wiredU

Changing the way applications are developed

Business Plan | Spring 2012

TABLE OF CONTENTS
1. EXECUTIVE SUMMARY...........................................................................................3 2. THE STUDENT ADVANTAGE..................................................................................4 3. CUSTOMER..............................................................................................................5 a. Universities & Local Businesses .......................................................................... b. Applications on the Open Market....................................................................... 4. CUSTOMER BENEFITS.............................................................................................7 5. PRODUCTS & SERVICES..........................................................................................7 a. Product Description................................................................................................ b. Envisioned Uses........................................................................................................ 6. MARKET & COMPETITION.....................................................................................8 a. Market......................................................................................................................... b. Competitors............................................................................................................... 7. STRATEGY & IMPLEMENTATION..........................................................................8 a. Initial Rollout............................................................................................................ b. Milestones............................................................................................................... c. Exit Strategy............................................................................................................... 8. OPERATIONS.........................................................................................................12 a. Legal Structure.......................................................................................................... b. Location and Facilities............................................................................................ 9. CRITICAL RISKS & ASSUMPTIONS......................................................................13 10. CULTURE................................................................................................................14 11. MARKETING..........................................................................................................15 a. Marketing Overview................................................................................................. b. Pricing........................................................................................................................... 12. FINANCIALS...........................................................................................................16 a. Costs & Revenue....................................................................................................... b. Ask.................................................................................................................................. 13. EXECUTIVE TEAM.................................................................................................18 14. GROWTH TIMELINE.............................................................................................19 15. APPENDIX..............................................................................................................20 16. WORKS CITED.......................................................................................................22

1. EXECUTIVE SUMMARY
Over the past decade, cellphone use has become ubiquitous. As a result, most companies have started using smartphone applications to attract and communicate with their customers. Yet, the development of smartphone applications requires specialized programming skills and technological resources. As a result, these interested parties turn to application development companies. In the current marketplace, almost all smartphone application developers exclusively target large clients. As such, WiredU has recognized this opportunity to develop applications for smaller niche customers, specifically universities, local businesses, and individuals on the open marketplace. We will uniquely realize this objective by utilizing the intellectual capital localized on university campuses, especially in computer science students, to program and develop applications of the highest quality for customers in a cost-efficient and creative manner. The mission of WiredU is to build a low-cost application development company using a unique double-fold business model to attract the business of specific niche market segments: namely, universities, their students and local businesses. The model will employ student programmers who are physically located at the same sites as all three types of customers requiring app development, allowing them to better understand and meet the needs of the customers. WiredU will be ready with a convenient and cost-effective solution to modernizing the university or businesses. In addition to developing distinct applications based on the customers instructions, WiredU will also have template application ideas and features to pitch to customers. The WiredU will operate with a unique hub and spoke system model. The Executive Team will be located in one hub while teams of different student contractors will compose different spokes, located on various university campuses. The hub and spoke system increases WiredUs scalability. The spoke model is easily replicable so new spokes can easily and quickly be opened at different locations, growing our market presence in a short time frame. Our competitive advantage is the employment of computer science students to develop the applications. This creative labor source benefits both WiredU and the student contractors. WiredU will provide the student contractors who desire hands-on programming experience and who would otherwise lack the business, with application development contracts obtained by our marketing and operations department. Additionally, they will receive the necessary material goods, a computer and development software, as well as industry-appropriate fiscal compensation. Furthermore, WiredU plans to initiate a programmer certification program in cooperation with their home university to further sharpen their competitive edge in the post- graduation job market. WiredU will attract high-quality student programmers by providing opportunities for skill improvement through professional development events like online lectures and programming challenges. As they begin developing apps on a contract basis, each team will have at minimum a weekly virtual conference with our CTO. To foster connectivity amongst the student contractors and facilitate creative problem solving, WiredU will maintain a back-end website for student contractors to connect. The employment of student 3

 contractors will also enable WiredU to operate in a cost-effective manner. The programming completed by students does not require expert developers, especially because a programming consultant will develop the platform code in the first few months. Our decentralized operations and utilization of technology to communicate with our spoke teams also reduce our overhead costs. As a result, WiredU will be able to maximize its profits. WiredU will target its anticipated populations, customers on the open market and contracted businesses, through tailored marketing. As a technology-based business, we plan on employing social media to reach students, universities and other potential customers. In addition, we also recognize the need for more traditional marketing such as print materials and local advertising to attract customers who are not technologically current. WiredU plans on being strategically acquired by a mid-size application development firm after five years of operation. As application development companies are looking to increase their size and presence, many mid-size firms have been acquiring smaller application development companies. An examination of recent transactions and industry trends in the application development industry confirms such acquisitions. Five years after implementation, WiredU will have expanded to 14 university campuses with over 50 employees, placing the firm in an ideal position to be strategically acquired.

