Harvard MS/MBA confers an MBA from HBS and a Master of Science in Engineering Sciences from Harvard's Paulson School of Engineering & Applied Sciences. Each year, the program enrolls about 30 students who have an undergraduate degree in engineering, computer science, or a related technical field and at least two years of full-time work experience in technology product development. The two-year program prepares students to lead technology ventures by extending their understanding of engineering, building design skills, and providing a strong foundation in general management.

This teaching case profiles Andreessen Horowitz (a16z), a venture capital firm launched in 2009 that quickly broke into the VC industry's top ranks. The case recounts the firm's history; describes its co-founders' motivations and their strategy for disrupting an industry in the midst of dramatic structural change; and asks whether a16z's success to date has been due to its novel organization structure. In late 2013, a16z's 22 investment professionals were supported by 43 recruiting and marketing specialists—an "operating team" that was an order of magnitude larger than that of any other VC firm. Furthermore, the operating team aimed to not only assist a16z portfolio companies, but also to be broadly helpful to all parties in the Silicon Valley ecosystem, including search firms, journalists, PR agencies, and Fortune 500 executives. The bet: by providing "no-strings-attached" help to ecosystem partners, the partners might someday reciprocate by steering founders seeking funding to a16z. The case asks whether this bet makes sense and whether a16z should seek to double its scale over the next few years.

During weeklong January-term trips to New York City in 2013 and 2014, students from across Harvard University studied cultural entrepreneurship: new ventures in fashion, food, fine arts, and design. Students explored how such ventures are launched, and how proximity to NYC's rich ecosystem of established companies, investors, and supporting organizations (e.g., universities, foundations, trade press, industry associations) influenced the ventures' evolution. The trips, sponsored by Harvard’s Innovation Lab and co-led by Eisenmann, SEAS's Beth Altringer, and i-Lab Managing Director Gordon Jones, featured visits to startups focused on the creative arts, such as Birchbox, Kickstarter, Etsy, and Makerbot; corporations and other established organizations that support cultural entrepreneurship—such as DVF, Fashion Institute of Technology, James Beard Foundation, W Magazine, and Macy’s; and venture capital firms that invest in creative industries. Students also met with alumni mentors and learned the basics of design thinking in a workshop led by consultants from IDEO.

Many blockbuster products and services that have redefined the global business landscape are built around platforms that tie together two distinct groups of users in a network. Examples include credit cards that link consumers and merchants; operating systems that connect computer users and application developers; and HMOs that bring together patients and health care providers. Due to network effects, platform products often enjoy increasing returns to scale. Yet many firms struggle to establish and sustain two-sided platforms because they confront a Catch-22: It is difficult to mobilize one group until the other is on board, and vice versa. In this Harvard Business Review article, Eisenmann, Geoffrey Parker and Marshall Van Alstyne draw on recent theoretical work to guide executives negotiating the challenges of two-sided platforms.

Due to network effects and switching costs in platform markets, entrants generally must offer revolutionary functionality. Platform envelopment offers a second entry path: one that does not rely upon Schumpeterian innovation. Examples of successful envelopment include Microsoft’s launch of Internet Explorer; Google’s Android platform; and LinkedIn’s move into recruiting markets. Through envelopment, a provider in one platform market can enter another platform market, combining its own functionality with the target's in a multi-platform bundle that leverages shared user relationships. Bundling exploits economies of scope and price discrimination opportunities. Further, envelopers may capture market share by foreclosing an incumbent's access to customers, and in doing so harness the network effects that previously protected the incumbent. This Strategic Management Journal article by Eisenmann, Geoffrey Parker and Marshall Van Alstyne presents a typology of envelopment attacks based on whether platform pairs are complements, weak substitutes, or functionally unrelated, and analyzes conditions under which these attack types are likely to succeed.

Many information technology startups have embraced "lean startup" management practices. Lean startups confront high levels of uncertainty about both customer problems and product solutions: the strength of demand for new solutions to prospective customers' problems is not well understood, nor is it clear how new solutions to these problems should be built. Lean startups address this uncertainty through very rapid cycles of hypothesis-driven, customer-centric experimentation. Objectives include: building, measuring, and learning at an accelerated pace; failing fast; and constantly improving a product based on nearly-immediate customer feedback. Lean startup practices often encompass: 1) launching with a "minimum viable product," that is, the smallest possible set of features that will meet the needs of early evangelists; 2) reliance on free open source software modules and "agile" software development methods in which requirements and solutions evolve iteratively through the collaboration of cross-functional teams; 3) intensive use of customer interviews, surveys and split market testing to gauge demand for new features; and 4) bootstrapping and avoiding heavy investments in customer acquisition to keep burn rates low until hypotheses about customer problems and product solutions are verified. Eisenmann's research on lean startups focuses on identifying contingencies under which different practices are economically attractive and determining which practices apply to new ventures outside the information technology sector.