OURCRAVE Social Shopping Platform - Making Deals Together, Saving Together

1. OURCRAVE is an online social shopping platform where customers can make their own deals on products or services of their choosing with sellers who can offer them in bulk at a discounted price.

2. User Experience design System Architecture * 12 international design awards * Co-founded olaworksInc (4M series A from Intel & Skylake) * Co-founded 1/2 PROJECT * Software engineer for 3 years (NHN Corp, iconlab Inc.) * Wide range of experience such as online shopping, computer vision, and internet radio Sungjoon Kim 1st MS (d-school) Minjong Chung 1st MS (CS) Front-end building Market research * Cognitive Science major * Developed an iPhone app on iTunes (SpotAlarm) * Ex-medical student * Project manager in network security for 3 years (Comtrue Tech) * Software engineer for 1 year in social network and a social shopping service (Paprika Lab) Daniel Poon 1st MS (CS) Jeongjin Ku 1st MS (EE)

3. Business Canvas #1 Seller: - Access to large online customer pool - Bulk sales with reduced commission Buyer: - Better discounts - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand - Powerful sellers - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller: Pro-sellers in Amazon and eBay who sell electronicsBuyer: Online shoppers • Web & App sales • -Online social networks - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads - Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries

4. Key Question for Business Canvass #1 WHO WILL BE OUR CUSTOMERS? DO THEY FEEL ENOUGH VALUE?

5. Seller Side Test with a fake E-MAIL Give me a quote for a bulk sale! FAKE CEO (Steve Feiberg) Electronics Sellers on Amazon/Ebay 57% showed interest 90% sell products on Amazon • 56% paid 10~20% transaction fee • 22% paid 5~10% transaction fee • 78% agreed it was too much • 33% actually provided discount proportional to group size

6. Seller Side Interview with Industry Specialist (LG Electronics) Main Target Bestbuy Target, Walmart 25% Associations of RegionalBig Sellers 25% 40%

7. Seller Side Interview with Industry Specialist (eBay) • Smaller sellers • Large sellers already have sufficient traffic • Older products • Sellers may want to clear the out-of-date products with huge discount

8. User Side • : Online User Survey Power to choose products Discount on products Buyer community feedback

9. Business Canvas #2 Seller: - More customer traffic - Bulk sales with reduced commission Buyer: - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand • Powerful sellers • Sellers who need more traffic - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller: Trustworthy online sellers with verifiable websitesBuyer: • Online shoppers who are willing to wait to get significant discounts on products • Web & App sales • -Online social networks - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads - Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries

10. Key Question for Business Canvass #2 HOW CAN WE ATTRACT BUYERS? CUSTOMER ACQUISION COST?

11. Buyer Demand Test Best Marketing Channel for having buyers is Facebook Wall : 144 Unique Visits,10 e-mail subscriptions for 3 days Facebook Wall Google Adwords Facebook Ads 5% 0.08% 0.005% (CTR) $7.52 $4.88 $0 (COST)

12. Business Canvas #3 Seller: - More customer traffic - Bulk sales with reduced commission Buyer: - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand • Sellers who need more traffic • Server providers • Established services- Online Marketing : Google/Facebook - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller: Trustworthy online sellers with verifiable websitesBuyer: • Online shoppers who are willing to wait to get significant discounts on products • Web & App sales • Online social networks • Online advertising - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries • - Online ad campaigns

13. Key Question for Business Canvass #3 HOW CAN WE ATTRACT SELLERS? COOPERATION WITH SELLERS?

14. Seller Contact Deal with sellers failed because no group pricing or discount too low. Organize Real Group Deal • Contact popular online sellers • 3 products: HD camera, protein drink, videogame • Videogame was for pre-order Result • Most sellers: no group discounts • Discounts offered < 10% • With shipping and tax still >= Amazon price • David vs. Goliath problem

15. To Pivot or Not to Pivot? Although dismayedat seller response, we did not give up. What do do? • Deal with sellers disappointing • Seller problem intractable? • Teaching staff: Pivot or else… Beaten, but not defeated • Lost one battle, but not the war! • Only contacted larger sellers • Sellers need more value • Show them a real website Filter advice and stay determined! No Pivot Yet

16. Solution 1 : Rapid Implementation Implement seller & buyer side features to give sellers fuller experience. Site Upgrade Frenzy • Improved site design • Buyer facebook login • Online social networking integration • Seller login and registration • Seller bidding • Seller group deal creation page

17. Solution 1 : Rapid Implementation Humble beginnings

18. Solution 1 : Rapid Implementation The Real Deal

19. Solution 1 : Rapid Implementation Main page Facebook connect Deal creation by sellers Bidding dialog

20. Solution 2 : More seller value & spamming Add value for sellers based on mentor and industry expert interviews Add Seller Value • Low transaction fees • Customer contact information • Cross-selling products • Ad banners • Power to create group deal The Art of Spam • Massive seller e-mail campaign (16,000 in total) • Stanford takes notice and issues warning (oops) • Enumerate value propositions • Show live website • Hand out registration codes

21. We made a single hit on seller side.

22. Seller Invitation Result 180 sellers # of sellers who signed up # of deals made by sellers 80 deals (below Amazon price)

23. Seller Invitation Result # of sellers who replied to our email 200 sellers # of sellers who made suggestions on OURCRAVE 50 sellers

24. Seller Invitation Feedback We’ve got two major feedback Who will be in charge of Shipping Cost & Sales Tax ? There are too diverse Product Categories

