Danceture.com Business Plan
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- Primrose Hutchinson
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1 Danceture.com Business Plan
2 Brand Positioning Danceture.com was conceptualized by Electronic Dance Music (EDM) aficionados that were frustrated with a gap in the market. Currently, there are no effective and compelling websites that anyone interested in EDM can go to for the latest information about EDM. In addition, content on other sites is dry and text-heavy. Danceture.com is a new approach to keeping users up-to-date with the latest news and stories in a rapidly growing genre that is increasing in popularity. We want to provide fellow EDM aficionados with a great source of high-quality and unique content on everything about EDM yet keeping it simple for those that only want news in a particular subset. We also intend to be the Wikipedia on steroids of EDM, with our Brain technology indexing content to be the best source of EDM information. Business Model We have four primary revenue drivers: 1) Ad Network Our own advertising network with partner EDM music blogs and event sites, would allow us to rapidly establish the Danceture brand and generate significant revenue through advertisers looking to target the dance music community. 2) Display Advertising We intend to drive our initial revenue through direct sales to local advertisers (City Guide) as well as enable users to advertise through our self-serve sidebar widget with fixed 12x12 banner ads. In addition, we will use Google Small Business Solutions in our beta development phase. 3) Affiliate Marketing Essential to our brand and our marketing strategy is developing partnerships with companies that sell products in the EDM genre event tickets, DJ equipment, and songs. We can generate a percentage of sales through affiliate marketing by leveraging our editorial content. 4) Premium Content Once our site moves beyond the beta phase and is well established and our Brain and guides (city, tech, music) have been developed out with significant high-quality content, we will offer a premium service that allows downloads of music, access to exclusive content (such as DJ techniques), as well as downloadable city guides from our site for a subscription fee.
3 Management Team 1. Editor-in-chief / Resident Music Guru: Kevin Kaiser Kevin founded his own music website Dancing Astronaut, which is the precursor to Danceture. He has written and edited this site for six months and managed all of its advertising. 2. Finances/Advertising: Alexander Ingram Alex will soon be graduating with a B.A. degree in Economics from Stanford University. He founded and served as CEO of the college media website GuruCampus.com, which aggregated virtually every online college newspaper in the country. He will be working at Credit Suisse in their Technology, Media, and Telecommunications practice in the fall. Alex previous served as a summer associate at O Shaughnessy Asset Management in Stamford, CT. 3. Advertising/Business Development/Site Design: Tim Lim Tim is Biomechanical Engineering major with an additional degree in Management Science and Engineering. He has a strong interest in the Internet industry and will be working in operations strategy management in Yahoo's SE&O division after graduating in June. He has previous experience consulting for Booz & Company, an internet/telecommunications technology company on their broadband strategy, as well as in product design for the 2010 iphone division at Apple in Cupertino. 4. Content producers/editors/pr: Stacie Chan and Miranda Simon Stacie produces content and social media for B-net. She has written for two community newspapers and did investigative reporting for KNBC L.A. Miranda has had experience producing content for the online news site Salon.com, where she also manages part of their social media communications. She has also reported for El Universal, one of the largest national newspapers in Mexico City. 5. Website coding/maintenance/business Development: Emmanuel Emmanuel is a Management Science and Engineering major and has had experience working with Java, C++ and HTML. Upon graduation Emmanuel will be working at Google on The Online Sales and Operations (OSO) team.
4 Product Marketing Strategy Once we launch the beta version of our site on June 3, 2010, we intend to drive our user traffic and increase brand recognition through the following strategy: Initial Growth 1. Advertise through EDM (Electronic Dance Music) blogs on a content sharing basis. 2. Make use of the Facebook s social graph. 3. subscription and weekly Danceture newsletters: eep fresh, up-to-date content going to members that is visually exciting and media rich to help to retain traffic and potentially grow users. Members can forward newsletters to friends or networks Sustainable growth and growth strategy 1. Develop partnerships with local venues featured in our city guide section we feature their clubs/bars/lounges in our content with user reviews and original editorial content, and they feature the Danceture name/brand in their clubs similar to Yelp model. 2. Ad Network, blog growth, EDM network. As our site is a one stop EDM shop, we can leverage our content network and continue to grow through the users that visit specific niches in EDM and want to branch to other niches. For example, an online user that frequents EDM music mix sites might be interested in a club or the latest equipment, and through our network discover our site and become a regular user. With funding to launch an Ad Network, we will have significantly greater leverage as we grow our advertising network in a very targeted genre, so we can provide advertisers with targeted, specific and relevant users (and vice versa) to translate to high CPMs, high CPCs and high CTRs. 3. Building brand image through EDM networks enthusiasts, clubbers, DJs, electronic equipment suppliers/buyers, and associated networks is key. Through our high quality content and unique editorial reviews, we intend to draw traffic and retain traffic, as well as enhance our reputation as THE online destination for all things EDM.
