1. ANDREW WEINTRAUB - #259
ILANA KITAIGORODSKY - #184
PETRINA MIRONIS - #210
ERIC SAUNDERS - #291
2. 1A
Economic and technological bubbles typically follow the same steps from
creation to demise: a breakthrough technology creates many risky start-ups, prospective
investors get excited and rush in to buy a piece of the future, then bankruptcies and
foreclosures follow suit, and ultimately, the stock market crashes. The rapid growth of the
Internet throughout the 1990s and 2000s is no exception to this for myriad reasons. It all
started with the initial public offering of web browser Netscape in August of 1995. This
IPO was set to be offered at $14 a share but last minute decisions set the price at $28.
(Freitas). The usage share of Netscape had fallen from over 90 percent in the mid-1990s
to less than one percent by the end of 2006. In 1999, American Online purchased
Netscape for an astounding $4.2 billion. The initial public offering of Netscape was
followed by the search engine Yahoo! in 1996. In April of 1999 Yahoo acquired
Broadcast.com, an Internet radio company, for a record $5.7 billion. (Rodrigo).
In 1997, Amazon had an IPO and became the first dot-com company to make it
big, along with eBay. Jeff Bezos, Chief Executive Office and founder of Amazon, held a
unique vision and business plan which was one reason why his company succeeded while
most failed. His “Get Big, Fast” slogan was a thought process to sacrifice profits now to
ensure rapid growth through increased customers in order to make up the lost profit in the
future. He did this by lowering the prices of books on his website to increase his
customer satisfaction and ensuing retention. With the use of public key cryptography, it
became much safer for customers to send credit-card information through the web. Wall
Street analysts, such as Henry Blodget, projected Amazon’s stock price to double within
a year, and this caused a buying frenzy, which effectively enabled the dot-com bubble to
commence. At this time, customers would buy any new company with a “.com” attached
to their name or an e- prefix. Another cause to the formation of the dot-com bubble was
the development of day-traders. Prior to this time, if you wanted to purchase stock, you
would have to call a stock broker on Wall Street and tell him what you would like to buy.
So, before the bubble, NASDAQ was controlled mostly by financial professionals. Now,
day-traders could work from the comfort of their homes and would buy a stock in the
morning and sell it later that afternoon, in the hopes of making a few pennies on many,
many shares. For this group of people, it became an obsessive hobby, and you can bet
that CNBC was on their televisions at all times throughout the day.
During the 2000 Super Bowl, many dot-com companies paid huge amounts of
cash and venture capital to secure a 30-second advertisement costing upwards of $2.2
million dollars per commercial. These ads proved unsuccessful and many of these
companies could not make back any of their lost investments. At this time, many Wall
Street Analysts knew that the majority of the dot-com companies would fail but their
subsequent strategy was another reason why a bubble followed. These analysts wanted to
hedge their bets, not minding losing money in those stocks in the hopes that one would
make it big. As mentioned earlier, Henry Blodget is a former Wall Street analyst who is
currently banned by the Securities and Exchange Commission (SEC). He knew that these
companies were “garbage” and would ultimately fail, but he knew that he would lose his
job if he did not recommend them to his clients. As a result, he helped build up these
unproven stocks and contributed mightily to the dot-com bubble. In early 2000, Alan
Greenspan, Chairman of the Federal Reserve, raised interest rates in the hopes to bring
3. the bubble to a close and he was, for the most part, successful. On March 10, 2000, a day
infamously known as Black Friday saw the NASDAQ peak at $5,408.62 and this stock
market has never recovered. (McCullagh). What officially ended the dot-com bubble
happened to be the events on 9/11, which accelerated the stock market drop. However, as
bad as it seems that the dot-com bubble was, it was not all bad. One positive effect that
came from the bubble burst was creative destruction. Advancements in the technologies
of fiber-optic cables and Amazon’s customer database took only five years as opposed to
a potential of 15 to 20 years if not for the accelerated speed and growth of the Internet.
4. 1B
Web 2.0 is a digital time period characterized by the social media revolution.
“MySpace once enabled a remarkable social renaissance: Because of the site’s
indefinable halo effect, you would answer e-mails, you would normally never open, meet
people you’d never suffer otherwise (Bill O’Reilly is one of my MySpace friends).”
