STRATEGIC BUSINESS PLAN

Transcription

1 STRATEGIC BUSINESS PLAN

2 EXECUTIVE SUMMARY BUSINESS DESCRIPTION COMPETITIVE ANALYSIS PRODUCT MARKET RESEARCH MANAGEMENT TEAM PLAN MARKETING PLAN FINANCIAL PLAN NOTES Business 4 Competition 4 Market Research 4 Management 5 Marketing 5 Finance 6 Business Overview 8 Mission Statement 9 Vision Statement 9 Core Values 10 Competitor Profiling 12 SWOT Analysis 13 Competitor Summary 14 Customer Demand 16 Customer Profiling 17 Leadership Roles 19 Personnel 20 Beta Marketing 22 Final Marketing 23 Revenue & Web Costs 25 Operating Expenses 26 Financial Summary 27 Appendices 29 References 31

3 Chapter 1 EXECUTIVE SUMMARY 3

4 1 Business Flair.com, Inc. will create the first Rewards Based Online Video Sharing Platform. Flair will be a web-based organization that will aim to provide the Internet community with high quality user-submitted video content. 1 Competition Video Sharing Site % of Online Video Sharing Market 81.9% 8.8%.1% 1 Market Research Percent by Age Group of YouTube Users % % US Online Video Viewers (Millions) 19.1% 57.8% 4

5 1 Management Founders CEO CMO Lead Product Manager Chynna Fry Company Cheerleader Ensures Communication Final Decision Maker Chari Redwine Head of Marketing Builds Relationships with Advertisers Innovates Ad Campains Kirby Kohlmorgen Head of Web Developers and Designers Site Feature Creator Technology Coordinator Employees Web Developers Develops Back-End Interfaces Develops in Redis and Mongo 3+ Years Working Experience BS in Computer Science Web Designer Develops Front-End Interfaces Has a Spectacular Portfolio Vast Technical Knowledge BS in Graphic Design 1 Marketing For first 6-12 months Flair will be an invitation only beta. All invitations will be distributed through Pay With a Tweet. After the beta period, the Pay With a Tweet invitation will be shutdown and advertising will shift exclusively to advertising space on Google and Facebook. 5

6 1 Finance Revenue Web Costs Gross Profit Gross $ per video Year One Year Two Ex.1 Year Two Ex.2 $0 $0 $0 $0 $182,500 $60,000 $122,500 $.0034 $547,500 $139,200 $408,300 $.0037 Gross Profit Operating Expenses Net Profit $0 $263,140 $263,140 $122,500 $253,140 $130,640 $408,300 $253,140 $155,160 $.0044 $

7 Chapter 2 BUSINESS DESCRIPTION 7

8 2 Business Overview Flair.com, Inc. will create the first Rewards Based Online Video Sharing Platform. Flair will be a web-based organization that will aim to provide the Internet community with high quality user-submitted video content. Flair recognizes the infancy of video sharing and how it is one of the most rapidly growing industries on the Internet, and Flair intends to capitalize on this industry. Typical video sharing sites like YouTube only provide their users with the video sharing service, but Flair intends to draw its users with the incentive of rewards, while at the same time generating higher content-quality videos through the same incentive. Flair s actual site will be very similar in interface to that of its competitors. Flair will have two different types of users: producers and consumers. Producers produce the video content that drive the sites interactions, where as consumers view, rate, and share videos across Flair s site as well as social networks. What makes Flair unique is its ranking and reward systems. The site will allow users to rank each video watched by giving the video a Flair Rating, an equivalent to a one to five star rating, see Appendix A. Video producers will be able to win prizes for receiving flair. Flair also intends to be one of the most effective video sharing sites. Users will access the site by signing in with either their Facebook or Twitter login, see Appendix B. This would have several advantages over a typical login. Firstly, both Facebook and Twitter, particularly Facebook, can provide information about the user to Flair. Information such as , age, sex, location, etc. will allow Flair to know more about the people visiting the site, and what videos they are watching. Secondly, Facebook can also provide what each user has liked on Facebook. This will allow Flair to more effectively recommend videos to each user. Thirdly, we will be able to tell our advertising clients more about the people that are interacting with their advertisements. Finally, the ease of using an existing login versus creating another username and password for the user to remember benefits the user. Money will be generated by selling video advertising packages to companies. Companies will be charged CPM (cost per thousand) in terms of video views. This cost will also be prepackaged a number of rewards that the advertiser will give away. Advertisers will determine the prizes, and more often than not the rewards will be discounts on products by the advertiser. An example would be 6 months free of a Netflix subscription. This way the advertiser spends less money and promotes their product at the same time. 8

