Prospectus for a New Venture

1. Prospectus for a New Venture

2. Semester Project • Design and Build a novel Business • Describe the: • potential customer set • product or service that can be sold by the firm using Internet Services • associated business model and value flows in the business model • Why is the Internet essential to your planned ‘consumption chain’ activities

3. Required • These are group projects • Your presentations will be strictly limited to 25 minutes • You should spend • 1 minute for your elevator pitch • 5-10 minutes for the Framing Challenge • 5-10 minutes for the Venture Capital Challenge • Presentation on Saturday and Sunday • You only need to give me your PPT slides • You may layout your webpage on Powerpoint, or in HTML • and if you have a Website please provide the URL on the presentation slides

4. Project Objectives • Framing Challenge (What is the Real Business?) • Potential customer set & business opportunity, • Features / attributes that will be profitable with these customers • Channels (consumption chain & conversion cone) appropriate for these customers • Venture Capital Challenge (What is the Business Value?) • What is your business worth, and why? • You compete in two markets: consumer & financial • Consumers look for narrative • Financiers want to tie that narrative to numbers: • activities, operations and products? • competitive forces outside management control • Net Present Value of future activities • Communication Challenge (Why should I listen to you or give you money?) • ‘Lead in’ which will ‘hook’ your listener (the elevator pitch) • Consider most important features of business model • Fast & fulfilling (the 25 second pitch)

5. Activities that Need to be Addressed in your Presentation

6. Activity #1:Identify your Customer • Commercialization is about creating a customer • ‘Quiz’ to identify your customer: • Who? • … is with customers while hey use the product & How much influence do they have • If we could arrange it, who would we want the customer to be with … • What? • … Do our customers experience when the use the product • … needs provoked our offering • What else? … might customers have on their minds • When? … do our customers use this .. • Where? … are our customers when they use this • How? … do customers learn to use the product ..

7. Activity #2:Define the Product or Service that this Customer will Pay for • What are the necessary core capabilities • Capabilities =Assets + Competences • What features are most important to customers? • Why? What are they doing that makes your product important to them? • Why can’t they get this from a competitor?

8. Identify the 1-3 most important features • Specify the particular customer choices you are offering in your product or service (no more than three) as • Identify the discriminators and energizers • What reatures are ‘basic’ in the sense that every competitor will have these • What differentiates your product from competitors’ in the customer’s minds? • List the three features that are important to the target customer, and rank them from most to least important.

9. Activity #3:Determin Profitability of Your Business • Define how you will measure the usefulness or attractiveness of each of these features to the target customer. • This performance metric should be a numerical measure • Provide some indication of the costs and revenues that will flow into and out of the business. • Think about your businesses competitors • Are these companies profitable? • Are there substitutes for your product or service? • Why is your product better? What differentiates it? • Think: Low-costor Differentiated Products?

10. Activity #4:Define your Marketing Channels • Determine the main steps in consumption • Each step on the consumption chain has an attribute map • You should only list the 3 or 4 most important steps • These will determine whether the potential customer proceeds to the next step (good) • Or leaves the consumption process (not good)

11. Every Link in the Consumption Chain must be Managed • Describes the processes that you need to manage In order that customers have a ‘good’ experience • … and more importantly that they Buy your product • How much will it cost you to run each of these consumption chain activities

12. How does your WebSite implement the Consumption Chain? • Your Website should implement these Consumption Chain activities • In your presentation, you should walk through your website’s structure, and show how the activities are implemented • You should explain your AdWords and keyword search strategy for getting customers to visit your website’s ‘Landing Page’ • You should explain the operation of your “conversion cone” in generating “Conversions”

13. Activity #5:Describe the Entrance Strategy • Start with a compelling story • Part of selling your strategy / investment • Tying Narrative to Financial Numbers • Strategy becomes less philosophy • More performance and outcome • What activities, operations and products are within the ‘scope’ of the valuation analysis? (Bubbles: depends on audience) • What are the significant environmental influences? (Boxes: major competitive forces outside management control) • How does value flow through the relevant scope of the analysis? (Arrows: value metric)

14. Market Entrance Strategy • What are the major competitive forces molding managerial strategy which add to, or take away from ‘Value’? • What ‘levers’ (strategy drivers) can management pull to influence value added? • What is the functional relationship between value and the strategy drivers? (Define the ‘Strategy Model’) • What are the major technologies relevant to managerial strategy which add to, or take away from ‘Value’?