(Hirschorn). However, just like MySpace, as well as Habbo and Orkut, what seems like a
fascinating novelty, soon became obsolete and boring. The Web 2.0 bubble is expecting
that the popular social media outlets of the present day, Facebook, Twitter, Google+, and
the like will soon become lackluster and outdated. It is different than the dot-com bubble
for a few reasons. Regarding the Web 2.0 bubble, there is no new technology that is
dazzling the entire world. The Internet has been around for a long time and social media
is only one aspect of the Internet. Also, Netscape released its IPO in 1995 and the bubble
burst in 2000 a grand total of five years. Although MySpace was not even the first social
network, it launched in 2003, and the social network Facebook is presently at the peak of
its prowess, a decade later. Social networking has already proven that it can last a decade
and it’s showing no signs of slowing down anytime soon. I believe that that Web 2.0 is
the beginning of something with much more staying power that the dot-coms of the
1990s. In the future, I think that Web 2.0 will still be flourishing but in a different aspect
than it is today. Not many social networks have proved successful in linking people with
similar interests; however, this seems to be changing. “Networks that make intuitive
linkages or networks that are built around more-organic associations (like the excellent
new Saatchi Gallery social network for artists) may soon draw away users with more-
sophisticated social-media palates.” (Saatchi). “And someone will figure out how to
network the networks, linking social-media sites and thus allowing iron-man social
networkers to commingle their friends, blogs, images, and video feeds all in one place.
(MiNGGL, Socialgrapes, and Wink are three new sites already trying to do this.)”
(CrunchBase). So, I see the “revised” Web 2.0 as more of a linking of links; a social
network of the social networks, which in my opinion can last through the foreseeable
future.
5. 1C
PART I
Wix.com Limited (NASDAQ:WIX)
Wix provides an infrastructure to create a website with no code at all. Their
simple to use system allows their users to create stunning designs with just a click of the
button. On November 6, 2013, Wix released their IPO. They raised $127 million by
selling 7.7 million shares, and now their market cap stands at $665 million. Wix is in a
unique position as a newly public company because of their very poor Return on Assets
(ROA). The ROA during the last three quarters has been -38.6%, and in the last fiscal
year was -92.9%. As one can see, there is a moderate improvement as the years go on;
however, the figure is still extremely low. Alternatively, their revenue numbers are
looking rather promising:
Revenue: 2010 - $9.85 million, 2011 - $24.8 million, 2012 - $43.68 million, so far
in 2013 - $55.53 million
In 2013, Wix is expected to exceed $70 million in revenue, more than seven
times, or 60% their revenue from just four years ago. They are the leader in their
industry, Internet Information Providers, with many competitors including Wordpress
and Weebly. A recent study by Netcraft found that there are 767 million websites within
the Internet, a number that has quadrupled in the last 5 years. Increasingly, websites and
the Internet as a whole for that matter are becoming more popular than ever before. In
what has turned into a necessity for local businesses, websites are becoming their number
one outlet for business ventures. People are even making websites for their personal
resume or portfolio by using such social media outlets like LinkedIn and Facebook. Wix
has $1.8 million in free cash flow to take advantage of this and gain customers who want
to make their own site.
6. LinkedIn Corp (NYSE:LNKD)
LinkedIn: social media dedicated to business professionals. It is widely used as a
recruiting and social tool for many professionals. On May 19, 2011, LinkedIn was one of
the first Web 2.0 companies to have an initial public offering. They also had the highest
rise in stock price on the first day of trading, going from an IPO price of $45, rising 110%
to $94.55. The month after their IPO was a rough one for LinkedIn, but since then the
company has grown substantially, currently trading at $220.45. At the end of its first day
of trading, LinkedIn had a market capitalization of $7.8 billion, and the figure currently
stands at $24.7 billion. Their ROA was 0.36% for the first three quarters of 2013 and
1.56% for the previous fiscal year. Their revenue was $972.31 in 2012 and has already
surpassed that in the first three quarters of 2013 with $1.1 billion in revenue. Many social
media companies are obtaining higher and higher sales revenues as a result of their
mobile growth, which LinkedIn can really benefit from. In 2011, only 8% of their unique
visitors came from a mobile device. Now, it averages to about 38%, an extremely low
number especially in comparison to Facebook who receives a staggering 49% of their
revenue from mobile.
LinkedIn has very little competition. There is no legitimate company that falls
within their niche, and until one comes along, they have a fully sustainable competitive
advantage. With all of this in mind and knowing that they have $118.9 million in free
cash flow, LinkedIn seems to be a worthy investment. Their leadership team knows how
to get creative by generating revenue and their growth will remain positive.
7. Yelp, Inc (NYSE:YELP)
Yelp maintains an “online urban guide” for brick and mortar businesses. They
provide their users with all of the public information of the business, as well as user
submitted reviews and ratings. Their IPO was on March 2, 2012 and were officially listed
on the New York Stock Exchange (NYSE). Yelp’s IPO share price was $15, valuing the
company at $898 million. During the first day of trading, Yelp’s stock price raised more
than 60%. Since its IPO, the value of a single share has gone up 416%, and the market
cap increased to $4.12 billion. In 2012, Yelp had a very unimpressive -10.2% ROA. In
the first three quarters of this year their ROA has been slightly better at -1.3%. Yelp
boasts an impressive 117 million monthly users. Many companies who have millions of
users start out with high operating losses as they are focusing on gaining users rather than
advertising. With that being said, Yelp has grown out of its infancy and still has bad
operating losses of $9.5 million. In 2011, the losses grew significantly to $16.2 million.