2. THE STUDENT ADVANTAGE

A. Benefit for Student Contractors The student contractor model is the backbone of WiredU and gives us our competitive advantage. Although the workforce demand for computer science majors is growing, there are still fewer jobs than computer science students. While there may be increased demand for employment post college graduation, there are still a limited number of positions for undergraduate computer science students while they are still enrolled in university. Furthermore, the existing employment positions for computer science majors require past internship experience developing applications. For this reason, computer science majors are looking for direct, hands-on experience programming apps to place them at a competitive advantage in the job market. Through working with WiredU, they will have the opportunity to gain hands-on expertise and learn more about specific areas of programming. WiredU provides students a platform to obtain contracts from businesses that would not otherwise offer business to individual undergraduate students. 4

 WiredU, specifically its CTO, will provide the students with all the necessary resources to program applications, including a computer with the latest software. Every student contractor will also be working in a spoke team with at least two other students. As a result, they will be able to share ideas and more effectively problem solve. The expertise of our contracted professional computer programmer and Executive Team members will serve as unique resources for student contractors. B. Benefit for WiredU The employment of computer science students allows WiredU to be cost effective and gives our company a competitive edge. Although student contractors will be paid in accordance with the industry standard for their skill level, our employee pay will be cheaper than that of graduated computer programmers. Before the company officially launches, three months will be spent developing the foundational programming code. This base code will then be adapted for individual projects. As a result, students will have the understanding and resources to efficiently and knowledgably complete the contracted projects. The majority of the applications that WiredU will develop will be for locally-based businesses and universities; we believe that the perspective provided by these students will help us to best deliver the product through intimate knowledge of the target demographic.

3. CUSTOMER

WiredU is uniquely situated to reach a varying range of customer populations due to the nature of our business structure. WiredU can tailor its applications to target burgeoning markets by producing products that reach unmet needs or solve problems in innovative ways. We will target three customer segments: universities, businesses and individuals seeking applications for the open market. A. Universities & Local Businesses Our initial entry market will be universities and the surrounding businesses. We will contact university departments first about our company; university departments are ideal entry points because they can be hired on a contract basis. Additionally the fact that university systems are comprised of many different departments and organizations means that WiredUs potential customer base within the university system alone is quite broad and diverse. Furthermore, university departments are always looking for ways to communicate more effectively with their students. They can achieve this objective with a smartphone application. We will use the technological generation gap to our advantage as well: 5

 many university professionals may not be technologically savvy or may not have the time to develop an application themselves. WiredU will be ready with a convenient and cost-effective solution to modernizing the university. The relationships with universities will enable WiredU to develop a presence in the community, which will then allow us to effectively approach local businesses. The ideal small business customer is interested in contracting the development of a smartphone application tailored to the goods, services, and customers of their individual business. Because our business model is localized around university campuses, there are many small businesses looking to maintain a fresh image with up-to- date technology in order to reach their tech- devoted student customers. Using student developers for these applications will increase the desirability of our product because they understand the customer base and will be able to thus create the most effective product. We also see strong potential for the development of an arm of WiredU that would work alongside smaller colleges to provide opportunities for students to gain experience at schools that do not have the resources to grow a robust computer science department. Students at these schools would work for WiredU to gain experience in an environment previously vetted by the college. This way, smaller universities can serve students interested in computer science without having to establish an entirely new department. B. Applications on the Open Market After establishing ourselves through Projected Customer Segmentation the contracting arm of our business, we plan to branch out into developing applications for the open market. Once again, our location on Universities university campuses will provide an almost-guaranteed customer base. As universities continue to highlight Local B usinesses innovation and entrepreneurship, more students are creating the ideas Applications o n t he for potential smartphone open m arket applications. Yet, a majority of students do not have the resources or the knowledge to develop the applications themselves, creating a space for WiredU. Similar to the services that we offer to universities and businesses, WiredU will develop applications based on the individual customers desires. This market sector 6

 is more volatile and we plan to mitigate the increased risk through a portfolio model wherein we spread risk through the simultaneous development of several applications. Smartphone sales are predicted to reach 631.3 million in 2012 and 1,438,010,000 by 2015.

