SIMPLEX SOLUTIONS:

EXPANDING THE
ENTREPRENEURIAL TEAM

Prof. Balagopal Vissa developed this decision scenario based on publicly available
information on Singaporean ventures. This case is to be used as the basis for class
discussion rather than to illustrate either effective or ineffective ways of managing
organizations.

© Balagopal Vissa & INSEAD. All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form
or by any means – electronic, mechanical, photocopying, or otherwise – without the
permission of INSEAD.

Keywords: Start-up team; Hiring venture team members; Entrepreneurship; Fault lines;
Team demographics

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 SIMPLEX SOLUTIONS

Martin - Chief Executive Officer (CEO) and Peter – Chief Technology Officer
(CTO), cofounders of Simplex Solutions, were considering two strategic hiring decisions
that could make or break their vision for the next stage of their company’s growth. The
key dilemma that Martin and Peter faced was this: Should they be hiring frontline
employees or searching for individuals that are effectively co-founders, in the sense that
they will have significant ownership stakes in the venture and will be equal in status and
rank with the initial founders. After considerable debate, they concluded that they were in
fact looking for co-founders who would jointly build their fledgling venture. Naturally, as
co-founders, they will – just like Martin and Peter – hold a considerable share of equity in
the new venture and will be officers of the company.

Founded in early 2002, Simplex Solutions is a software company dedicated to

developing and marketing optimized event scheduling solutions. By combing the latest
research in Constraint Programming, Operations Research and Heuristic Search their
software platform provides robust and cost-effective solutions that could add unique
value to customers by generating optimized event schedules reliably and extremely fast,
when compared to existing solutions. The scheduling solutions are professionally
designed, complete with user-friendly interfaces, and are integrated in the customer’s
software and hardware infrastructure. These solutions could be valuable in diverse
markets such as sports event scheduling, university time tabling, flight crew / cockpit
crew rostering or nurse / doctor rostering.

Simplex Solutions secured angel investor funding for prototype development and
currently has 10 full time employees (mainly software programmers) on its payroll and a
number of part time staff. A near fatal cash flow crisis a few months earlier and the need
for further cash infusion from external investors to fund the next stage of the venture’s
evolution convinced Martin and Peter that they desperately needed a full time Chief
Financial Officer (CFO). In addition, very successful user trials with National University

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© 2005 Balagopal Vissa, INSEAD
Hospital and John Hopkins in Singapore convinced them that the most promising
application of their technology was to automate the rostering of doctors and nurses in
large hospitals. Simplex Solutions urgently needed a full time Chief Marketing Officer
(CMO) who would build a sales and marketing organization and lead the development of
a viable business in this market.

Currently, senior nursing officers and doctors spent about 3 days a month in
manually drawing up a roster schedule – which was also significantly sub-optimal. In
contrast, Simplex Solution’s software product enables near optimal rostering in less than
1 hour! Simplex hoped to capitalize on the three benefits that they believed their product
provided to hospitals: (i) enormous time savings for their senior nurses and doctors who
prepare the roster schedule and whose time is better spent on actual operations (ii)
integration of their personnel management systems (such as leave and overtime
management) and payroll systems with roster schedules and (iii) the inherent fairness of
the system from the hospital employee’s point of view since it allowed nurses and doctors
to “bid” for particular time offs (very much like bidding for electives in MBA courses at
business schools such as INSEAD, where students are allocated a “capital” of 100 points
which they used to “pay” for different electives).

Martin (30 years old), born and brought up in the United States, is an MD from
Harvard Business School and a PhD in Artificial Intelligence from MIT. Prior to starting
Simplex, he was, for 4 years, a Clinical Fellow in Internal Medicine at John Hopkins
University’s Singapore campus in the Clinical Services practice. Martin’s career has
combined clinical medicine with a solid foundation in science and computer
programming. He has extensive experience in creating computer models of biologic
systems and also has numerous scientific publications in the area of neural network
algorithms.

Peter (34 years old) brings to the table 12 years of constraint programming
research and practice. Prior to starting Simplex he worked as a research scientist at the
National University of Singapore’s Center for Artificial Intelligence on event scheduling

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applications ranging from university timetabling, automated music composition, to sports
scheduling. He has authored several international publications on constraint programming
applications and served on the programming committee of the main international
conferences on constraint programming and timetabling. Born and brought up in the
United Kingdom, Peter holds a Master of Science in computer science from Imperial
College - London.

