Academic journal article Journal of Information Systems Education

Procyon LLC: From Music Recommendations to Preference Mapping

Academic journal article Journal of Information Systems Education

Procyon LLC: From Music Recommendations to Preference Mapping

Article excerpt

1. BACKGROUND

1.1. Introduction

In this case, a small entrepreneurial firm made a move from providing a music recommendation product, Electra, to re-launching a new product, Capella, with a new purpose. Instead of focusing on end users in a saturated market, Procyon used its experiences with music discovery to find new partners and customers in the business-to-business (B2B) marketplace that would benefit from their personalized music recommendations, advertising and editorial content preference mapping technology. The business on which the case is based has been disguised to protect the source.

The case is especially useful for graduate MBA and upper level MIS students studying e-commerce, Internet marketing, strategy, or entrepreneurship. In the MBA course, the case could be used to consider the overall strategy for an organization in a rapidly evolving e-commerce environment. In a strategy course, the notion of core competency becomes key as Procyon seeks to apply its technology to a different marketplace. For entrepreneurship, the case illustrates the need for small businesses to be nimble and adaptable. MIS students could explore how online music sites with recommendation features work, and which components can be used by business partners. E-commerce students would benefit from analyzing this type of Internet business as it moves from a business to consumer (B2C) orientation to B2B, and its struggle to find the right market segment and business partners.

Learning Objectives

As stated above, the case provides opportunities for discussion on various topics by both undergraduate and graduate students. The major objective is to determine the company's core competencies, assess the different directions it could take with its shift in strategy, and make a case for pursuing new B2B choices with new business partners. Other learning objectives are:

1) To discuss how a small technology company's mission and strategy has evolved over time and why.

2) To explore the nature of the online music marketplace and discuss industry directions.

3) To discuss the concept of the "long tail" (Anderson, 2008) and the impact this has had on e-commerce.

4) To discuss the impact of Web advertising and marketing, as well as other nontraditional method, such as the use of social media.

5) To discuss critical success factors based on competitor analysis, and then to decide what Procyon's critical success factors are.

6) To examine different types of B2B partnering arrangements.

7) To explore the phenomena of both the "local web" and geo-location, and the broad market opportunity associated with targeted advertising based on taste and psychographics as an extension of demographic targeting - first in music, and then potentially in other categories.

2. THE CASE

The following sections provide company background and evolution up to the re-launch of the new recommendation site, an analysis of music recommendation systems and the Internet marketplace. The case then describes the options Procyon faced in pursuing a B2B strategy. The ultimate decision is left for students to discuss.

2.1. Company Background: Procyon LLC

Procyon LLC was founded in 2004 as Procyon Music LLC by Laura Hewitt, Elizabeth Gray, Ray McCarthy, and Sergei Bodrow. Ray and Elizabeth had built software that could provide music recommendations, but lacked the business and music industry connections to market it. Laura and Sergei had the music industry connections as a result of work they had done together on a music festival, and Sergei had received ten Grammy Award nominations; in addition, Laura's experience at a leading computer software organization followed by a successful entrepreneurial venture in the mobile phone industry gave the group the necessary know-how and impetus to move forward. The original vision for the company focused on combining the music recommendation software and the management team's connections in the music industry to provide a launch pad for music discovery, especially for "indie" artists that needed more exposure. …

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