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Matt Chic | Eric Irvine | Bryan Mascioli | Jake Wise October 2012
Executive Summary .......................................................................................................................... 4 Introduction ....................................................................................................................................... 5 Macro Trends .................................................................................................................................... 5 Market Research ............................................................................................................................... 6 Market Analysis & Sizing ............................................................................................................... 6 Customer Base ................................................................................................................................. 7 Description of the Customer Need ................................................................................................ 7 Consumer Segments ..................................................................................................................... 7 Consumer Demographics .............................................................................................................. 7 Consumer Interests and Interactions ............................................................................................. 8 Competitive Landscape ..................................................................................................................... 8 Competitive Analysis ..................................................................................................................... 9 Competitive Advantage ............................................................................................................... 10 Service Definition ............................................................................................................................ 10 Search & Discovery: .................................................................................................................... 11 Service ..................................................................................................................................... 11 Line of Business ....................................................................................................................... 11 Inventory Distribution: .................................................................................................................. 11 Service ..................................................................................................................................... 11 Line of Business ....................................................................................................................... 12 Business Intelligence: .................................................................................................................. 12 Service ..................................................................................................................................... 12 Line of Business ....................................................................................................................... 12 What does Success Look Like? .................................................................................................. 13 Consumers ............................................................................................................................... 13 Providers .................................................................................................................................. 13 Marketing Plan ................................................................................................................................ 13 Brand Promise, Positioning & Values .......................................................................................... 13 Market Segmentation .................................................................................................................. 13 Prototyping .................................................................................................................................. 14 Early-Stage Tactical Market Strategy .......................................................................................... 15 Consumers ............................................................................................................................... 15 Providers .................................................................................................................................. 16 Broader Go-To-Market Strategy .................................................................................................. 16
Advertising, Promotion & Sales Strategy ..................................................................................... 17 Exit Strategy ................................................................................................................................ 17 Operations Plan .............................................................................................................................. 18 Pricing .......................................................................................................................................... 18 Search and Discovery Lead Generation................................................................................ 18 Bundled Inventory Distribution ............................................................................................... 19 Data Analytic Subscriptions/ Business Intelligence ............................................................... 19 Financial Projections ................................................................................................................... 19 Production Activities .................................................................................................................... 19 Initial System Development ......................................................................................................... 19 Search & Discovery Storefront ................................................................................................. 20 Inventory Distribution Storefront .............................................................................................. 21 Business Intelligence Storefront .............................................................................................. 21 Cost Analysis ............................................................................................................................... 21 Fixed Costs .............................................................................................................................. 21 Variable Costs .......................................................................................................................... 22 Organizational Design ..................................................................................................................... 23 Management & Organization for Venture Launch ....................................................................... 23 Management Team .................................................................................................................. 23 Founders .................................................................................................................................. 23 Advisory Board Target Members .......................................................................................... 25 References...................................................................................................................................... 26 Appendix: Identified Competitor Feature Set Matrix ...................................................................... 27
Proble m
The Share Economy has grown significantly over the last few years and while the use of services is growing in popularity, the search and discovery of relevant information is becoming more challenging for providers and consumers alike. Providers are those Share Economy companies that operate as either a peer-to-peer platform or shared resource service provider
Solution
Fiddle is an online platform that aggregates all Share Economy information. Fiddle provides consumers access and discovery of Share Economy information and providers the opportunity for lucrative marketing and distribution partnerships. For users, Fiddle organizes information by location, functionality and price. For Share Economy providers, Fiddle delivers a turn-key solution to increase visibility and acquire new customers at low cost.
Opportunity
There is no existing Share Economy aggregator. As of May 2012 there were over 6,500 companies worldwide that operate in and around the Share Economy, which represents a 5x increase of new entrants over the last 18 months (Gansky, 2012). The total market value of Share Economy services is estimated to be $110 billion (Fast Company, 2011).
Positioning
Fiddle is your gateway to the Share Economy. We facilitate discovery of services so that users may locate needed services and combine their offerings with others to sell service packages.
Busine ss Mode l
Fiddle is an information aggregation platform that generates revenue through transaction fees and subscription fees via three lines of business: Search & Discovery, Inventory Distribution and Business Intelligence.
Please access the Fiddle financial model, video pitch and prototype wireframes below:
Model
Pitch
Prototype
Introduction
In Whats Mine Is Yours: The Rise of Collaborative Consumption, by Rachel Botsman, the author points out that the average power drill, which most everyone owns, is actually utilized only about 12 minutes over the course of its life. Jessica Scorpio of GetAround stated, You have a car that sits idle 92 percent of the time; it serves its owner well, but it also is a really expensive asset that could be used more effectively. The Share Economy premise is fairly straight forward: a more efficient means of consumption results in better resource utilization. Instead of us wasting our dollars on things like power drills which we require only occasionally, we can share them with those in our community and unlock untapped value.