In 2012, the loss was still increasing to $18.7 million. In the first 3 quarters of this year,
the loss has been around $6.75 million. As a result of this, we do not think that Yelp is a
good investment. They are overdue for a promising quarter, however, until proven
otherwise they are not a safe investment. This is especially true because the have negative
cash flow. If they do happen to have a turnaround period over the next few months, our
opinion could change because they are the still a dominant player in the industry. Once
they can figure out a better way to use the data of their users to generate a profit, their
stock price could soar.
8. 1C
PART II
Kickstarter is a platform where users can gain funding for their creative projects.
They have not had an IPO and claim they have no reason to have one. There could be
many reasons for this including their thought of not needing funding, and their dedication
to keeping Kickstarter a community of people who donate in what they believe in, rather
than investors. Kickstarter has made a lot of money on its own, and for them to get an
IPO at this point would just be a way for the individuals in the company to cash in. To
further this point, their board of directors is not greedy, and wants to do what is right for
the community. Kickstarter has the option to allow people to invest in Kickstarter
campaigns in exchange for equity, but has chosen not to do this. Instead, they keep it as a
way to donate to a project you may find interesting. If they were to go public, the
decisions would be up to the shareholders, and not the current board. If shareholders
thought that investments were a better route for Kickstarter, they could force it upon the
company.
Reddit is an open sourced, online community where users vote on specific
content. Each community has its own category known as a subreddit. Reddit reaches over
85 million unique visitors last month alone. The most significant reason they have not
filed for an IPO is because they do not have a reliable future revenue model. Reddit’s
Chief Executive Order admitted that his company was still in the red. They are very user
friendly and want to keep it that way. That requires the Reddit team not to spam their
users with ads and find other ways to make money. They have done this by having an
upgraded account, Reddit Gold, and by having a marketplace where users can buy Reddit
gear. Before considering an IPO, they have to figure out if they are going to follow the
route of Facebook and have myriad ads, or find a new way to add to their existing
revenue plan. Many investors would invest today simply based on the amount of users,
but it is in Reddit’s best interest to figure everything out internally, solidifying their
business plan, and then taking it from there.
9. 1D
WHAT IS VENTURE CAPITAL (VC) FINANCING? HOW DOES IT WORK?
Venture capital (VC) financing is venture capital’s form of financial capital.
Financial capital is money spent by businesses to purchase necessities in order to offer
their services or produce their products. Venture capital is essentially financial capital,
differentiating itself by being used specifically startup businesses. Startup businesses are
unique as they are exposed to high-risk situations and also have a high growth potential.
Seed funding is the equity behind venture capital. For example, this can be when an
investor buys a piece of a business. The venture capital financing course tends to contain
five steps. The five steps are: the seed stage, the start-up stage, the second stage, the third
stage, and lastly, the bridge/pre-public stage.
WHAT ARE SOME OF THE DIFFERENT STAGES VCS CAN FUND?
Seed funding begins at the seed stage, which is essentially the setting up. This is
when the startup business communicates with a VC firm investor for funding
opportunities. The business tries to convince the investor to contribute money towards
their company/idea. The investor will then investigate the company and its idea to
determine whether or not it is worth investing in. This is then followed by the start-up
stage; a business plan made by the business will be presented to the venture capital firm.
A managing team will then be made to run the capital. During all of this, the prototype is
also being created and tested. The VC firm then completes market research to find their
target market. If market research is successful, the second stage will commence. In the
second stage, the product or service is being completely developed is being sold to
customers. This is when the business wants to take market share away from some of their
competitors to breaks even. If the management team seems to be successful in handling
competition and the rest of their tasks, the third stage will start. The third stage is an
extension of the previous one. Here, the venture tries to take more market share than
before by creating a marketing campaign. They also try to reduce production costs as
well as anything else to save money. They also try to see if they can expand their product
or service. The last and final step, the bridge/pre-public stage is where the venture tries to
attract new market segmentation.
HOW CAN VCS MAKE MONEY?
Venture capitalists make money through management fees. A fund is set up
usually with a ten-year life, taking a fee such as 2-2.5% of the total money under
management. A second way they make money is on carry. On a deal, once the money
has been returned and invested on that deal, that money goes to the investors. In addition,
the VC firm takes 20% of every dollar. Senior partners tend to have higher percentage
ownership and are authorized to a larger amount of the profits. Also, partners that supply
more to the return of a fund are paid more. Having a respectable reputation also gives
venture capitalists more opportunities to make more deals, which also leads to more
profits.
