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

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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

ultimately


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.


Questions


Sources:

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

New York


Times

, August 22, 2012, [no longer online]


www.nytimes.com/2012/08/23/business/smallbusiness/struggling-to-recover-from-


a-cyberattack.html?pagewanted=all&_r=0

; "MyBizHomepage," Crunchbase, 2013,


www.crunchbase.com/company/mybizhomepage

; "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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