Blue River Technology B
Blue River Technology begins with background on company co-founder Jorge Heraud and the founding story of the enterprise. Blue River was created by Heraud and co-founder Lee Redden, who were both graduate students at Stanford University when they began exploring commercial opportunities for autonomous vehicles employing computer vision technology. The co-founders decided to focus on agricultural applications, with lettuce thinning as an initial target service and larger global row crops as an aspirational goal. The case challenges students to first think through the possible business models that Blue River (BR) could use to serve its target marketplace(s). Then the case walks students through BR’s early discussions with Khosla Ventures (KV), a Silicon Valley venture capital firm. KV has a divergent view on how BR should grow and tackle marketplace opportunities, and at the end of the case, Heraud and Redden face a series of decisions as to how they should engage KV and make optimal financing decisions for the business.
This case is intended for use in a course called S353: Formation of New Ventures, which explores a spectrum of issues related to founding, growing, and financing start-up companies. The case highlights business model strategy, investor-entrepreneur conflict, and fundraising strategy. The teaching objective of the case is to get students to wrestle with complicated investor-entrepreneur dynamics, and think about building a scalable business from the early days of the company.