Macro Trends
In 2010, Latitude Research and Shareable Magazine conducted the first-ever comprehensive sharing industry study, entitled, The New Sharing Economy, to establish benchmarks for awareness and adoption of existing sharing services, as well as sharing attitudes and behaviors. What they found was that 75% of participants predicted that their offline sharing will increase in the next 5 years; the most popular perceived benefits of sharing (67% each) were saving money and being good for society; and 45% of participants liked the idea of sharing services that felt smaller and more accessible like local or grass root communities. In The Big Switch, Nicholas G. Carr refers to the Great Unbundling i.e., the radically disruptive disintermediation associated with the Internet Age. The trend of distributed disruption began with open source code and file sharing. Then people shared their lives on Facebook, their media on YouTube, and now their assets on various platforms (Sacks, 2011). Over 3 million people from 235 countries have couch-surfed and over 2.2 million bike-sharing trips occur each month (Sacks, 2011). Super angel Ron Conway recently identified the Sharing economy as 2012s hot area for angel investment (The Rise of the Sharing Economy, 2011). Growth of mobile technology and the rise of peer-to-peer platforms are chief contributors to rapid growth and expansion of this market. In 2009, 385 million mobile phones were estimated to be in circulation worldwide. By 2013, that number is estimated to triple to 990 million (Botsman, pg. 85). This is all to say that the future is likely one driven by distributed solutions. People are empowered to disrupt. There is therefore a great deal of value to be unlocked by aggregating users and resources and facilitating access. As provided below, users may include humans, applications, or devices , while resources may include assets, code or ideas. A number of entities already exist to promote collaboration and facilitation of access between users and resources (i.e., GitHub, Quirky). Most notably, Cosm, formerly Pachube, is a platform that supports a community of developers (those who build apps) and products (those who build devices). Whatever the label, be it co-development, co-curation, social coding, social development, the data that is extracted from H2M (human-to-machine) and M2M (machine-to-machine) interactions is unique in the fact that by itself it is not typically very interesting, but when it is opened up and available to a community of empowered individuals, it becomes a driver for all kinds of awesome innovations, like crowd-sourcing movements and new interactions within urban infrastructures. Some resulting products are funded via Kickstarter (i.e., Air Quality Egg, Sensordome).
What
Gateway
AggregationofUsersandResources
As Clay Shirky states in Cognitive Surplus: How Technology makes Consumers into Collaborators (May 2011), with a large enough crowd, unpredictable events become predictable.once the uncertainty of demand is divorced from the individual customers and remanded to the aggregate, whole new classes of activity become possibleMore is differentwhen you aggregate a lot of something, it behaves in new ways, and our new communications tools are aggregating our individual ability to create and share, at unprecedented levels of more.
Market Research
Our team has consulted industry participants and interviewed both current and prospective customers of Share Economy services to better understand the space. The following Share Economy professionals are advising our product development process: Lisa Gansky, Founder of Mesh Labs, Jeremy Barton, Founder of Legit, June Lin, Community Manager at Vayable, Emil Martinsek, Product Manager at Hotwire.com, Fadi Bishara, Founder of Blackbox, and Kevin Zellmer, Business Development at Hearsay Social.
Accompanying this boom of activity and new services is information saturation and fragmentation. Information discovery has become a customer pain point. As the number of services increases, the ability to easily discover what is relevant and accessible to an individual consumer in a specific geographic area becomes increasingly time consuming.
Customer Base
Fiddles customer base consists of Share service providers, consumers, and prosumers (those that both provide and consume).
Consum er Demographics
Our potential customers span a mix of age, gender, education and familial status. Interviews, site traffic demographic data from leading Share Economy services and recently published research has helped us understand our customer in more detail. AS provided in the graphic below, the majority of Share Economy consumers are women between the age of 25 and 34, without children, who have a college education or higher, most of which are accessing their Share services at work (alexa.com,n.d.)
Competitive Landscape
As a Share Economy aggregator Fiddle seeks to facilitate discovery of services so that users may locate needed services and combine their offerings with others to sell service packages. Our competitors fall into three general concept areas: recreation travel, collaboration champion and business opportunity. Each concept satisfies the customer need to some degree, but not completely. The Share Economy is nascent and therefore fragmented. At this stage, Share as an offering represents a broad spectrum. Degrees of Share include shared products and services, co-ownership, redistribution or reuse, and content collaboration. Ultimately a market is rising up around the more efficient use of idle resources. Incumbents in the recreation travel industry, otherwise known as Online Travel Agencies (OTA),
dominate the traditional marketplace. These are established companies with scale as their primary advantage. These players include the likes of Expedia, Kayak and Priceline. It is these companies whose market share we might be eating into which gives us pause as the strategy may not be to compete with these behemoths but rather to collaborate or pursue acquisition. Ultimately it is going to take a shift in the customer mindset to truly impact the OTAs top line. Additionally the recreation travel concept category includes players like Weekend Sherpa, TripAlertz, FlexTrip and TripAdvisor, which operate in niche markets (i.e., outdoor activities, sustainable tourism, group tours). This shift in mindset requires pushing the collaborative consumption concept, which is an action performed by the champions. These champions include Canada-based Uniiverse, the Mesh Directory, Shareable and UK-based CollaborativeConsumption.com, all of which are social movement-oriented players whose objectives are both to inform and organize. Each promotes a collaborative lifestyle but to varying degrees. Participants are also interested in business opportunities; the chance to make or save money. Craigslist and Shareasale both provide participants the opportunity to pursue collaborative capitalism. The Share Economy is a three-sided marketplace. There are Providers of Share products and services, Consumers of Share products and services, and Prosumers who both provide and consume. Transactions between these parties play out at three levels: business-to-business, business-toconsumer, and consumer-to-consumer capitalism.
