CASE $16$ TLContact: CarePages Service $($A$)$

CHRISTOPHER LOVELOCK

An Internet start$-$up company has successfully developed a Web$-$based service that enables hospital patients to stay in touch with family and friends through the medium of individualized home pages. Three years after launch, the company is finally becoming profitable and the founder and CEO is reviewing strategies for future growth.

Eric Langshur, CEO of TLContact, Inc. $($TLC$),$ was pleased as he drafted the company's latest quarterly activity update. The news was encouraging on almost all fronts.

TLC$\text{'}$s primary product, CarePages, was a Web$-$based service that enabled patients to stay in touch with family members and friends through the medium of individualized home pages. Utilization of CarePages was accelerating among existing customers, primarily acute care hospitals in the United States and Canada, and the company continued its record of $100$ percent renewals. New sales were up dramatically, individual users continued to be delighted with the service, and new enhancements had been well received. Press coverage and word$-$of$-$mouth had been phenomenal; the latest Google search of "tlcontact" had yielded more than $400$ entries. Meanwhile, competitors were stumbling and one had just shut down. Eric predicted that consolidated annual revenues would reach about $$3$ million, up sharply over the previous year.

Then he shook his head as he looked again at the $$3$ million figure. Fifteen years earlier, at age $25$ and fresh out of an MBA program, he had been running a $$25$ million business. And prior to launching TLContact in $2000$ with his wife, Sharon, a physician, he had been president of a large division of a multinational aerospace company. Were challenge and reward directly proportional to scale? He didn't think so$.$

The activity update on which he was working would make pleasant reading, he