4. CUSTOMER BENEFITS

Customers will yield more benefits through working with WiredU than through any other smartphone application developer. The primary benefit lies in the localized services provided by a company that understands the needs of smaller businesses as well as the knowledge of their particular environment and customer base. Close proximity makes in-person meetings possible and thus provides a superior level of customer service if required or requested. As outlined Exhibit 11.1 (Price Comparisons), WiredU also offers a lower-cost alternative in the long term thanks to our innovative tiered maintenance plan.

5. PRODUCTS & SERVICES

A. Product Description The product that WiredU provides is the development of a customizable smartphone application. Although the applications will be made to order for each client, WiredU will provide customers with application ideas and suggestions for features. For example, WiredU predicts that a common application will be a campus guide for universities. Even though the product for each university will be different, WiredU will have a general framework and suggested ideas to quickly and easily personalize it. Although not the product that will be brought to market, the unique business structure of WiredU is a component of its product as well. B. Envisioned Uses As previously mentioned, we plan to have several framework applications ready to be modified by the students at the location quickly and easily. Although the specific design and features will be unique to each client, WiredU will create a base template for the common application types in order to quickly and easily customize from the base model. One sample framework for a university client would be the Campus Guide application, which would be a supplementary campus tour for the University Admissions to distribute for prospective tourists who want a more specialized tour, or who may not have time for the traditional tour. Other such applications for university usage might be an application to inform students of events that are happening around campus in the near future or an application that will allow visitors and students to find handicap accessible locations around campus. After establishing WiredU as an application company through our work with universities and businesses, we plan to branch out in designing apps from individuals ideas. This will help to fill the gap in the current market that exists between skilled programmers and members of the general population with strong ideas for potential smartphone and tablet applications. This will be an invaluable step for our business because it increases our idea base and our potential for having wildly successful applications branded under the WiredU banner. 7

6. MARKET & COMPETITION

A. Market The mobile application industry is growing exponentially. In 2011, the direct revenue from the sale of apps, in-app purchases, and subscriptions across smartphones and tablets was $7.3 billion. This figure is projected to rise to $36.7 billion by 2015 ("Canalys.com"). As such, it will be an ideal time for WiredU to enter the growing market. Leading investors in the United States are taking note of this growing market. Investments in mobile technology comprised 42.4%, or $6.3 billion, of all venture capital investments in technology in 2011 (Chand). Two of the most highly regarded venture capital firms in the United States, Sequoia Capital and Kleiner-Perkins, made 24 and 19 investments in mobile technology, respectively (Chand). The confidence of these investors in the application development market indicates that WiredU is entering a profitable market. B. Competitors Competitors for WiredU include several application development companies that have already established themselves in the market. Our primary competitors include: (x)cube Labs, Mobisoft Infotech, BarZ Adventures, and Hobson ("bestwebdesignagencies.com"). (x)cube Labs and Mobisoft Infotech are larger companies that serve a small number of well-paying large clients. They develop apps for the same industries we would be targeting, which include education and businesses. However, our business model is differentiable from them because we occupy a different niche in the market. WiredU will be operating on a local scale, with contracts from universities, local businesses and individuals. BarZ Adventures and Hobson are smaller companies that also develop apps for universities, but we will be able to differentiate ourselves from them in terms of pricing, as evidenced by Exhibit 11.1. We also anticipate that the personal connections to the communities in which our teams are working will give us an advantage against our competitors.

7. STRATEGY & IMPLEMENTATION

The initial strategy for WiredU will begin on a single test campus where the company can develop techniques for gaining connections with students and faculty in addition to testing different ideas for possible applications. This test site will also provide experience in selling and otherwise contracting with the University personnel. Once the test campus is established, WiredU will enact a hub and spoke model to include new campuses into their consumer base, independent of other campuses, and maintain a central office as the home location, to be determined.