Competitive Analysis
We have identified two themes across the discussed concept areas: Messaging and Content. With respect to messaging, competitors are positioned either as promoters of economic gain or social benefit. With respect to content, each competitor provides a different degree of information, organization and aggregation. The 2x2 below serves to illustrate this observation.
Information
Economics
Movement
shareabout
X-axis: Messaging Y-axis: Content
Facilitation
Fiddle has identified an opportunity to play all three roles: facilitator via experience bundling and travel packages, champion via organization of Share information (or ShareHub), and provider of business opportunities for prosumers. Though at present our venture has many indirect competitors, there exists no entity that executes in all areas. Even those players that have partnered, Airbnb and Vayable or Expedia and Groupon, do not execute across all identified value adds. In the Appendix is a feature set matrix for Fiddles identified competitors. Included in the table are the companys concept category, demographics, revenue streams, value gain features and value loss. The demographics provided in ascending order are as follows: User Age Brackets, Gender, Education, Children, Browsing Location, and in some instances the Upstream Website. The data for all competitors without upstream/downstream information is Google and Facebook.
Competitive Advantage
The nature of Fiddles competitive advantage will be its ability to offer authentic experiences at lower cost. We will organize and facilitate Share Economy resources for primary adopters and champion the Share concept to secondary adopters. Fiddle is an interactive website that combines the strengths of each competitor concept. Our competitive advantage lies in the combined provision of differentiated recreation travel, the opportunity to collaborate across multiple verticals and business opportunities for prosumers. Our strategy is to roll out the bundling of recreation travel packages/experiences initially and then expand our offering with new features for each category in phases. It is our intention to lead with the most viable option, transaction fees from bundling, and therefore our focus initially will be to draw attention to the site via bundling and success will come from our ability to deliver high quality user experiences. If our Share portal can deliver a targeted audience to our vendor partners and advertisers, other revenue streams will avail themselves. Our initial strategy is a sliver of the larger value proposition, which is to organize the worlds idle resources and network consumption of those resources. There are environmental, economic and social benefits associated with this vision. The benefits include resource efficiency (i.e., reduced extraction and use of virgin materials), secondary incomes for prosumers, and community building via increasingly local collaboration.
Service Definition
Fiddle will be the hub of the Share Economy. Fiddle will organize the entire Share Economy in order to maximize visibility and participation. In so doing, we aim to dramatically increase traction of the access over ownership concept. Multiple participants drive the Share Economy. Fiddle performs three specific functions for current and prospective participants and has three distinct lines of business against each. The services Fiddle provides are: 1) Search & Discovery, 2) Inventory Distribution, and 3) Business Intelligence
Search & Discovery: Service Fiddle will database every operating Share Economy company and make them searchable per category, functionality, price, reputation, availability and geographic location. The Search & Discover service will solve the problem of fragmented and opaque information. Currently, it is a very time consuming process to find well-organized, concise information on Share Economy companies whose services. Fiddle will deliver convenient search and discovery to the current and prospective individual consumer, provider and prosumer and encourage new discovery via suggestion engines and bundled products and services, which we will explore below. The search and discovery function of Fiddle is available to every visitor without a required sign up or registration process. Every first time visitor can benefit from Fiddles intelligent search capabilities immediately upon arrival. Line of Business Fiddles search and discovery service is a lead generation line of business. We will sell leads to the companies in our database on a cost per acquisition basis. Based on our research we estimate that a newly acquired customer is worth $4 to a Share Economy company. We expect to sell leads to companies on our database on a scale based on activity. Inventory Distribution:
Service Fiddle will deliver a new line of distribution for selling Share Economy inventory in the form of usergenerated bundled packages. Providers and prosumers who currently offer one category of inventory (i.e., lodging) will have the opportunity to bundle their inventory with another provider or prosumer with a complimentary type of inventory (i.e., transport). Another example may be an instructor for hire paired with a classroom for rent. Enabling providers and prosumers to bundle their inventory offers a more compelling product. Providers and prosumers will benefit from increased sales with a new line of distribution. Current and prospective consumers will benefit from a broader selection of complete packages, potential discounts from economies of scales achieved and easier discovery of new services. When an individual user registers on Fiddle, they are given the ability to import their personal inventory from every share company service they use. Therefore a user who rents their car through the Share company RelayRides would be able to import their RelayRides vehicle listing into their personal Fiddle inventory. In this process, Fiddle also provides recommendations for new services to try out, to help individual users build as large of a personal inventory as possible. Once the user inventory is imported, all of the items are searchable by category and by Share company service on Fiddle. In the RelayRides e x a m p l e , anyone searching Fiddle might find that users car by searching for transportation or by searching RelayRides in their geographic area. Importing their inventory into Fiddle immediately gives the user new and searchable internet real estate. In addition to the automatic basic listing, Fiddle gives two options to combine inventory and sell bundles of inventory in one click. A Fiddle user can either build a bundle from their own inventory or choose to pair their inventory with others. If one user has two complementary items, they can choose to build a bundle and sell those items for one price. If one user has one item but not the other, Fiddle will recommend pairing that item with a different users item to raise the likelihood that
both items will find a buyer. For providers Fiddle delivers targeted, easy, inexpensive exposure and a new distribution channel for sales. The Fiddle platform is designed to act as a partner to Share Economy providers. With the robust search and discovery function described above, Fiddle is a delivery system for new potential customers. A Share company partner then only needs to allow specified data to be searchable on the Fiddle platform and Fiddle will drive new customers. The Fiddle system is a superior lead capture point of origin than basic internet search engines because it is pulling in customers specifically interested in diverse aspects of the Share Economy. Many will just be browsing locations for available services. The majority of Fiddle search traffic will arrive because they have been driven to Fiddle as Gateway to the Share Economy. The likelihood of finding a new customer from a pool of Fiddle traffic is higher than basic internet search engines. Further the Fiddle recommendation engine will pull users towards options that complement what they use already. In addition to pulling new customers from prime traffic, Fiddle will push a Share Companys services toward those who might best use it.
