Professional Documents
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2. BUSINESS CONCEPT & OPPORTUNITY a. THE BUSINESS..05 b. TARGET CUSTOMERS PROFILE & NEED (END-CONSUMER)05 c. TARGET CUSTOMERS PROFILE & NEED (BUSINESSES)06 d. DIFFERENTIATION STRATEGY & UNIQUE SELLING POINT.08 e. MARKET SIZE & MARKET GROWTH...09 f. COMPETITIVE ADVANTAGE & PARTNERSHIPS..09
3. PRODUCTS & SERVICES a. PRODUCT & SERVICE DESCRIPTIONS.10 b. PRODUCT BENEFITS & UNIQUE SELLING POINT..12 c. DISTRIBUTION PLAN...13 d. RESEARCH & DEVELOPMENT LIFE CYCLE..15 e. INTELLECTUAL PROPERTY RIGHTS..16
4. ORGANIZATION STRUCTURE a. BUSINESS REGISTRATION.17 b. OWNERSHIP STRUCTURE..17 c. FOUNDERS & CORE BUSINESS OWNERS.18 d. GAP ANALYSIS & OTHER EMPLOYEES.19 e. REMUNERATION POLICY...20 f. EMPLOYMENT TERMS & CONDITIONS..21 g. OFFICE FACILITIES..21 h. MISSION STATEMENT, VISION & CULTURE.22 i. COMPANY HISTORY & MILESTONES.22 j. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES...23
6. FINANCIAL PLAN a. CURRENT OPERATING EXPENSES & FUNDING.27 b. REVENUE GENERATION....28 d. EXPANSION PLANS.29 c. BREAK EVEN POINT...29 e. HARVEST STRATEGY.31 f. EXIT STRATEGY & CONTINGENCY PLANS..31 g. RETURNS ON INVESTMENT.32
7. CRITICAL RISKS & ISSUES a. PRIVACY CONCERNS & SECURITY..33 b. DATA INCONSISTENCY33 c. DEPENDENCY ON TELECOMMUNICATIONS NETWORKS.33
1. EXECUTIVE SUMMARY Carla Inez Associates (C.I.A.) is a smartphone application (app) developer that has been in operation for four months. Headquartered in Eunos TechPark, C.I.A. is a partnership, owned & operated by seven shareholders. The initial start-up capital for C.I.A. was SGD $450,000, with the CEO and Deputy Director each funding 22.2% (SGD $100,000), and the remaining five shareholders each contributing 11.1% (SGD $50,000).
Specialising in supplying real-time crowd density information to aid in user convenience, the company has already achieved market penetration for their first app Human Traffic, as well as carved a niche for themselves. C.I.A. is set to go regional by 2012 and global by 2014.
A customer-oriented and innovative company, C.I.A. strives to provide exceptional service to users. The companys knowledge and awareness of the increasing demands for smartphone apps that provide real-time information is the driving force behind its mission.
The companys marketing strategy is four tiered. First, C.I.A. plans to lead this uncharted path by generating interest, second, to gather reviews and feedback to review the initial trial usage, third, a formal launch and the reliance on users to play a critical role in the marketing, as loyal pioneer users push interest to the new users. Finally, the company plans to aggressively promote its service with loyalty schemes and establishments tie-ins for higher profit margins to allow for maximized profits.
In its first year of operations, C.I.A. plans on breaking even. In years two and three, the company will become more profitable as user base increases and the company grows internally to become more efficient in operations.
With this business plan, C.I.A. seeks investments from venture capitalists to fund our growth and expansion plans. We boast innovative technology, a well-developed business model, potential for rapid growth, an impressive management team, and relatively lower risks, as we are currently at the expansion (ramp-up) stage.
a. THE BUSINESS Carla Inez Associates (C.I.A.) specialises in developing smartphone apps that utilizes human traffic information and crowd density data to create customer convenience tools. The company has been in operation for four months.
b. TARGET CUSTOMERS PROFILE & NEED (END-CONSUMER) Our primary end-consumer is a female around the age of 25 who earns at least SGD $2,500 per month. It is likely that she still lives with her parents, and is active in social activities.
An avid consumer, she spends most of her income on fashion, gadgets, and mid-range eateries. She is a regular patron of entertainment establishments.