A. Initial Rollout Initially, WiredU will reach out to the test university (currently forecasted to be the University of North Carolina at Chapel Hill), which has been identified as interested in producing a number of mobile applications for students to use. Our firm will consult with the university on the types 8

 of applications available and provide other potential designs for the university to consider. Then the company will reach out to the computer science students on campus interested in contracting their skills. Students who do work with us will then be provided with any tools necessary for the production of the application as well as contact with other students on the campus who may be able to aid in the production of the application. WiredU will also contract an experienced programmer whom the students may contact virtually for aid or advice concerning programming. When students have completed the raw code for the applications, WiredU will provide beta testing and will enter negotiations with the university concerning the sale, maintenance, advertisement, and other processes involved in implementing the application. If the university or a company were ever to sell these developed applications on the open market, the students responsible for producing these applications would receive a predetermined percentage of the sales of that application. This process will be repeated at this campus for as long as the University is interested in contracting applications, and will be maintained simultaneously at other Universities, allowing for fast production and multiple negotiations to be happening concurrently. We anticipate that programming quality applications may take several months per application. Given the nature of programming unique apps, each application might take a slightly different amount of time. However, keeping in mind the advice of experts, one app should not take longer than 3 months (Android App Developer). We anticipate that this application development timeframe will shorten as our student contractors become more experienced and can share helpful tips and advice (Clark). Exhibit 7.1: Spoke Implementation Steps

 We will start specifically promoting Android based applications, as they are a more popular mobile device, can be programmed faster by less experienced programmers, and Android mobile phones also outnumber Apple-based products in sales, as evidenced by the graph below. WiredU also recognizes the prevalence of Apple devices, especially in university communities. As a result, we will begin programming for the iPhone after we have established ourselves in the Android market. Exhibit 7.2: Projected Global Smartphone Sales

http://www.statista.com/statistics/12867/forecast-for-global-sales-of-smartphones-by-operating-system/

Our strategic market positioning is what makes WiredU unique. We will already have spokes in 14 locations across the country in the fourth year. We will also have established ties with universities. These connections are helpful double-fold: they build brand recognition and reputation as well as generate profit in the future. As technology continues to play an increasing role in our every-day lives, institutions will need new applications developed accordingly. These established customers will also need their previously developed applications to be updated. B. Milestones The following chart demonstrates the milestones that WiredU hopes to reach. As evidenced by the Growth Plan (Exhibit 6.3), we hope to grow the number of spokes at an increasing but feasible rate in order to achieve the best results. 10

 Exhibit 7.3: Growth Plan Year 1 2 3 New Spokes 2 3 4 Total 6 9 12 Employees at New Spokes New - 2 4 Employees at Old Spokes New 6 9 12 Contracts at New Spokes (3 in the initial year) New - 8 20 Contracts at Old Spokes (4/yr) Total 6 17 32 Contracts Total Student 6 17 33 Contractors Total Spokes 2 5 9 Exhibit 7.4: Growth of Total Spokes & Student Contactors

4 5 15 6 15

36

51 54 14

Growth of Total Hubs & Student Contractors

60 50 40 r e b 30 m u N 20 10 0 Year 1 Year 2 Year 3 Year 4 Year after Implmentation
Number of Student Contractors

Number of Total Hubs

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 C. Exit Strategy WiredU aims to be acquired after its fifth year of operation. We envision ourselves being acquired by a mid-sized company that is looking to expand. There have been several acquisitions of this kind in recent months. Examples include Appcelerators acquisition of smaller app developer, Aptana. The final terms of the sale were undisclosed, but Aptana was valued at $7.8 million before the sale (Haynie). Also, Taiwanese smartphone company HTC acquired Inquisitive Minds Inc., a childs app and interface designer, for $13 million (Brian). We have identified two companies that could expand their production and strategic options by acquiring WiredU: WillowTree Apps and Y Media Labs. Each company has an annual revenue of $1-3 million, approximately 25 full time employees, and a loyal clientele ("bestwebdesignagencies.com"). WillowTree Apps and Y Media Labs do development work for the University of Virginia and Stanford University, respectively, and could use our connections with college towns to expand further into that market ("bestwebdesignagencies.com"). While they both develop apps for businesses, neither company has the operations on a local scale that we can provide them.