Line of Business Fiddles Inventory Distribution Service is a transaction fee based line of business. Our research shows that we can demand a 10% commission per transaction from bundles sold on Fiddle.
It is our observation that inventory in the Share Economy is a different proposition because the owner of the resource is looking for a secondary income and not seeking profit to offset a primary investment. The opportunity to make/save money is the value proposition for both the consumer and Share service provider. Therefore, inventory, and the traditional operational risks associated, may not be a constraint as long as Fiddle is delivering on this objective.
Business Intelligence: Service As the hub of the Share Economy, Fiddle will be uniquely positioned to track and analyze Share Economy information. Fiddle will have insights to consumer category preferences, price tolerances, participation trends, business model success and failures, use data, transaction volumes and transaction values. As a central hub for all participants, Fiddle will track and analyze data on each participant type and make this data and analysis available for sale.
Fiddles data analytics services will provide leading and comprehensive metrics on the patterns of Share: Geographic preferences for Share Economy participants Most searched companies Most searched terms Most demanded services Most active platforms Average value of Share transaction Most valuable product & service combination Location and product attributes of most valuable combination Demographic data on Fiddle users
Line of Business Fiddles Business Intelligence Service is a subscription fee based line of business. Our research shows
that we can demand at least $99 annual subscription fee for access to premium data.
Consum ers Success relies on our ability to reach customers and draw them in based on the economic incentive. We are confident that our offering will address the need of not only the primary adopters of Share services but also the latent demand among secondary adopters. Our research demonstrates that consumers are eager for deals and opportunities to make/save money. Further, many of the potential secondary adopters we spoke to were not aware of the breadth and depth of offerings currently available in the Share Economy. What revealed itself through our customer interviews was that for secondary adopters, though there was interest in learning about the various services and how they could use them, there was little interest in spending time to get over the learning curve or sorting through the landscape. To this extent, Fiddle addresses the problem of convenience and discovery. Providers The key to the success of this model is contingent upon the ability to build the multi-sided market. This relies on negotiating exclusive partnership agreements with current Share service providers. Fiddle is exploring partnerships with key service providers in the Share Economy, each in different functional categories. While all of these companies have made a name for themselves in their respective sectors, there is not at this point an intermediary that is offering their services together. As an intermediary, we will provide our customers the opportunity to bundle their product offerings lodging, activities, and food together.
Marketing Plan
Brand Promise, Positioning & Values
Our mission at Fiddle is to dramatically scale the Share Economy. We aim to organize the services of the Share Economy to drive an exponential increase in discovery and participation. As such, Fiddle is THE gateway to the Share Economy and intends to become its de-facto brand. Fiddle makes two important promises. For consumers, Fiddle promises to make the Share Economy more accessible, more convenient and more useful. For Share Economy providers, Fiddle promises a lucrative marketing and distribution partnership.
Consumers exclusively purchase or rent goods and services from others. The Share Economy pure consumer is motivated by saving money, convenience, the ethics of resource efficiency and the idea of building community. Pure consumers benefit from Fiddle because they are able to discover new Share services based on their location, needs, and price range. Fiddles message to pure consumers is about convenience and discovery. Providers can be broadly divided into peer-to-peer platform companies and shared resource access companies. Peer-to-peer companies run platforms that unite individuals with supply and individuals with demand. Shared Resource companies manage a resource that consumers pay to access. RelayRides is an example of a peer-to-peer car rental platform where individuals provide both supply and demand. Zipcar is an example of a shared resource access company where the company manages supply and the individuals rent access. Fiddle benefits providers by increasing the audience to whom they can offer their service and by allowing them to build packages with other providers for more complete offerings to the economy. For example, one providers car on RelayRides coupled with another providers room on Airbnb, becomes a more marketable complete product. Fiddle offers an additional, flexible storefront for providers. Fiddles message to providers is about increasing distribution and creatively building package offerings with other providers. Prosumers participate on both the buy and sell side of the Share Economy and benefit from Fiddle in the same manner as both consumers and providers. Fiddles messaging to prosumers is about both discovery and distribution.
