ThreeFive Photonics: Searching for the Holy Grail?

In 2001, the Dutch company ThreeFive Photonics was founded by telecom professional Wouter Deelman and PhD student Chretien Herben attached to Delft University of Technology. The founders set out to develop revolutionary opto-electronic chips with the potential to change the telecom industry. That year, venture capital firms invested € 7 million in the promising start-up, but additional capital was needed to develop ThreeFive’s radical “Holy Grail” technology. However, during the product development phase disaster struck: the ‘telecom bubble’ burst and the industry crashed. Desperately trying to keep the company alive, the founding team and investors turned to investigate less radical products, while trying to secure the extra funding needed. As the company’s final hour began to strike they faced an important decision: should ThreeFive try to enter new markets with new products, or look to merge with a competitor?

Written by Elco van Burg, Hans Berends and Sharon Dolmans from Eindhoven University of Technology. Download the full case and teaching note at www.thecasecentre.org or request them from j.c.van.burg@vu.nl.

Fruitful prospects: A European apple breeding company

Since 1982, Martin Peeters, owner of an apple tree nursery and Robert Jensen, research director at the fruit breeding centre of a German university, had worked together on the development of new apple varieties. In the nineteen nineties, Peeters’ knowledge of traditional breeding and Jensen’s expertise in molecular breeding had resulted in a number of high quality breeds. They were now, in 1998, thinking of founding a company to commercially grow and sell these new breeds. In fact, they were convinced of consumers’ interest in new apple varieties. They based their opinion on a successful experiment of Peeters’ company had conducted with the German-based supermarket chain, Home.

However, there were important hurdles Peeters and Jensen needed to tackle. The apple market in Northern Europe offered ever diminishing margins for both apple breeders and growers. The absence of quality differentiation, an over-supply of fruit and declining consumption had led to low prices for the producer. Traditional breeding techniques were barely profitable, but the market was still unwilling to embrace Genetically Modified Organisms (GMO’s). If they wanted their company to succeed, they had to think very carefully about the commercialization of their produce. This required a thorough analysis of the value chain and the relationship between the different actors involved.

Written by Petra Andries, Anneleen Bruylant and Yvonne Kirkels from the University of Leuven and Fontys University of Applied Science. Download case and teaching note at www.ecch.com or request them from Petra.Andries@econ.kuleuven.be.

When intellectual property rights go beyond patents

In 1999, three technical engineers invented a membrane system to clean sewage water. They filed for patent for their inventions, founded their company Watertreat GmbH, and in 2000 received financial support from different start-up support programs. The founders successfully acquired venture capital from an investor and for the next three years, the product worked well.

In December 2003, the company received its first major order; for Watertreat, the future looked bright. And then in January 2004, a lawsuit alleging multiple infringements of intellectual property rights threatened the company’s very existence. How would the founders react to this danger, and what options did they have to counter it?

Written by Malte Brettel, René Mauer and Tobias Karmann from RWTH Aachen University. Download the case and teaching note at www.thecasecentre.org or request them from karmann@win.rwth-aachen.de.