April 13, 2009MIT Arab Business Plan CompetitionDear MIT Team,It is our pleasure to be part of the MIT business plan compe...
April, 2009BLOG SOUQBUSINESS PLAN                        1|Page
Executive Table of ContentsA. EXECUTIVE SUMMARY .............................................................................
Detailed Table of ContentsA. EXECUTIVE SUMMARY ..............................................................................
Team Risk....................................................................................................................
A. EXECUTIVE SUMMARYBusiness MissionBlog SouQ is an innovative startup established with the mission to empower people tode...
other criteria. The auditing platform will provide live reports including industry and sectoraverage performance measures ...
support services, the company will launch its operations from iPark, the Jordaniantechnology incubator.To bootstrap starti...
B. THE COMPANY, STRATEGY, MANAGEMENT, AND ORGANIZATIONB.1. Business MissionThe ConceptBlog SouQ presents an innovative sto...
Investors PerspectiveThere are three core types of investors that we are going to target. The first type is thefinancial i...
ObjectivesLong - Term Objectives       – Provide a trading platform for matching investors and blog owners;       – Engage...
B.2. Management TeamFounders (Adey Salamin, Ahmad Takatkah, Ammar Ibrahim)The management Team is to be governed by an advi...
Ahmad TakatkahOverview:Ahmad Takatkah has over five years experience in business development consulting andtraining for Te...
organizations, which include: Amman Stock Exchange, Securities Depository Center (SDC)of Jordan, Ministry of Water and Men...
B.3. Ownership and Management StructureOwnership StructureInitially we plan to register Blog SouQ as a limited liability c...
Organizational StructureThe following is the envisioned long term organizational structure:   a. Advisory Board of Directo...
B.4. Other ResourcesHuman Resources RequirementsAs shown in the table below, Blog SouQ will need the following resources a...
C. THE MARKET AND COMPETITORSC.1. MarketMarket IntroductionOur market is the Blogsphere, which is the collective community...
Technorati.com methodology.) The following are the results which form the basis for ourfinancial and market analysis.Blogg...
According to Technorati.com 2008 survey, almost half of the blogging happens in the USwhile the rest of the world also has...
Market PotentialBlogs are now money makers. According to technorati.com, regular blogs generate meanannual revenues of $7,...
Bloggers with advertising are even more sophisticated in terms of their use of tools,advertising platforms and even events...
C.2. CompetitionCompetitorsTipJoy.comTipJoy.com competition to Blog SouQ could be summarized by its ability to enable blog...
listed, but no actual ownership of blogs are transferred. BlogShares.com is purely a fictionalmarketplace for entertainmen...
– Enabling blog owners create and retain loyal readers by giving readers the     opportunity to own the blog and partner w...
time to market and will leverage Woopra’s team experience in web             analytics.      Ease of Use –             Our...
The Global Financial Crisis –            In lieu of the current economic crisis, investors are looking for new            ...
C.3. Need for Market ResearchOur idea is new and still not tested in the market, so we need an extensive market researchta...
D. THE PRODUCT OR SERVICED.1. Products and Services DescriptionBuilding on our knowledge and experience, and after consult...
In addition, the auditing solution will investigate the blog’s content regarding its quality andquantity. For quality, it ...
chart and conduct all required functions from there such as: viewing the blog’s auditingreport, bid for a sell/buy price, ...
Sales and                                  Marketing          Direct Sales                             Online Marketing   ...
D.2. Product DevelopmentTechnology UsedBlog SouQ will intensively use open source technology unless a proprietary solution...
when the business development unit decides to introduce the service in a new language, it’llbe merely a task of translatin...
SCRUM has the following attributes:       – Scrum is an agile process to manage and control development work.       – Scru...
D.3. Identifying Costs / Manufacturing and OperationsPre-Startup CostAs explained below in the startup summary, our startu...
D.4. Risks and RegulationsTeam RiskBeing a small startup company, employees might not feel job security. Staff members mig...
Technology RiskWe are aware of the need to run an IT infrastructure audit and web applications audit onperiodic basis to e...
E. MARKETING AND SALESE.1. Marketing PlanCompany MessageAll our marketing efforts will be targeting blog readers, the buye...
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
Blog Souq Business Plan
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  1. 1. April 13, 2009MIT Arab Business Plan CompetitionDear MIT Team,It is our pleasure to be part of the MIT business plan competition. Our award has been thefinalized business plan; which will form the basis of running our business.We look forward to learn from the invaluable feedback that each of the experienced andknowledgeable judges is willing to give to help improve and strengthen both our businessplan and business model.We would like to thank you for the invaluable workshop that enhanced our businessphilosophy in lovely Beirut. We would like express our special thanks to Mr. Ken Morse forhis inspirational words that helped nurture our entrepreneurial behavior.Best Regards,Blog SouQ Team Adey Salamin, Ahmad Takatkah, Ammar Ibrahim
  2. 2. April, 2009BLOG SOUQBUSINESS PLAN 1|Page
  3. 3. Executive Table of ContentsA. EXECUTIVE SUMMARY .................................................................................................. 5B. THE COMPANY, STRATEGY, MANAGEMENT, AND ORGANIZATION .................. 8C. THE MARKET AND COMPETITORS ............................................................................ 17D. THE PRODUCT OR SERVICE ........................................................................................ 28E. MARKETING AND SALES .............................................................................................. 38F. FINANCIAL INFORMATION .......................................................................................... 42G. APPENDICES .................................................................................................................... 58 2|Page
  4. 4. Detailed Table of ContentsA. EXECUTIVE SUMMARY .................................................................................................. 5B. THE COMPANY, STRATEGY, MANAGEMENT, AND ORGANIZATION .................. 8 B.1. Business Mission ........................................................................................................... 8 The Concept ...................................................................................................................... 8 The Problem ...................................................................................................................... 8 The Solution ...................................................................................................................... 9 Mission Statement ............................................................................................................. 9 Objectives ........................................................................................................................ 10 Keys to Success ............................................................................................................... 10 Growth Plans ................................................................................................................... 10 B.2. Management Team ...................................................................................................... 11 Founders (Adey Salamin, Ahmad Takatkah, Ammar Ibrahim) ...................................... 11 Other Key People ............................................................................................................ 13 Advisory Board of Directors ........................................................................................... 13 B.3. Ownership and Management Structure ....................................................................... 14 Ownership Structure ........................................................................................................ 14 Organizational Structure.................................................................................................. 15 B.4. Other Resources ........................................................................................................... 16 Human Resources Requirements..................................................................................... 16 HR Development Strategy............................................................................................... 16C. THE MARKET AND COMPETITORS ............................................................................ 17 C.1. Market .......................................................................................................................... 17 Market Introduction ......................................................................................................... 