8. OPERATIONS

A. Development Strategy The scope of our operations will be to provide design concepts and organize students together to develop these programs. We will pipeline the production of these applications by having students work both individually and with a support group of other students to produce the applications faster. We estimate that they will be working roughly ten to fourteen hours a week, but our contract with them does not dictate the amount of time they spend on programming, just that they have a complete program at previously decided check-in dates. We will then enter negotiations with the University for the sale, advertisement, and implementation of these applications, and possible designs for future applications. The sale of these applications will provide a majority of our revenue, though we will offer the university to contract our services to maintain the sold applications for an amount to be determined by the magnitude and frequency of maintenance needed by the application. Should the university decide not to contract our maintenance services, we will only provide initial setup and promotion, in addition to the physical application (Harper). Based on the industry standard, we should charge roughly 15% of the initial contract cost for upkeep and maintenance per year (Haugen). The number of student contractors on each individual campus will be determined by interest and needs of the University. These students can be added and removed from the operation without affecting the processes on other campuses, and will reflect the growth of our company. As discussed before, they will be hired on a contract basis for several reasons, including cost

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 efficiency and ownership issues. The core team of WiredU, and its executive board, will consist of one CTO, a CEO, a CFO, and Marketing Director. B. Legal Structure Since WiredU will not require venture capital funding, the best route of incorporation will be to file as an S-Corporation. This will enable taxable income to be passed directly through the shareholders, the four officers named in this plan in this case, and taxed at their applicable rates according to their ownership percentage (Riley). This is more beneficial than filing as a C- Corporation, in which WiredU pays a tax on its earnings, and then the shareholders would pay a second tax when earnings are distributed to them in the form of dividends. Though some individuals tax rates are higher than those applied to a C-Corporation, this would not be applicable to our presiding officers. Filing as an S-Corporation would also give us more flexibility in terms of deducting any unforeseen losses we might have from personal income taxes (Riley). We will also have legal counsel to advise us on any structural changes we may need to make, or patents for which it would be beneficial to file. C. Location and Facilities Though we hope to expand this operation across the country, the amount of personnel located at each individual campus is minimal. Our primary interaction with students, beyond the initial meeting, will be maintained through virtual contact from a home facility, where a majority of the employees will work. Possible locations for the main location of the operation would be an office space; preferably in an area with easy access to the different locations we have student teams. Such areas would be cities like Raleigh, which has easy access to prominent universities, local business, and an airport, which we could use to access other universities quickly, or New York for many of the same reasons. Possible locations of starter universities include UNC at Chapel Hill. Ideal candidates are close to a large city, but are a part of thriving smaller towns, which would provide for when we choose to expand to small businesses. These universities also have strong computer science departments, providing a solid pool for student contractors.

9. CRITICAL RISKS AND ASSUMPTIONS

WiredU assumes that there will be a market for our services. WiredU also assumes that the target campuses do not have a currently established infrastructure designed for producing mobile applications. This assumption also implies that these target campuses desire or need applications to modernize various aspects around the campus. The business structure assumes that some of the computer science students located on campus will be interested in developing applications in conjunction with WiredU, in exchange for pay, experience within the business arena, and other compensations. We also assume that they will have some basic understanding of programming, but will be interested in expanding that experience by creating applications based on information and design specific to their University. We plan to hire them as independent contractors, so that we may maintain rights to the code and set contract prices rather than an hourly wage, which is typical in such contracts (U.S. Chamber of Commerce).

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 The company is aware of potential risks associated with the venture and accordingly, has taken actions to minimize risk. In dealing with intellectual property, there is also the potential for legal issues. In anticipation of such concerns, WiredU has employed a lawyer to oversee that the contracts address these issues. Similarly, the student contractors will be obligated to sign contracts for the apps that they help develop to protect the rights of the company. There is an element of technical risk associated with any technology company. We recognize that the students may not all have the immediate industry knowledge, which is why we will work with a computer programmer consultant regularly. We are providing the student contractors with the necessary tools, the information and the computers, to aid them in their job, but we recognize that there is still risk whenever a human element is involved in using less experienced labor. However, we believe that recognizing these risk will help mitigate their impact on the venture.