10. WHO ARE ANGEL INVESTORS?
An angel investor is a person who invests in a start-up company, providing capital
towards the new company’s business venture. This money is usually personal money
from their own funds. For doing this, they gain some ownership of the company or leave
the company in some debt to them. They tend to have some business experience and are
looking to help themselves out as well but having some sort of role in the company.
Angel investors are dealing with high risk but also a high ROI.
WHAT IS CROWD-FUNDING?
Crowd-funding is a when people invest in a certain organization or company over
the Internet. Groups of people can put in money towards it and can be advertised through
social media such as Twitter and Facebook. Crowd-funding makes it easier to gain angel
investors as well as exposure. It can be used for a multitude of things such as startup
companies, disaster relief, research, development, campaigns, and other various
activities. By doing this, a company can sell small amounts of their company to many
investors.
WHAT IS SEED MONEY?
Seed money is the money used when an investor buy part of a business. It is in the
early stages of a business and can be used to support the startup company until it can gain
more money. It is usually used for preliminary operations and tends not to be that much.
Seed funding requires high risk because it is so early on in a business and there is not an
existing service or product to evaluate.
WHAT ARE SOME POTENTIAL “EXIT STRATEGIES” FOR VCS?
“Exit strategies” for VCs tend to be when a company gets an IPO. An initial
public offering results in the selling of shares and thus money which can be the largest
return to venture capital that an investor can have. Another strategy can be selling the
company to a larger one. This will also give them a very large sum as a return to their
investment.
DISCUSS THE RELATION BETWEEN SILICON VALLEY AND VC INVESTMENTS, AND HOW WEB
2.0 IS CHANGING IT.
Silicon Valley and venture capitalism have been associated with one another since
the mid to late 1900s. Venture capitalism is when investors put their money into startup
companies. “Venture capital (VC) is funding invested, or available for investment, in an
enterprise that offers the probability of profit along with the possibility of loss,” (Rouse,
2005). Silicon Valley in North California is where many startup businesses are located.
“It’s the talent pool, a few VCs told me, suggesting that all the world’s star programmers
come to the Valley,” (Mckenzie, 2012). These startup companies go to Silicon Valley in
search of venture capitalists in order to create their respective product or service. As of
recent years however things are shifting as social networking is growing. Because of this
shift, Web 2.0 is changing the relationship between venture capitalism and Silicon
Valley. “The emergence of Web 2.0 companies causing a good deal of excitement for
11. entrepreneurs. Among the hallmarks of these next-generation companies are their low
startup costs, limited infrastructure needs, and speedy time-to-market with products,”
(Burke, 2005). Web 2.0 reduced the need for large investments by firms, which reduces
the venture capitalists in Silicon Valley.
WHAT ARE THE TOP THREE REASONS WHY STARTUPS FAIL? DISCUSS.
Businesses can fail for so many reasons. One focal reason is that businesses spend
all of their investment money on starting the businesses and then don’t have any left to
maintain it for long. Most of the time, an entrepreneurs main goal is finish starting up the
business before going broke. “Be conservative with your financial projections and plan
on having adequate funds when you launch to cover all sunk costs (including startup
losses) until your company becomes cash flow positive”, (bradbentz, n.d.). They fail in
not taking into account how many years it takes for a business to really be profitable. If it
starts up but cannot sustain itself, then it failed anyway. A second reason why these
businesses can fail is because entrepreneurs don’t put enough attention into marketing
and advertising, which means they do not attract a lot of customers. They fail in thinking
that gaining customers is easy when in reality it is not and can be very costly. “They
assume that because they will build an interesting web site, product, or service, that
customers will beat a path to their door. That may happen with the first few customers,
but after that, it rapidly becomes an expensive task to attract and win customers…”(Skok,
n.d.). A third reason is failing due to the result of a poor management team. If they don’t
have a proper background and experience, the business can die fairly quickly. “New
business owners frequently lack relevant business and management expertise in areas
such as finance, purchasing, selling, production, and hiring and managing employees.
Unless they recognize what they don't do well, and seek help, business owners may soon
face disaster,” (Schaefer, 2011). The management team needs to be productive and
efficient in order for a successful startup and business.
WHAT ARE THE TOP THREE REASONS WHY STARTUPS SUCCEED? DISCUSS.
Startup business can succeed due to a multitude of reasons. The first is through a
trust of their customers. Businesses tend to let their customers give them feedback and
rate how they think the company is doing as well as offer suggestions for improvement.
“Even negative customer feedback should always lead to action: Entrepreneurs should
either fix the product or rethink their target market,” (Carter, 2012). Startup businesses,
more so than others, should heed the advice of the customers because if the customers are
content then the business has more of a chance of succeeding. A second reason for a
successful business is due to the employees. Hardworking, determined, and happy
employees will have a good work ethic and bring success. “First off, people who have
already had a career -- whether it's at a corporation or even running their own business
like Kallman did -- have a distinct advantage. They come with a ready-made set of skills
and experiences to draw upon,” (Gogoi, 2006). Lastly, a business can succeed in having a
very unique product or service. Being unique means less competition and more attraction
from customers or users. “If you cannot concisely describe the uniqueness of your idea
(and create some excitement in potential users), you may not have the basis for a
successful business,” (toolkit, 2012). Being unique is a key factor for success and if a
company is unique then customers will be more attracted to it, leading in success.