17 Market Analysis .............................................................................................................. 17 Market Potential .............................................................................................................. 20 Target Market .................................................................................................................. 21 C.2. Competition ................................................................................................................. 22 Competitors ..................................................................................................................... 22 Competitive Advantage ................................................................................................... 23 Barriers to Entry and Future Competition ....................................................................... 24 SWOT Analysis ............................................................................................................... 24 C.3. Need for Market Research ........................................................................................... 27D. THE PRODUCT OR SERVICE ........................................................................................ 28 D.1. Products and Services Description .............................................................................. 28 Type of Tradable Shares.................................................................................................. 28 Blog Auditing Solution ................................................................................................... 28 Online Trading Platform ................................................................................................. 29 Listing Process ................................................................................................................ 29 Trading Process ............................................................................................................... 29 Customer Service ............................................................................................................ 30 Business Model ............................................................................................................... 30 D.2. Product Development .................................................................................................. 32 Technology Used ............................................................................................................. 32 Strategic Partnership........................................................................................................ 32 Technical Overview ........................................................................................................ 32 User Requirements .......................................................................................................... 33 Development Methodology ............................................................................................. 33 D.3. Identifying Costs / Manufacturing and Operations ..................................................... 35 Pre-Startup Cost .............................................................................................................. 35 Operating Cost ................................................................................................................. 35 D.4. Risks and Regulations ................................................................................................. 36 3|Page
  5. 5. Team Risk........................................................................................................................ 36 Regulations Risk.............................................................................................................. 36 Execution Risk ................................................................................................................ 36 Technology Risk.............................................................................................................. 37 Capitalization Risk .......................................................................................................... 37E. MARKETING AND SALES .............................................................................................. 38 E.1. Marketing Plan ............................................................................................................. 38 Company Message .......................................................................................................... 38 Strategic Position and Brand Building ............................................................................ 38 Marketing Strategy, 4Ps .................................................................................................. 38 Marketing Methods and Advertising ............................................................................... 39 Community Involvement and Social Responsibility ....................................................... 40 E.2. Sales Strategy ............................................................................................................... 41F. FINANCIAL INFORMATION .......................................................................................... 42 F.1. Time Frame (Implementation Schedule) ..................................................................... 42 Goals and Milestones ...................................................................................................... 42 Startup Summary ............................................................................................................. 42 Financial Plan Summary ................................................................................................. 43 F.2. Forecast Assumptions .................................................................................................. 44 Basic Assumptions .......................................................................................................... 44 Five Years Revenue Forecast Assumptions .................................................................... 45 F.3. Financial Statements (Five Years) ............................................................................... 46 Financial Assumptions .................................................................................................... 46 Projected Profit and Loss (Income) Statement ................................................................ 47 Projected Balance Sheet .................................................................................................. 49 Projected Cash Flow Statement ....................................................................................... 50 Projected Revenues ......................................................................................................... 51 Projected Payroll Expenses ............................................................................................. 52 Projected Expenses .......................................................................................................... 53 Breakeven Analysis ......................................................................................................... 54 Sensitivity Analysis ......................................................................................................... 55 F.4. Funding: Capital and Debt ........................................................................................... 56 Funding Strategy: Capital vs. Debt ................................................................................. 56 Stages of Funding Required and Use of Proceeds .......................................................... 56 Exit Strategy .................................................................................................................... 57G. APPENDICES .................................................................................................................... 58 G.1. Detailed Financial Model ............................................................................................ 58 G.2. Founders CVs .............................................................................................................. 58 4|Page
