Cardsmith

Babson Professor William Bygrave, Case Director

Carl Hedberg, Case Writer

Arthur M. Blank Center for Entrepreneurship

© Babson College, 2006.

Abstract

This case follows a classic student venture from on-campus conception in 1994, to harvest during the late 90s Internet wave, to its rebirth as a virtual business model. The enterprise began as a paper-based debit card that enabled Dartmouth College students to purchase merchandise at participating local pizza shops, copy centers, coffeehouses and the like. By the time founder Taren Lent and his partner took their system online in 1996, the ‘Green Card’ had a broad campus following, significant vendor participation, and average monthly revenue of $160,000. The entrepreneurs funded their expansion with informal investments from family, friends, angels, and a bank loan. In 1999—near the peak of the Internet bubble—they were scooped up by Student Advantage, a ‘high-concept’ venture-backed dot-com that was spending millions to build online market share in the higher-education space. Taren, who was heading up the campus card division, was astounded at how little attention was being paid to pursuing viable revenue models. When Student Advantage ultimately (and somewhat predictably), ran out of money and was liquidated, the campus card segment was sold to Blackboard. Taren Lent, however, had other ideas. He and a new partner left to start a virtual card venture focused on the higher education market. That focus would soon be put to the test by compelling opportunities that are doable, but not within their narrow strategic focus; e.g. business campuses, theme parks, and government agencies like NASA.

Location of the company: Dartmouth College and Boston, MA

Years spanned by the case: 1994-2005

Business: Student debit card program

Age of entrepreneur: Early 20s to early 30s

Teaching Objective: To present a an example of an undergraduate embarking on an entrepreneurial career and gaining experience by learning on the job, and to convey the spirit of the ‘just do it’ school of entrepreneurship, in contrast to the planning school that advocates writing a business plan before starting a new venture.

Key Words: Debit cards, campus town retailing, on-campus entrepreneurship, opportunity recognition, bootstrapping, improving the opportunity with new technologies, the Internet wave; late 1990s, sustainable vs unsustainable business models, low overhead and virtual businesses

DVD

There is a 54 minute DVD available for this case. Please place orders through ecch.

Teaching Notes

An 11 page case teaching note package, written by William Bygrave is available for this case.