10. CULTURE

Culture plays an integral role in the success of our venture. Due to our decentralized nature, we will place a large emphasis on creating a culture that enables our student contractors to feel like they are part of a team. One of the objectives that our student contractors hope to realize through their work with WiredU is the first-hand experience and insight into developing apps. For that reason, the role of CTO on Executive Team is primarily devoted to encouraging our culture. Mandy Melton will serve as the students point person with all questions, technologically related and otherwise. It will be in their weekly team meetings with Mandy that individual team members can ask questions and share their creative suggestions for programming ideas. They will work together to develop individual and team goals, and action plans to realize them. While we do expect contractors to develop the work that is being asked of them, we will have their preferences on file -- in which fields they would like to work and in which capacities they would like more experience and consider their preference when assigning contracts. As a company that also aims to grow our intellectual capital, we will provide students with any resources programs or books that they might need. We will also hold regular webinars, coordinated by Mandy, for them to further their knowledge. Given that our contractors are technologically inclined and often communicate best online, Mandy will develop a back-end website through which our student contractors can interact as a part of a team to share coding tips and ideas. We recognize that strong leadership and recognition of quality work are cornerstones of creating a successful company and inclusive culture. We hope to reward successful student contractors by giving them more influence regarding their contracts. After the initial period of implementation, we hope to develop a time-based incentive program, rewarding student contractors for quick turnaround time for development.

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11. MARKETING
A. Marketing Overview As a technology based company, WiredU will emphasize marketing through social media platforms such as Facebook, Twitter, and Blogspot. We foresee these ways as effective mediums to share about our company and create buzz surrounding application ideas. The use of social media is also low cost, especially since our founders are technologically savvy and there is no need to bring in an external social media coordinator for startup purposes. We also recognize that a portion of our initial target market is comprised of businesses that currently lack knowledge of social media. Therefore, we will also use more traditional low-tech marketing in order to reach these companies. Door-knock campaigns and appropriate literature in the form of brochures detailing the services and benefits provided by WiredU will be essential to procuring those initial contracts. B. Pricing In order to establish a foothold and attract initial customers, we expect that the introductory contracts at new "spokes" will cost $10,000. One year following the initial opening of a "spoke" WiredU will charge $15,000 per application developed. This pricing structure allows us to compete effectively with other companies like Hobson's and Bar-Z Adventures in our market space while paying our student contractors fairly and developing a profitable company. The flexibility in our pricing, only paying one lump sum fee instead of an annual rate, will hopefully attract customers. After an application has been developed and delivered to the customer, the customer has the opportunity to pay for upkeep. This service will provide for both software updates as well as content updates at a price of $10,000 per update. Exhibit 11.1: Price Comparisons

Hobson
Droid Application One time implementation fee Total cost Year 1 Total cost subsequent years $2,650 $5,000 $15,500 $10,500

Barz Adventure
Minimum for basic package Subsequent years $5,000 $5,000

WiredU
Basic Package Upkeep

15,000 average $10,000

One minute of $250 to finished video $400

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12. Financials
A .Costs & Revenue WiredU has relatively low start-up costs, enabling a large profit margin. The capital needed to implement one spoke, with a minimum of 3 student contractors, is only $4,000 . Each student will need access to a computer, at a cost of $1,200, resulting in a minimum start-up cost of $3,597 with an additional $400 allocated for marketing to publicize the venture. Each spoke will also be allocated $300 annually to continue their marketing and advertising efforts after the initial year. The implementation of spokes will also necessitate one week of programming consulting from an expert. This expert consulting will cost $1,500, in alignment with the industry standard annual salary of $80,000. Given that our venture requires many legal documents such as contracts, it is necessary that WiredU contract the services of legal counsel to protect our rights and intellectual property. In our Cost Projections (see Appendix 3), we have adjusted the legal costs to adapt with our growing business. This investment is necessary for the long-term success of our venture. The other associated cost is travel; one member of our team will be the designated point- person to travel to new collegiate locations to open up operation spokes.The salary that we pay to our student contractors and employees is the only other large expenditure. The initial four investors will take a reduced salary because our ultimate pay-off will derive from the sale of WiredU. Although we will be generating profit by Year 2, the primary return on our investment will be through our exit strategy. For that reason, the four executives on our team will each receive a salary of $20,000. The student contractors will be paid $3,000 annually for their work on approximately 3 contracts. (For more detailed financial information, see Cost Projections in the Appendix) Exhibit 12.1: Cost Price Assumptions Price Assumptions (Cost) Programming Consulting $1,500/week based on a $80,000 annual salary (1 week for each new Spoke) Technology Packet for $1,200 new student contractors Implementing new spokes $3,600 for 3 technology packets + $400 advertising Marketing (per spoke) $300 Legal Counsel $10,000 initial + $2,000 more every additional year Travel for New Spoke $1,000 Student Contractors Pay $3,000 Executive Team Pay $20,000