  6. 6. A. EXECUTIVE SUMMARYBusiness MissionBlog SouQ is an innovative startup established with the mission to empower people todevelop the Blogsphere ecosystem by participating in sustaining, developing and promotingblogs.Blog SouQ is establishing a platform to accelerate the process of monetization of originalcontent created by individuals. As an initial proof of concept the platform is focused on semiprofessional / professional bloggers allowing them to solve their traditional problems ofraising capital for development and unlocking value from their efforts.Blog owners can raise capital and improve their blogs’ performance and revenues. Investors(whether financial, enthusiasts or corporate), get an opportunity to capture the benefits of thisnew exciting market. Blog SouQ will provide a safe, secure and friendly service that bloggersand investors can trust.Management TeamBlog SouQ is being established by an ambitious and committed team with a vision and thedesire to stand behind the company in a world full of competition and a continuous movinglandscape of technology. Our team includes three professionals with a proven track recordyet we seek and accept coaching to overcome recognized weaknesses. Team record includessenior positions with an investment advisory, founders to a management and IT consultancy,founders of three IT startups, mentors for Queen Rania Center for Entrepreneurship, CTO ofthe largest Middle East digital content providers among many other accomplishments.Ownership StructureFounders of Blog SouQ are: Adey Salamin, Ahmad Takatkah and Ammar Ibrahim, eachowning 25% of equity. 10% of Blog SouQ’s shares will be held as an incentive scheme forthe potential CEO, while the remaining 15% will be held as an option pool for senior levelemployees.MarketBlog SouQ is targeting a 25 billion dollar market of 200 million blogs and 346 million blogreaders worldwide. It is estimated that there are 7.4 million active blogs worldwide of which50% (3.4m) have advertising. According to Technorati, it is also estimated that the number ofnew blogs are doubling every six months. Across the span of 5 to 7 years we plan to target amarket share of 10% of the active blogs with advertisements (370,000 blogs).CompetitionCurrently we have two potential indirect competitors: Tipjoy.com and BlogShares.com.Tipjoy allows users to donate money to blogs while BlogShares is a fantasy exchange thatrates blogs based on number of outgoing and incoming links.Products and ServicesWe will create a similar structure to a stock exchange allowing bloggers to raise capitalwithout the hassle of public-company regulatory oversight. Our two main products are atrading platform and a blog auditing solution. The trading platform will be very much similarto traditional stock trading platforms with modifications to match our new blog-ad-sharesconcept. Our blog auditing solution will be built in partnership with Woopra, a web analyticsprovider, and enhanced to investigate blogs contents regarding quality and quantity among 5|Page
  7. 7. other criteria. The auditing platform will provide live reports including industry and sectoraverage performance measures and benchmarks to help investors evaluate blogs.Business ModelWe will charge a 5% transaction fee for listing and trading blog shares while charging $10for an annual subscription to an unlimited number of detailed blog audit and analytics reports($5 will be for Blog SouQ and $5 will be for our strategic partner Woopra).Marketing and SalesOur marketing efforts will mainly focus on blog readers, the buyers and potential investors.Blog owners will be targeted by our direct sales operations. Our initial strategy is to focus onindirect advertising methods in the startup phase while moving to direct channels afterreceiving the seed investment. We will promote Blog SouQ via a multi-channel targetedmarketing campaign that includes network marketing, word of mouth, PR portals, businessreviews and social media marketing. This will enable us to start with minimal advertisingexpenses prior to the seed investment. Sales transactions will be conducted directly on ouronline trading platform. In communicating our message with blog owners, we will emphasizeour value proposition of simplifying access to public investments and leveraging blog readerloyalty.Financials and AssumptionsBlog owners will be allowed to sell up to 50% of their blog ownership and we have assumedthat the average blogger will only offer 25% ownership in their blog. To be conservative wewill also assume no growth in the number of blogs and only 20% of our target market issuccessful in raising funds. We have also assumed that only 0.5% of the total blog readersmarket (estimated at 346 million) would be interested in gaining access to our blog auditreports within the total five year projected period.It is projected that year one will have zero revenues while our focus will be on finalizing theplatform development for Blog SouQ coupled with the integration with our strategic webanalytics partner.Given an average blog revenue of $7K per year we have assumed a TTM multiple of 3 forvaluing the blogs prior to listing on Blog SouQ. We have also assumed that during the spanof the investment and for re-trading the shares, the average valuation of the Blog and hencethe transaction value will not change. To be conservative, we have assumed that only 20% ofthe listed blogs on Blog SouQ will have their blog shares re-traded and only twice in theirlife span.Given the conservative assumptions, in year one the company will have no revenues and inyear five it is projected to reach $17.9 million. Assuming zero debt, we expect to achieve anet income margin of 68% in year two and grow it to 266% in year five.The company is projected to breakeven in year two of operations and at a hypotheticaldiscount rate (WACC) of 20%, our Net Present Value is estimated at $10.8 million with anexpected Internal Rate of Return in excess of 300%. A detailed financial model has beenprepared in a separate addendum named Blog SouQ Financial ProjectionsStartup Summary and Funding RequestOur vision is to start small and grow rapidly within the next five years. To jumpstart thebusiness, reduce time to market, lower startup cost, and get advantage of the offered business 6|Page
  8. 8. support services, the company will launch its operations from iPark, the Jordaniantechnology incubator.To bootstrap starting the company we need to raise initial funds of $60,000. We are planningto operate in a lean mode, participate in local and international business plan competitions,and target freelance consultation projects. The initial funds will be used to develop our alphaversion, file for the business method patent, pay for the incubator’s rent and pay our basicsalaries for the next 6 months. In parallel we will seek to promote our alpha version amongfriends and family members that own blogs with advertising. They will be our first batch ofclients and focus group to test the basics of our product and business model.Next, we will be seeking a seed VC investment of $500,000 to cover our startup operatingexpenses of hiring the basic technical team to develop a beta version of Blog SouQ to launch.We expect to breakeven at the end of the second year.During the 3rd year, we will expand our team and start sales and marketing campaignsdepending on our own revenues. An experienced CEO and CFO will be hired in addition toan online sales and marketing team and customer services team. As our user base grows sowill our technical requirements which will be higher and will require a more sophisticated IThosting environment.Exit StrategyFor us, the founders, Blog SouQ is built to last. However, early investors can exit at laterinvestment rounds, and late investors can exit either via an IPO, which is expected within 7to 8 years of operations, or a potential acquisition. 7|Page
  9. 9. B. THE COMPANY, STRATEGY, MANAGEMENT, AND ORGANIZATIONB.1. Business MissionThe ConceptBlog SouQ presents an innovative stock market concept for blogs. It enables blog owners toraise capital to improve their blogs’ performance and increase revenues by selling blog-shares to the public without the complications of traditional stock markets. Investors can buyand trade blog-shares in a safe, secure and friendly online environment.Building on the traditional stock market concept, Blog SouQ is solving huge problems whenit comes to issuing, selling, and trading blog-shares. Blogs are not limited liability or publicshareholding companies; most of them are not even registered companies at all. So how canblogs be traded publicly without being registered entities? How can you control and monitora blog’s performance? How do you protect shareholders’ rights? For how long willshareholders/investors hold their shares before profiting from them? How would a price goup/down? What are the rules and regulations for such a stock market?The combination of our team experience in web development, business solutions and financecreated answers to all above mentioned questions. We are introducing a comprehensive websolution backed with solid business and legal processes that enable people to trade blog-shares and protects everyone’s rights.The ProblemBlog Owners PerspectiveBlog owners need to raise capital in order to invest in: – Hiring technical support – Hiring editors – Improving blog features – Buying or developing new web applications – Running online marketing campaigns for the blog – Renovate the blog design – Travel and attend overseas events to cover its activities – Start a new blogGiven the need to raise capital, the challenge becomes in how to raise it. Many blogs aresmall in size hence requiring a small amount of investment. Furthermore, in most casesblogs are not owned by companies but by individuals.Some of the challenges in raising capital: – How do I meet blog investors? – How do I value my blog? – I need a small investment, who will facilitate it? – How do I protect my blog ownership? – Are there any legal issues? 8|Page
