Artemis Images Case Study Report

Artemis Case Study Report

Executive Summary:

        Christine Nazarenus, along with three of her colleagues, founded Artemis Images—a company for digitizing photos and images archives. The team started off strong with solid team members and great content management experience. They planned to collaborate with Indianapolis Motor Speedway Corporation (IMSC) and use their archives to start with their business. They created thorough business plan, financial forecast and competitor analysis to differentiate themselves from the rest of the market. Artemis Images was positioned to have a long-term revenue sharing business model, which differs from its major competitors Getty Images and Corbis. However, within the first few months, Artemis Images failed and went down the hill. In this report, I will analyze some of the key components that are crucial to Artemis Images success, including the founding team and their business model.

Founding Team:

        Founding team is an important aspect to bring a start-up business from scratch to success. Without an experienced and skilled management team, the business will be dysfunctional. The founding team of Artemis Image consists of four members: Chris, who has experience in content management and general management experience; George, who has experience with e-commerce, Web-enabled fulfillment, domestic and international shipping, etc.; Frank, who is an expert in content management technology and strategy, business analysis and creating on-site service solutions; last but not least, Greg, who has extensive sales experience and functional expertise, including financial and operational analysis, strategic marketing, fulfillment strategies and the evaluation of start to finish marketing campaigns (Byers et al., 2015, p. 544). They are recruited into the team via personal network. This is a great way to recruit people that have specific talents required for the star-up business. Indeed, all of the members in the founding team have managerial experiences and skills. They could oversee the project in the long-term and are capable to make critical decisions. They also acquired specific skills required for running a online website, such as, e-commerce, content management technology and system and web-enabled fulfillment. George is especially experienced in the operation and function of receiving and shipments or online orders. From just a glance of their profiles, they have the passion and ideas of running Artemis Image.

However, some of elements were missing from this team. As mentioned previously in the case study, some founding members understood the business idea but has never been involved in actually running a business while other founding members might have knowledge in digital technology and project management, but were lacking skills or experiences in how to launch a start-up company (Byers et al., 2015, p. 542). Besides these, Web development and constructing, being a critical part to build upon, was not a skill that was acquired by any founding member. Besides all the ‘hardware’, certain soft skills should be considered when forming a team. The founding team should have leadership skills. The leader of the founding team should be capable of recruiting new talents and focusing on team buildings. However, there wasn’t a leader, or CEO, decided by Artemis Image’s founding team, which potentially downgraded team’s execution capability. The chemistry within the team wasn’t working, either. During the launching period, Greg and Frank was hesitant to commit due to the envisioned risks. They are lacking the team dynamic and willingness to commit and to implement on the ground. “Ideas are a dime a dozen, it is the quality of execution that matters” (“Team”, 2014). From my point of view, I would recruit the same people but with a few extra personnel who are expert in operation and website developing/IT to remedy current team deficiency. Artemis Image’s founding team lack core functions that are required to execute their concepts into a niche market with precision and well supported technology.

After the founding members get together, they formed the company into an S-corporation and decided their equity share to be equally distributed, being a 25% percent interest in the company per person. Since they expected each person would contribute equally, they chose to be given the same option. Later on, their subsequent equity share changed after Chris and George invested in the company with cash. This kind of initial equity share was to avoid conflict at the early stage. It made sense for Artemis Image since they didn’t have a CEO. One advantage of having equal equity share is sending the message to all founding members that their sets of skills are valued equally. Regardless of who came up with the idea, as long as everyone are devoted and committed to the project, then equity share should be equal. Yet, despite the simplicity nature of equal equity share, the initial equity allocation is an important factor for company’s future success. The issue should be taken seriously. More and deeper discussions will reveal that one or more founders deserve more of the equity based on more experiences, better opportunity costs, more relevance in the origin of ideas for the new startup, etc. Equal equity share isn’t a decision but rather a compromise for all the founders (“The only wrong answer is 50/50”, 2011). I personally think the allocation of equity share should have been done differently by using a formula to weight over the relevance of each person’s contribution. Idea is the foundation of a new startup. The idea generator should increase their equity shared by 5%. The person who drafted the business plan, brought in the patent, and has the ability to raise capital should be giving another 10%. And then finally, the CEO, being the one who execute, lead and bearing all the trusts, should add another 10%. If I were Chris, I would clearly evaluate each founding member’s level of relevant experience first and then divide up the portion of the equity based on their talents and potential contribution. I’ll obtain this information by interviewing other founding members prior to their entrances. Founding members should be able to answer questions such as their focus in this company, their degree of commitment and what they could bring to this company (money, technology, talents, network, etc.). I’ll make it clear that each person’s equity share is subject to change based on their performance and commitment. Subsequent equity share will be based on a metrics that evaluate each member’s contribution. This would motivate founding members to devote fully into the startup business while being objective towards equity share.