By David Dodson, Matthew Saucedo
2016 | Case No. E591 | Length 10 pgs.

Debbie Sterling was waging war with The Pink Aisle—home to Barbie Dolls, tea sets, and Easy-Bake Ovens.  Sterling had come to believe that early-age modeling and stereotyping by toy companies channeled girls away from science, technology, engineering, and math.  As a result, she was inspired to create a start-up toy company to break the traditional model and develop revolutionary products for young girls.  With the help of a video that went viral, she raised over $285,000 on Kickstarter and launched her company.  The success only continued to grow from there—Intuit awarded her fledgling start-up a free commercial in the 2014 Super Bowl.  TED, Fortune, Forbes, NBC, Time, Huffington Post, the New York Times, and the Wall Street Journal all wanted in on the story of Debbie Sterling and in her mission to change the lives of millions of young girls.  After all, the company was earning $300,000 in sales per month after only the first six months.

This success made it all the more puzzling when, after she returned from a trip to India, Sterling discovered that a member of her management team, and her first hire, had sent her a calendar invitation to attend a meeting with the company’s senior management team.  Once seated, as Sterling recalled, Monica Sanchez, the vice-president of sales, told her, “Debbie, the company morale is low.  Everybody wants to leave.  Everybody hates it here.  The problem is you, Debbie.  You’re the reason why things aren’t working out, and we need to have a come-to-Jesus moment with our leadership team and figure out what do to.  Maybe our chief marketing officer should be the new president.”

The case follows the story of Debbie Sterling as she navigates a winding path of litigation, hiring and firing decisions, and determining how to deliver bad news to a company that so many people hope succeeds. 

Learning Objective

This case is about managing commercial litigation, and common issues with building a management team. It also addresses the issue of founder succession and what it means to have a for-profit company that has a not for profit mission. Debbie is also a resource for general thoughts regarding women in management and creating a company around a mission, and so she should have extra time if possible.
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