She has an on-the-go lifestyle, is tech-savvy and perpetually plugged in 24/7 to her smartphone. She has a tendency to be self-centred, and likes attention. A social network addict, accessing and sharing information online is a constant fix for her. i. ii. Primarily female Born in the mid-1980s, in her mid-20s 5
Earns a minimum of SGD $2.5K per month Still lives with parents, contributing to the family income Single, social butterfly Constantly on-the-go, wants information on the move and at her fingertips. Spends on tech gadgets, fashion, mid-range to high-range eateries, entertainment, vacations
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Tech-savvy, perpetually plugged-in 24/7; a smart phone app in itself would appeal to her preference for online technology.
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Attention-craving, active social media user; the social media aspect of this app would appeal to her nature of sharing information and seeks input from others.
While this is our target primary end-consumer, C.I.A. also has a secondary target market for our apps. This secondary market would include any tech-savvy, smart phone users who desire convenience and seek out good deals that offer cost savings.
c. TARGET CUSTOMERS PROFILE & NEED (BUSINESSES) Besides end users, our apps also feature ads, and tie-in promotions with businesses. Our target businesses include:
TOURIST ATTRACTIONS Current: Wildlife Reserves Singapore, Sentosa Development Corporation Singapore, Universal Studios Singapore, National Parks Board Future: National Heritage Board, Singapore Flyer, Marina Bay Sands, Resorts World
PUBLIC TRANSPORTION Current: SMRT Corporation Ltd, Transit Link Pte Ltd, ComfortDelGro Corporation Limited, Premier Taxis Pte Ltd Future: SMART Cabs, Trans-Cab Services Pte Ltd
EVENTS Current: Singapore EXPO, ZoukOut, COMEX, The Great Singapore Sale
Future: Grand Openings, IT Show, Japan Matsuri Festival, Cosfest, Singapore Arts Festival, Singapore International Film Festival, F1 Singapore Grand Prix, World Cyber Games
SHOPPING CENTRES Current: ION Orchard, VivoCity, Tampines Mall, Jurong Point Future: Velocity, Junction 8, AMK Hub, Causeway Point, NEX Mall, 313@Somerset, Orchard Cineleisure, The Cathay, Wisma Atria, Ngee Ann City, Paragon, The Shoppes at Marina Bay Sands, Northpoint, Tampines 1, Century Square, Leisure Park Kallang, Raffles City, Lot One, IMM, Tiong Bahru Plaza
BEAUTY & WELLNESS Current: The Body Shop, Jean Yip Group Future: Browhaus, Glow Couture, The Hair Inn, Zenique Beauty
SUPERMARKETS Current: Sheng Siong Supermarket, NTUC Fairprice Co-operative Limited, Dairy Farm International Holdings Limited
HOTELS Current: One Fullerton, Swissotel, Marriott Future: Mandarin Oriental, Goodwood Park,, Traders Hotel, The Scarlet, Hotel Re!, PARKROYAL, Four Seasons
FOOD Restaurants Crystal Jade Kitchen, Paradise Inn Group, Prima Tower Revolving Restaurant, Haeboks Korean Restaurant, Serenity Spanish Restaurant, Shabuhana Japanese Restaurant
Fast Food Burger King, McDonald, Kentucky Fried Chicken, Long John Silvers, Wendys, MOS Burger, Carls Jr., Popeyes Louisiana Kitchen
Cafe Coffee Bean, Starbucks, Fine Palelet, Broun Cafe, Cafe Hacienda, Caramel Cafe, Food For thought Cafe, Jones The Grocer
ARTS & ENTERTAINMENT Current: Esplanade, Cathay Organisation Holdings Limited, Shaw Organization, Golden Village Multiplex Pte Ltd
NIGHTLIFE CLUBS Butter Factory, Zouk , St James Power House, Cafe Del Mar
BARS Timbre, Club 5, The White Bar, Wala Wala, Liquid Bar, ORGO, Over Easy, 1Altitude, Breeze, Helipad, Kinki Roof Top Bar, Halo Rooftop Lounge, Beer Market, Loof
CORPORATE/PROFESSIONAL SERVICES United Overseas Bank Building, OCBC building ,Marina Bay Financial Centre(MBFC), Straits Trading building, Republic Plaza, Hitachi Tower
EDUCATION Singapore Institutes Management (SIM), Management Institute of Singapore (MDIS), Singapore management University (SMU), Nanyang Technological University(NTU), National University Singapore (NUS), Kaplan, TMC Academy.
d. DIFFERENTIATION STRATEGY & UNIQUE SELLING POINT The Unique Selling Point (USP) of our company is our ability to gather information on human traffic in a given area, and disseminate this knowledge in real time to our customers for practical applications through our apps.