5 Competition Several general EDM online sites exist in the market: DJMag.com, residentadvisor.net, theuntz.com, and mixmag.net DJmag.com is the online version of "DJ magazine". Its paper edition is very popular, and is a monthly magazine dedicated to Electronic Dance Music and DJs. The magazine is translated in to Portuguese, Polish, Ukrainian, Lithuanian, Chinese, Bulgarian, and Italian. Strengths The paper magazine has a significant subscriber base, and has styled itself as "the world's largest selling dance music magazine. It currently claims sales of 27,500 copies out of a total circulation of 32,250 (with 5,000 given away free). The content on its website mirrors that of its paper version. Shortcomings While the brand is established, there are many shortcomings with the website. The navigation of the site is difficult and the content is not interactive. Information feels impersonal, and with the confusing layout the experience is not very engaging or compelling. The forum is limited, and it does not seem to translate well to social networks, hence limiting online growth. Poor website monetization: The website is highly dependent on paper magazine subscribers wanting a simple online transcription of the magazine content and monetizes predominantly through subscriptions. Poor site structure: Further exploration of the site shows that search doesn't return very relevant results for music, seems to be more event based. 2. MOG Music Network MOG is a vertical ad network that targets a wide variety of music blogs. MOG does not focus on the electronic dance music space. Our Competitive Advantage Better for users Danceture.com intends to aggressively enter the dance music niche and provide fresh and up-to-date content with an attractive and simple user interface, with compelling and media rich content that is personalized users can sign in and indicate what aspects of EDM they are interested in, and the feeds using our BRAIN keyword system will pull news and stories that are relevant to them.
6 Better for advertisers/affiliates With each user s preferences easily visible on the site from their news preferences, as well as clear navigation through our music, events, brain and technology pages, our advertisers will be able to reach more relevant customers and hence drive higher conversions. 3-year timeline for Danceture Year 1 The core focus in our first year is to develop our content, which will drive our site traffic growth. We will build Danceture s brand recognition in the EDM community and establish our site as a compelling and high quality content-rich source for EDM aficionados. We want to ensure that site navigation is fully functional, build our Brain, increase our user base, and develop our user input through the Brain. We will generate revenue in year 1 through several channels. Firstly, direct sales through Doubleclick for small businesses, where we will have a sales team to reach out to advertisers. In addition we would reach out to affiliate sales partners, and advertise their products on our site. We will market our site through social networks as well as EDM blogs and similar sites to achieve our year 1 goal of reaching 40,000 unique visitors per month by the end of the first year. Year 2 Once the brand is more established and we have significant user and site traffic, we then turn to our Ad Network. At this point, Danceture will be a recognizable name in the EDM community, and given our revenue streams from advertising and affiliate programs, we will build out an Ad Network (requiring substantial investment as highlighted in the financial plan. We will hire a full sales team to drive this growth, and focus on the real value proposition providing the link between our relevant and high-spending users (and those on network blogs/sites as well) and the advertisers that want to reach the EDM community. Year 2 is when our true value proposition comes into play, as we will leverage our users and our network to expand and capture a highly monetizeable community for potential advertisers. Year 3 After 2012 we plan a continued expansion of our Ad Network, and by leveraging our rapid user growth and established brand name we will continue to offer additional services that will improve the user experience. We will offer exclusive and custom content such as in-house electronic dance music mixes and live event recordings. We
7 want to develop direct relationships with hardware manufacturers such as Pioneer and offer improved incentive structures to buy through Danceture.com by offering increased promotional discounts to our users, and eventually exploring branding our own recommended equipment that we review on our website. Once our content and users are established with our core products we want to improve the user experience by providing more premium and exclusive content.! Current Offering! Danceture has not yet been incorporated. We seek to raise $125,000 in capital to develop our site and content and to begin a direct sales effort for our advertising inventory. The capital will largely be used to build out the site s infrastructure, hire an engineer, and fund a capable direct sales team.