  10. 10. Investors PerspectiveThere are three core types of investors that we are going to target. The first type is thefinancial investors looking for new short term financial products and new investmentopportunities. The second type is the enthusiast investor: people who are interested ininvesting because they are loyal readers for those blogs and would like to have somebloggers to continue their task. The third investor could be a company that wants to promoteits brand through that blog.From the investors’ perspective, blogs are not actually limited liability or public shareholdingcompanies; they are not even registered companies.So the challenges become: – How do you find Blogs that need the investment? – How do you introduce and match blog owners with blog investors? – How do you facilitate the investment in the blog? – How do you protect the investors’ shares? – How can investors exit their investment? – How can you monitor and audit a blog’s performance? – How do you determine the value of the blog?The SolutionFor blog owners: they can secure investments or raise capital by issuing and trading sharesvia Blog SouQ without the need to register as a public shareholding company, without theneed for board of directors, external auditing, or any of the complicated regulatoryrequirements and long process of the actual stock market but providing a similarenvironment.For Investors: Blog SouQ has provided a new financial product for the financial investors, away for the enthusiast to give money to the blog owner as long as the owner continues toblog, a better way for the brand owners to sustain marketing their brands of specific blogs byowning part of it.The detailed trading process is provided in the products and services section of this plan, insummary, Blog SouQ will: – Provide a platform for blog owners to meet blog investors – Minimize legal process for both the investors and blog owners – Act as an escrow agent – Act as an external auditor for blogs – Perform blog valuations – Provide the means for investment while protecting both the investors and the blog ownersMission StatementOur mission is to foster to empower people to develop the Blogsphere ecosystem byparticipating in sustaining, developing and promoting their favorite blogs..We enable blog readers to invest in and promote blogs which they love, we enable blogowners to improve their blogs’ performance and to achieve rewarding financial status bysimplifying access to public investments, and we create new investment opportunities forfinancial investors. 9|Page
  11. 11. ObjectivesLong - Term Objectives – Provide a trading platform for matching investors and blog owners; – Engage and encourage bloggers to independently grow via attraction of necessary investment; – Ensure sustainability of blogs via an independent funding model from loyal readers of these blogs as investorsShort - Term Objectives – Build-up an independent blog trading platform; – Promote Blog SouQ to key blog platforms and blog owners; – Partner with a blog analytics platform to add our customized auditing and valuation functions. – Reach out to blog readers.Keys to SuccessBlog SouQ keys to success are: – Experienced and highly committed team – Developing a solid trading platform – Meeting all development dates in a timely fashion – Solid marketing execution – Establishing trust between Blog SouQ and both investors and blog owners – A strong market entry – Controlling costs – Attain independence from any blogs platforms and owners – Attracting loyal blog readers to invest in their favorite blogs and encouraging them to promote blogs in which they invest in. – Flexibility to enrich the management team with a senior CEO for equityGrowth PlansAlthough Blog SouQ is initially targeting only blogs for this new stock market concept, weplan to apply the same concept to any startup website.All startup blogs and websites could be part of our stock market before going public in thetraditional stock markets.We have avoided startup websites at this stage because of their countless business modelsand revenue streams that could not be controlled in one online auditing solution. Websitesmay also have direct physical cash transactions with their customers that could not be trackedonline with our current proposed system. While for blogs, it is simple and straightforward,most of the blogs depend mainly on affiliate advertising services to generate revenues, whichcould be tracked and audited online without the need to have a physical external auditor.In our future growth plan, we will be developing a new trading process that targets a specificgroup of startup websites to include them in our stock market. 10 | P a g e
  12. 12. B.2. Management TeamFounders (Adey Salamin, Ahmad Takatkah, Ammar Ibrahim)The management Team is to be governed by an advisory board of directors and will have thefollowing team members (CVs provided in the appendix):Adey SalaminOverview:Founder and Partner at Singularity Advisors: An advisory firm founded in January 2007tofocus on opportunities across the MENA – India corridor.Having started his career as an IT professional and subsequently an entrepreneur, he hasmoved on to become an investment professional in recent years. Adey has enjoyed aninternational career having held senior management positions in the US and Jordan. Adey hasalso been involved in setting up technology commercialization strategies and innovationclusters in Jordan and has worked with and advised numerous IT startup companies in theMENA region.Track Record:Prior to founding Singularity Advisors, Adey founded and managed Strategment Consulting,a strategic management and IT consulting firm based in Jordan then acquired by SingularityAdvisors. Previously, Adey was an Associate Vice President in the Strategic ManagementGroup at Merrill Lynch Investment Managers in New Jersey and New York.Adey’s track record over the past 8 years includes involvement in the development of theJordan Innovation Cluster, Technology Commercialization and transfer initiative, Mafraq &Irbid Special Economic Zones, founder of CST Capital (MENA, India), founder ofSingularity Ventures (India Seed Fund). He has held senior positions with Merrill Lynch(NY, NJ - USA), International Computer Systems Ltd (London), Computer &Communications Systems (Amman), founder of Strategment Consulting (Amman). Adey hasalso been involved in numerous consulting projects in Jordan, UAE, KSA and Libya.Adey has worked and lived in Jordan, UAE, Libya, Canada and USA. He is a recognizedfigure among entrepreneurs and IT developers and well-reputed investment professional inJordan, bringing a wealth of experience to the investment sector having come from atechnology background with an international business-rich exposure.Exposure:Current primary area of focus includes 1) Capital Syndication, 2) Market Entry / CrossBorder M&A and 3) Corporate & Financial RestructuringAs a Consultant, Adey advised numerous entrepreneurs and startups in Jordan (techoutsourcing), India (financial tech startup), Pakistan (web startups) and UAE on the topics ofbusiness planning, business development, deal sourcing, and market entry strategies.Education:Adey holds a Finance and Accounting Certificate from the Wharton School of Business ofthe University of Pennsylvania and a Bachelor of Computer Science and Engineering, cumlaude honors, from the University of Pennsylvania with minors in Economics and Math. 11 | P a g e
  13. 13. Ahmad TakatkahOverview:Ahmad Takatkah has over five years experience in business development consulting andtraining for Technology Startups focusing on: entrepreneurship capacity building andmentorship, business planning, angel and venture capital investment process and term sheetsnegotiations.Track Record:Before starting Fruits Ventures, a consulting firm for technology startups, Mr. Takatkahworked as a Program Manager at the Arab Science and Technology Foundation (ASTF)working on the “Startups Development” program to help technology entrepreneurs to starttheir own business, get incubated, access to capital investment, link with potential partners,and reach out to clients in the market.Prior to joining ASTF, Mr. Takatkah worked as a freelance business development consultantfor multiple companies, organizations and venture capital firms between Amman and Dubaisuch as Riyada Ventures, Portuguese Trade Center, Access New Markets, RecruitGulf.com,Epygi Technologies, Fexco, and others to help them access the Middle East market and toorganize local business events.Previously, He worked as a Marketing Manager for “Empretec”, the United Nations’entrepreneurship capacity building program under the UNCTAD division.As an entrepreneur, Mr. Takatkah have founded and managed an online business companyfor which he successfully raised angel investment. The company lasted for one year onlybefore the partners decided to shut it down. The business model was hard to sell and wedidn’t manage to raise a second round of funding.Exposure:Mr. Takatkah is a recognized trainer for “Queen Rania Center for Entrepreneurship” and the“Jordanian Engineers Association” in the fields of business planning, VC funding process,raising angel and venture capital investment and introducing term sheets for technologystartups. He had successfully mentored three of the winning plans in the QRCE business plancompetition for three consecutive years.Education:Mr. Takatkah holds an MBA with distinction from the New York Institute of Technology,and a B.Sc. degree with distinction in Electronics Engineering from Princess SumayaUniversity for Technology.Ammar IbrahimOverview:Founder and Partner at Indemaj Technology: Web development and consultancy start up.CTO at Al Bawaba Middle East.Track Record:Nearly a decade of experience in developing state of the art web applications. FoundedIndemaj Technology in late 2006 and serves as a CTO for the largest digital content providerin the Middle East, Al Bawaba. Worked as a web technology consultant for many 12 | P a g e
