Problem Statement
Cork’d is a New York based wine social network. The site has been very successful; however, it is at a point where it is encountering financial distress. Cork’d’s start-up funds are diminishing and they are shorthanded on developers. The company is confronted with two major alternatives (1) Stay with their current business model or (2) Create a different business model in order to not only stay on business but to compete and regain the members both individuals and wineries that they have lost to their competitors.

Situation Analysis
Since Cork’d inception in February 2006, the company was designed for and by wine lovers. Time showed that this industry had such a demand that needed more dedication and that is when Gary Vaynerchuck bought the company. He, then later appointed CEO, Lindsay Ronga to run the company. Under the new administration, individuals could register for free; however, the main source of income came from the $999 winery annual signup fees. There is brief mention of other source of revenue, which are the commissions Cork’d receives for outbound clicks to an external third-party site that sold wines. Being that their business model did not utilized any other type of strategy to attract customers (wineries and individuals) not even through web advertisements, Cork’d was constrain to their sole revenue source.
After the re-launched of the new and improved website, 42 wineries signed up, as previously mentioned at $999 each. However, this amount of money ($41,958) was not going to be able to cover for their expenses as follow described:
• Labor costs
- Lindsay Ronga – CEO - Harvard MBA
- Full-time CTO
- Five summer interns
• Other costs
- Technology (web hosting, etc.)
- Overheads (offices)
- Promotions (wine tasting, etc.).
In order to solve this economic issue and become a successful organizations,