12. 1E
Company Coinbase DuckDuckGo Codeacademy
About Bitcoin wallet and platform
where users can exchange the
digital currency
Private Search engine
that avoids all the
“clutter” on the internet
Platform that allows users to
learn to code interactively
Investment
Amount
$700,000 $700,000 $600,000
Reason Gradually, bitcoins are making
their into mainstream society.
Many high officials even like
what they see in the future of
bitcoins, including federal
reserve chairman, Ben Bernanke.
Coinbase has quickly become the
go to way to store, and exchange
the currency. As bitcoins
continue to grow in popularity,
coinbase will be right there wil
it.
Many google users are
starting to have a hard
time finding
information because of
the clutter on the
internet.
There has been a big
push for internert
privacy. With
companies like Google,
Yahoo, and Bing giving
information to the
government, a safe
alternative is very much
needed, and will be
trusted by many.
It used to be that only the
most skilled coders could
learn how to build a website.
Codeacademy has led the way
to help everyone learn to
code. Their platform teaches
users how to code, and then
lets them do it on their own.
They had more than 5 million
users at the end of 2012, and
continue to grow every day.
Company Business Date
Founded
Current
Employees
Funding
Foursquare Social media based off one’s personal location March 11,
2009
121 $112
Million
Gogobot They make planning a trip fun and easy by
using social data to their advantage
March 1,
2010
8 $19
Million
Etsy Comparable to an ebay for items you may see
at a craft fair.
June 18,
2005
300 $97.1
Million
Zemanta Platform where a web user can gain exposure
for their content.
September,
2010
30 $7.35
Million
Silk After a user uploads their collections, they have
the ability to filter and visualize it in an easier
manner.
January,
2013
12 $3.66
Million
Stack
Exchange
Network of individual communities in the form
of many forums.
July, 2008 100 $18
Million
13. REFERENCES
Bradbentz (n.d.). The top ten reasons startups fail. [ONLINE] Available at:
http://www.squidoo.com/starup_failures. [Last Accessed November 26, 2012].
Burke, John (2005). Web 2.0: meet venture capital. [ONLINE] Available at:
http://www.technologyreview.com/news/404826/web-20-meet-venture-capital/. [Last
Accessed November 23, 2013].
Carter, Nicole (2012). 6 secrets to a successful start-up. [ONLINE] Available at:
http://www.inc.com/nicole-carter/6-secrets-to-a-successful-start-up.html. [Last Accessed
November 23, 2013].
CrunchBase. (Oct 14. 2013). CrunchBase. Minggl. Retrieved from:
http://www.crunchbase.com/company/minggl.
Freitas, Steven. (May 2. 1999). WFU. Pricing Netscape’s Initial Public Offering in the Context of the
Legal Responsibility of Investment Banks. Retrieved from:
http://users.wfu.edu/palmitar/Law&Valuation/Papers/1999/freitas.html
Gogoi, Pallavi (2006). Startup secrets of the succsessful. [ONLINE] Available at:
http://www.businessweek.com/stories/2006-01-17/startup-secrets-of-the-successful. [Last
Accessed November 23, 2013].
Hirschorn, Michael. (Apr 1. 2007). The Atlantic. The Web 2.0 Bubble. Retrieved from:
http://www.theatlantic.com/magazine/archive/2007/04/the-web-20-bubble/305687/.
Mckenzie, Hamish (2012). What is silicon valley?. [ONLINE] Available at:
http://pandodaily.com/2012/06/01/what-is-silicon-valley/. [Last Accessed November 23,
2013].
McCullagh, Declan. (Mar 10. 2010). CNet. NASDAQ 5,000: Ten years after the dot-com peak.
Retrieved from: http://news.cnet.com/8301-10784_3-10466637-7.html
Rodrigo. (Oct 16. 2012). The Write Pass Journal. 2001 dot-com Bubble: its causes, effect, and lessons
learnt. Retrieved from: http://writepass.com/journal/2012/10/2001-dot-com-bubble-its-
causes-effect-and-lessons-learnt/.
Rouse, Margaret (2005). Venture capital (VC). [ONLINE] Available at: http://searchcio-
midmarket.techtarget.com/definition/venture-capital. [Last Accessed November 23, 2013].
Saatchi. (2013). Saatchi Gallery. About. Retrieved from: http://www.saatchigallery.com/.