  14. 14. organizations, which include: Amman Stock Exchange, Securities Depository Center (SDC)of Jordan, Ministry of Water and MenaITech an Optimiza company.Exposure:Advocate of Open Source technology. Frequent speaker and panelist.Participated in dozens of events all over the globe.Interviewed by Linux Journal (http://linuxjournal.com/article/8504)Worked as a technical reviewer for "Linux System Administration"Published by OReilly, March 2007.Education:A graduate of Jubilee school/King Hussein Foundation for gifted students.Bachelor of Computer Science/Information Technology from Jordan UniversityOther Key PeopleBlog SouQ business requires a high level international experience in financial investments aswell as online business management.Although we can manage to develop Bog SouQ’s beta version and startup the company,down the road, we believe that we will need a professional CEO with international previousexperience to enrich the company by his/her understanding of how things work on a globallevel.After developing the beta version, Blog SouQ will also need to hire an experienced: ChiefFinancial Officer.Our plan includes incentives for key management team members with equity shares in thecompany as described in the ownership structure below.Advisory Board of DirectorsBlog SouQ team appreciates the advice of senior international level professionals. We will beasking for mentorship, guidance and advice from specific domain experts who are needed forthe success of Blog SouQ.We define the responsibilities of the board as: – Sets objectives, goals and strategic direction for management – Supervises the management of Blog SouQ – Ensures management successionWe will be targeting well known overseas advisors to leverage their global knowledge andbest practices. Periodic conference meetings will be conducted.Detailed description of needed advisory domain experts is provided in the organizationalstructure section below. 13 | P a g e
  15. 15. B.3. Ownership and Management StructureOwnership StructureInitially we plan to register Blog SouQ as a limited liability company (LLC) in Amman,Jordan. All business, management, and development functions will be performed from there.As we grow, we plan to register another company in a tax free zone such as the CaymanIslands, Delaware or British Virgin Island.Founders of Blog SouQ are: Adey Salamin, Ahmad Takatkah and Ammar Ibrahim, eachowns 25% of equity. 10% of Blog SouQ’s shares will be held as an incentive scheme for thepotential CEO, while the remaining 15% will be held as an option pool for senior levelemployees. Ownership Structure Other Key People, 15% Adey, 25% CEO, 10% Ammar, 25% Ahmad, 25% 14 | P a g e
  16. 16. Organizational StructureThe following is the envisioned long term organizational structure: a. Advisory Board of Directors The advisory board of directors will include 5 experts as follows: 1. Financial Auditing Expert 2. Senior Financial Market Analyst 3. Management Expert 4. Technical Expert 5. Laws and Regulations Expert b. Key Management 1. Chief Executive Officer (To be appointed at the 3rd year of operations) 2. Chief Business Marketing, Ahmad Takatkah 3. Chief Operations Officer, Adey Salamin (for the first two years will also be responsible for the tasks of the CFO) 4. Chief Technology Officer, Ammar Ibrahim 5. Chief Financial Officer, (To be appointed at the 3nd year of operations) 15 | P a g e
  17. 17. B.4. Other ResourcesHuman Resources RequirementsAs shown in the table below, Blog SouQ will need the following resources and they will behired at the shown years of operation:Positions Year Year Year Year Year 1 2 3 4 5Senior Developers (3 people): 1. With data mining background √ √ √ √ √ 2. With financial applications background √ √ √ √ √ 3. With high scalable web applications background √ √ √ √ √System Administrator (1 person) √ √ √ √ √User Interface Designer (1 person) √ √ √ √ √Quality Assurance (1 person) √ √ √Accountant (1 person) √ √ √ √Online Sales and Marketing Officers (3 people) √ √√√ √√√ √√√Customer Service Officers (3 people) √√√ √√√ √√√Admin Assistant (1 person) √ √ √ √HR Development StrategyCreativity, innovation and risk taking are our motives. Thus, we will focus on hiringpassionate resources that think out of the box to create higher value.Continuous learning is one of our values. Our staff shall be attending at least twobusiness/technical/personal development training workshops every year. We also plan toencourage learning from each other to build the spirit of team work.Being a client-oriented company is not only a marketing issue. In our team selection process,we take into consideration the persons ability to accept feedback and show more effort insatisfying our clients.On the long run, an ownership structure for employees will be introduced to create thefeeling of "working on my own business" for all employees.In addition to social and medical insurance, a trip will be organized every six months to alocal area, and a relaxation session will be organized every month. 16 | P a g e
  18. 18. C. THE MARKET AND COMPETITORSC.1. MarketMarket IntroductionOur market is the Blogsphere, which is the collective community of all blogs. A blog (acontraction of the term "Web log") is a web site, usually maintained by an individual withregular entries of commentary, descriptions of events, or other material such as graphics orvideo, in which readers can also post their own comments.But as the Blogosphere grows in size and influence, the lines between what is a blog andwhat is a mainstream media site become less clear. Larger blogs are taking on morecharacteristics of mainstream sites and mainstream sites are incorporating styles and formatsfrom the Blogosphere.Whether or not a brand has launched a social media strategy, more likely than not, it’salready present in the Blogosphere. Four in five bloggers post brand or product reviews, with37% posting them frequently. 90% of bloggers say they post about the brands, music, moviesand books that they love (or hate).Company information or gossip and everyday retail experiences are fodder for the majorityof bloggers. Companies are already reaching out to bloggers. One-third of bloggers havebeen approached to become brand advocates.There have been a number of studies aimed at understanding the size of the Blogosphereyielding widely disparate estimates of both the number of blogs and blog readership. Allstudies agree, however, that blogs are a global phenomenon that has hit the mainstream. TheBlogosphere continues to evolve - with micro-blogging, long blogging, and video blogging.The numbers vary but agree that blogs are here to stay; the following are some snapshotsabout blogs from different media: – comScore MediaMetrix (August 2008) – Blogs: 77.7 million unique visitors in the US – Facebook: 41.0 million | MySpace 75.1 million – Total internet audience 188.9 million – eMarketer (May 2008) – 94.1 million US blog readers in 2007 (50% of Internet users) – 22.6 million US bloggers in 2007 (12%) – Universal McCann (March 2008) – 184 million WW have started a blog | 26.4 US – 346 million WW read blogs | 60.3 US – 77% of active Internet users read blogsMarket AnalysisWe have based our market analysis on the 2008 “State of the Blogosphere Report” presentedby Technorati.com which conducted a survey from a random sample from more than 1.2million bloggers who have registered with Technorati. (For more information, please see 17 | P a g e
  19. 19. Technorati.com methodology.) The following are the results which form the basis for ourfinancial and market analysis.Bloggers are not a homogenous group: personal, professional, and corporate bloggers allhave differing goals and cover an average of five topics within each blog. They are oftendescribed as savvy and sophisticated. On average, bloggers use five different techniques todrive traffic to their blogs. They’re using an average of seven publishing tools on their blogand four distinct metrics for measuring success.According to Technorati.com, bloggers are more affluent and educated than the generalpopulation with 70% having college degrees and four in ten have an annual householdincome of more than $75K.Global Snapshot of Bloggers: (Source: Technorati.com) Demographics U.S. Bloggers European Bloggers Asian Bloggers (N=550) (N=350) (N=173) Male 57% 73% 73% Age: 18-34 years old 42% 48% 73% Age: 35+ 58% 52% 27% Single 26% 31% 57% Employed full-time 56% 53% 45% Household income >$75,000 51% 34% 9% College graduate 74% 67% 69% Average blogging tenure (m) 35 33 30 % Blogs with advertising 52% 50% 60% Average Unique Visitors (m) 18,000 24,000 26,000Segment Snapshot of Bloggers: (Source: Technorati.com) With No Personal Corporate Professional Demographics Advertising Advertising (N=1015) (N=156) (N=590) (N=695) (N=595) Male 64% 70% 72% 66% 66% Age: 18-34 years old 52% 45% 48% 53% 45% Age: 35+ 48% 55% 52% 47% 55% Single 36% 24% 31% 34% 34% Employed full-time 52% 51% 55% 49% 56% Household income>$75k 37% 49% 42% 40% 37% College graduate 70% 74% 74% 69% 72% Avg. blogging tenure (m) 35 35 38 35 33 % Blogs with Advertising 53% 64% 59% 100% 0% Avg. Unique Visitors (m) 12,000 39,000 44,000 46,000 4,000 18 | P a g e
