Maggie Hapher-Stepp at Open Bit Mine, Inc. 1 Maggie Hapher-Stepp had just about had enough. The last seven months as product manager of Open Bit Mine (OBM) had been difficult to say the least. Staff turnover, communication breakdowns, conflict, and delays had become the new normal. The most recent delay of OBM’s initial product—a first-of-its-kind, mass market cryptocurrency mining device—had caused an explosive late-night phone call with her boss, Mike Jeffries (CEO and founder of OBM, Inc.). Maggie hung up the phone wondering if being the target of verbal outbursts was going to be yet another “fun” feature of her daily routine. Despite being undeniably burned out and rightfully upset by Mike’s outburst, Maggie could still see both sides. Maggie understood that the repeated delays were not only frustrating but a risk for OBM, given that the success of the new device depends on bringing it to market well before anyone else. Though there had been significant growth in the number of people mining for cryptocurrency, technical barriers had prevented anyone from bringing the capability into the home. The main challenge was for a prospective crypto miner to have adequate computational power in their “rig” (the mining hardware + software) such that they could mine enough coin to be profitable, above and beyond the massive cost of electricity consumption. As legend had it, one guy had set up a crypto mining operation in a closet in the law office where he worked. The electricity consumption put such a strain on the local grid that the police department suspected that someone was running an illegal marijuana farm. When they raided the office all they found was a closet full of computer servers. If mining could be made to be more profitable, either by reducing electricity consumption or by increasing the probability of getting coins (or both), and the mining hardware could be fit on the floor or shelf of a home office or living room, then a flood of miners would enter the market. Furthermore, anyone who could solve this technological riddle would probably receive the backing of fledgling cryptocurrencies because their great fear is that nobody will mine for their coin. OBM, Inc. was launched by Mike Jeffries while he was still a graduate student at MIT. He believed that he could overcome the technological barriers to crypto mining for the masses, and after iterating through several prototypes, he developed the first “personal” coin mining rig—the Cryptominer. The device was the size of a gaming console or WiFi router, and could fit on a bookshelf. It would indeed consume a lot of electricity, but less than anyone had imagined possible. And it could be set up quickly to mine enough coin worth 20% more than the cost of its electricity consumption (based on the 3-month average, though volatile, value of the dominant coin on the market). Although Cryptominer owners would need to pay for the hardware upfront, it was projected that a novice miner could pay off the cost of the hardware within 6 months of round-the-clock mining. Expert miners could cut this time in half so that after 3 months they would turn a profit. However, there are whispers that competitor Coin Rig is confirming some initial tests of a rig that was similar to the Cryptominer in most respects and even more efficient in its energy usage. If this is true, and if Cryptominer doesn’t launch soon, prospective buyers will simply wait for Coin Rig’s apparently superior device. From that perspective, the verbal outburst from Mike—admittedly not the best way of communicating—was more understandable. But from the perspective of her own performance, Maggie couldn’t imagine another person doing so much with so little. She hadn’t ignored a single issue and “stepped up” when asked. In fact, it was a minor miracle that Open Bit Mine, given the circumstances, was as close to launching the Cryptominer as it was. It was unimaginable to Maggie that Mike was blind to this, and to blame her for the delays simply felt wrong. Backstory 1 This case was written by Joe Magee ( jmagee@stern.nyu.edu ) and Nate Pettit ( npettit@stern.nyu.edu ) for educational purposes only. Please do not copy or distribute without the authors’ permission. A 30-year-old recent MBA grad (class of 2016) from an elite business school in the northeastern US, Maggie Hapher-Stepp had a reputation as a fantastic colleague: relatable, reliable, willing to pitch in, and very bright. In fact, her recommenders from prior jobs frequently used phrases like “ideal colleague” and “goes above and beyond.” Prior to business school, Maggie had great success working on teams as a consultant but left because of an interest in technology and a desire to help develop and market products in that space. To help with this career pivot, she spent the summer after her first year in b-school as a product development intern at a mid-size software development company and received an offer to join the firm full-time after graduation. At the same time she was considering the offer, Maggie became fascinated by cryptocurrency and blockchain. The trouble was that none of the young firms in this space recruited at b-schools and she would need to be especially proactive to land a job. In fact, few of these firms made their hiring intentions public, and those that did seemed uninterested in someone with Maggie’ profile. After many emails and pleas, the only interest Maggie received was from OBM CEO Mike Jeffries, who asked her to come in for a brief chat. Maggie knew little about what OBM was up to, but after speaking with Mike, she was certain that this was what she wanted. It was the perfect place for her to get her feet wet in startup culture and in a hot space with huge potential. Maggie let her other offer lapse and several weeks went by without Maggie hearing from Mike, or