We are the only regional company that harnesses mobile technology to supply real-time human traffic information for the benefit of businesses and consumers. 8
e. MARKET SIZE & MARKET GROWTH There are 7.3 million mobile phones in Singapore, of which 72% (approximately 5.3 million) are smartphones (Chow Jermyn, Straits Times Online, Sep-2011). Even with conservative estimates of a 10% take up rate per app, the market is still sufficiently large.
The company will focus on the Singaporean market first. Further expansion to the ASEAN region is possible within 24 months, based on our growth and profit projections. We aim to go global within 3 years.
f. COMPETITIVE ADVANTAGE & PARTNERSHIPS Having the first mover advantage in this market niche, the company is being watched closely. Our partners have a vested interest in seeing us succeed.
Human density tracking depends heavily on partnership agreements with the telecommunications industry, thereby granting access to their network. We have partnerships with the major telecommunications companies in Singapore. Current: Singapore Telecommunications Limited, Starhub Mobile Pte Ltd, Mobileone Limited Future: Vodafone Group Pte Ltd, AT & T, China Mobile
We also have partnerships with major establishments, such as vendors in the Food & Beverage (F&B) or Entertainment arenas, for cross-promotional and marketing purposes. See Section 2c for list of Partners.
Allows users to be pre-empted about where the crowded locations around Singapore are so as to avoid congested places; also acts as a social media platform where users can share real-time information with each other. Below is a screenshot of what Human Traffic looks like (Mock-Up):
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Informs users where taxis congregate so as to allow them (users) to choose the best possible spot for street hire without having to make phone bookings; also allowing users to save on booking charges and waiting time.
Informs users about the queue conditions in specific establishments where queuing is the norm (e.g. ATMs, Singapore Pools outlets, clinics, etc.); also granting users a tool that allows for better time management planning
Scans users receipts of specific purchases, and compiles them into an online database so as to enable a transparent comparison of product prices; app also contains information on prices, and shop locations.
Scans users receipts of their purchases, and automatically compiles a monthly balance sheet.
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Instead of having multiple rewards cards and accounts with different companies, this app allows users to gain access to a one-stop portal to keep track of their points collected at each establishment.
Allows caretakers and children to track whereabouts of elders in their care. Due to privacy concerns, the elderly being tracked will have to give their consent, and users doing the tracking would have to verify their identity.
i. Convenience, Time & Cost Savings Information from our apps allows end-users to plan with the real-time information provided, saving unnecessary time and costs. For businesses, it provides them with an additional active method to re-direct consumers to their establishments.
ii. Interactivity The millennial generation is defined by their need for on-the-go connectivity to their friends and networks. Our apps provide them with a way to connect and broadcast information like nothing has before.
We also take our customers feedback seriously, implementing feasible feedback as updates to our apps, or as ideas for new apps.
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iii. Tracking Satisfying the human need to know, apps that provide tracking of all kinds are a market niche that C.I.A. has carved out for ourselves.
iv. Fortnightly newsletter C.I.A. publishes a fortnightly e-newsletter. On top of uploading it onto our website, this enewsletter is sent to all our app users. This serves to update our consumers on promotion and events held by our tie-in partners and vendors.
v. Tie-In Partners Part of our marketing strategy involves tie-in partnerships with corporations and establishments. Through our apps, these vendors have traffic driven to their establishments, and in return, they will assist to encourage their consumers to take up our apps.
c. DISTRIBUTION PLAN
The distribution channels utilized by the C.I.A. include: i. Our Company Website & Online Store: Consumers can download our apps from our website, which includes an online store. The fortnightly newsletter can also be viewed online, and the site is regularly updated with events and offers from our tie-in partners. 13
ii. App Store for Smartphones: Presently collaborating with Apple (iOS), Google (Android) and BlackBerry to enable user download via online access or through a mobile device. We are planning to work with HTC, LG, Motorola, Nokia, Samsung and Sony Ericsson in time to come.
iii. Social Media: We currently utilize Facebook and Twitter to promote our apps. Besides advertising, consumers can download the apps from links on our Facebook or Twitter pages. Future advertising platforms include LinkedIn and consumer blogs.
iv. Tech Blogs: We invite popular tech blogs to review our apps as part of our marketing strategy. Within the reviews, links to download the app will be included.
v. Print Media & Quick Response (QR) Codes: Our apps have been advertised in the entertainment and digital sections of local newspapers Today and Digital Life. In the magazine sector, we have advertised with popular IT or gadget magazines such as PC World and ComputerWorld.