  20. 20. According to Technorati.com 2008 survey, almost half of the blogging happens in the USwhile the rest of the world also has a significant share of the pie: Blogging Geographic Distribution 3%2% 7% North America 13% Europe Asia 48% South America Austra lia 27% ROW Source: Technorati.comAlmost all bloggers manage their blogs themselves, while one in ten of professional andcorporate bloggers pay staff to contribute to their blogs. This keeps the costs of maintainingthe blogs at a minimum: Blog Management 13% 9% Manage alone Paid staff Unpaid help 78% Source: Technorati.comBoth personal and professional topics are equally popular. Forty percent of bloggers considertheir blogging topics outside of these categories. “Other” blog topics include: 2008 USelections, alternative energy, art, beauty, blogging, comics, communication, cooking/food,crafts, design, environment, internet/Web 2.0, Jamaica, and media/journalism.Three-quarters of bloggers cover three or more topics. The average number of topics bloggedabout is five. There were some global differences. Music is more popular and politics is lesspopular in Asia, while personal, lifestyle, and religious topics are less popular in Europe. 19 | P a g e
  21. 21. Market PotentialBlogs are now money makers. According to technorati.com, regular blogs generate meanannual revenues of $7,000. Blogs with 100,000 or more unique visitors per month generate$75K+ in annual revenue, while a successful blog might hit an average of $ 20,000+ permonth such as TechCrunch.com.The majority of bloggers have advertising on their blogs. Investments include hosting,marketing, staff, and paid contributors. Among those with advertising, the mean annualinvestment in their blog is $1,800, but it’s paying off.Bloggers are sophisticated in using self serve tools for search, display, and affiliateadvertising, and are increasingly turning to ad and blog networks. Many bloggers withoutadvertising may consider it when their blogs grow – the inability to set up advertising willnot be a factor. Bloggers invest significant time in creating and updating their blogs, as wellas driving traffic and retaining their audiences. One in four bloggers spends ten hours ormore blogging each week.So if we consider the blog as a “Revenue Generating Unit”, now more than ever, blog ownerscan raise capital by issuing and trading shares like any other company.Average Blogs Investments: (Source: Technorati.com): US$ Dollars invested in blog over past year How many dollars have you invested in your blog over MEAN MEDIAN MAXIMUM the past year? ALL $1,020 $50 $200,000 U.S. bloggers 635 80 75,000 Europe bloggers 2,140 15 200,000 Asia bloggers 940 30 70,000 Corporate bloggers 3,790 200 200,000 Bloggers with advertising 1,800 100 200,000 Bloggers without advertising 100 0 5,000Average Blogs Revenues: (Source: Technorati.com): Annual revenue from blog (US$) What is your annual estimated revenue from advertising on your blog? MEAN MEDIAN MAXIMUM U.S. bloggers $5,060 $200 $350,000 European bloggers 9,040 200 324,000 Asian bloggers 7,440 120 250,000Blogs are an increasingly attractive platform for advertisers. The majority of bloggers wesurveyed have advertising on their blogs. Marketers realize that bloggers are creating highquality content and attracting growing, loyal audiences. 20 | P a g e
  22. 22. Bloggers with advertising are even more sophisticated in terms of their use of tools,advertising platforms and even events to build reader loyalty. They also invest moreresources (both time and money) in their blogs.Active bloggers receive CPMs for advertising on their site on par with large online mediapublishers (although the median is considerably lower). On the other hand, some targetedblogs are enjoying double-digit CPMs. CPM US$ (cost per thousand impressions) What is the average CPM that you receive for advertising on your site? MEAN MEDIAN MAXIMUM U.S. bloggers $4.20 $1.20 $30 European bloggers 3.31 0.55 50 Asian bloggers 6.21 1.3 55 (Source: Technorati.com)More blogs are raising venture capital. In 2008, VentureBeat (a blog) reported raising$320,000 from aVC investment. In 2007, several blogs raised considerable VC investments:Sugar Inc. ($10 million), GigaOm ($1 million), Xconomy, Blogher ($3.5 million) and TheHuffington Post ($10 million). That’s at least $25 million in 2007 invested in popular blogsand blog networks that are registered as official companies.Target MarketBlog SouQ is targeting “Active World Wide Blogs with Advertising Revenues”. We aretargeting low-revenue blogs that are not registered as companies yet and whom owners arekeen to receive relatively small amounts of investments in order to grow their blogs andincrease their revenues to be more attractive to VC investors.To calculate the market size in dollar value (Source: Technorati.com): – 184 million blogs world wide – 133 million blogs indexed at Technorati.com – 7.5 million active blogs – Over 50% are with advertising revenues – Average annual blog revenue is $7,000This means that our target market includes only 3.75 million (50% times 7.5 million)activeblogs with advertising revenues, each with average annual revenue of $7,000 which yields in$26.25 billion as the annual dollar value of our target market.On the other hand, according to Universal McCann (March 2008) worldwide blog readers areestimated to be 346 million readers.Blog SouQ is targeting to attract a 10% share of the active blogs market with advertising inthe first 5 to 7 years, and 0.5% of blog readers market. Detailed forecast are provided in thefinancial section of this business plan. 21 | P a g e
  23. 23. C.2. CompetitionCompetitorsTipJoy.comTipJoy.com competition to Blog SouQ could be summarized by its ability to enable blogowners to raise money from their readers in the form of “Tips”, and to enable readers tosupport blogs that they love by giving them some donations as tips.TipJoy applies the idea of a “tip jar” on blogs and other content sites to help bring in a fewextra dollars for bloggers. Their donations and payouts are made through PayPal, and thereare a number of plugins for various blogging platforms to make the process easier.TipJoy is designed to make it even easier to get people to click that tip button. Readers arenot required to create an account or have a PayPal account to leave a tip, so there is littlefriction to them getting started. If they want to leave a tip they just click the button and typein their email address.If you leave a tip as a new user, you start to build up an account debit, although no one comesafter you if you choose to skip out on the bill. You can eventually pay that off via PayPalwhich gets 2% of the tip, and TipJoy keeps 3% of the tip.You can also start to ask for tips on your own site, and anything people leave for you offsetswhat you’ve given to others. The TipJoy site shows popular sites that have received a lot oftips, and you can also send any URL or email a tip directly as well. As a tipper, you canchoose the amount you’d like to tip by default (starting at ten cents). Then, every time youclick the tip button on a participating site, that amount is added to your bill.If you want to cash out of your tips you can choose to either receive an Amazon gift card ordonate the amount to charity. For now, you can’t receive cash since the company wants toavoid becoming a regulated money transfer service. In the FAQs they suggest they’ll beadding this functionality eventually.TipJoy was part of Y Combinators winter 2008 funding cycle, and in September 2008, it hasclosed a $1 million Series A funding round. The round was led by New York-based seedstage investor Betaworks and also included the Accelerator Group, David Shen Ventures, andprivate investors Chris Sacca, Taavet Hinrikus, and Ron Bouganim.BlogShares.comBlogshares.com competition to Blog SouQ could be summarized by its ability to enable blogreaders and financial investors to make money out of their favorite blogs, and to enablebloggers to involve blog readers to help promote their blogs.Blogshares.com is a fantasy stock market where blogs are the companies. Players investfictional dollars in a wide spectrum of blogs. Blogs are valued by both incoming andoutgoing links, and can add value to other blogs by linking to them. Prices increase ordecrease based on trading and the underlying value of the blog. Although real blogs are 22 | P a g e