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 WiredU expects to receive average revenue of $15,000 for each contract. As mentioned in the pricing section (11.b), this payment is consistent with industry pricing, even presenting a cheaper long-term alternative for many businesses. We predict that in our initial year of implementation, the revenue generated might be lower because we will still be establishing ourselves in the area. For that reason, we have adjusted the revenue projections appropriately. We will begin offering upkeep services in our third year of implementation for businesses that want their initial application updated with new information and technology. We will charge $10,000 for the upkeep of one application. (For further financial information, see Revenue Projections in the Appendix) Exhibit 12.2: Revenue Price Assumptions Given above costs and revenue assumptions, Price Assumptions (Revenue) Contracts at $10,000 on average WiredU will become profitable in its second year. By the fourth year of implementation, the firms Spokes in their profitability will approach half a million dollars Initial Year Contracts at $15,000 on average ($458,100). It is important to underscore that the largest profit will result from the sale of Spokes after their WiredU. Initial Year Upkeep $10,000 (For detailed financial information, see Profit and Loss based on Growth Projections in the Appendix) Exhibit 12.3: Projected Profit Graph

Projected Profit
500,000 400,000 300,000 t i f o 200,000 r P 100,000 0 Year 1 -100,000 Year 2 Year 3 Year 4
Profit

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 B. Ask After consultation with fellow entrepreneurs and legal experts, WiredU has determined that the most appropriate funding vehicle to fund the venture is a bank loan. Given that the Executive Team will be investing $10,000 of their own equity and be taking a reduced paycheck for the beginning years, it is in their best interest to retain as much equity as possible. WiredU will be asking for a bank loan for $100,000. The combined total fund of $140,000 should cover all start-up costs and provides an appropriate cushion for unforeseen costs.

13. EXECUTIVE TEAM

Carly Uhlman (CEO) Carly is a sophomore Economics and Spanish double-major at UNC Chapel Hill. Her understanding of the markets and global economic climate will be critical for the success of WiredU, especially around the time of acquisition. Carly has experience implementing creative business models in developing countries through her employment with the microfinance company Soluciones Comunitarias in Ecuador. This experience will help her to foster innovation and ensure the success of WiredU as a venture. Furthermore, her work in finance at JP Morgan will also allow her to bring critical logistical skills to the team. Her knowledge of Spanish serves to further broaden our network of potential customers. Sam Poole (Director of Business Development) Sam is a junior American Studies major and Art History Minor at the University of North Carolina at Chapel Hill. As a self-made entrepreneur, he has demonstrated the drive and work-ethic essential to creating a successful venture. His studies in Art History help him to consider aesthetics, a valuable insight in the creation and management of promotional materials. This expertise could also be useful in the design stage of the applications we produce. Additionally, his work in the Carolina Admissions Department gives him valuable insight as to the way departments function. This allows him to better build relationships and reach out to universities as we work to establish new spokes. Mandy Melton (CTO) Mandy is a junior who is majoring in Computer Science and English at UNC Chapel Hill. As a computer programmer, Mandy has experience in app development. In addition, she has been programming in Java and C for over a year and recently has learned how to use location-based technology an innovative feature that will be a cornerstone of our apps. Mandys insight into the mind of a computer programmer will enable us to more accurately address the needs of our student contractors. Her connections with the computer science community will be integral in the creation of new spokes. Ross Hardeman (COO) Ross is a junior at the University of North Carolina at Chapel Hill. He is majoring in History and Political Science. Ross has first-hand experience with technology-based customer service due to his previous employment. His study of Political Science gives him insight into the legality concerns of our venture. Ross is dedicated to making the business succeed and knows how to passionately communicate our vision to customers and contractors alike. 18

14. Growth Timeline

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15. Appendix Cost Projections

Year Executive Employee Pay Programming Consulting (for each spoke) Student Contractors Pay Travel for New spoke Cost of Implementing new Spokes Cost of New Machines for New Employees at Old Spokes Marketing Legal Counsel Total Cost 1 80,000 3,000 18,000 2,000 8,000 - 2 80,000 4,500 51,000 3,000 12,000 2,400 3 80,000 6,000 99,000 4,000 16,000 4,800 4 80,000 7,500 162,000 5,000 20,000 7,2000