Quick Response (QR) Codes to direct consumers to our online store have been included alongside these advertisements.
vii. Road Shows & Contests: We plan to hold road shows and contests that involve usage of our apps. We will offer limited freebies from our existing business partners.
viii. Opinion Leaders/Peer Recommendations: We will offer people in the scene to try out our app services and get them to give their reviews for publicity purposes.
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ix. Tie-in with Business Partners: Discounts, coupons or rewards will be offered through our business partners. Conversely, our business partners will encourage their consumers to try out our apps.
x. Web/Mobile Based: There wont be any physical stores, our services can only be accessed on the web or through a mobile device.
xi. Pre-Packaged with New Smartphones: As partners of the telecommunications industry, the lite version of our apps will come prepackaged with new smartphones.
Free Lite Versions & Paid Versions As part of our distribution and marketing strategy, we will offer free Lite versions of our apps to entice consumers, which contain limited functionality. Full paid versions are available for SGD $0.99.
d. RESEARCH & DEVELOPMENT LIFE CYCLE The time to market for an app is three months. While the app is under development in the first month, advertisers and vendors will be approached to tie-in or advertise within the app.
By the second month, the app will be launched for beta testing to a limited number of users. Also, marketing for the app will begin using different media channels.
The full roll-out will take place in the third month. The company has already released its first app, Human Traffic, and its second is under beta testing.
C.I.A. realizes that the potential market for various tracking apps is huge. Future development plans include apps designed around Road Traffic Usage, Elderly Safety, Games, Military Applications, Price Comparisons, Search & Rescue Operations, and Animal Tracking. 15
With funding from investors, we hope to shorten the time to market of our apps, reducing the timeframe to two months.
e. INTELLECTUAL PROPERTY RIGHTS All our apps are copyrighted under Carla Inez Associates (C.I.A.). Every detail, from codes to graphics, is produced in-house.
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4. ORGANIZATION STRUCTURE
a. BUSINESS REGISTRATION The business is registered as a Limited Liability Company (LLC) in the form of a Private Limited Company. This arrangement has the following benefits:
i. Tax Benefits. Tax is set at 9% for profits of up to $300k. This is capped at 17% should profits exceed $300k. The remaining profits will be distributed tax free to shareholders.
ii. Protection against Legal Liabilities. Personal assets will be protected from legal judgments.
iii. Credibility. An incorporated business projects a more professional image regarding its management, drive to succeed and growth potential.
iv. Ease of Raising More Capital. New shares can be easily created and sold to raise more capital.
v. Ease of Transfer of Ownership. The business will not be dissolved with the death or resignation of a shareholder. The shares held can be transferred partially or wholly with minimal disruption to the business.
b. OWNERSHIP STRUCTURE Executive powers reside with the CEO and Deputy Director, while each of the remaining five founding members are active business partners, holding critical appointments.
The CEO and Deputy Director each contributed SGD $100,000 to the initial start-up, while the remaining five founding members contributed SGD $50,000 per person, raising a total capital of SGD $450,000.
As such, the CEO and Deputy Director have overriding power when it comes to decisionmaking in the management board. 17
i. CEO - Carla Ang (Hong Peiqin), 23. The owner of several successful online businesses, Carla has decided to venture into the mobile technology market. Being the major shareholder, she also dictates and aligns the companys vision, and sets objectives. She has strong corporate leadership traits and has an extensive pool of contacts in various industries.
ii. Deputy Director (Human Resource & Finance) - Inez Lim Xia Huan, 22. As the company co-founder, Inez has managed and planned nation-wide events. She brings to the table several high-profile corporate clients, with whom she has established goodwill over the years. She is also concurrently responsible for human resource and finance functions within the company.
