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,"
, August 22, 2012, [no longer online]
; "MyBizHomepage," Crunchbase, 2013,
; "Five Plus," 2013
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?
What steps can online companies such as MyBizHomepage take to
minimize the effects of cyberattacks?
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
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.
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?
Recently Asked Questions
- Define and explaine those 3 tyes of entrepreneurship: Self employment (working alone), Team entrepreneurship (e.g. startup) and Franchising /chain
- Question 1 Gabriel Wong, a Hong Kong businessman, has had a successful career in marketing, starting out in retail sales and moving up through positions in
- What would be one possible way that you could improve community networking in your area with your business using technology to bring awareness?