15. Business Model and Strategy Need to do Two Things • (1) Must produces revenue by satisfying customer demand • i.e., that meets the ‘Framing’ challenge; and • (2) Must controls costs and generates a high return on investment, • where expected revenues significantly exceed expected costs, • and thus can be argued to meet the ‘Venture Capital’ challenge.

16. Competitors? • State how you categorize potential competetors • Usually because of their market power, the coreness of the product to their capabilities, and their interest in this market

17. Activity #6:Getting Customers to your Landing Page • Keywords, keywords, keywords • Which will you buy? • What are the trends? • How much will it cost? • How much traffic? • How much revenue • Will that traffic generate?

18. Keyword Toolhttps://adwords.google.com/select/KeywordToolExternal • Use the Keyword Tool to find 3 keywords-phrases that are better than those you selected • How much did monthly search volume increase • Will you have to pay more for these new keywords?

19. Keyword Trendshttp://www.google.com/trends • Will your 3 old keywords-phrases be more or less popular one year from now • Will your 3 new keywords-phrases be more or less popular one year from now

20. Traffic Estimator

21. Identify your Keyword Goals • Get more clicks • Focus on keywords and placements. Increase your ad exposure by adding keywords and site placements to your ad groups.  • Increase clickthrough rate (CTR).“ • Focus on ad quality • Attract more clicks by refining your ads, • Eliminate extra impressions by choosing highly targeted keywords and placements and using negative keywords • Improve return on investment (ROI)." • First, focus on your ads and your keywords and placements to attract the right audience • Then focus on your website. • Be sure your landing page and site are set up to let users find what your ad offers 

22. Conversions • Conversion = Money Generating Web Action • Point users to the right landing page. • When users click on your ad, they should arrive at a landing page clearly displaying the information or product offered • Keep the user experience in mind. • Place important information and images on the top left, where the eye naturally goes first. • Help people get what they want in three clicks or fewer. • Create a simple process for users to complete transactions

23. Activity #7: Website Usability • What will you do once you get a potential customer to your ‘Landing Page’? • Walk through your website: • Show how it implements the Consumption Chain • Show how you lead customers from one page to another • How many steps are there from • Landing Page to • Conversion (collecting payment)?

24. Website UsabilityAttention Management • Identify where customers attention is focused • What is your goal? • Think in terms of Conversions!

25. Points of Emphasis!

26. Synopsis: The Communication Challenge • Provide a ‘lead in’ which will ‘hook’ your listener • Provide a brief ‘sales pitch’ • Consider what parts you most want to emphasize about the business • Answer your investors’ question: • Why should I give you My money?"

27. Synopsis: Venture Capital Challenge • Create pro forma financial statements: • Balance Sheet containing cash, AR, Inventory, Fixed assets, Liabilities and RE • Income Statement containing Sales, SG&A Expenses, Gross Margin, Net Profit • Provide pro forma forecasts of ROI, and Scenarios (Best, Worst, Expected) • How did you tie this to your business model? • What are the activities, operations and products? • What are the major competitive forces outside management control

28. Synopsis: The Communication Challenge • Provide a brief ‘sales pitch’ • Consider what parts you most want to emphasize about the business • Answer your investors’ question: Why should I give you My money?” • Answer your customers’ question: Why should I give you My money?” • How do these relate to your: • AdWords Campaign for this Business? • Channels tied to Campaigns? • Keywords and Bid Prices for those Keywords

29. Required: Meet the Challenges • Framing • What Is the Real Business Problem? • the reality of the situation and • the objectives of the organization • Venture Capital • Your new venture competes in two markets: (1) Product; (2) Financial • What are its activities, environmental influences, operations and products? • How does value flow through your business model? What is the NPV of future activities • Communication • Provide a ‘lead in’ which will ‘hook’ your listener (the elevator pitch) • Provide a brief ‘sales pitch’ presenting the major components of your innovation and business • Consider what parts you most want to emphasize about the business model • Answer your investors question: • Why should I give you My money?"