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iii. Sales and Marketing Ivan Teh Xifeng, 28. Having worked in the sales and marketing line for the last 10 years, Ivan has been instrumental in developing marketing materials and securing sales for numerous start-ups. His extensive network and contact base in various industries built over the years is another plus point.
iv. Public Relations Keith Tyrone Neubronner, 22. Having worked with a variety of start-up technology companies, Keith is also an experienced PR practitioner. Headhunted by companies ranging from Groupon to Google, Keith is responsible for the company online portal, and providing regular updates to consumers.
v. Program Development Daniel Kwok Siu Ming, 24. Having been the lead application developer for a variety of companies, Daniel has an experienced feel for apps that consumers want. Furthermore, he is versed in development for cross-platform compatibility between smartphones and computers, which will be critical for future growth.
vi. Designer Marleen Ang Yoke Cheng, 21. The management teams youngest member is also a child prodigy. Recognized at a young age for her talent in art, she graduated top of her university cohort for Graphic Design and Animation. She brings her creative vision and direction to the team.
vii. Operations Manager John Chan Chee Yuan, 34. With over 15 years of experience in various telecommunications companies handling portfolios ranging from Business Development to Resource Deployment, John is also well-versed in telecommunications, satellite signals and mobile communications operations. His contacts among the telecommunications industry was critical in securing access to the telecommunications network in Singapore.
d. GAP ANALYSIS & OTHER EMPLOYEES The management team lacks qualified in-house personnel for legal and accounting. These positions were addressed by hiring a lawyer and an accountant on retainer.
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The company has employed full-time two program developers to assist with app development, and one full-time administrative assistant to assist with the human resource and finance aspects. Furthermore, the company has also employed two sales executives for the marketing team.
The company has one student intern to assist with simple day-to-day administrative and programming tasks.
e. REMUNERATION POLICY As an LLC, wages are replaced by remuneration in the form of dividends for the shareholders. The annual profit (after corporate tax) will be equally divided among the founding shareholders. Therefore, in view of the capital raised now, each of the five founding members will be entitled to 11.1% of the profits, with the CEO and Deputy Director each getting 22.2% of the profits.
Also, there will be a clause that 2% of all dividends handed out have to be reinvested for company growth until 2014.
The accountant and lawyer on retainer receives SGD $500 and SGD $1,000 monthly respectively.
Our two program developers receive SGD $2,000 per month each.
Both personnel in the sales and marketing team receive a base pay of SGD $2,000 per month each. In addition, they will receive a sales commission of between 3% - 15%, depending on the nature of the sale.
With funding from investors, we hope to double the number of staff in Month 6.
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f. EMPLOYMENT TERMS & CONDITIONS To safeguard company interests, a non-competition clause for five years was part of the employment terms. This includes setting up other companies in competition against ours, working on similar products, or utilizing any part of our technology. In such cases, legal actions will be taken.
g. OFFICE FACILITIES A rented office located in District 15. Address: 60 Kaki Bukit Place, Eunos TechPark. Size: 153m2. i. Fittings: Wifi-connected, and fully air-conditioned. ii. Layout: Three cubicles with two attached toilets. iii. Safety: SCDF fire-safety compliant iv. Rental charges: $3800 gross per month, less utility fees
With funding from investors, we hope to double our office space in Month 6. Locations for considerations include renting a unit adjacent to our current office, or an office in Jurong.
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MISSION STATEMENT To be the leading mobile applications development company with an endless presence in Singapore and the region.
Professionalism At all times we shall act with integrity, providing top quality service & upholding a strong image of dependability.
Reliability Our word is our bond. Our actions will be consistent in providing solutions and creating value.
Results We emphasise strongly on excellent products and cutting-edge technology. We only aspire to have excellent and remarkable outcomes.
We believe in ensuring that all our employees have a healthy work-life balance. As such, the company practises flexible work hours, provided tasks are completed on schedule. We will also have a quarterly eat with your family day.
j. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES We plan to donate a percentage of our annual profits to a selected charity upon achieving our first million dollars in turnover. Furthermore, we plan to donate smartphones or tablet PCs pre-loaded with our apps to selected non-profit institutions. These apps will benefit the recipients in their day-to-day operations. For example, tablet PCs pre-loaded with our app Grandma Tracka could be donated to retirement homes. This will be done once per annum from 2013 onwards.
