Oe pv2

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Oe pv2

  1. 1. Opportunity Execution Project FOOD ROUTES-
  2. 2. TEAM FORMATIONMaria Botchkova, Francisco Kattan, Adrianne Chen, Abdullah Sukkar Four strangers, scattered across the globe: Saudi, Australian, Honduran & Russian Meeting for the first time through the Stanford Venture Lab course. Diverse range of skills and experience: Combine over 50 years in product development & management, marketing, strategy, HR, IT, systems implementations, finance, sales, operations, project management, and consulting And a shared interest in : Travel and Food! Food Routes
  3. 3. How the business model works and makes moneyInterest in : Travel, Food and New Experiences! We connect people who want to experience an authentic home-cooked meal to hosts who want to provide one .The problem this company solves is: For guests: being able to get authentic local meals when traveling. Targeting to thosetravelers who want to experience local cuisine and local environment beyond what can beoffered in the restaurant. For hosts: being able to earn extra income from assets they already have: a home,cooking skills and local food knowledge.The company makes money by taking a booking fee and a percentage of the meal price onmeals organized through the site. Food Routes
  4. 4. How the business model works and makes money “Guests” register for free, and can organize meals with hosts or join a scheduled meal. The value they get includes ability to search and set up meals in their destination country with the host of their choice, read previous guest reviews and hosts ratings, research host neighborhood information, etc. Hosts register by paying a nominal registration fee for their identify and address verification, and can then advertise their food/experience to guests. The value they receive is the ability to reach a large audience of interested customers. Each meal booking is charged a booking processing fee. 24 hours prior to the meal the full booking fee is charged (which is transferred to the host, minus the company margin even if the guest does not turn up). In the early network building stage all hosts will be verified by company staff, house pictures will be required. The registration fee will be waived for the promotional periods. Food Routes
  5. 5. Why we are confident this is a profitable business Market Size. We initially sized the market to include only US and Australian travelers in their top 5 travel destinations. This resulted in a modest market size estimation of1.3m meals worth roughly $45.5m. However based on customer feedback we believe the proposition has greater relevance than just Americans and Australians. We refocused on adventure- seeking tourists and top 8 destinations determined by largest tourist arrivals and high interest in trying a local- hosted-meal as discovered by our survey and interviews. Source: Wikipedia chart based on World Tourism Organization StatisticsMARKET SIZE = $ 4.6 billion and growing346.5m tourists * 38% tourist looking for off-the-beaten path experience” *$35 meal fee Food Routes
  6. 6. Why we are confident this is a profitable businessCustomers want the productWe asked customers (surveys and open-end interview questions) and got anoverwhelming “yes” that people have an interested in using the service (89%).Naturally, not all interested will become a paying customer, but anotherencouraging outcome is 38% surveyed identified themselves as tourists thatprefer to travel off-the-beaten path and 100% of those had interest inservice. Those 38% is our main target.Customers are willing to pay for the productWe tested customer price point and found that “price” was not the maindriver for using the service. People are willing to pay $30-50 per person permeal. At this price point we are not looking as a “fast food” or “budget food”proposition. A small percentage (9%) where even willing to pay more, if theexperience was unique/special.Both Fixed and Variable costs are lowOur costs are relatively low and fixed once the concept is set up and runningwithin a country (mainly marketing and IT support). We dont necessarilyrequire outside financing at the early stage. To break even (annualized) weneed to get to 6.3k meals booked, representing a 0.005% penetration of ourpreferred countries. Food Routes
  7. 7. How we dealt with Business Model Risks? A core value in our model is TRUSTED HOST Network and VIBRANT travelers community. Failure to build and maintain either is a key risk. Another key risk to our business is low technical barriers to entry. To minimize risk our strategy is to :  Focus our host business development by taking a country by country approach - be the ‘first-mover’, lock in the best hosts, and concentrate on maintaining host relationships  In addition to global partners and distribution/marketing channels maintain relationship with country specific partners: local travel sites, travel booking services, B&B hotels  Build vibrant travelers community, through encouraging blogging, sharing, best picture contests, and various monthly community events Food Routes
  8. 8. Opportunity Execution and Next Steps We conducted 5 marketing experiments:Key Findings Key Decisions Made to Improve Conversion Rate•The social media campaign (Facebook page)was most effective (44% Conversion Rate) •Sent traffic to new Marketing Page insteadand least expensive. of Prototype• Paid campaigns (Pay4Tweet) performed •Rebranded from DISH Network to Foodworst. Routes•Customer Acquisition Cost through •Changed Tagline to better reflect valueFacebook and Email are lowest and present propositionthe best ROI for future campaigns Food Routes
  9. 9. Opportunity Execution and Next Steps Based on the results from completed marketing campaigns we believe that we need to concentrate on acquiring additional 3 - 6 hosts first in the top 1-2 tourist destination. Once 3-6 hosts are signed up and several introductory events are conducted we will proceed to work with influencers, to get the articles published about the service on Trip Advisor, Lonely Planet and/or similar publication. Once we got some support will spread the word using social networks. Our current conversion rate is 35% and our most challenging issue is directing traffic to the website. Working through ‘influencers’ and having events scheduled to review and discuss will help drive interested traffic to the site. To facilitate host signed up we plan to have a conference event in the target city. That will allow for face to face communication which will eliminate some hosts concerns that we encountered and also will allow us to personally verify hosts which will minimize guest security concerns. The cost for the event is estimated at $200. The first target location is Malaysia. Once the service is established we will move away from face-to-face marketing to make sure that the acquisition cost for hosts remains low. Food Routes
  10. 10. Links to Our: Marketing Video Landing Page. FaceBook Page Prototype Stats 12/12/12: 69 view of the landing page, 9 signed up for updates, 8 active users on the prototype sites Food Routes

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