8 Summary - Income Statement Revenue 121, ,761 4,350,194 Expenses 130, ,167 1,330,167 Expense/Revenue Margin 108% 92% 31% Operating Profit (EBITDA) -9,475 70,594 3,020,028 Operating Income Margin -8% 8% 69% Cumulative EBITDA -9,475 61,119 3,081,147 Investing Income Capital Expense Earnings Before Taxes -9,475 70,594 3,020,028 Income -3,790 28,238 1,208,011 Earnings -9,475 42,356 1,812,017 Net Margin -8% 5% 42% Ending Cash
9 Cash Flow from Operations MONTHLY 2010 June July August September October November December Revenues 0 7,021 14,042 21,063 23,531 26,288 29,368 Expenses 10 7,510 22,267 25,100 25,100 25,400 25,400 Net Income ,225-4,038-1, ,968 Net Cash Provided from Financing Activities 125,000 Beginning Cash 125, , , , , , ,557 Ending Cash 124, , , , , , , Revenues 36,779 41,418 46,668 52,612 59,347 66,987 75,659 85,511 96, , , ,586 Expenses 67,167 64,083 54,083 54,083 64,500 75,333 75,333 80,750 79,750 79,750 85,167 85,167 Net Income -30,388-22,665-7,416-1,472-5,153-8, ,761 16,966 29,721 38,840 55,420 Net Cash Provided from Financing Activities Beginning Cash 115,525 85,137 62,472 55,056 53,585 48,432 40,086 40,411 45,172 62,138 91, ,700 Ending Cash 85,137 62,472 55,056 53,585 48,432 40,086 40,411 45,172 62,138 91, , , Revenues 159, , , , , , , , , , , ,188 Expenses 101,833 91,833 97, , , , , , , , , ,083 Net Income 57,686 89, , , , , , , , , , ,105 Net Cash Provided from Financing Activities Beginning Cash 186, , , , , , ,480 1,163,695 1,444,268 1,776,524 2,174,691 2,649,042 Ending Cash 243, , , , , ,480 1,163,695 1,444,268 1,776,524 2,174,691 2,649,042 3,206,147
10 Revenue Summary YEARLY Affiliates 29, , ,128 Advertising 92, ,262 2,234,873 Ad Network 0 157,419 1,408,194 TOTAL 121, ,761 4,350,194 MONTHLY 2010 June July August September October November December Affiliates 0 1,688 3,375 5,063 5,656 6,318 7,059 Advertising 0 5,333 10,667 16,000 17,875 19,969 22,309 Ad Network TOTAL 0 7,021 14,042 21,063 23,531 26,288 29, Affiliates 7,886 8,810 9,842 10,996 12,284 13,724 15,332 17,128 19,135 21,378 23,883 26,681 Advertising 24,924 27,844 31,107 34,752 38,824 43,373 48,456 54,134 60,477 67,564 75,481 84,326 Ad Network 3,969 4,764 5,718 6,864 8,239 9,890 11,871 14,249 17,103 20,530 24,643 29,579 TOTAL 36,779 41,418 46,668 52,612 59,347 66,987 75,659 85,511 96, , , , Affiliates 29,808 33,301 37,203 41,562 46,432 51,873 57,952 64,742 72,329 80,804 90, ,851 Advertising 94, , , , , , , , , , , ,738 Ad Network 35,505 42,617 51,155 61,403 73,703 88, , , , , , ,600 TOTAL 159, , , , , , , , , , , ,188
11 Costs Summary YEARLY MONTHLY 2010 Staffing 121, ,667 1,224,167 June July August September October November December Legal 8,000 10,000 10,000 Staffing 0 7,500 14,167 25,000 25,000 25,000 25,000 Ad Network Setup 0 20,000 0 Legal 8,000 iphone Application 0 20,000 0 Ad Network Setup Server / IT 1,120 38,500 96,000 iphone Application Total 130, ,167 1,330,167 Server / IT Total 10 7,510 22,267 25,100 25,100 25,400 25, Staffing 46,667 52,083 52,083 52,083 57,500 68,333 68,333 73,750 73,750 73,750 79,167 79,167 Legal 10,000 Ad Network Setup 10,000 10,000 iphone Application 5,000 5,000 5,000 5,000 Server / IT 500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 6,000 6,000 6,000 6,000 Total 67,167 64,083 54,083 54,083 64,500 75,333 75,333 80,750 79,750 79,750 85,167 85, Staffing 85,833 85,833 91,250 96, , , , , , , , ,083 Legal 10,000 Ad Network Setup iphone Application Server / IT 6,000 6,000 6,000 6,000 6,000 6,000 10,000 10,000 10,000 10,000 10,000 10,000 Total 101,833 91,833 97, , , , , , , , , ,083