25. Business Canvas #4 - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand Seller: - More customer traffic • Bulk sales with reduced commission • - Access to customer contact information • Cross-sell their products.- Site advertising- Power to create deals • Buyer: - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers • Sellers who need more traffic • Server providers • Established services- Online Marketing : Google/Facebook • -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller: Trustworthy online sellers with verifiable websitesBuyer: • Online shoppers who are willing to wait to get significant discounts on products • Web & App sales • Online social networks • Online advertising - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries • - Online ad campaigns

26. Key Question for Business Canvass #4 Key Activities for Next Stage Can we make enough money?

27. Key Activity – Seller Management We should manage main feedbacks from sellers by making basic function, 1. Convenient System • Auto Sales Tax Calculator • Bulk List Uploading Function • Notification to Sellers • for relevant cravebags 2. Building credibility • FAQ List for Sellers • Share buyer information • F2F meeting with big sellers 3. More Incentives • Cross selling Option • Seller Advertisement Feature

28. Key Activity – Initial Advertisement By price comparison site and online ads, test our early service model. Then, Crazy deals needed for jumping 2nd Active : Crazy Deals • 20~30 % sales for Promotion Deals • Very very very famous products 1st Passive : Online Ads • Google / Facebook / Yahoo Ads • Price Comparison Site ( very important)

29. Key Activity – Encouraging Buyer’s Viral We will implement incentive system for sharing deals and help buyers communicate with each other in our service Incentive for sharing Buyer Community 14% 22% People who willing to share deals in FB* People who shared deals In FB* • OurCrave Point • Extra Discount • Free shipping or tax Coupon • Live comment on cravebags • Weekly Best cravebag vote • Youtube Ads Competition * OurCrave User Survey in 2/3 weeks

30. Revenue / Cost Source Revenue Cost Product Ads Transaction Fee ( Main ) Float Money Site Maintenance Marketing ( Main ) Customer Support Server/Traffic /Mobie Apps 15% of transaction Ads for buyer Seller Management 3~5% ( paypal) Outsourcing 20%/60days* * google/groupon’s rule, we are asking sellers about this rule.

31. Income Estimation * • TRANSACTION FEE IS MAIN REVENUE • MARKETING COEST IS MAIN COST • BREAK-EVEN IS 3 DEALS/DAY *Appendix in Blogs

32. Business Canvas Final Seller: - More customer traffic • Bulk sales with reduced commission • - Access to customer contact information • Cross-sell their products.- Site advertising- Power to create deals • Buyer: - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers • Sellers who need more traffic • Server providers • Established services- Online Marketing : Google/Facebook • - Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback • Growing and maintaining online buyer/seller communities and credibilityof transactions- Promotionof website and brand • - Establishing credibility Multi-sided platformSeller: Trustworthy online sellers with verifiable websitesBuyer: • Online shoppers who are willing to wait to get significant discounts on products • Web & App sales • Online social networks • Online advertising - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads - float money • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries • - Online ad campaigns

33. Key Lessons

34. APPENDIX : FULL BM HISTORY

35. Business Canvas – Week 1 Seller : - More customer traffic - Bulk sales- Lower transaction feesBuyer : - Better discounts - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Powerful sellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller :pro-sellers on Amazon and eBayBuyer :Online shoppers - Web & App sales - Online social networks - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries Seller side:- transaction fees Buyer side:- targeted ads

36. Business Canvas – Week 2 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts - Power to choose product deal - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Powerful sellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller :pro-sellers on Amazon and eBayBuyer :Online shoppers - Web & App sales - Online social networks - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries Seller side:- transaction fees Buyer side:- targeted ads

37. Business Canvas – Week 3 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts - Power to choose product deal - Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Powerful sellers • -Regionalsellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller : Sellers on Amazon and eBayBuyer :Online shoppers who are willing to waitto get significant discounts on products - Web & App sales - Online social networks - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries Seller side:- transaction fees Buyer side:- targeted ads

38. Business Canvas – Week 4 • Seller : - More customer traffic • Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Sellers who need more traffic • -Regionalsellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller : Sellers on Amazon and eBayBuyer :Online shoppers who are willing to waitto get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries Seller side:- transaction fees Buyer side:- targeted ads

39. Business Canvas – Week 5 - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand Seller : - More customer traffic - Bulk sales- Lower transaction fees- Brand name marketing - Access to customer contact information - Ability to cross-sell products - Site advertising Buyer : - Better discounts - Power to choose product deal - Buyer community feedback on products and sellers • - Sellers who need more traffic • -Regionalsellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller : Sellers on Amazon and eBayBuyer :Online shoppers who arewilling to waitto get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries - Online ads Seller side:- transaction fees Buyer side:- targeted ads

40. Business Canvas – Week 6 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Access to customer contact information - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Sellers who need more traffic • -Regionalsellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller : Sellers on Amazon and eBayBuyer :Online shoppers who arewilling to waitto get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries - Online ads Seller side:- transaction fees Buyer side:- targeted ads - float money

41. Business Canvas – Week 7 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Access to customer contact information - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- Promotion of website and brand • - Sellers who need more traffic • - Regionalsellers • - Server providers • Established services- Online Marketing : Google/Facebook -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller :Sellers on Amazon and eBay Seller: Trustworthy sellers with verifiable websites.Buyer :Online shoppers who arewilling to waitto get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries - Online ads Seller side:- transaction fees Buyer side:- targeted ads - float money

42. Business Canvas – Week 8 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Access to customer contact information - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining and growing online buyer/seller communities and credibility)- Promotion of website and brand - Establishing credibility • - Sellers who need more traffic • Established services- Online Marketing : Google/Facebook -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platform Seller: Trustworthy sellers with verifiable websites.Buyer :Online shoppers who are willing to wait to get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries - Online ads Seller side:- transaction fees Buyer side:- targeted ads - float money