Henry Tam and the MGI Team Custom Case Solution & Analysis

1. Evidence Brief

Financial Metrics

Contest Prize: 25,000 USD for the winner of the business plan competition.
Seed Capital Required: Approximately 50,000 USD to 100,000 USD for initial prototype refinement and marketing.
Equity Split: Not defined in the case text; remains a source of unspoken tension.
Market Potential: Cited as a multi-billion dollar music gaming industry, though specific revenue projections are absent.

Operational Facts

Team Composition: Five members including two Russian founders (Sasha and Roman) and three students from Harvard and MIT (Henry, Dana, Igor).
Product Status: Functional prototype of a music-based game developed by Sasha and Roman prior to team formation.
Location: Cambridge, Massachusetts; primary meetings held in student apartments.
Timeline: Seven weeks remaining until the final business plan submission and presentation.
Work Distribution: Sasha and Roman handle technical development; Henry, Dana, and Igor focus on the business plan, marketing, and financials.

Stakeholder Positions

Sasha: Founder and primary visionary. Exhibits high psychological ownership and resistance to external critiques of the product.
Roman: Technical lead. Aligned with Sasha; skeptical of the value provided by the non-technical members.
Henry Tam: MBA student. Seeks professional structure and clear communication; feels marginalized by the founders.
Dana: Marketing lead. Prefers harmony and avoids direct confrontation; often acts as a passive observer during conflicts.
Igor: Finance lead. Attempts to bridge the gap between the Russian founders and the MBA students but lacks formal authority.

Information Gaps

The specific intellectual property (IP) ownership agreement between Sasha and Roman.
Detailed competitor analysis for the music gaming niche in 2002.
The exact evaluation criteria used by the competition judges.
Commitment levels of each member post-competition if the prize is not won.

2. Strategic Analysis

Core Strategic Question

How can the MGI team resolve structural founder-member friction to produce a winning business plan and a viable startup entity before the seven-week deadline?

Structural Analysis

The team suffers from a fundamental misalignment of goals and roles. Applying the GRPI model reveals that while the Goal (winning the competition) is shared, the Roles are overlapping and undefined, the Processes for decision-making are non-existent, and Interpersonal dynamics are characterized by low trust. Sasha and Roman view the venture as their personal property, whereas Henry and the others view it as a collaborative professional partnership. This ownership gap creates a barrier to effective knowledge transfer and strategic pivoting.

Strategic Options

Option 1: Formalize Governance and Equity. Draft a memorandum of understanding (MOU) that defines equity stakes, voting rights, and specific job descriptions. This forces a difficult conversation immediately but provides the structure required for long-term viability.

Rationale: Eliminates ambiguity regarding ownership.
Trade-offs: High risk of immediate team dissolution if Sasha refuses to share control.
Resource Requirements: 10 hours of legal/mediation discussion.

Option 2: Adopt a Project-Manager Model. Appoint Henry or Igor as the formal project lead for the competition only, deferring equity discussions until after the prize is won. Sasha remains the technical lead but cedes process control to the MBA members.

Rationale: Focuses on the immediate deadline while bypassing the emotional weight of equity.
Trade-offs: Does not solve the underlying power struggle; only delays the conflict.
Resource Requirements: Agreement on a strict project timeline and milestones.

Preliminary Recommendation

The team must pursue Option 1. Without a clear equity and role structure, the founders will continue to treat the business students as temporary contractors rather than partners. This lack of skin in the game for Henry, Dana, and Igor will lead to subpar work and eventual exit. A startup cannot scale on a foundation of resentment and undefined ownership.

3. Implementation Roadmap

Critical Path

Week 1: Conduct a facilitated alignment session to define equity and decision-making authority.
Week 2: Finalize the team charter and sign a preliminary founder agreement.
Weeks 3-5: Execute parallel workstreams: technical roadmap (Sasha/Roman) and market/financial modeling (Henry/Dana/Igor).
Week 6: Integrate components into a cohesive business plan.
Week 7: Pitch rehearsal and final submission.

Key Constraints

Founders Ego: Sasha and Romans emotional attachment to the prototype inhibits necessary product pivots.
Time: The seven-week window leaves zero margin for continued interpersonal stalling.
Communication Barriers: Cultural differences in communication styles (direct vs. indirect) lead to misinterpreted intentions.

Risk-Adjusted Implementation Strategy

The primary risk is a total breakdown in communication during the equity negotiation. To mitigate this, the team should use an external advisor (a professor or mentor) to facilitate the session. If Sasha refuses to grant at least 30 percent collective equity to the business team, Henry and the others should exit the project immediately. It is better to fail early than to invest hundreds of hours into a venture where they have no legal standing. If the agreement is reached, the focus shifts to a modular work plan where technical and business tasks are decoupled to minimize friction until the final integration phase.

4. Executive Review and BLUF

BLUF

The MGI team is currently a collection of individuals, not a functioning startup. The founders, Sasha and Roman, treat the business students as a service providers rather than partners. This structural flaw will result in a disjointed business plan and a failed pitch. The team must either formalize equity and leadership roles within the next seven days or disband. Continued investment of time without a legal and operational framework is a waste of human capital. Success depends on Sasha ceding control of the business process to Henry while Henry acknowledges Sashas technical authority.

Dangerous Assumption

The analysis assumes that Sasha and Roman prioritize the commercial success of the venture over their personal control of the product. If their primary motivation is ego-validation rather than market dominance, no amount of structural reorganization will save the team.

Unaddressed Risks

IP Litigation Risk: Without a formal assignment of the existing prototype to the new MGI entity, the founders could walk away with the technology after the MBA students build the business case.
Market Timing: The 2002 gaming market is shifting rapidly; the team is so focused on internal bickering that they have ignored external competitive threats.

Unconsidered Alternative

The team should consider a licensing model rather than a full startup launch. Sasha and Roman could license their technology to an established gaming firm, using the business students as agents to broker the deal. This removes the need for a long-term partnership and allows each party to profit from their specific strengths without the friction of co-management.