12 Visitor Projections YEARLY MONTHLY Unique Visitors Linear Growth 348,619 2,490,138 4,880,670 June July August 2010 September October November December Geometric Growth 143, ,847 3,491,988 Unique Visitors Pageviews Linear Growth 0 16,601 33,202 49,803 66,404 83,005 99,605 Linear Growth (Average) 5,926,527 42,332,338 82,971,382 Geometric Growth 0 8,333 16,667 25,000 27,929 31,202 34,858 High 8,715,481 62,253, ,016,738 New Visitors Medium 5,577,908 39,842,200 78,090,712 Linear Growth 16,601 16,601 16,601 16,601 16,601 16,601 Low 3,486,192 24,901,375 48,806,695 Geometric Growth 8,333 8,333 8,333 2,929 3,273 3,656 Geometric Growth (Average) 2,447,832 15,705,405 59,363,803 Pageviews High 3,599,754 23,096,183 87,299,711 Linear Growth (Average) 0 282, , ,647 1,128,862 1,411,078 1,693,294 Medium 2,303,842 14,781,557 55,871,815 High 0 415, ,046 1,245,069 1,660,092 2,075,115 2,490,137 Low 1,439,901 9,238,473 34,919,884 Medium 0 265, , ,844 1,062,459 1,328,073 1,593,688 Low 0 166, , , , , ,055 Geometric Growth (Average) 0 141, , , , , ,594 High 0 208, , , , , ,461 Medium 0 133, , , , , ,735 Low 0 83, , , , , , Unique Visitors Linear Growth 116, , , , , , , , , , , ,817 Geometric Growth 38,943 43,506 48,604 54,300 60,663 67,771 75,712 84,584 94, , , ,759 New Visitors Linear Growth 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 Geometric Growth 4,085 4,563 5,098 5,695 6,363 7,108 7,941 8,872 9,911 11,073 12,370 13,820 Pageviews Linear Growth (Average) 1,975,509 2,257,725 2,539,940 2,822,156 3,104,371 3,386,587 3,668,803 3,951,018 4,233,234 4,515,449 4,797,665 5,079,881 High 2,905,160 3,320,183 3,735,206 4,150,229 4,565,252 4,980,275 5,395,298 5,810,321 6,225,344 6,640,367 7,055,390 7,470,412 Medium 1,859,303 2,124,917 2,390,532 2,656,147 2,921,761 3,187,376 3,452,991 3,718,605 3,984,220 4,249,835 4,515,449 4,781,064 Low 1,162,064 1,328,073 1,494,083 1,660,092 1,826,101 1,992,110 2,158,119 2,324,128 2,490,138 2,656,147 2,822,156 2,988,165 Geometric Growth (Average) 662, , , ,098 1,031,266 1,152,108 1,287,111 1,437,933 1,606,429 1,794,668 2,004,966 2,239,905 High 973,578 1,087,661 1,215,112 1,357,497 1,516,567 1,694,277 1,892,811 2,114,608 2,362,395 2,639,218 2,948,479 3,293,978 Medium 623, , , , ,603 1,084,337 1,211,399 1,353,349 1,511,933 1,689,100 1,887,027 2,108,146 Low 389, , , , , , , , ,958 1,055,687 1,179,392 1,317, Unique Visitors Linear Growth 315, , , , , , , , , , , ,028 Geometric Growth 147, , , , , , , , , , , ,028 New Visitors Linear Growth 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 16,601 Geometric Growth 15,439 17,249 19,270 21,528 24,050 26,869 30,017 33,534 37,464 41,854 46,758 52,237 Pageviews Linear Growth (Average) 5,362,096 5,644,312 5,926,527 6,208,743 6,490,958 6,773,174 7,055,390 7,337,605 7,619,821 7,902,036 8,184,252 8,466,468 High 7,885,435 8,300,458 8,715,481 9,130,504 9,545,527 9,960,550 10,375,573 10,790,596 11,205,619 11,620,642 12,035,665 12,450,688 Medium 5,046,679 5,312,293 5,577,908 5,843,523 6,109,137 6,374,752 6,640,367 6,905,981 7,171,596 7,437,211 7,702,825 7,968,440 Low 3,154,174 3,320,183 3,486,193 3,652,202 3,818,211 3,984,220 4,150,229 4,316,238 4,482,248 4,648,257 4,814,266 4,980,275 Geometric Growth (Average) 2,502,375 2,795,600 3,123,186 3,489,157 3,898,013 4,354,777 4,865,065 5,435,148 6,072,033 6,783,547 7,578,435 8,466,468 High 3,679,963 4,111,177 4,592,920 5,131,113 5,732,371 6,404,084 7,154,508 7,992,865 8,929,460 9,975,804 11,144,757 12,450,688 Medium 2,355,176 2,631,153 2,939,469 3,283,913 3,668,718 4,098,614 4,578,885 5,115,434 5,714,854 6,384,514 7,132,645 7,968,440 Low 1,471,985 1,644,471 1,837,168 2,052,445 2,292,949 2,561,634 2,861,803 3,197,146 3,571,784 3,990,322 4,457,903 4,980,275
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