Abstract

LeadNitro is an AI sales automation startup founded in 2023 that aimed to automate a large portion of what business development representatives (BDRs) do so they could complete more sales work with less time and effort. Matthew Lau, the protagonist of this case, first conceived of this idea during his time as a software sales BDR. Having worked first as a BDR, Matthew understood how time consuming and repetitive the job could be. To this end, he developed different scripts, automations, and custom integration tools to help get the job done, which was the barebones foundation for what LeadNitro would eventually become.

This case shows the journey that Matthew has taken to turn a problem or pain point into a business idea and how that idea evolved into a business startup. The case ends when Matthew is pondering the next move to scale the business with additional funding and resources. This case offers a great lesson for those who are inspired to be entrepreneurs and prepares them for what to expect beyond having just a business startup idea, such as issues related to marketing, finance, and operations, in order to scale the business. 

Students will have an opportunity to apply many relevant business concepts and techniques from the perspective of the founder of a startup company: how an idea can turn into a startup business and how it can grow to achieve its potential value. In the process of studying this case, the students can also learn many relevant and important business issues that startup business owners face; e.g., how to properly price a new product or service and determine the valuation of a business when inviting prospective investors to meet additional funding needs.

Learning Objectives

After analyzing the case, students should be able to:

1. Identify the value proposition of a new startup business.

2. Apply the business model canvas to identify key issues of turning an idea into a profitable business.

3. Determine the price of a product/service to match the customer perceived value with the Van Westendorp pricing model.

4. Decide on the appropriate valuation of a startup business using the annual recurring revenue (ARR)–based and earnings before interest, taxes, depreciation and amortization (EBITDA)–based approaches