Expending considerable time and resources, Martin and Peter assembled a list of
12 candidates. After several months of intensive interviews they narrowed the list to 3
candidates each for the position of CFO and CMO respectively. A brief profile of each
candidate is given below.

Which candidate would you pick for each of these positions and why?

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© 2005 Balagopal Vissa, INSEAD
 PROFILE OF CANDIDATES FOR THE POSITION OF CHIEF FINANCIAL
OFFICER (CFO)

Candidate 1: Pierre

In his mid 30s and currently CFO of an established medium size manufacturing company
in the west coast of the US, Pierre has a reputation of being an extremely high achiever.
His peers rate him as being excellent in managing internal control systems as well links
with the banking and finance community in the west coast. References are universally of
the opinion that he is someone who can do the job and he has the track record to prove it.
In his current job, he had created a novel organizational structure that encouraged
purposeful competition among his subordinates. Some of his former subordinates feel
that he is a bit aloof, does not suffer fools gladly and could often come across as rude and
curt. However, his more loyal subordinates feel the aloofness probably stems from his
privileged background. Pierre is a certified accountant trained in France (his home
country) as well as the US and holds an MBA from Wharton.

Candidate 2: Wei

CFO of a logistics company in Taiwan, and in his mid 30s, Wei was part of the team
involved in taking the company from start-up to a successful IPO in 5 years despite very
difficult conditions in the financial markets. This was the third start-up that he was
associated with, and with his current company stabilizing into a going concern post-IPO,
Wei was interested in moving on to his next start-up. He had spent his entire professional
career working in Taiwan and welcomed the chance to gain international experience. A
soft spoken person, Wei has a reputation of being an extraordinary team player with a
trustworthy, low key demeanor. His peers rate him as being very smart and thoughtful
with a fine, analytic mind. Wei is a certified accountant trained in Taiwan (his home
country) as well as the US and he holds an MBA from Stanford.

Candidate 3: Sau Yin

Currently the CFO of an electronic waste recycling and processing services company
based out of Singapore, Sau Yin was a critical member of the management team that led
the company to IPO. Sau Yin has the reputation among her subordinates of being an
exceptional team builder who had nurtured and coached them when they joined the
company. Sau Yin (in her early 30s) is perceived by her peers as an exceptionally gifted
person with extraordinary technical as well as people skills. Sau Yin holds an MBA from
Harvard Business School and an undergraduate degree in Economics from the National
University of Singapore (her home country).

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 PROFILE OF CANDIDATES FOR THE POSITION OF CHIEF MARKETING
OFFICER (CMO)

Candidate 1: Kumar

VP of Marketing of a highly reputable medical imaging company, in his late 30s, Kumar
had strong marketing skills and experience. In his current position, based out of
Singapore, he leads a sales and marketing team of 25 people. Prior to joining this
company he had been the proprietor of a small advertising business. Kumar attended the
Delhi School of Economics, arguably the best school to study economics in India (his
home country) and an MBA from Wharton. Kumar has a reputation for providing strong
leadership to his team and he projects tremendous enthusiasm about Simplex’s future -
offering numerous ideas about leveraging the company’s lead in the marketplace through
strategic partnerships. However, some of his former subordinates feel that Kumar can be
very instrumental in dealing with people.

Candidate 2: Lucia

VP of marketing with a large and highly reputed American medical devices company, in
her early 30s, Lucia has the reputation of being an extraordinary team builder, earning the
loyalty of employees at all levels. In her current position, as the head of the business unit
selling specialized surgical equipment to hospitals in Asia-Pacific, she has increased
revenues from $1 million to $50 million in 30 months. Prior to this job, Lucia was the
founder and CEO of a failed start-up selling medical equipment training services to
hospitals. She holds a bachelors degree in fine arts from the National University of
Singapore (her home country) and an MBA from Harvard Business School.

Candidate 3: Alan

In his late 30s and currently VP Marketing of a fledgling division within a large and
established manufacturing company in the US mid-west, Alan is an exceptionally high
achiever. In his current job, Alan had increased divisional revenues from zero to $20
million in a year’s time and more importantly, was instrumental in developing an
excellent new product pipeline, assuring the future growth of the division. His peers and
superiors rated him as a razor sharp mind with excellent verbal, written and visual
communications skills. However, some of his peers and subordinates feel that he is often
a bit unapproachable because he is very short tempered and argumentative, especially in
high stress situations. Despite his under-privileged background, his excellent academic
performance got him a fellowship to attend the University of Pennsylvania where he
majored in economics. He also holds an MBA from Harvard.

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