JONATHAN WEST Fresh Connections Mary Alice McKenzie was pleased with the progress Fresh Connections had made in only a year. The company had opened for business in August of 1998 and by September of 1999 had $6 million in revenues. McKenzie and Fresh Connections CEO Douglas Hyde still had more questions, however, than answers. There were immediate operational problems: the company's production processes suffered from bottlenecks and the only way to solve this would be to purchase expensive new equipment. McKenzie was concerned with ensuring both quality and efficiency as the company grew and implemented more sophisticated systems. Where would they get the necessary capital? In addition, she had been bearing the burden of substantial up-front R&D costs for her customers, who were still free to cancel a contract at any time. How should she structure her contracts moving forward so as to protect her small firm from such dangerous financial exposure? There were also longer-term strategic decisions to make. Which customer segment(s) should the company pursue? The fresh prepared foods market was on the rise and Fresh Connections needed to devote more effort to sales. Given the abundant opportunities, where should they channel their energies? The restaurant business? Supermarkets? Niche players like organic and specialty markets? Each segment had its own advantages and disadvantages. Which opportunities would allow them to compete effectively and grow the business without becoming overwhelmed? These were just a few of the things she was thinking about on the company's one-year anniversary.