Schaefer, Patricia (2011). The seven pitfalls of business failure and how to avoid them. [ONLINE]
Available at: http://www.businessknowhow.com/startup/business-failure.htm. [Last Accessed
November 23, 2013].
Skok, David (2012). The seven pitfalls of business failure and how to avoid them. [ONLINE]
Available at: http://www.forentrepreneurs.com/business-models/why-startups-fail/. [Last
Accessed November 23, 2013].
Toolkit (2012). Business success depends upon successful marketing. [ONLINE] Available at:
http://www.bizfilings.com/toolkit/sbg/marketing/overview/business-success-depends-upon-
successful-marketing.aspx. [Last Accessed November 23, 2013].
15. 2C
MISSION/VISION
Our mission is to eliminate the struggle of finding the ‘perfect fit’ bar or club
location for our users while reaching our goals of growth, expansion, and profitability.
Our vision is to create a nationwide community of clients and businesses in order to
provide the optimum experience in personalization and accuracy. We strive to give our
customers the most accurate and detailed reports as possible.
IDEA
Ever wanted to go out to a bar when on vacation but didn’t want to be surrounded
by people entirely younger or older than you? Maybe you want to know how crowded or
not a certain club is before you wait on line to get in. Nightlife venues can fluctuate in
types of people as well as number of people day-by-day and hour-to-hour. What if you
knew that information in real time whenever you felt like searching it? That’s where we
come in.
Niche is free mobile application that offers a simple solution for people unsure of
which bars and clubs to go to. We provide demographic and quantitative statistics both in
the form of real time and historical data about bar and club guests, using easy-to-read
graphs and charts.
All statistics about demographics and quantity of guests at venues is user-
contributed. We use our location services to ask our users if they’re at a certain locations,
and for permission to use that information. We incentivize users to utilize our app by
offering our users rewards at their chosen bars and clubs, such as free or discounted
drinks and entry. For example, if they ‘check in’ at their nightlife venue a certain amount
of times, they can redeem rewards.
MARKET
Between the years of 2008 and 2012, there was an average of 18 million people
who went to a bar or nightclub in each year. This is a huge market, and we are looking to
capitalize on its size. Our target market is wealthier men and women who are between the
ages of 18 and 49. They are the most likely to use our products because 89% of people
between 18 and 29 use social media, and 79% of people from 30-49 use social media.
This is also the age-range of people who would be interested in going out to bars and
clubs.
16. COMPETITION
We have two major competitors, Foursquare and Yelp. Foursquare is a location-
based social networking company that “helps you find the perfect places to go with
friends.” One differentiator is that Foursquare enables user-generated content to form
opinion about the different places. Yelp, operates as an “online urban guide” and business
review site. As mentioned on their website, “Yelp is the best way to find a local
business.” Similarly to Foursquare, Yelp’s users contribute ratings and comments to
allow other Yelp users know which places are worthy of attendance and which ones are
not. What separates us from our competition is our real-time statistics feature. Foursquare
and Yelp both use historical data to show who goes where and the like. With real-time
data, our users will be able to know who is where at exactly the moment they desire.
FINANCIALS
Fixed costs are ones like rent and administrative payroll that don't change much
from month to month, regardless of how many units sold. We plan to ask a utility
company for average bill amount over the past year for our location. Also, we will call an
insurance broker for a quote for our particular business. Variable costs are ones like
inventory, shipping and sales commissions that rise or fall with our sales volume. We
plan to look up the financials of public companies in the location-based information
provider industry: 10-Ks, which are annual disclosures, or 10-Qs, which are quarterly.
Even though those public companies will be larger, we can size down the acquired data
as the ratios will not be far off. We set our prices by looking at our competition, and how
they price their products. We derive our average price per unit by taking the advertising
income we are receiving by how many customers we expect. We use our break-even
model to help us decide important financial decisions. The formula states that break-even
quantity equals our fixed costs ($545,800) divided by the difference between our average
price per unit ($0.75) and our average cost per unit ($1.25). The results show that we
would need at least 1,091,600 unique, yearly customers to break even.
VC MONEY
We are seeking a $1 million investment in exchange for 20% of our company.
This valuation comes because of the amount of users our company has, and the continued
percent of growth we are experiencing. This money would help us in many ways. We
already have a demonstrated model of success through our website, and now we would
like to make an app to further our success. In order to do this, we need to hire top level
personnel who have vast experience working with startups. They will help us create a
marketing plan. In addition, we would use some of the money to advertise Niche as one
of the nation’s most exciting new companies. The most important reason we need the
money for is research and development. This is going to be one of our biggest costs
moving forward as we need to data mine our user information to produce the best result
for companies who may want to advertise with us. We need to fully understand what our
customers are like, what their interests are, what types of places they been to, and how
they felt about the places. With this data we can allow companies to advertise precisely to
17. their target market. We will be able to charge more for a single click than Facebook can
because of how direct of a target our users are. We plan on allowing companies to
advertise in the following ways. The first is sponsoring ‘niches’, which can be
advertisement for an event or place; a nightclub may want to advertise a special Friday
night event for users who live in NYC, or they may want to just advertise their club as a
whole. Banners at the bottom of the page will work in a similar way, except in addition to
offering bars and clubs the option to advertise about an event or place, advertisements
can come from non-bar and clubs about products targeted at a similar market. The last
service we offer companies is the opportunity to advertise deals on our site as banner ads.