9 2 Mission Statement Our mission is to provide users with an infrastructure where users can create a community of video content producers and consumers, and where these users can be rewarded with real prizes for their efforts and their high quality video content. 2 Vision Statement Within three to five years Flair aims change the video sharing market place, and be the leader in this new market of Rewards Based Online Video Sharing. 9

10 2 Core Values Placing the user s experience before all other endeavors. Encouraging the growth of a positive user based community. Promoting the pursuit of individual talent. Using only user submitted videos. Supplying users with quality video content. Keeping our service free of charge for users. Creating a positive user environment for all ages. Using analytics and metrics to ensure effectiveness in user interface and product development. Working innovatively with advertisers. 10

11 Chapter 3 COMPETITIVE ANALYSIS 11

12 3 Competitor Profiling Flair s competition for the online video sharing market can be distilled down to three companies: YouTube.com, Vimeo.com, and Viddler.com. Each of the online sites have been profiled according to three categories: description, strengths, and weaknesses. Flair believes that its strengths are able to provide were these other companies have failed. Description YouTube is an online video sharing site that allows anyone around the world to upload, view, and share videos. Vimeo is an online video sharing site geared towards indie filmmakers and more creative video content generators. Viddler is an online video sharing site for brands and other businesses. Strengths YouTube s service is 100% free to use. YouTube currently maintains 82% of all online video sharing. Vimeo offers its video viewing free of charge. Offers HD streaming Viddler has found a niche in brand advertising purely on their site. No actual website advertisements. Weaknesses Poor video content far exceeds quality video content. Video consumers far out weigh video producers. Limits users to 500MB s of video data per week. Charges users for premium upload service. Viddler focuses only on brands and businesses. Charges users for upload service. 12

13 3 SWOT Analysis Threats Opportunities Weaknesses Strengths Flair is a new idea in the young market of video sharing websites. Flair gains its edge by providing users with physical rewards for their video content. If Flair is not popular, advertisers will not pay for advertising space on the website. Flair enters as a small competitor in themarket going against YouTube. Barriers to entry and exit are few. Flair will grow with the demands of its user community. Competitor s who already maintain a large portion of the market could quickly innovate towards a reward-based model as well. Flair s Internet based infrastructure allows for it to be easily scalable. The actual service is free to the user. Flair has a limited budget. There are many substitutes such as YouTube, Vimeo, etc. The Internet is a large, young, and world-wide market. A downward economy should not negatively impact demand. Users could find ways to game the system, and make the video sharing competition unfair. Flair is 100% user driven, therefore the user is in control of their experience. Will take six to twelve months to build the site. New businesses are entering the online market successfully. Limiting staff while iterating innovation and site development. 13

14 3 Competitor Summary In terms of popularity and overall site usage YouTube with over 80% of the market share is the obvious leader, see appendix C. Entry into this current market will be difficult, but Flair feels that it will be able to leverage its reward system to draw users. The intention of having higher quality content as well as content that is dynamically adjusted to each user will be main leverage points. 14

15 Chapter 4 PRODUCT MARKET RESEARCH 15

16 4 Customer Demand The demand for online video sharing has streadily inceased over the years. In October of 2009 there were 11 billion videos streams watched by 139 million unique users last month in the U.S., which represents growth of 24.8% and 11.3% respectively compared with September 2008 (Sysomos). YouTube alone has 1.2 billion video views each day as of 2009 (TechCrunch). Currently, in 2011, there are 183 million online internet video viewers, more that a 300% increase from 2003 (Hybridsem). Not only is there a market for uploading, watching, and sharing videos online, but there is also a market for achievement based reward systems. Kiip.com, founded only a little more that a year ago has already formed a network of 15 millions users for its iphone based game reward system (Kiip). With Kiip users are rewarded with real rewards for their achievements on iphone based games. Kiip also just recently, as of April of 2011, recieved 4 million dollars of seed money for the companies startup (CrunchBase) US Online Video Viewers (Millions) 0 7/10 10/10 1/11 4/10 7/10 11/11 Kiip Users (Millions) 16