600 10,000 127,000

1,500 12,000 166,400

2,700 14,000 229,000

4,200 16,000 301,900

Revenue Projections
Year All Contracts -- New hubs -- New contracts at old schools Upkeep Total Revenue 1 60,000 60,000 - - 60,000 2 210,000 90,000 120,000 - 210,000 3 420,000 120,000 300,000 60,000 480,000 4 690,000 150,000 540,000 70,000 760,000

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Profit and Loss based on Growth Projections:

YEAR Total Number of Spokes Total Number of Contracts Total Number of Employees - Executive Team - Student Contractors REVENUE Contracts Upkeep TOTAL COSTS Total Salary Technology Packet Travel Marketing Legal Counsel TOTAL PROFIT 1 2 6 11 2 5 17 22 3 9 32 38 4 14 51 59

5 6 60,000 -- 60,000 101,000 8,000 2,000 600 10,000 127,000 - 67,000

5 17 210,000 -- 210,000 135,000 14,400 3,000 1,500 12,000 166,400 43,600

5 33 420,000 60,000 480,000 185,000 20,800 4,000 2,700 14,000 229,000 251,000

5 54 690,000 70,000 760,000 249,500 27,200 5,000 4,200 16,000 301,900 458,100

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16. Works Cited

http://images.colourbox.com/thumb_COLOURBOX2565438.jpg (logo) U.S. Chamber of Commerce. Sample Independent Contractor Agreement . Washington DC. Web. <http://www.uschambersmallbusinessnation.com/toolkits/tool/indcon_m>. "Android App Developer Tips: How Long Does A Fast App Builder Build An App?." Android App Developer. N.p., 24 05 2011. Web. 28 Mar. 2012. <http://www.androidappdeveloper.net/android-app-developer/android-app-developer-tips- how-long-does-a-fast-app-builder-build-an-app>. Clark, Rhonda. "How Long It Takes To Make A App." MakeAApp. N.p., n.d. Web. 28 Mar 2012. <http://www.makeaapp.net/how-long-it-takes-to-make-a-app/>. "How long should it take to build an app?." Develop. N.p., 01 06 2011. Web. 28 Mar. 2012. <http://www.develop-online.net/news/37813/FEATURE-How-long-should-it-take-to-build-an- app>. Kay, Tom, Nick Thorn, and Rob Hudson. "How long does it take to create an Android App?." Chunk the shareable task and to do list: The story of 3 guys attempting to make an Android app over the Royal Wedding weekend. N.p., 29 004 2011. Web. 28 Mar. 2012. <http://www.chunkapp.com/blog/how-long-does-it-take-to-make-an-android-app/>. "May 2011 State Occupational Employment and Wage Estimates North Carolina." Occupational Employment Statistics. Bureau of Labor Statistics, Mar 27, 1012. Web. 27 Mar 2012. <http://www.bls.gov/oes/current/oes_nc.htm "Student Employment Postings." Division of Financial Aid. Purdue University, n.d. Web. 27 Mar 2012. <https://www2.itap.purdue.edu/dfa/jobposting/jobsearch.cfm>. Christian, Carey. "Who We Are." University of Texas at Austin: ITS . University of Texas, June 9, 2011. Web. 27 Mar 2012. <http://www.utexas.edu/its/about/studentprogrammer.php>. "How much time a week do you spend on extracurricular programming?." Nov 11, 2010. N.p. Online Posting to StackExchange. Web. 27 Mar. 2012. <http://programmers.stackexchange.com/questions/18392/how-much-time-a-week-do-you- spend-on-extracurricular-programming>. Harper, Jez. "The true cost of developing your mobile app." Ts Nua Designs. N.p. Feb 5, 2012. Web. 27 Mar 2012. <http://www.tusnuadesigns.net/?p=1088>.

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 Haugen, Dan . "Negotiating Software Costs." Twin Cities Business. N.p. Sept 2010. Web. 27 Mar 2012. <http://www.tcbmag.com/industriestrends/technology/130082p1.aspx>.

Riley, Peter. "S-Corporation vs. C-Corporation."cpaservices.com. Riley & Associates P.C., n.d. Web. 7 Apr 2012. <http://cpa-services.com/special_sco.shtml>.

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