We support on-going education. For one week every year, all employees are required to conduct a course in their profession for a non-profit organization. This could range from conducting programming classes for seniors, to marketing courses for corporations, to design classes for students. Our decision to employ a tertiary student intern at all times is in line with this objective.
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5. MARKETING PLAN
a. MARKETING OBJECTIVES We believe in the two-step adoption process. Advertising will be geared towards influencing opinion leaders to try the Lite version of our apps, which are free but contain limited functionality. We will then offer incentives for them to adopt the full paid version, which costs SGD $0.99; and to refer their contacts to try the app.
Incentives include promotions and discounts from tie-in partnerships with vendors and establishments, or freebies.
b. MARKETING METHODS We recognise that as a form of product, phone apps are a class of their own. Due to their unique qualities, they are suitable for newer distribution models too. In addition to tested, traditional marketing methods, such as advertising, we will be using creative new ways to 24
Company revenue will come from both apps sales and advertisers.
Phase 1. Lead phase The focus here will be to generate interest. A multi-pronged approach will be used. The launch of each beta version will be accompanied by a publicity campaign that uses social networks. Opinion leaders will be identified, and consumers information gathered by purchasing databases. An attractive website will also be designed as the face of the apps, with a DOWNLOAD NOW and BUY NOW button; app videos will also be made, uploaded and distributed. Traditional means such as paid advertising will also be used. These steps serve to establish a presence in the market.
To differentiate ourselves from our competitors, our sales pitch will emphasise on our USP: human density tracking applications. Phase 2. Review phase. This phase focuses on gathering reviews and feedback. Apps will be submitted for trial usage and expert review. Tech publications will be targeted. Positive reviews will be published for extra publicity; flaws and inadequacies will be addressed before the launch of the final versions.
Phase 3. Launch phase. The focus now will be on gathering momentum and generating more interest. With the apps formally launched, the reviewing will continue. Additional inputs from opinion leaders such as tech bloggers will be included. Listings on apps stores and search engine will also be optimised by paid means. Online forums and communities will be created by the marketing team, since they are more likely to be perceived as being neutral, and therefore credible. Traditional methods of publicity will be used throughout to reinforce presence.
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Loyalty schemes, and tie-ins with establishments will be planned to entice regular use. This encourages habitual usage, which once formed is unlikely to subside easily. It is also advantageous for our in-apps advertising services, since with as a sizable base, we can command higher rates. Add-ons and updates will also be pushed to users periodically. Through emails and newsletters, regular updates also serve as reminders to maintain presence. Cross-marketing of our other products will also be placed in each of our apps.
c. SALES PROJECTIONS Based on current figures and prevailing sales trends, we are able to project a conservative monthly increment of 10% for advertising and tie-in promotions revenue for the next 24 months.
Apps sales are set to double for Months 4 and 5, before slowing down to 50% in Months 6 and 7 as the apps ownerships get saturated. This is expected to further drop to 25% after Month 8. As these projections are based on conservative estimates, the potential is likely to be higher. Please refer to chart below for our sales projections figures.
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6. FINANCIAL PLAN
a. CURRENT OPERATING EXPENSES & FUNDING Our initial capital of SGD $450,000 was contributed by each of the seven founding members. The company was first set-up with a total of SGD $38,000. Our current monthly operating expenses is SGD $25,000. Provided the company doesnt expand, the business is able to survive for one year and five months (17 months). We are currently in our fourth month of operations.
Upon expansion, our monthly operating costs will increase to SGD $45,170 per month. With this increase in monthly overheads, the company will be able to survive without any profit for up to 11 months. Below is a breakdown of our projected future operating expenses after expansion. 27
b. REVENUE GENERATION Revenue is generated from three main sources: Firstly, from advertisers who embed their ads in our apps, and secondly, from vendors who uses our crowd re-direction services through tie-in promotions. Thirdly, while the lite versions are free, users are charged SGD $0.99 to unlock the full versions of our apps.
Revenue from apps purchases cannot be depended on, as it is limited to the number of users. Since apps are one-time purchases, the targeted source of revenue is from advertisers and tie-in promotions. Such revenue is recurring.
User traffic will justify our advertising rates. Therefore, focus will be on capturing and retaining the number of users through our marketing campaigns.