17 4 Customer Profiling The Internet is a worldwide market; this causes there to be a large and varying demographic for online video sharing. However, within this varying demographic there remains to be a dominating age in which video sharing and consuming is most popular percent of the users on YouTube are between the ages Marketing will be directed toward this demographic to maximise Flair s site usage and minimize wasteful spending on advertising to a group that is not interested in Flair s services. Percent by Age Group of YouTube Users % % 60+ Percent by Gender of YouTube Users 41.7% Male Female 19.1% 57.8% 58.3% 17

18 Chapter 5 MANAGEMENT TEAM PLAN 18

19 5 Leadership Roles Flair s management team will consist of three lead positions of management; Chief Executive Officer, Chief Marketing Officer, and Lead Product Manager. Each management position will be in charge of a small team of 2-3 employees. The Chief Executive Officer, Chynna Fry, will oversee all aspects of the company. It is her responsibility to make sure that everyone is happy and doing their job as effectively as possible. Chynna will have weekly meetings with the other lead officers to ensure that everyone is on the same page and working towards the same goals. She will also be the director of employment at Flair, and will be doing all of the hiring. She will follow the overall growth of the company. In a way, Chynna will be Flair s cheerleader, going out and making connections with clients, investors, and users. Chynna will have final decision over product design, employment, and all other company decisions. The Chief Marketing Officer, Chari Redwine, will be in charge of all of Flair s advertising. It is Chari s responsibility to lead Flair s marketing team. Advertising is the sole revenue producer for Flair; therefore Chair holds one of the most vital management positions. It is her job to pursue new advertising clients as well as maintain relationships with current clients. Chari will work one-on-one with each client to ensure that they are happy, and that all of their needs are being met. Chair will build real relationships with each client and will be frequently asking for their input on Flair s product development to ensure that the product best suits their needs. The Lead Product Manager, Kirby Kohlmorgen, will be in charge of all Flair s product development. It s is Kirby s job to work with both site developers and designers, and make sure that communication between the two groups is constantly achieved. Kirby will measure the usage of the site and the features, and will ensure that Flair s features are being utilized by all of the users, and that they fulfill the users needs. He will have serious input on all of Flair s features, and will make sure that each feature is user-friendly, advertiser-friendly, and cost effective. 19

20 5 Personnel Once Flair gets its funding the hiring process will begin. Three people will be hired when the company starts. Two web developers will be hired to create the back-end for Flair. Their job will requrire them to have a swiss army knife of coding and development skills. These skills will range from programing in systems such as Redis, Hadoop, and Mongo to solving geospatial problems to developing an effective video recommendation engine. We will require that each developer have 3+ years working experience will a 1 million plus user system, and that they have at least a BS in Computer Science or the equivalent. The third person hired will be a web designer. The designers job will be to make the frontend of the site visually appealing while at the same time forming a layout that is user friendly. The designer will have to be able to proficently communicate with the two web developers. This requires that the designer have a good knowledge of how Flair s back-end system works. We will require that the designer provide a portfolio of work. This protfolio will weigh very heavily in the hiring process. We will also require that they have a BS in Graphic Design or the equivalent. 20

21 Chapter 6 MARKETING PLAN 21

22 6 Beta Marketing For first 6-12 months Flair will be an invitation only beta. All invitations will be distributed through Pay With a Tweet. Pay With a Tweet is simple social payment system where one gains access to a service by tweeting an advertisement for that service. The exclusivity of an invitation only service will drive more people to sign up for the service. This will cause a snowball effect of signups because each added user would have advertised Flair to all of their followers on Twitter. This is a simple, yet effective way for Flair to freely advertise. The beta will allow us to build up a user-base and content database, and at the same time allow us to receive valuable feedback. This feedback will allow us to tweak the site until all of the features are ready for a full site launch making the site available to everyone. 22

