BUSINESS PLAN. DESIREE PEILL GSB Class of 2016 MAX JOHNSON Stanford Class of 2015

Transcription

1 BUSINESS PLAN DESIREE PEILL GSB Class of 2016 MAX JOHNSON Stanford Class of 2015

2 Table of Contents HUDDL it s what we re talking about 1) Executive Summary 2) Company description: history, start-up plans 3) Product/Services: what are you selling? 4) Market Analysis: Size, who, how to reach them? 5) Strategy and Implementation /Milestones/Track results 6) Management Team: Describe organization and who does what 7) Financials: Projected P&L for three years w/cash flow Assumptions? 8) The ask: How much start-up funding do you need? (Table) 9) Mockups

3 1) Executive Summary We are suffering from content overload. Between the innumerable content platforms, social networks, and communication devices accessed daily by millennials, it s difficult to know where to look to stay informed on the news stories and social issues that matter most to our communities. Huddl is a community-based news app that unites college campuses around their most pressing topics of conversation. Each day, Huddl curates articles, videos, and poll questions related to the single most important topic affecting each individual campus and allows users to engage through voting, commenting, and additional content submissions. Everyone gets on the same page about the issue most central to their community that day, driving educated, consensusproducing discussions among America s brightest students. Huddl presents a unique digital platform for local advertisers to reach their college markets through targeted advertisements and content sponsorship. As college newspapers lose readership and prestige with the rise of the Facebook newsfeed, Huddl will be perhaps the best way for local businesses and employers to get noticed on campus. We see a $20-40 million business opportunity for Huddl. But this is just the beginning. We need to get businesses, towns, interest groups, lobbyists, NGOs, and government agencies Huddling about their most important issues and stories. Let s fight through the clutter and come together around the content that best describes our shared experience. Let s Huddl up!

4 2) Company description: history, start-up plans We designed Huddl with the following needs in mind : College students want to be informed about the world. However, their relative proactiveness to discover news content varies greatly from those who use multiple news apps and follow several publications to those who don t know exactly where to look for news or what exactly to look for. These students are overwhelmed by the amount of news content that s passed around on their social media pages. It s difficult to figure out what exactly your friends are reading, what they actually like, and which issues matter most to the network. Stories like the Ferguson Protests, Title IX Sexual Assault cases, and LGBT Equality engender strong emotional responses from members of progressive, civically-oriented communities. Currently, these communities lack a centralized platform to experience these stories together. Huddl contains the following key attributes: There s really only ONE story or issue that most people talk about every day on a campus, in a large company, in a town, etc. It s The Daily Huddl. Huddl will feature one topic/story a day on the front page of the site. Previous Huddls will be pushed behind but still accessible to more eager users. And they can be pushed back to the front if the story becomes the Daily Huddl again. Every morning, the Huddl staff will choose the Huddl of the day (based on some sort of algorithm combining Facebook and Twitter mentions, local publication analysis, and on-campus correspondents) and curate 3-5 articles, 3-5 videos, and post one poll question. Users engage with the platform through several engaging, quick, and informative ways. After reading an article or watching a video, users must vote Worth the read or Not worth the read, which will move the content up or down the network feed and indicate which pieces of content are most important to the community. Users can suggest additional pieces of content to be added to the Huddl, which will be moderated by the central curator. Each user will have a brief profile indicating their age, gender, and relative political affiliation. This data can be visualized in the polling section so users can better gage the opinions of their peers. Finally, users will be awarded for their participation on Huddl through higher statuses. As users gain status, their votes on content will be worth more so they can have a greater impact on the feed. High-status users will get their suggested content posted more regularly and will have a greater role in setting the community agenda. Community activity on Huddl will set a social agenda. Everyone goes to school/work knowing what the topic of the day is having read similar content. People can better deliberate and come to social consensus about the toughest themes and questions

5 facing our lives. Communities will strengthen around shared stories, thought pieces, and high-level debate. A daily blast will remind users to check the Huddl and will allow them to access the day s curated content through their inbox.

6 3) Product/Services: what are you selling? We are a network based business with one-sided market effects. We will target university campus communities and will monetize this audience to advertisers. The campus community is a valuable but difficult to reach target group for advertisers. As the resources available to college students continue to change, on-campus marketing becomes more complicated than ever. Marketing to this profitable cohort is no longer simply a matter of stationing a representative outside the quad or getting a product in the hands of a few university influencers. College students now are just as mobile as their devices, with a fluid definition of university boundaries and a virtual world just as vivid as the physical one 1. Key Insights about our target group: College students are most plugged into their mobile devices, favoring laptops, tablets and smartphones over desktops and televisions. College students are accustomed to display banner ads. To stand out, marketers must be as relevant as possible. Display marketers should layer location-based targeting on top of their traditional behavioral and contextual tactics to deliver the most relevant ads. Huddl will target the campus community with our daily briefing and will be able to offer highly targeted advertising by gender, interest, age and location. 1

