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few years after Peter Justen sold the financial services company that he and several


cofounders had started to TD Ameritrade, the serial entrepreneur was ready to launch

another company. A self-confessed "numbers guy," Justen recognized that most small

business owners struggled to understand their companies' financial statements and the

valuable information that the statements could provide them. Justen's research also

showed that many business owners used the accounting software QuickBooks to

manage the financial aspects of their companies. That led Justen to create

MyBizHomepage, a free Web-based financial service that includes MyBizDashboard, a

free online financial dashboard aimed at small businesses that extracts the necessary

data from their QuickBooks records and presents it in an easy-to-understand dashboard

that features simple charts and graphs. "My idea was to simplify things for business

owners to give them an easy way to see the problems and opportunities in the numbers

of their businesses," he says.

Justen hired a team of programmers and spent the next two years developing the

prototype for MyBizHomepage, which uses a series of algorithms to analyze the data

extracted from small companies' QuickBooks records to create performance indicators

and comparisons against industry standards. The dashboard was designed to reveal

meaningful information that entrepreneurs could use to make better business decisions

and that might otherwise stay buried in a company's financial records. MyBizHomepage

automatically pulls the required values from a company's QuickBooks records and

generates easy-to-understand reports on its vital financial components, including

accounts payable, accounts receivable, cash available, sales, cost of goods sold, payroll,

and working capital. The dashboard also includes alerts that communicate time-sensitive

key business indicators to business owners using e-mail and text messaging. "The idea

was that by checking the numbers every day, a business owner could see where he was

headed," says Justen.

When MyBizHomepage went live in 2008, the site, which was free to small business

owners, attracted a great deal of media attention, driving significant traffic to the

company's Web site. Justen's business model called for generating a profit by selling

advertising to businesses that wanted to reach small business owners using

MyBizHomepage. As traffic grew, Justen turned to several private investors, including

Joe Silbaugh, a former real estate developer, and Bryan Elicker, an entrepreneur who had

recently sold his coffin manufacturing business, to raise the capital he needed to expand

the company. The investors also served on the company's board of directors.

Within a few months, Justen and his board received an offer from a large company to

purchase the business for nearly $100 million, but they declined the offer. "We hadn't yet

tapped the potential of the product, especially among the global audience," says Justen.

At that point, the company had only 6,000 customers, and Justen and the board believed

that they could increase that number significantly.

Shortly after declining the offer to purchase the company, Justen learned that his chief

technology officer (CTO), with whom he had worked for several years, was working with

two other managers at MyBizHomepage to launch a similar, competing company.

Furious, Justen fired the men and had his attorney send them a "cease-and-desist" letter

about starting the competing company. Almost immediately, MyBizHomepage's Web site

began to crash regularly, causing problems for its small business customers and

credibility problems for the company. Someone also hacked into the e-mail accounts of

Justen and his board members and sent false e-mails to everyone in their address books

accusing them of unethical and improper business practices. The messages implied that

MyBizHomepage was defrauding investors. "It hurts your reputation when someone

Googles your name and finds that," says Silbaugh, who had invested more than $1

million in the company.

Justen contacted authorities about the cyberattacks and told them that he suspected

that his former CTO was behind them. Only then did he discover that the former CTO

was not the person he claimed to be. In fact, he had no official identity at all. He had no

driver's license and no credit cards in his name and had filed no tax returns—all of which

made tracking him down virtually impossible. Justen and his IT staff


determined that the former CTO had built multiple hidden "backdoor" entrances into

MyBizHomepage's software that he could exploit undetected whenever he wanted.

Justen knew that the only way to make the site and the software safe again was to shut

down the company and rebuild the software from scratch, which would require a capital

investment, but he was hesitant to go back to his original investors for more money. If he

declared bankruptcy, he and his investors would lose all of the money they had put into

the business. He also worried about how much information about the incident to make

public because his small business customers had trusted his company with very

sensitive information about their companies. He was considering simply shutting down

MyBizHomepage and walking away.



Based on Darren Dahl, "Struggling to Recover from a Cyberattack,"

New York


, August 22, 2012, [no longer online]


; "MyBizHomepage," Crunchbase, 2013,

; "Five Plus," 2013

1. C2-1.

Is the way that Peter Justen spotted this business opportunity typical of the

way that entrepreneurs come up with creative ideas for the businesses they start?

2. C2-2.

What steps can online companies such as MyBizHomepage take to

minimize the effects of cyberattacks?

3. C2-3.

Why did Justen and his board decline the offer from the larger business to

purchase MyBizHomepage? Do you think that they made the right decision at the

time? Explain.

4. C2-4.

If Justen decides to rebuild his company's software and start a new

company, what sources of financing do you recommend that he use? What steps

should he take to attract either debt or equity capital? Which sources of financing

do you recommend that he avoid? Explain.

5. C2-5.

MyBizHomepage's selection process was obviously flawed. What steps

should entrepreneurs take to avoid hiring dishonest employees who have the

potential to damage or destroy their companies?

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