Prototyping
In line with our Marketing plan, we conducted one experiment towards individuals using a wireframe mock-up and another toward potential partners using our concept video. The individual experiment we conducted was for the purpose of identifying what information an individual user wanted to have while navigating the Fiddle portal. We started with broad questions to friends, family and colleagues asking about the types of websites they liked the best and what they desired in a user experience. The common denominator was simply that people wanted clean, uncluttered and easy to understand search experiences. The people we spoke to also gave us the following information: They wanted to be able to search and use the system without signing up. They want to immediately see what Fiddle could find for them in their area. They wanted to have the ability to type in any category of search term: A location, a specific service, a category of service or a date range. They valued seeing what other people were using but wanted a social networking inclusion to be optional. The partner experiment was an empirical survey to demonstrate the concept behind Fiddle and test the waters for feasibility with partners. We employed our promotional video for such. Our goal was to understand if their technical teams saw mileage in the idea and if their business development teams understood the value in the product.
A summary of the feedback we received included: Due to the overhead that's required to manage affiliate partnerships, they [i.e., Provider] won't really pursue anything unless a partner [i.e., Fiddle] is sending them at least 100 users per month. At that point, TaskRabbit will start paying on a Cost Per Acquisition basis short answer, yes, Fiddle does sound appealing Big factor for our involvement is ROI. We'd need to see Fiddle's audience numbers, demographics, and other metrics before getting involved We have seen a good return from using, for example, Groupon and other deal sites, because they provide us the eyeballs of our target audience. I watched the video and think it's a great idea in concept. I'm not sure how the logistics will work specifically with us and our real-time parking focus, but I am sure there are possibilities We definitely want to find ways of partnering now and in the future We would definitely like to be part of other bundled shared services, or have partnerships I'm not sure what the payment would need to be... I imagine though that it would make sense to be somewhere around 10-20% Interesting idea. I think the packaging on collcons (collaborative consumption) services has potential. We wouldn't base our decision on lead gen, but more on your product and whether other notable companies are participating. Nice video. Simple but engaging. I'd be interested to learn a little more about your plans. I think there's definitely value in bundling services Your idea makes perfect sense. Whats going to be tough is that there are no APIs at present and these are nascent companies with limited resources; they would need to see marginal value over unbundled resources in order to migrate Companies [i.e., Providers] will not allocate dev resources unless Its truly compelling (i.e., can you show the benefits of bundling for a resource that is under-utilized? does it result in more clicks?
In reviewing the feedback from this experiment, Fiddle is very encouraged by the response and opportunity. Two key takeaways from the exercise are that the Fiddle business model is both desirable and not currently available elsewhere; this puts Fiddle in a first to market position. A third key takeaway is that even though there are a few technological hurdles to work out, the majority of the responses suggested that these hurdles are not insurmountable. The latter point was further reinforced through initial engagement with our engineering consultants. Based on the feedback above we have developed a wireframe prototype.
Consum ers Facing the consumer, Fiddle needs to build awareness of the product to maximize demand in anticipation of the actual product launch. Early stage awareness-building to Individuals will involve circulating our promotional video, concept messaging through social media channels and direct outreach to the most active prosumers on existing Share Economy peer-to-peer platforms. The goal of this tease campaign is to 1) create excitement for the product concept and 2) collect information about individual consumers, providers and prosumers who are eager to try it. We will know if our customer acquisition strategies are working if the metrics we employ begin to shed light on the consumption
patterns of users. The tease campaign aimed at consumers will support efforts to establish Provider partnerships. It will center around a pre-launch page that hosts multimedia and social media streams, and collects names, emails and demographic information about the Share services our prospective individual customers use. We will be able to demonstrate and track declared interest in our product concept directly from their customer base.
Providers For the pilot stage partnerships, the most valuable Share Economy Company partners are Peer-to-Peer platform companies. Peer-to-peer platform services are Fiddles most important early stage partners because achieving inroads with the company also means receiving access to active Share Economy consumers, providers and prosumers.
There are two important activities required in establishing pilot partnerships. The first activity is to achieve concept buy-in from prospective peer-to-peer partners through the use of our promotional video and in-person networking. The Fiddle team needs to sell the value-add that our new service will provide to partners. The second activity is to set standards for the API integration with our partners so that our engineering team can build a product that will function seamlessly with our partners backend systems. The partnership campaign will inform the capital needs of the company and headcount necessary to build the beta product. Early-stage Tactical Market Strategy success for Fiddle means having cultivated a base of awaiting individual customers, and an initial group of 10 partner companies, who will inform the technological requirements of our beta product.
Go To Market Strategy
Tasks Involved
Attract attention to Fiddle via social media, promotional video and personal networking.