  24. 24. listed, but no actual ownership of blogs are transferred. BlogShares.com is purely a fictionalmarketplace for entertainment purposes only.Players can basically play for free with transactions limits that prevent them from conductinghigh number of shares selling and buying. Premium membership is available to removetransaction limits and give access to some powerful tools to help players level up in theirscores. Memberships available: $2.95 per month $7.95 for 3 months and our most popular purchase $15.00 for a full yearHowever, people can make real money out of this by selling B$ trillions (Blogshares fictionaldollars) for real-world dollars on eBay and via direct sale.Blgoshares.com fans have created hundreds of blogs to discuss prices, market trends, stocksanalysis, and to educate new players how to get started and how to make money.BlogShares was written in early 2003 by Seyed Razavi in his free time. The overall objectiveof BlogShares was the exploration of an emerging social network while providing anaddictive and fun environment for bloggers to join and help add to the worth of the socialnetwork. Another one of the purposes of this site was to prove the Power Law theory. Part ofthis theory is based on the fact that 20% of the population holds 80% of the wealth. This canalso be attributed to weblogs, 20% of the blogs contain 80% of all incoming links.BlogShares hits a home run with this theory.BlogShares was taken over by its current owner, Jay Campbell. Blogshares.com now has40K active users, over 17K blogs have been claimed by their owners and 7.3 million blogstracked.Competitive AdvantageBlog SouQ’s sustainable differential competitive advantages give us an edge over the abovementioned rivals and it presents a greater value for blog owners, blog readers and investors.Blog SouQ was created in a way that makes it difficult for competitors to neutralize thoseadvantages.To clearly identify our competitive advantages, we went through abstract thinking sessions.We were able to identify the real value of what we are presenting to the market. This couldbe summarized in the following: – Enabling blog readers to financially participate in the development of the blog sphere. – Enabling the public to invest in popular blogs in very early stages before they become registered public companies to maximize return on investment. – Enabling blog readers to make money out of their favorite blogs by trading blog shares and/or by getting part of their annual revenues.On the other hand, – Enabling blog owners to raise funds/investment from their readers and from other financial investors without being registered entities. – Enabling blog owners to involve their blog readers to help promote their blogs. 23 | P a g e
  25. 25. – Enabling blog owners create and retain loyal readers by giving readers the opportunity to own the blog and partner with its original owners.Blog SouQ actually solves the basic problem: How to issue and trade real shares of blogswithout being registered companies? We have provided an innovative totally new model ofstocks and a secured process to trade those stocks.Our core competency that differentiates us from our competitors is the ability to help blogowners raise real (unlike Blgoshares.com) and considerable amount of capital (unlikeTipJoy.com) from the public to improve the blogs performance and to increase theirrevenues.Barriers to Entry and Future CompetitionAfter consulting with local patent consultants, we found out that this idea could be filed as abusiness method patent. If filed in the USA, our new stock type and new process will beprotected from copiers. Although people will still get around it by changing some features orsteps in the whole process and copy the concept, but we think this patent will at leaststrengthen our position in front of VCs.We still don’t have enough financial resources to hire an IP lawyer and file a patent. Untilthen, we plan to file a provisional patent (which is valid for only one year) directly aftersecuring basic required capital targeted by participating in business plan competitions andlocal grant programs.Blog SouQ is also backed with a huge technical barrier to entry. To develop our aimedsolutions, top technical experts are needed. We started negotiating with a technical partnerthat has an existing web analytic system (Woopra: that generates live detailed statistics aboutthe visitors to a website) to reduce our time to market and be the market leader in blog publicinvestment market that we are looking to create.Directly after filing the provisional patent and after developing our beta version, we will startmassive proactive direct sales campaigns by contacting potential bloggers via emails andVoIP calls to promote using our services of raising public capital. We will ask listed blogowners to place our button (with logo) on their blogs. The purpose is to quickly build ourbrand and get the maximum market share to make it harder for new comers to get largeshares in this market.SWOT Analysis Strengths Innovation – Blog SouQ has an innovative trading model and a new equity stock type that was created specially for blog stocks and solves the blog owners’ basic problems. Strategic Partnership – Blog SouQ has started developing a partnership agreement with Woopra, a web analytics service provider to build on their experience to create our web auditing and valuation solution. This will reduce our 24 | P a g e
  26. 26. time to market and will leverage Woopra’s team experience in web analytics. Ease of Use – Our trading platform will look and feel the same way investors are used to in traditional online stock market. There are no sophisticated special functions and activities to be learned. Access – Our system can be used from anywhere in the world without downloading any software. Any browser on any system can be used to tap into the full potential of Blog SouQ. Cost Effective Marketing – As detailed later in this plan, our creative marketing strategy will enable us to promote Blog SouQ with minimal advertizing expenses. Committed and Experienced Team – We are a highly committed professional team with diverse business and technical expertise to start Blog SouQ.Weaknesses Lack of International Level Leadership – Blog SouQ’s team is experienced enough to start it, but none of us could take it to grow and compete globally, that’s why we are planning to give equity to attract an international CEO with related experience. Time to Market – Although we are partnering with Woopra, we will still need relatively long time to develop our beta version (one year).Opportunities Clearly Defined Target Market – We have clearly defined market characteristics and managed to segment the market by narrowing it to identify our niche target market. Increasing Number of New Blogs – According to Technorati.com, number of new blogs is doubled every 6 months. We are looking into an exponentially growing market. Bloggers Pain – Experienced bloggers face huge challenges to convince venture capital investors to invest in their officially registered blogs as companies, so what about new unregistered blogs? Tap into new relevant markets – Blog SouQ’s innovative platform is not exclusive to blogs. We plan to tap into similar markets once our business model picks up. This can prove to be a huge opportunity in the long run for Blog SouQ. 25 | P a g e
  27. 27. The Global Financial Crisis – In lieu of the current economic crisis, investors are looking for new financial investment opportunities.Threats Competition – Currently there are two main non direct competitors. One of them is very similar to our concept and with long experience in this field but as a fantasy game. So it could convert to trade blog shares for real money. Regulations and Legal Issues – There are different public investment regulations in different countries that we might have to comply with. 26 | P a g e
  28. 28. C.3. Need for Market ResearchOur idea is new and still not tested in the market, so we need an extensive market researchtargeting potential clients (bloggers and investors) to collect feedback from a focus group.This would result in solidifying our existing process, business model and marketing plan.During the development of Blog SouQ, and after filing a provisional business method patent,we will start discussions on popular blogs about the idea, and collect and analyze allcomments and feedback from blog owners and readers. We will also work on collectingfeedback from financial investors who use online trading platforms.After developing the beta version, we will offer a number of blog owners incentives to listtheir blogs by waving our commissions. We will also incentivize a number of investors tobuy shares by guaranteeing their capital investment in specific blogs if the prices go down.Our purpose from this is to create a real world test group to collect practical feedback frompeople who are using Blog SouQ with their own money.Continuous development is one of our core values. Although initially we will not include abudget for R&D, after developing the beta version, our core developers will be dedicated towork full time on next versions of Blog SouQ. 27 | P a g e