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The company is currently in our fourth month of operations. Total revenue generated from the last three months is SGD $70,525. The leading source of revenue is from tie-in promotions ($52,493), followed by advertisers ($16,219). Apps sales account for $1,813. Please see chart below.
c. BREAK EVEN POINT We are currently in our fourth month of operations. Our aim was to break even and recoup our initial investment of SGD $450,000 by Month 6.
However, with the additional SGD $100,000 from investors to fund our expansion, our new break-even point is Month 17.
d. EXPANSION PLANS We hope to raise SGD $100,000 from investors. This will be used to double our office facilities and number of staff. With this growth, we hope to shorten the time to market for our apps. With the funds raised, we will commence our expansion plans in Month 6.
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Furthermore, we will venture into the regional market in Month 13, by offering countryspecific versions for our apps. We hope to go global within our third year.
PROJECTED REVENUES AND PROFITS AFTER EXPANSION Based on conservative estimates of 10% growth in advertising and tie-in revenue, with varying increments in apps purchases, the overall growth in revenue will still be exponential. This will be especially the case in the event the company expands to the region and beyond.
Please see charts below for culminative revenue and total profits.
Including revenue from the first three months of operations, we have projected a total revenue of SGD $5,557,987 from now (Month 4) till Month 26.
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Including profits from the first three months of operations, we have projected a total profit, less operating expenses, of SGD $4,459,117 from now (Month 4) till Month 26.
e. HARVEST STRATEGY We plan to publicly list on the stock exchange by 2014. Investors will be given the option to purchase additional shares before members of the public.
f. EXIT STRATEGY & CONTINGENCY PLANS Our current funding of SGD $450,000 is sufficient to sustain our business operations for a total of 17 months, even without profits or funding from investors. We are currently in our fourth month.
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By Month 15, if we still havent made any profits, we will implement our exit strategy to cut further losses.
Our first exit strategy is to sell off the business, including all assets and all apps developed. This attempt will hopefully recoup some of our losses.
If this strategy isnt successful, by Month 16, all employees will be dismissed. The management team will then officially dissolve the company. The remaining SGD $25,000 from the initial funds will be divided equally among the seven founding members of the management team.
Contingency plans exist for each app. If an app fails to hit 30% of our projected number of users by the third month from launch, we will halt all marketing efforts for the app. The remaining resources will be redirected to the next app launched.
g. RETURNS ON INVESTMENT The venture capitalist that invests SGD $100,000 to fund our expansion plans (ramp-up) will be able to look forward to: i. Returns on investment (SGD $100,000) within eleven months (From Month 6 to Month 17). This shorter than average time-frame is due to the projected high growth of the app market.
ii. Stock options equivalent to the amount invested. In this case, with an investment of SGD $100,000, they will be given 18% of company non-executive shares. Based on our profit projections, our company will hit a total profit of SGD $4,459,117 by Month 26. Investors will therefore receive a profit of SGD $802,641 (8 x Profit) by Month 26.
iii. The option to purchase additional shares, before members of the public, when the company lists publicly on the stock exchange in three years time.
iv. First option to take over the company as a going concern in five years time.
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a. PRIVACY CONCERNS & SECURITY For the purposes of our apps, the company only retrieves information on the number of mobile phones within a selected area from the telecommunications network. No other personal data is retrieved, so consumers wouldnt be tracked personally.
However, the consumer has the freedom to declare their current location to their network. In such cases, the consumer may be personally identified to other consumers in their personal network.
b. DATA INCONSISTENCY Location of phone may not indicate location of owner. Take for example, if all students in a class left their mobile phones in the classroom, and went to the canteen. To a user of our app, they might view the classroom as crowded, as our data is generated from mobile signals.
However, such cases are few and far between. At least where major public venues are concerned, a large number of consumers are unlikely to be separated from their mobile devices all at the same time.
c. DEPENDENCY ON TELECOMMUNICATIONS NETWORKS As human density tracking is dependent on the telecommunications network, any failure in their system would also affect our apps.
Furthermore, our company is currently strongly dependent on the agreement and partnerships we have with the Telecommunications companies (Telcos). If for any reason, this partnership were to be dissolved by them, we may lose our competitive advantage.
We have mitigated this risk with two strategies. Firstly, we are currently developing our apps to run on open-source platforms and networks that aren't dependent on the
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telecommunications network. On such possibility we are currently exploring is running our human density tracking on Google platforms.