Share Economy Initial Partner Sign- Demonstrate the concept to Share Economy ups companies to enlist initial Partners. Account Management for Initial Partners Identify Capital Structure and Team Headcount Requirements Test and iterate as necessary
Matt
Bryan
Interact with Investors and Recruit the necessary Jake Engineering Team
Exit Strategy
Fiddle has considered two hypothetical futures across two orthogonal dimensions: Consolidation and Market Growth. We believe the soundest strategy is to plan for the worst- case and thereby ensure a successful exit were the venture to not go as planned. In the best-case the Share Economy grows by leaps and bounds and with that growth and increasing fragmentation, or expansion across each Share vertical, comes a demand for organization of that market. Fiddle prospers. In the worst-case the Share Economy does not take off as hoped and certain dominant players begin to
assume Fiddles role following a wave of consolidation. The need to facilitate or organize is then fulfilled by that SuperShare entity rather than by Fiddle. Fiddle is no longer relevant. Our strategy to remain relevant will rely upon successful execution of three objectives: 1. Become the Share Hub 2. Design for SuperShare 3. Think Bigger Share Hub: Fiddle needs to establish a presence in the Share space. All things Share happen at Fiddle: new Share services and events are promoted, our blog informs, our name becomes synonymous with collaborative consumption and the Share Economy, fledgling Share providers rely upon us for customer acquisition, etc. Design for SuperShare: Fiddle must engage pilot partners. We must better understand their needs before we can solve their needs. Designing our experience around them will galvanize the relationship and secure the future partnership. Think Bigger: Fiddle must continue to think bigger than its competitors. Pursuing a grander vision of what Share represents will enable us to stay ahead of those who are seeking to replace us. Share does not stop at houses and cars, it has the potential to disrupt and transform the way in which we consume any number of resources. In this way, if we do not execute successfully we will at least be positioned for acquisition ourselves. Potential acquirers, besides SuperShare entities, may include: API developer Social Coding Provider
Operations Plan
Pricing
Fiddle earns revenue from transaction fees for the Search & Discovery and Bundled Inventory Distribution lines of business and subscription fees for the Business Intelligence line of business. The pricing for each line of business is as follows:
L ine of Busine ss Search & Discovery Lead Generation Bundled Inventory Distribution Data Analytics Subscriptions Pricing $4 per new customer delivered to a partner platform. 10% of the provider cut. $99/year
Bundle d Inve ntory D istrib ution Fiddle is compensated based on a percentage of the total bundle cost. This is in effect a 10% commission per transaction. High/Med/Low bundles, $250/$125/$75, are weighted as 20%/70%/10%, respectively. D a ta A n a ly tic S u b s c rip tio n s/ Business Intelligence A three year lag is anticipated for this stream. We believe this to be a conservative approach given that a threshold amount of data is required to provide meaningful pattern identification. A flat subscription fee is assumed. F ina ncia l Proje ctions
Fiddle generates revenues by scaling two units: Users and Bundles. U s e rs : Arguably there are nearly six thousand different Share providers in existence to date. Of that figure Fiddle drilled down to the top ten providers in terms of annual unique visitors. We aggregated the annual unique visitors across those seven sites and then assumed that we would attract just 1% of that traffic. This is a rather conservative estimate, but subsequent to Year 1 we assume 30% exponential growth YOY. A steep revenue curve was assumed in order to align with both the reality of launching a venture and the growth realized in recent months in the Share Economy. B u n d le s : We assumed that in Year 1 Fiddle would facilitate the creation of just three bundles per day, in six different urban hubs. Subsequent to Year 1, the numbers of bundles facilitated doubles YOY.
Production Activities Fiddle is a web-based platform with three lines of business serving Share Economy participants:
1) Search and Discovery 2) Inventory Distribution, and 3) Business Intelligence. All three lines of business are delivered via web-based storefronts accessible on browser, tablet or mobile interface.
Letter of Intent
Specify technical system development needs with initial partners. OBJECTIVE: Perfect functional prototype with 1st UX/UI. Execute private launch market Fiddle beta product to pilot users. Conduct user group testing and improve product. OBJECTIVE: Perfect the UX/UI for Public Launch.
Functional Prototype
Private Launch
Debut Fiddle with a Mega Bundled Event. OBJECTIVE: Gain traction with individual consumers, suppliers and prosumers. Grow the individual consumer, supplier and prosumer user base through advertising and marketing. OBJECTIVE: Develop a strong user base for leverage in negotiations with partner companies on pricing.
Public Launch
Customer Base
Scale Operations
Sign Accounts
Target Top 5 prospective Partners: RelayRides, Airbnb, TaskRabbit, Skillshare & GetAround. OBJECTIVE: Leverage traction and bundled pricing analytics to sign major accounts.
Following the initial system build, Fiddles production processes are focused on updating and expanding the storefronts serving each line of business.
Search & Discovery Storefront Updated and managed by the Fiddle team. Fiddle users search & discover information about Share Economy services relevant to them.
