18: GenapSys, Disruptive Innovation

Read the article, "What is Disruptive Innovation?". Today’s class will include a discussion about “disruptive technologies” and the opportunities they present for high-tech entrepreneurial ventures. This Harvard Business Review article provides a timely discussion of this topic, the theory of which was first introduced in Clayton Christensen’s best-selling book, The Innovator’s Dilemma.

Read the “GenapSys: Business Model for the Genome” case (HBS #9-816-701). This case explores one of the most common and complex decisions facing an entrepreneur - the choice of revenue model for an offering that could be sold as a product, service, or combination of the two. This decision also surfaces the financial implications and quantitative analysis required to inform the decision.

Consider the following study questions in preparation for class discussion:

• How do you expect the market for gene sequencers to develop?

• What are the major market uncertainties to consider when deciding to bring GenapSys's technology to market?

• What are the three business model options that Esfandyarpour and Rastegar are considering to bring GenapSys's technology to market?

• Review the Principles of Pricing

  reading we had earlier this semester (with the LinkedIn session). Each of the three business models has a different associated price. How do each of the three prices:

  • reflect perceived value by customers?
  • impact adoption by customers?
  • impact revenue-generation for GenapSys?

• For each business model option above, consider the following:

  • What assumptions about the market and competitors would need to be true for GenapSys to succeed?
  • What are the major risks?
  • What are the consequences if things do not go as planned?

• Which of the three options would you recommend that GenapSys adopt?

• Cash is the life blood of startup companies. What is the impact of each of the options on the following:

  • Cash requirements of the company
  • Cash flows (inflows and outflows) of the company
  • Timing of cash flows (inflows and outflows)

DUE:

Following the guidelines in the Case Method Overview (posted in Canvas Files), write a concise 2-page essay addressing the question:

Esfandyarpour and Rastegar developed three business models to bring the GenapSys GENIUS DNA sequencer to market. Which business model would you recommend they adopt? Explain and be sure to consider the market, competitors, company's operating performance, and cash requirements in your response.

Submit your essay via Canvas prior to class. This essay must be your own work subject to the University’s Code of Academic Integrity.

---

Final exam: why it is disruptive? or not disruptive

GenapSys GENIUS is Disruptive

1. Depend on bussiness need
2. New value proposition
   1. speed of analysis
   2. data access
   3. small size, ease of use
   4. no equipment needed
      1. data centers