Secondly, we are planning to develop apps that arent based on human density tracking, but still incorporate tracking features. For example, price tracking, tracking of individuals or animals, and tracking of rewards points.
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8. STRATEGIC ANALYSIS
a. STRENGTHS i. ii. iii. iv. v. Strong team of personnel from relevant industries in the management positions First mover advantage Low overhead costs Initial funding sufficient for 17 months Niche market of human density tracking and tracking apps Innovative technology & USP vi. vii. Partnership with Telcos prevent other competitors from easy market entry High growth potential
b. WEAKNESSES i. Multiple portfolios for internal staff at the current stage of the business. For example, the
Deputy Director oversees HR and Finance, two portfolios that can (and will) be separated as the company expands further. However, due to manpower constraints at this stage, we will maintain this arrangement for as long as we deem fit. ii. Short attention span and low loyalty of apps consumers. This is addressed through new
promotions and offers from tie-in partners, as well as regular updates provided through the company web site and newsletter. iii. iv. v. Privacy Concerns & Security Issues - Addressed in Section 7: Critical Risks & Issues Data inconsistency - Addressed in Section 7: Critical Risks & Issues Dependency on telecommunications networks - Addressed in Section 7: Critical Risks & Issues
c. OPPORTUNITIES i. Mobile applications technology market is a global, vast market for expansion. Future
growth will include country specific apps based around tracking. ii. Untapped segment of apps market - Tracking apps 35
iii.
Mutually beneficial partnership with other businesses through tie-in promotions; we direct
people to their establishments, they encourage their consumers to use our apps
d. THREATS Competition from millions of other apps. In this day and age where development of apps seems to be the way forward, an average of over 500 apps are released every day, the majority of which become dormant soon after (App Store Metrics, Sep-2011).
This is addressed with aggressive marketing campaigns, tie-in partnerships with businesses, and opinion leaders word-of-mouth recommendations.
e. COMPETITORS Currently, there are two main app companies - Foursquare and Google Latitude that are seen as our closest competitors.
However, there is a clear distinction between our competitors and us, in that we supply realtime human density information generated not just from active user check-ins, but also from passive information piped through from the Telcos we work with.
Company
Foursquare
Google Latitude
Product Description
- Location-based mobile platform where users can check in at different locations - Checking in is done via a smartphone app or SMS, and the information is shared with friends - Points and virtual badges are
- Location-aware mobile app based on Google Maps - Allows mobile phone user to allow certain people to view their current location - Users have control over their own privacy; they can reveal the exact
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rewarded to users
Market Segment
- Smartphone users - 10 million users as at April 2011 (3 million check-ins daily) - 50% users are from U.S. - Equal usage between males and females
Pricing
Free
Free
Brand Awareness
- Worldwide, particularly after foursquare changed is location availability from 100 metro areas in US to worldwide - US President Barack Obama became a user on 8 August 2011, with updates made by the White House
- Not as hyped as foursquare, gowalla, etc. - Did not have a clear benefit to users in the past; now have introduced the check-in and automatic location tracking features
Technology
- Currently has iPhone, Symbian, Android, webOS, Windows Phone 7 and BlackBerry applications
Currently has iOS, Android, BlackBerry OS, Windows Mobile and Symbian capabilities
At this present time, C.I.A. doesnt view these two companies as a threat to our business.
- END -
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Business Plan written by: Name: Hong Peiqin (Carla Ang) Name: Inez Lim Xia Huan Name: Ang Yoke Cheng Marleen Name: Kwok Siu Ming Daniel Name: Keith Tyrone Neubronner Name: Teh Xifeng Ivan Name: Chan Chee Yuan (John) ID: 3309884 ID: 3353986 ID: 3309715 ID: 3293004 ID: 3354056 ID: 3309957 ID: 3309721
References & Attribution: 1. Chow Jermyn, Straits Times Online, Sep-2011. SAF to ease blanket ban on camera phones in camps. Web Document. Retrieved 30-Sep-2011, from http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_714738.html 2. App Store Metrics, Sep-2011. Web Page. Retrieved 30-Sep-2011, from http://148apps.biz/app-store-metrics/ 3. FourSquare. Web Site. Retrieved 30-Sep-2011, from https://foursquare.com/ 4. Google Latitude. Web Site. Retrieved 30-Sep-2011, from http://www.google.com/latitude
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