any of the other OBM team. Finally, Mike called to offer Maggie a job as head of sales for the Cryptominer. He liked her obvious ability to work with others and thought her tenacity in pursuing this job made her an ideal fit for OCB’s young culture of support and personal initiative. Maggie’s first year at OBM exceeded her expectations. She benefited from an excellent working relationship with her first boss, Amanda McKee (the VP of Products who was overseeing the Cryptominer product launch). Maggie and Amanda had similar work styles and “clicked” from day one. Prior to joining OBM, Amanda had worked for six years at a large, established software development firm that had a lot in common with the company where Maggie had interned the previous summer. Amanda also saw Maggie’s potential and spent time coaching her and involving her in areas beyond sales. For instance, Maggie was present on calls with suppliers in China. Amanda also brokered a relationship between Maggie and the head design engineer, Dalia Kordova, who had overseen the “look and feel” of the Cryptominer. Amanda’s efforts gave Maggie a uniquely high level of insight and exposure, not to mention important relationships, at OBM. In early July 2017, Mike Jeffries (who had spent much of Maggie’s first year on the road meeting with potential investors) requested a call with Maggie. Mike had just learned that Amanda McKee would be leaving in two weeks to again work for a larger software development firm. Amanda had a great deal of prior success in this industry and OBM simply couldn’t come close to offering her enough money to prevent her from pursuing the opportunity. This was clearly a loss no matter the circumstances, but Mike sounded especially frazzled when relaying the news—likely because of Amanda’s critical role in the launch. True to her reputation as a great colleague, Maggie sensed that Mike perceived Amanda’s impending departure as a crisis, and immediately asked “How can I help? Just name it.” Mike’s response surprised her. “Maggie, you’ve done nothing but great work since you started a year ago. I know that Amanda involved you in aspects of the launch outside of sales and I think you can handle the lead role. I get that this is a sizable step forward in terms of position and responsibility, and I’m prepared to offer you the title of Product Manager and a 55% salary bump effective immediately, plus a sizable bonus once the launch is complete. In addition, I’ll make you VP at year’s end if the launch goes well.” Before Maggie could respond, Mike got a call on the other line. “Ugh, I’m sorry Maggie. Let me put you on hold while I get rid of this guy.” While Mike was on the other line, Maggie had a moment to process what she’d just heard. She couldn’t decide what was more surprising: that Amanda was leaving or that she was asked to take on Amanda’s role in the launch. Such an opportunity could fast-track her—in terms of responsibility, title, and compensation—at a rate well beyond her peers and, for that matter, her expectations. At the same time, was she actually ready? The weight of the launch would rest on her shoulders and the hours would be intense. This is exactly what she wanted, she just didn’t think it would happen so fast. Mike came back on the call. “Sorry again, Maggie. That guy is always asking for something. Anyway, I know I threw a lot at you at once, and I hate to do this but I have to get back to this meeting. Given the circumstances, I need to know tomorrow. If you have questions email me or we might be able to set up a quick call. Like I said, I’d really like you in this role, and I’ll have your back.” Maggie barely had time to thank Mike for the offer before he hung up. Maggie got together with several b-school friends that night and asked them for their advice as she weighed whether to take the offer. She wanted to help OBM during this tough time and was excited by what she would learn. And, the extra money would help Maggie with two of her financial goals: more aggressively paying off her outsized b-school loans and saving for an apartment. Upon reflection, Maggie also realized that she’d always risen to the occasion when faced with a challenge she initially thought was too big. All of these factors, combined with the encouragement of her friends, led Maggie to accept the offer the next day. The trouble begins As Maggie assumed her new role, she needed to make a recommendation about who would take over her duties as head of sales. It was down to two members of her sales team, Tim Chen and Lynn O’Connor. Maggie personally favored Lynn. She was more introverted than the typical salesperson, but Maggie liked her experience and evidence of personal initiative. Maggie also solicited input from Mike Jeffries, Dalia Kordova and her design team, several more junior sales personnel, and Hong Wei who was in China and managed the relationship with the manufacturing facility where the Cryptominer was assembled. Collectively, they had a slight preference to slot Tim into the role. Maggie agreed that Tim was capable but also privately thought that he had a tendency to wait for direction before taking charge of most things that obviously needed to be done. Maggie wrestled with the final decision for several days. Given the group’s preference, she ultimately decided on Tim and forwarded her recommendation to Mike Jeffries. After some back and forth with Mike, Tim officially took on Maggie’s prior role. Soon afterward, details of Tim’s new compensation package somehow leaked out. (It was later discovered that he disclosed this information to a co-worker.) Lynn O’Connor learned that Tim—her former peer and now boss —would be making almost twice her salary, which she saw as extremely unfair given that the workloads and responsibilities did not differ as dramatically. Maggie tried