An example of a deal would be a popular NYC bar offering any customer who wants to
pay $30 to have unlimited beer on a Tuesday, or Wednesday night.
24. APPENDIX B:
HOME PAGE:
<!DOCTYPE html>
<html>
<head>
<style>
h1 {font-size:40px;}
h2 {font-size:30px;}
p {font-size:20px;}
A:link { color: #76923C }
A:visited { color: #76923C}
A:hover { color: white }
body { color: white }
</style>
</head>
<body>
<body bgcolor="black">
<font face="arial" color="white">
<p>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<center>
<a>
<img src="niche_logo.jpg" />
</a>
</p>
<p> Because who’s there matters.</p>
<p>
<a href="AboutNiche.html">About</a> | <a href="NicheTeam.html">Team</a> | <a
href="FAQ.html">FAQ</a> | <a href="Screenshot.html">Screenshots</a>
<p><h3>the free mobile application<br>
that helps you and your friends<br>
find the most suitable bar or<br>
club for your occasion.</h3>
25. ABOUT:
<!DOCTYPE html>
<html>
<head>
<meta name="description" content="About Niche">
<meta name="keywords" content="About, Niche, Information, Description,
Company">
<meta name="author" content="Niche Corporation">
<style>
h1 {font-size:40px;}
h2 {font-size:30px;}
p {font-size:20px;}
p.margin
{margin-top:100px;
margin-bottom:100px;
margin-right:300px;
margin-left:300px;}
A:link {color: #76923C}
A:visited {color: #76923C}
A:hover {color: white}
body {color: white}
</style>
</head><body>
<body bgcolor="black">
<font face="arial" color="white">
<center><head>
<b><font color="white"><h2> ABOUT NICHE</h2></font></b>
</head>
<p class="margin">
<br>Ever wanted to go out to a bar when on vacation but didn’t want to be surrounded by
people entirely younger or older than you? <br>
Maybe you want to know how crowded a certain club is before you wait on line to get in.
<br><br>Nightlife venues can fluctuate in types of people, as well as number of people
day-by-day and hour-to-hour.
<br><br>What if you knew that information in real time whenever you felt like searching
it? That’s where we come in.
<br><br>Niche is free mobile application that offers a simple solution for people unsure
of which bars and clubs to go to. We provide demographic and quantitative statistics both
in the form of real time and historical data about bar and club guests, using easy-to-read
graphs and charts.
<br><br>All statistics about demographics and quantity of guests at venues is user-
contributed. We use location services on smartphones to ask our users if they’re at a
certain locations, and for permission to use that information.
<br><br>We incentivize users to utilize our app by offering rewards at their chosen bars
and clubs, such as free or discounted drinks and entry.
<br><br>Figuring out the demographics and quantity of people at your bar or club could
make or break your outing.
<br>Use Niche-
<font color="#76923C"><b>because who's there matters.</b></p></font>
<p><a href="Home.html">Return to Home Page</a></p>
26. TEAM:
<!DOCTYPE html>
<html>
<body>
<head>
<style>
h1 {font-size:40px;}
h2 {font-size:30px;}
p {font-size:20px;}
A:link { color: #76923C }
A:visited { color: #76923C}
A:hover { color: white }
body { color: white }
p{background-color:black;}
p.margin{margin-top:100px;
margin-bottom:100px;
margin-right:50px;
margin-left:50px;}
</style>
<meta name="description" content="About the Niche Team">
<meta name="keywords" content="About, Team, Niche Team, CEO, CIO, CFO,
COO, Eric Saunders, Ilana Kitaigorodsky, Andrew Weintraub, Tina Mironis">
<meta name="author" content="Niche Corporation">
</head>
<body>
<body bgcolor="black">
<font face="arial" color="white">
<center><p class="margin">
<h1> THE NICHE TEAM</h1>
<br>
<a href="Home.html">Return to Home Page</a>
<br>
<br>
<table border="1">
<tr>
</tr>
<tr>
<td width=100>
<center>
<a><img src="Team Member Photos/ilana.png" /></a>
<b><p>Ilana Kitaigorodsky</b> is the Chairwoman and CEO of Niche, a free mobile
application that helps you and your friends find the most suitable bar and club for any
occasion. Previously, Ilana worked at Match.com as VP of Marketing. In her role, she
was responsible for creating, implementing and managing successful marketing
campaigns for the company. Before that, Ilana was pursuing a career as a body builder.
