Compumat: Math That Can't Add

CASE TITLE: Compumat: Math That Can’t Add (PDF)

AUTHORS: Andrés Ibáñez and Gustavo Maturana

UNIVERSITY: Pontificia Universidad Católica de Chile

BABSON FACULTY ADVISOR: Dennis Ceru

PUBLICATION DATE: 2010

PAGE LENGTH: 11

ABSTRACT: In 2003, after thirty years teaching math at Pontificia Universidad Católica de Chile, María Victoria Marshall (PhD in mathematics) founded Compumat S.A., a company that develops software called E-Mat. E-Mat is a learning platform that allows students between 8 and 14 years old to learn math on line at their own speed to improve their performance and practice 100% of their skills. The major potential markets for this product are public schools, private schools, and the home. The results of using the software, based on independent public tests, have been outstanding. Although the software has been used by 85 schools and approximately 13,000 students, the company has not reached the breakeven point after four years of commercial operation. Defining the growth path and the profit model are critical. Next week, María Victoria will meet with an investor who has asked to review the strategic plan of the company. This is a decision-making case that illustrates a common crossroads for many entrepreneurs when a venture does not achieve the desired profitability level: is it simply matter of time or do fundamental changes need to be made to the business model?

TOPICS: Business opportunity identification. Transition from a successful and stable academic career to entrepreneurship. Business idea vs. business model vs. profitable business idea. Business escalation and financing growth. Breakeven analysis.

COURSE POSITIONING: After receiving training on marketing and basic strategy. During the middle of an entrepreneurship course when alternative business models are reviewed and discussed. Overall teaching objective: Decision making case in which the student explores migration from the initial entrepreneur idea to a profitable business idea.