1. Fiddle business development brings new Share Economy company partners on to the site 2. New company partner integrates with Fiddle using the Fiddle API (or partner API) 3. New partners inventory is organized per Share category, functionality, geographic location and availability
4. New partner business & new partners inventory are made searchable on the Fiddle storefront pages
Inventory Distribution Storefront Updated and managed by Fiddle users. Using the Fiddle platform, Fiddle users combine offerings with other users to sell bundled services.
1. Fiddle users import the Share Economy services they use 2. The Fiddle platform suggests valuable bundle combinations to new users 3. The Fiddle platform places new bundles in the appropriate local storefront 4. The Fiddle platform rotates bundled offerings according to demand preferences
Business Intelligence Storefront Updated and managed by the Fiddle Team, the platform produces information analysis from purchasing patterns and user activity on the site.
1. The Fiddle Analytics Storefront updates daily using the following information: Geographic preferences for Share Economy participants Most searched companies Most searched terms Most demanded services Most active platforms Average value of Share transaction Most valuable product & service combination Location and product attributes of most valuable combination Demographic data on Fiddle users
Cost Analysis
Fiddle has identified the following fixed and variable costs.
Personnel
All non-C-suite salaries provided below represent the market rate for the San Francisco Bay Area as determined by Glassdoor.com. The 15% increase in salary per annum is in lieu of equity and deemed sufficient to retain talent and mitigate turnover. C-Suite: The CMO, COO, CEO and CFO have agreed to defer compensation until year five. Salaries start at $50k and escalate to $150k in year five. The founders will retain equity ownership. Marketing: Fiddle plans to launch, in phases, in six densely populated cities. The first phase will require a marketing manager in San Francisco as well as one in New York in order to manage the buildout. Marketing Manager salary $70k to start and increases by 15% per annum. No equity will be granted.
Engineering: Due to the complexity of the venture we will need a strong development team. We will bring on one full-time software engineer, two contract developers and a R&D Manager. Contract developers will be compensated $52k while the software engineer and R&D Manager will receive $80k. Each member of the development team will realize a 15% increase in salary per annum. No equity will be granted. Administration: We plan to bring on a full-time Accountant and Talent Manager as well as maintain Legal Counsel on retainer. The Accountant and Talent Manager will receive $75k and $50k, respectively. No equity will be granted.
Capital Expenditures
These are the capex necessary to scale over five years. Cost estimates provided are based on figures provided by various members of our advisory board. Three year straight-line depreciation is assumed given that the average lifecycle of these technologies is rather short. Computers, Software & Office Equipment (est. @ $20k/year) Servers, Bandwidth & Storage (est. @ $18k in year 1) Server farm capacity will likely increase with the number of Users, we believe it is conservative to assume a doubling in cost every year Domains, SSL Certs & Misc. (est. @ $5k/year)
Variable Costs
Expenses dependent upon number of units sold.
Organizational Design
Initially, Fiddle will comprise a simple organizational structure characterized by low departmentalization, wide spans of control, centralized authority, and little formalization. The current stage of the business necessitates such a structure in order to allow for agility and to address the varying startup actions, which will require continuous cross-functional collaboration. As Fiddle matures from a startup into high-growth, the company will begin to organize based on a hub and spoke model. The hub will consist of the founding team and core business operations and spokes will be the specific cities and regions that Fiddle penetrates. This will move Fiddle from a simple structure to a team structure, with each locale consisting of its own self-managed team yet working under Shared Fiddle mission, vision, and values. Undoubtedly, each team will develop its own subculture, however cross-pollination and collaboration will be encouraged to facilitate one company and avoid the creation of cultural silos. Decision-making will need to be timely and will require some autonomy among the founding team. To facilitate decision-making and communication a meeting structure will be put in place that efficiently and effectively fosters collaboration and openness. This structure is based on Patrick Lencionis book, Death by Meeting, and sets up a meeting structure based on several components including daily checkins, weekly tacticals, monthly (or ad hoc) strategics, and quarterly off-site reviews. The key roles for the Fiddle organization will be divided according to the core functional competencies needed to build the business. These key roles consist of marketing, operations, finance, pre-sales/ business development, legal and information technology. Though each founder is responsible for a core functional area, each founder is also expected to hone competencies in each area to ensure that strategy remains aligned. Within each key functional role will exist specific responsibilities. This allocation of responsibilities and objectives will result in efficient and equal distribution and management of the overall workload. The meeting structure will facilitate workload calibrations as it is expected that many tasks and responsibilities will overlap and/or require participation and input from all team members.
M anagement & Organization for Venture Launch M anagement Team Fiddle's founding team brings a wealth of knowledge that spans across Finance, Marketing, Business Development, Operations and Education. Matthew Chic, Eric Irvine, Bryan Mascioli and Jake Wise will all remain on board through product launch, at which point the Fiddle team will reevaluate its financial standing. Each founding member brings something different to the company and with the exception of a technical and legal lead, all roles are filled thus far. Founders The Fiddle founding team comes from various backgrounds and covers many of the key functions necessary to execute the go-to-market strategy. Matt Chic and Eric Irvine will lead concept demonstration and tease campaign activities while Bryan Mascioli and Jake Wise will lead the product development, team building and financial activities.
