Underground hip hop ughh

UNDERGROUNDHIPHOP.COM As Undergroundhiphop.com (UGHH) approached its 10th anniversary, company founder Adam Walder felt he had reached a crossroads. Although UGHH was the leading source of independent hip-hop on the Internet, company revenues remained small compared to major online music retailers. The opening of a storefront in 2005 helped create new opportunities within the music industry, but also proved to be a drain on company resources. Adam was proud of the fact that his company had remained debt free throughout its history. Now, he wondered if such a conservative financial strategy was limiting its potential. UGHH desperately needed to hire programmers, designers, and managers to keep up with new technological developments and social trends, such as music downloads, blogs, and online social networking. Yet the cost of running a bricks and mortar retail store left little to invest in other areas of the business. Despite these challenges, 2007 promised to be an interesting year. Adam had a number of exciting new ideas for growing the business, ranging from franchising opportunities to the creation of a reality TV show. The question was, which should he pursue and how should he finance them. BACKGROUND In high school, Adam Walder worked part time as a music store clerk, where, one day, he met a radio disk jockey from Rutgers University Radio. The station transmitted to a 25-mile radius around New Brunswick, New Jersey, and, like most college stations, offered an eclectic mix of content. Adam used the opportunity to solicit a position at the station. Soon afterward, he found himself hosting the “Monday B-Side,” a popular Monday night hip-hop program broadcast between 10 PM and midnight. After graduating high school in 1995, Adam attended Northeastern University in Boston, Massachusetts, where he majored in business administration and information technology. At first, he was eager to work at the Northeastern This case was written by David Wesley under the suprvision of Professors Mike Zack and Ben Compaine soley for the purpose of class discussion. The authors do not intend to demonstrate either effective or ineffective management. The authors may have been disguised names and other identifying information for the purpose of maintaining confidentiality. Copyright 2006 Northeastern University, College of Business Administration Page 2 * radio station. However, when the station insisted that he take the 3 AM to 6 AM slot, he quickly realized that it was not to his liking. “I had an ego by then,” he explained with a slight note of resentment. “I went from one of the top shows in New Jersey to a slot where nobody was going to hear me.” After about 10 weeks, Adam quit his position at the radio station. Nevertheless, music companies continued sending promo albums, which he gladly added to an already extensive record and CD collection from his days with Rutgers University Radio. Around the same time, a high school friend who had moved to California called Adam on the phone and told him about a new Internet homepage he had created. It was a simple page that simply said, “Yo, Adam, what’s up.” But at a time when the World Wide Web was in its infancy, it was a revelation. Although at that time, nearly everything on the Internet was text based, Adam thought to himself, “if I can see this in Boston, I can give this web address to anyone in the world and they can see it. I’ve got to learn how to do this.” Adam immediately delved into HTML (see Glossary for technical definitions). Soon after, he created a homepage highlighting his career as a disk jockey. At first, he directed the page to family and friends. Later, he began to compile an index of promotional music that record companies had sent him over the years.