23 6 Final Marketing After the beta period, the Pay With a Tweet invitation will be shutdown and advertising will shift exclusively to advertising space on Google and Facebook. Google and Facebook will be the only mediums for advertising because of their more effective advertising model. Both Google and Facebook support the most effective adverting platforms. With Google we can specify keyword sponsored search results. Keywords like video sharing, YouTube, and Flair will be bought through Google and every time someone googles any of those keywords Flair will be the top search result. With Facebook we will be able to specifically target our target demographic of tech savvy males and females between the ages of 13 and 30. We will be able to not only advertise within our demographic, but also will be able to filter our advertisements to only hit people who like other video sharing services like You- Tube, Vimeo, and Viddler. 23

24 Chapter 7 FINANCIAL PLAN 24

25 7 Revenue & Web Costs The only revenue producer for Flair is advertising revenue. Flair has decided on a CPM method for charing advertising space. After research was done a $5 CPM rate was determined to be the industry average for online video advertisments. Flair s website will be hosted through Amazon Cloud Services. With Amazon, Flair is only charged for the data that is streamed to the user, a chart with their pricing can be seen in Appendix D. Financially, one thing going against Flair is the fact that the first full year of operation no revenue will be produced, because that year will be spent developing the site. Below is the first two years of revenue and web costs, the second year shows two differing senarios the demonstrate Flair s scalability and viewership requirements. Revenue Web Costs Site Visitors Videos per Visit Total Videos CPM Advertising Revenue Video Size Terabytes Streamed Streaming Costs Year One Year Two Ex.1 Year Two Ex $5.00 $ GB 0TB $0 3,650,000 (10,000 daily) 10 36,500,000 $5.00 $182,500.02GB 730TB $60,000 7,300,00 (30,000 daily) 10 10,950,000 $5.00 $547,500.02GB 2,190TB $139,200 Gross Profit Revenue Web Costs Gross Profit Gross $ per video $0 $0 $0 $0 $182,500 $60,000 $122,500 $.0034 $547,500 $139,200 $408,300 $

26 7 Operating Expenses Operating Expenses Employees Cost per Employee Salary Expenses Loan Amount Term Interest Rate Total Loan Costs Lease Utilities Office Supplies Branding Legal Fees Total Operating Expenses Year One Year Two Ex.1 Year Two Ex.2 6 $30,000 $180,000 $450, Years 5.5% $34,308 $18,000 $8,400 $9,600 $10,000 $263,140 6 $30,000 $180,000 $450, Years 5.5% $34,308 $18,000 $8,400 $9,600 $0 $253,140 6 $30,000 $180,000 $450, Years 5.5% $34,308 $18,000 $8,400 $9,600 $0 $253,140 Gross Profit Operating Expenses Net Profit $0 $263,140 $263,140 $122,500 $253,140 $130,640 $408,300 $253,140 $155,160 26

27 7 Financial Summary As demonstrated by the varying viewership in year 2, the amount of Flair users will be directly proportional to revenue. Flair has decided to pay each employee $30,000 for the first 3 years of existence. After those 3 years both pay and staff size will increase according to site traffic. Along with the $30,000 each employee will receive real equity in the company in the form of stocks. Each new employee will receive approxiametly 5% of the company. Below is a graph demonstrating Flairs scalibiliy. $.0044 $

28 Chapter 8 NOTES 28

29 8 Appendices Appendix A Flair.com Appendix B 29

30 Appendix C Appendix D 30

31 8 References Works Cited Inc., Sysomos. In-depth Statistics on Online Video Sharing and Engagement - Part I. Social Media Monitoring Tools for Business by Sysomos. Web. 28 Oct < Kiip CrunchBase Profile. CrunchBase, The Free Tech Company Database. Web. 28 Oct < base.com/company/kiip>. Kiip About. Kiip, a New Model. Real Rewards for Virtual Achievements. Web. 28 Oct < List of Video Sharing Sites and Impact of Video Marketing» Orange County SEO Arizona SEO Experts. Orange County SEO, PPC, Social Media & Video Marketing Consulting Services - Rank Better HybridSEM.com. Web. 28 Oct < YouTube Video Streams Top 1.2 Billion/Day. TechCrunch. TechCrunch, 9 June Web. 28 Oct < crunch.com/2009/06/09/youtube-video-streams-top-1-billionday/>. 31