<p>Ilana holds a Master's degree from Harvard Business School, and a Bachelor's degree
from Binghamton University's School of Management. </td>
<td width=100><center>
<a>
<img src="Team Member Photos/tina.png" /></a>
27. <p>
<b>Tina Mironis</b> is the President and COO of Niche. Prior to accepting her position
at Niche, she was the VP of Marketing at AOL in London. Before that, was a homeless
bum living on the streets of New York City.
<p>
Tina holds an MBA from Columbia University, and a Bachelor's degree from
Binghamton University.
</p></td>
</tr>
<tr>
<td><p>
<center>
<a><img src="Team Member Photos/eric.png" /></a>
<p><b>Eric Saunders</b> is the CIO of Niche. Previously, he was Lead Architect at
Warner Brothers, and Senior Software Architect with the Global Digital Business group
at Sony Music Entertainment. In this role, he oversaw and developed various applications
that dealt with content management and distribution of mobile products and was the lead
developer of Sony's Music Box mobile application. Eric was a professional hula-hooper
in his past life.
<p>
Eric holds a Master's degree in computer science from New York University, and a
Bachelor's degree from Binghamton University.</p></td>
<td><p><center>
<a>
<img src="Team Member Photos/andrew.png" /></a>
<p>
<b>Andrew Weintraub</b> is the CFO of Niche. Prior to joining the Niche team, he was
VP of Product Development at Oppenheimer & Co, Senior VP of Product Operations at
Johnson & Johnson, and most recently, Senior VP of Finance at Morgan Stanely. Andrew
can juggle a maximum of twelve oranges while standing on one foot.
<p>Andrew holds an MBA in Economics from Brown University, and Bachelor's degree
in accounting, finance and economics from Binghamton University.
</p>
</td>
</tr>
</table>
</body>
</html>
28. FAQ:
<!DOCTYPE html>
<html>
<head><style>
h1 {font-size:40px;}
h2 {font-size:30px;}
p {font-size:20px;}
p.margin
{margin-top:100px;
margin-bottom:100px;
margin-right:300px;
margin-left:300px;}
A:link {color: #76923C}
A:visited {color: #76923C}
A:hover {color: white}
body {color: white}
</style>
<meta name="description" content="Frequently Asked Questions">
<meta name="keywords" content="FAQ, Questions, Answers, Question,
Answer, Information, Privacy">
<meta name="author" content="Niche Corporation">
</head>
<body>
<body bgcolor="black">
<font face="arial" color="white">
<center><font color="white"><h1> FAQ</h1></font>
<p class="margin">
<font color="#76923C"><b> What do we do?</b>
<font color="white"><br>We provide our users with real-time and historical information
about how many and what kind of people go to/are at bars and clubs. Whether you're
looking for a specific type of crowd, or just want to see how busy a venue is- this is the
app for you. This app is made for you and your friends to perfect niche for any
occasion!<br><br>
<font color="#76923C"><b> Neat! How do you do that?</b>
<font color="white"><br>We do that by asking YOU to fill in some information about
yourself<br> <i>(Gender, age, race and sexual orientation)</i><br><br>
<font color="#76923C"><b>Woah, Woah, Woah! isn't that kind of information
personal? </b>
<font color="white"><br>Yes, exactly! And we intend to keep it private. No one will
ever know anything about anyone's individual information; they only have access to the
compiled information. Think of the info we ask you as just a tiny puzzle piece that will
help to complete the puzzle!<br><br>
<font color="#76923C"><b>Hmm.. alright. Well, what's in it for me?</b><br>
<font color="white"><br>We knew you'd ask- other than having up-to-date, accurate, as
well as historical guest information about the bars and clubs you go to, for using this app,
you get (drumroll please!) REWARDS! That's right- every bar or club in our database is
offering deals for checking into their bar. Plus, with continued usage, you'll get evne
more discounts and deals on drinks and entry fees that one can only get through using
Niche!<br>
<br><br>
<a href="Home.html">Return to Home Page</a>
30. APPENDIX C (2X)
Overall, we as a group believed that this project was thought provoking as it
challenged us with questions, but also allowed us some freedom and creativity. However,
we do have a few suggestions that could potentially enhance the experience. One way to
make it better would be to learn a little more about html in class, and perhaps get some
practice on beforehand. We would recommend giving a smaller assignment earlier on in
the semester, which teaches us the basics of making a website, and requires us to practice
before this big project. A second suggestion would be to eliminate the competition
amongst groups. We find it a little unfair that our grade is determined by the grades of
other groups around us as only so many people can get an A. Lastly, we suggest most of
the weight of this project not be based off of the idea. The project has many components
that take up a lot of effort and time; to put most of the pressure on one part (originality of
idea) seems drastic.
