Gmcr Essay

9249 Words Feb 21st, 2012 37 Pages
9-899-180
REV : JUNE 9 , 2 0 0 4
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Professor Paul W. Marshall and Research Associate Jeremy B. Dann prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 1999 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval
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“We got absolutely nowhere because, 1) they did not believe that we could create a coffee-maker, and 2) they thought we were crackpots,” recalled Dragone, tongue-in-cheek.
Greenwood had soon created a makeshift coffee-maker to prove that the portion pack concept actually worked. Dragone continued to fine-tune the business plan, gaining critical input from experienced entrepreneurs and venture capitalists after he presented the concept to the MIT
Enterprise Forum. He also discussed the plan with representatives of the Northeast Office Coffee
Association, a trade organization composed of distributors, equipment manufacturers and other companies involved in marketing coffee and services to businesses. The partners needed to determine whether they would work with existing distributors servicing the office market or create their own channel employing a direct mail fulfillment program.
In late 1993, Greenwood and Dragone began to seek financial backing from venture capitalists.
They met with Larry Kernan, a 1979 HBS graduate. Kernan was with MDT Advisers, a financial management company responsible for the Memorial Drive Trust, the $1 billion pension fund of
Arthur D. Little, a consultancy based in Cambridge, MA. As a part of its holdings, MDT Advisers managed a $100 million venture capital fund focusing on high technology, communications and consumer products. “These guys were not ready for prime time,” recalled Kernan. “Their machine leaked all over the

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