to explain to Lynn that Tim had also secured an outside offer from a competitor and obviously negotiated successfully with Mike, but her efforts did little to mitigate Lynn’s feelings. Further, Hong Wei sent Maggie an email accusing her of “playing (and paying) favorites.” Maggie wrote back saying that even though she personally favored Lynn (apparently Hong Wei favored Lynn as well), because the preference of the collective was for Tim, she felt like her “hands were tied.” Maggie also informed Hong Wei that she wasn’t personally involved in Tim’s negotiations over salary, and, in fact, Tim was making much more than Maggie had in the same role. “That’s just the way it goes,” she wrote. Hong Wei replied only by saying “thanks for the info.” Despite having talked to Lynn, Maggie could still sense tension between her and Tim. Although they were cordial to one another, Lynn did not seek out Tim’s advice the way she had when Maggie was their manager. It was unclear to Maggie whether Tim failed to notice or simply did not care. Maggie organized a sales happy hour hoping to ease tensions on the team. At the same time, even though Maggie replied to Hong Wei’s accusatory email in a way that Maggie felt was respectful, something was amiss there as well. This was especially problematic because there were serious quality control problems with the rigs that were being manufactured in China. Prototype rigs built at a small US plant were all registering electricity consumption within +/- 2% of target, but ≈1/11 rigs produced by the Chinese factory were well above that margin for error (with some exceeding 10%). Remediating these errors would be costly and could delay the launch by more than three months. Maggie needed Hong Wei to be proactive about finding a solution. During another sleepless night, Maggie drafted an email to Hong Wei explaining the dire situation and pleading with him either to solve it or to ask for help. Hong Wei replied with “ok got it”. Mike Jeffries suggested that someone needed to travel to China to check on the quality problems. Maggie agreed that these problems were too big to ignore and sent Tim to China for two weeks. Just as Amanda McKee had done for her, Maggie had included Tim on the manufacturing calls and felt he was up to speed. Maggie also sent Tim because, with mounting delays, the sales team was starting to lose the support of several new cryptocoin startups who had pledged their financial backing to Maggie. In her prior sales role, Maggie had worked hard to cultivate those relationships because she knew how important their support would be when the Cryptominer was launched. Since taking over as Product Manager, Maggie had little time to stay in touch with her contacts at those cryptocoin startups, and so she asked Tim and Lynn to provide coverage instead. Given Tim’s more passive approach, and his increasingly distant relationship with Lynn, these relationships didn’t get the attention they deserved (and had received under Maggie’ leadership). Not only were the relationships with the cryptocoin companies slowly eroding, but many of them also had tough questions about the repeated Cryptominer delays; however, neither Tim nor Lynn was able to offer satisfactory answers. Maggie had fully briefed Tim on the causes, yet Tim hadn’t communicated these to Lynn or anyone else who ought to have known. Losing the support of these key players would be a disaster, and unfortunately they had begun to hear the same whispers about Coin Rig’s potentially superior device. Maggie shifted her attention to assuaging their concerns but couldn’t attend to them fully because so much of her time was spent trying to manage suppliers in China from afar (in addition to everything else). Maggie was in crisis mode and reached out to both Dalia Kordova and Mike Jeffries for help keeping the cryptocoin companies happy. Unfortunately, all she received was some advice over email rather than a serious commitment of time and/or resources to addressing her concerns. She had hoped to solicit their help on the manufacturing problems as well, but given their tepid response to her first request, she decided not to ask. It was not only at work where Maggie was having a tough time. Her racing mind wouldn’t allow her to sleep even when she had time. She rarely cooked and felt, in her words, “absolutely disgusting” from a steady diet of take-out. She used to exercise, but she was at work by 8AM and leaving at or after 9PM almost every night. After work, she was often texting with Hong Wei and other partners in China, as that was the start of their workday. Instead of connecting with friends and taking trips out of town, her weekends were spent on the couch or, most often, at the office. Her friends did not text or call like they had just seven months prior because they knew Maggie probably could not talk and definitely could not meet up. As such, Maggie was surprised to receive a call at 10:15 on a Friday night. It was Mike Jeffries, so Maggie picked up. After enduring a few minutes of Mike yelling at her about the delays, Maggie learned that Hong Wei had serious complaints about Maggie’s lack of guidance and leadership on the manufacturing problems. She also learned that Mike and Dalia now saw the situation as so dire that they were returning early from their out-of-town investor meetings and would be in the office all next week to focus exclusively on the launch. Mike’s voice, by the end of the call, had that same frazzled tone Maggie remembered from when Amanda left. QUESTIONS TO THINK ABOUT BEFORE COMING TO CLASS What are the immediate problems Maggie is facing? What is underlying these problems? What has Maggie done to try to address these problems? How should Maggie direct Mike and Dalia’s time while they’re in the office? How should she prepare for the week ahead?