7 4) Market Analysis: Size, who, how to reach them? The user opportunity: In fall 2014, 21.0 million students attended American colleges and universities, constituting an increase of about 5.7 million since fall Millennials consume news and information in strikingly different ways than previous generations, and their paths to discovery are nuanced and varied. Millennials are very much interested in news and the world around them (85%) and the vast majority wants to get their news daily (69%). 3 They further tend to prefer original news reporting sources to their social media feeds when they want to inform themselves on hard topics. 4 In our on campus interviews we found the following needs which underpin the necessity of Huddl: Needs found: Authorities for best content are trusted friends, refined network Facebook is too large and uncomfortable to discuss and share content Consensus over what constitutes a top story News as a shared experience, a moment in time that everyone is experiencing People read fascinating content, don t know what to do with it Civic duty to be informed about world, national, local events but many feel uninformed Sorting through clutter is hard, time wasted finding the best content In order to reach these college graduates we will use a campus per campus strategy where we launch with a big bang (on campus presence, blasting through key influencers, flyers and Facebook advertising) on each campus. With 5 campuses in the first year we will ramp up to 25 in the second year and will reach a 100 in the third year

8 The advertising opportunity: College students represent a $16 billion market and are often at a stage in their lives when they are still establishing brand loyalty and awareness 5.The advertising market to this hugely lucrative crowd is a $1 billion market. More than 30% of this advertising budget is allocated to online marketing. Under the assumption that we reach 50% of the schools with a 20-30% market penetration we see a market potential of $30-45 million for Huddl. We would primarily focus on local advertisers and employers who want to market to the campus community. Our bottom-up market sizing calculated with 500 campuses with ~15,000 people each and a market penetration penetration of 20-30%. With 1,500,000-2,250,000 users we could have

9 ads per campus for $500 (verified via the Stanford Daily rates for small print ads) per sponsored campaign which would result in $20-40 million revenue per year. We would further make use of video advertising, newsletter advertising and general banner ads. We will reach the local advertisers through local outreach and skilled sales people and an easy to use technological platform where advertisers can design, schedule and post their own advertising to the app. They will also be able to directly track the success of their campaign through the app. For the national advertisers and the employers we will offer sponsored campaigns which allow them to sponsor the app for a day or a week. The relatively high rate of $500 per sponsoring and campus reflects other non-cpm based sponsoring models such as the Quartz newsletter and is due to the exposure of a highly valuable target group

10 5) Strategy and Implementation /Milestones/Track results Campus-by-campus approach: We will install Huddl one campus at a time, making sure the product becomes deeply integrated into community life. Targeted Facebook advertisements, advertisements in university publications, and physical flyering and merchandising will familiarize communities with the product and generate excitement. We will likely start with Stanford, the campus that inspired the creation of the app. We will then move to Berkeley, where a larger and more politically vocal student body will align themselves with Huddl s values. It will be important for us to find our most promising and loyal users early on and reward them with status upgrades. These campus thought-leaders will greatly influence Huddl adoption rates. Acquiring advertisers: Once we ve gained campus users, we will approach local advertisers through our network of sales agents We will further enable local advertisers to directly advertise with us and see the success of their campaign through our technological advertising platform where advertisers can directly design, post and track their campaigns For the national advertisers in particular employers we will work with the sponsoring model described above and reach out to them after we amassed a large enough student base Our usage metrics: Initial downloads might go up to 50% of campus students but we calculate with a retention rate of 40-60% of initial downloads Our goal is to reach 20-30% of students on each campus who we will be able to retain as our users Huddl should be opened by 50% of our users at least once a day Time spent on Huddl should be at least 5 min daily 10% of Huddl users should invite at least 1 of their friends to the app

11 6) Management Team Desiree Peill Operations, Sales, Strategy Desiree graduated from St. Gallen University, Switzerland, with a B.A. in International Relations and a long involvement in school and campus journalism. After working for varying newspapers and magazines as a journalist and later as a business developer with a focus on content monetization strategies she joined McKinsey & Company in Berlin, Germany, to focus on the innovation of media business models and operational excellence in media businesses. She has worked for numerous European and international media brands and helped to develop their digitalization and M&A strategies. Desiree is now a M.B.A. student at the Stanford GSB and is focusing on new monetization models for digital content during her time at Stanford. In her free time she loves skiing, reading and spending time with her family and friends. Max Johnson Marketing, PR, Creative Max graduated from Stanford with a B.A. in International Relations and Economics and is a digital media enthusiast. Originally interested in serving his country as a Foreign Service Officer, after a half-year position at the State Department Max decided to dedicate his career to influencing public opinion and social change through digital storytelling and online engagement. He worked at the Project On Government Oversight managing an online community of watchdogs and federal whistleblowers and produces a YouTube talk show covering social and political issues central to the lives of

12 college-aged millennials. Max is a professional spin class instructor, hispanohablante, and chocoholic. 7) Financials: Projected P&L for three years w/cash flow Assumptions? Overview 5 year plan: Overview revenue streams: (Assumptions in yellow) Our revenue streams include sponsoring for $500 per campaign per campus (80 daily full sponsorings of the app per campus, including multiple ads and content (Price based on Stanford Daily cheaper print ads, Quartz Newsletter sponsoring, Economist daily briefing app sponsoring)) advertising for a 15$ CPM with 50% daily page views (80 banner advertisements per campus (price based on Stanford Daily)) video advertising for a 20$ CPM with 50% daily page views (20 video advertisements per campus) newsletter for a 15$ CPM with 50% daily opening (80 banner ads in newsletter)

13 Overview costs: (Assumptions in yellow)

14 8) The ask: How much start-up funding do you need? (Table) For the first 2 years we have a funding need of $666,543. We will be profitable after the second year.

15 9) Mockups HUDDL OF THE DAY and PREVIOUS HUDDLs

16 SWIPE LEFT, LOCAL ADVERTISEMENT

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18 USER PROFILE

19 NATIVELY INTEGRATED ARTICLE, VOTING

20 POLL QUESTION and DATA MANIPULATION