Telezoo

TELEZOO (A): FEAST OR FAMINE?

Introduction: July 4, 2000

Marie-Louise Murville heard a series of loud noises outside her offices on the Northern Virginia

side of the Potomac River. As she peered out her office window, she saw fireworks erupting in a

myriad of colors over the Washington and Jefferson monuments. Murville, the newly appointed

Vice-president of Marketing and Business Development at Telezoo, realized that she had

forgotten Independence Day because she had been completely immersed in the preparation of

her presentation for the upcoming board meeting. She sat and enjoyed the celebration’s grand

finale while pondering the fate of her own company. Would telezoo.com (Telezoo) fade into

obscurity as another dot-com casualty or would it make an indelible impression on the

procurement decision-making process in telecommunications?

The company had recently burned through a significant amount of capital with a limited positive

return on investment. In addition, as recently as April 2000, the amount of capital markets had

come to reject the hype initially given to Internet stocks. Although the founding team had

accomplished a great deal, they and the board understood from the beginning that to maximize

the company’s potential, seasoned general management, marketing, sales and finance executives

would need to join the company. Ideally a CEO would be hired first to build the team, but as the

market exuberance faded, and the sources of fresh investment capital dried up, Telezoo faced a

dilemma. A seasoned CEO would only join a startup that had plenty of cash in the bank; yet,

new investors would only be interested in companies with full management teams already in

place. Murville had been working closely with the management team and the board for six

months as a venture capitalist. Despite the increasingly critical cash/market changes, she

decided to join the risky startup, a choice that provided the necessary executive skills and gave

reassurance to both a...