Advisory Board Target M embers Fiddle's four-member advisory board contributes significantly to the well-being of the company by offering guidance that will alleviate some of the operational risk. Each board member comes from a different background with proven experience in the entrepreneurial world.
Lisa Gansky : An author, entrepreneur, and investor, Lisa brings a wealth of knowledge as she was the founder and CEO of Ofoto, sits on the board and advises over a dozen startups, and wrote The Mesh, why the future of business is sharing, a New York Times best seller that describes the benefits of
the Share Economy.
Jeremy Barton : JB is the founder and CEO of Legit, a credit rating for the Share Economy. JB's
intimate working knowledge of the industry and connection to many of the marquee companies make him an invaluable resource to our team.
Chris Macho: Chris is the head designer at Maximilian & Co. Design in Los Angeles, CA. Chris has
over ten years experience building websites and mobile applications. His ability to vet our ideas and give us constructive feedback has been extremely beneficial.
Re fe re nce s
Alexa the Web Information Company. (n.d.). Retrieved March 7, 2012, from http://www.alexa.com/ Barton, J. (2012, March 2). Share Economy, Legit. Busque, L. (2012, March 15). Share Economy, TaskRabbit. Clark, S. (2012, March 13). Carsharing. Gansky, L. (2012, March 20). Share Economy, Mesh. Glassdoor an inside look at jobs & companies. (n.d.). Retrieved May 17, 2012, from http://www.glassdoor.com/index.htm Kahneman, D. (1979). Prospect Theory. Econometrica. Macho, C. (2012, March 2). Engineering Costs, Maximilian & Co. Sacks, D. (2011, 18). The Sharing Economy | Fast Company. Retrieved May 17, 2012, from http://www.fastcompany.com/magazine/155/the-sharing-economy.html Sarin, S. (2010). Bundling. Wiley International Encyclopedia of Marketing. Stoll, M. (4 4 12). Shareable: San Francisco Pitched as Beacon of The Sharing Economy. Retrieved May 17, 2012, from http://www.shareable.net/blog/san-francisco-pitched-as-beacon-of%E2%80%98collaborative-consumption%E2%80%99 Tsotsis, A. (n.d.). TaskRabbit Gets $17.8M For Aggressive Expansion, Wants To Grow Internationally And Beyond | TechCrunch. Retrieved May 17, 2012, from http://techcrunch.com/2011/12/13/taskrabbitgets-17-8m-for-aggressive-expansion-wants-to- grow-internationally-and-beyond/ Yarow, J., & Goldman, L. (2011, July 28). GROUPON SURVEY RESULTS: More Than 50% Of Groupons Business Customers Do Not Want To Issue Groupons Again - Business Insider. Retrieved May 17, 2012, from http://www.businessinsider.com/groupon-survey-results-2011-7 Zipcar Doubles Its Asset Backed Securitization Facility to $100M to Support Fleet Growth (NASDAQ:ZIP). (n.d.). Retrieved April 25, 2012, from http://ir.zipcar.com/releasedetail.cfm?ReleaseID=636905
Expedia
Recreation/ Travel
Ads
No collaboration, per se
Weekend Sherpa
Ads
Outdoor activity focused Limited profiling (income, gender, etc.) California only No bundling No collaboration, per se Flights, hotels only No bundling No collaboration, per se
TripAlertz
18-34 Female College No kids Work Upstream: Shareasale Downstream: TravelZoo 25-44 Male Grad School
Donate 1% of revenue, Affiliated with Pachamama Alliance Earn cash for travel by inviting friends to the site Vote on special package deals My trips section of the user profile
FlexTrip
per se
TripAdvisor
Recreation/ Travel
Ads
TravelZoo
Recreation/ Travel
25-34, 55-64 Female Grad School No kids Work 18-34 Male College No kids Work
Ads
Reviews heavy Offers hotel, restaurant, vacation rental Travel inspiration page Mobile App Offers sort by luxury, family or business Can access friend trip reviews Usergenerated wiki for reviews of neighborhoods form real travelers Travel, entertainment, local deals; search for deals by destination, conduit for bookit.com, fly.com, carrentals.com, Discover: authentic services and activities Offers dashboard and profile to create listings Discover new things AND/OR become an entrepreneur Directory by category Join for free Blog and book push the concept Big picture
Uniiverse
Champion
No Ads
Meshing.It
Champion
No Ads
Collaborativ e Consumptio n
Champion
No Ads
Craigslist
Business Opportunities
No Ads
Shareasale
Business Opportunities
Antenna: Top 3 ideas Lab offers consulting and advice for the space Identify as a HUB for Product Service Systems, Redistribution Markets, Collaborative Lifestyles Organized Categories: Community, For Sale, Housing Discussion Forums, Event Calendar Anonymous!, Search by price, location, picture Affiliate network providing payper-sale, payper-lead, and pay-per-click programs for webmasters Caters to people who are looking to make some extra cash by generating leads on commission
Anonymous No bundling
No bundling