  29. 29. D. THE PRODUCT OR SERVICED.1. Products and Services DescriptionBuilding on our knowledge and experience, and after consulting with domain experts fromregional and international stock markets, we have developed solid trading processes forwhich we are developing two main web technologies: Blog Auditing Solution, and OnlineTrading Platform. The detailed process and the two web applications along with our plannedcustomer services strategy and the business model are described in the following sections.Type of Tradable SharesWe are introducing new type of shares because of the special nature of blogs and theirbusiness models. Although our new share represents equity in the blog, it’s treated as a“Revenue Share”, not as a “Net Profit Share”. i.e., dividends will be distributed directly fromadvertising revenues not from blog’s net profits.Why? Simply, because in the case of blogs, which are not registered companies, onlyadvertising revenues are auditable and can be tracked by our web auditing solution. Cost ofdeveloping and operating the blog cannot be audited online, they will need official financialstatements and traditional financial auditing, which will be a nightmare for us because blogsare not legal entities or companies, and a nightmare for personal bloggers who might noteven know anything about financial management and accounting.Bloggers will be allowed to sell up to 50% of reveuve shares in their blogs. We have comewith this percentage based on the fact that average blogs cost 25% of their revenues (Source:Technorati.com). Thus, for bloggers to cover their cost and get at least 100% return on theirinvestment, they cannot sell more than 50% of their blogs. This way we can guarantee thatbloggers will still have stake in their blogs and will keep working on enhancing the blogsperformance.When blog owners decide to exit the market and convert their blogs into officially registeredcompanies to receive VC investment, all shares in the market should be bought andconsidered part of the investment.Blog Auditing SolutionOur blog auditing solution is a critical building block in our business model. Public tradedcompanies always need external auditing firms to gain investors trust.Since all blog revenues will come directly from online advertising, online sales and onlinesubscriptions, our auditing solution will investigate all web tools that can give accurateestimates about money generated by a specific blog, or money that could be generated by thisblog.Our solution, which will be developed in partnership with a web analytics provider: Woopra(detailed later in this plan), will investigate: Web Stats, Web Traffic, Members, SearchEngines Optimization, RSS Feeds, links to the blog, its click through rate, number of adclicks, number of sales leads directed by this blog, and number of sales transactions directedand/or conducted via this blog. 28 | P a g e
  30. 30. In addition, the auditing solution will investigate the blog’s content regarding its quality andquantity. For quality, it will evaluate its content by comparing it with the most searchablekeywords on the net regarding specific sectors such as: politics, science and technology,fashion, music, etc…. For quantity, it will simply measure how often the blog is updated withquality new posts and comments.Blog SouQ will provide live instantaneous performance and auditing reports about all listedblogs. We will generate industry/sector average performance measures for people tobenchmark with when they want to evaluate any new blog.Online Trading PlatformThis solution will be very much similar to any online stocks trading platform, except forsome modifications needed to match our new blog-ad-shares concept.This solution could be developed utilizing already existing open source systems to save timeand effort. Trading will be conducted on the blogs’ stock charts and live performance andauditing reports will be easily accessible from those charts.Listing ProcessFor any blog to be listed on Blog SouQ, it has to meet our criteria of “Accredited Blogs”.Accredited blogs are blogs that: - Use one of the automated advertising networks such as: Google Adsense Commission Junction, LinkShare, Shareasale, ClickBank, etc…. - Have at least 500 unique visitors per day - Have been active (at least weekly new posts) for at least one yearIPO process starts by either bloggers, or Blog SouQ team. Bloggers who already know aboutour stock market can approach us online. Our team will act proactively by scanning blogs onthe net looking for potential blogs to be listed, contacting them to introduce the concept andincentivizing them to list their blogs.Next, blogs will be tested against our above mentioned criteria. Then bloggers will be askedto send us the username and password of the blog’s domain name, in order to transfer thedomain name to our hosting partner. Passwords will be changed so that only Blog SouQ willhave full control over the blog as a third party to protect all shareholders’ rights.After that, blogs will be audited and valuated by our web auditing system. The output reportwill give summaries and analysis of the blog history for the last year of operation regardingtechnical and business aspects. It will also suggest the IPO price per share.If bloggers agree on the IPO price, and indicate how many shares (up to 50% equity) theywould like to list, the report will be published to all public investors, and the blog will belisted on our online exchange for investors to view.Trading ProcessWhen blog shares are listed, investors (users) can buy and sell those shares online. They cansearch for specific blogs, or browse blogs by sector, by annual revenues, or by keywords.Investors can choose a blog and view its share price chart. They will be able to trade on the 29 | P a g e
  31. 31. chart and conduct all required functions from there such as: viewing the blog’s auditingreport, bid for a sell/buy price, place a limit-up/limit-down constraints, etc…Prices of blog shares will go up and down depending on the blog’s performance and itsability to generate more revenues or based on investor interest and bids. Basic (free) liveperformance reports about all listed blogs using our web-auditing system (described above)will be published to all users, while detailed reports (paid) with analysis will be onlyaccessible to subscribed users.All blogs advertising revenues will be directed to a specific bank account created andcontrolled only by Blog SouQ. Bloggers will get 50% of the collected revenues on monthlybasis. The other 50% will be saved in the blog’s account until the end of the fiscal year. Atthe end of the year, revenue dividends will be distributed to all shareholders of the other 50%including bloggers (if they kept a share for themselves in the other 50%).Investors can keep their shares until the end of the fiscal year to get their dividends, and theycan sell (trade) their shares to other investors.For the IPO shares, prices will be fixed and investors can buy on “first come first served”basis. While for the shares trading after the IPO, investors will trade in a free market whereprices will depend on demand and supply and on blogs’ performance.Customer ServiceAfter developing and testing our beta version, and after reaching considerable number oftransactions per day, we will establish Blog SouQ’s customer service department.Our customer services will be mainly a 24/7 live chat support. We will be facilitating onlinemonetary transactions. So to avoid any serious problems, and customer bad experience, allcustomer inquiries should be answered immediately to satisfy and even exceed our users’expectations.Business ModelOur business model is simple and straightforward. We will charge the seller 5% salescommission on any sales transaction. Blog owners will not be charged any setup or listingfees, and investors will not be charged any access fees to trade blog-shares. No subscriptionfees will be charged to view the basic blog reports and charts. However, we will chargeinvestors an optional annual subscription fee of $10 to be able to access our detailed liveblogs audit and performance reports for any blog listed. ($5 will be given to our WebAuditing partner Woopra, while $5 will be retained by Blog SouQ).The blog owner will not be charged any IPO or listing fees, but will be charged a salescommission of 5% when a sale is conducted on our platform. Investors will not be chargedany commissions when buying blog shares. However, they will be charged the 5% salescommission when they sell their shares to other investors.Our business model also includes advertising services on the trading platform and on the blogreports pages. We will not be dependent on advertising revenues in the startup phase. Tofocus on our basic business model, and on customer service, we will use third party affiliateadvertising networks. The following is the General Blog SouQ Process Flow: 30 | P a g e
  32. 32. Sales and Marketing Direct Sales Online Marketing Investors Staff Contact Bloggers Contact Subscribe on Blog Bloggers Blog SouQ SouQ Blog Not Ready Initial Ready TestInvestors Contact Blog Auditing Blog SouQ Report Blog IPOSuggestions to Get Valuation and IPO Ready Price Blogger Specifies No. of Shares to be Listed (up to 50%) Blog Domain Name and Ad Revenues Transferred to Blog SouQ 50% of Ad Revenues will be Transferred Monthly to Blogger The other 50% will be kept with Blog SouQ till the end of the Fiscal Year, then will be distributed to Shareholders Investors View Blog will be Listed IPO Blogs & their Stock Market on Blog SouQ Reports For IPO: Fixed Share Price First com first served Money Investors Buy Transferred to Shares Blogger Investors View Quarter Blog Reports No Sell? Yes Get Revenue Dividends at the End of the Year Stock Market Offer Shares in the For non-IPO: Free Market Environment Market (Supply and Demand) Rev. up, Demand up, Price up Other Investors Rev. down, Demand down, Price down Buy and Sell Shares 31 | P a g e
  33. 33. D.2. Product DevelopmentTechnology UsedBlog SouQ will intensively use open source technology unless a proprietary solution provesto be a better choice. Blog SouQ’s CTO has around a decade under his belt building andmanaging software development using open source technology. He’s a frequent instructorand speaker in open source events around the world.Open source has proven to be a very important factor in saving IT costs. The examples ofGoogle, Facebook and Yahoo are almost entirely reliant on open source technology.The main technology stack to be used is LAMP. LAMP covers most of technology that willbe used for Blog SouQ, and it stands for the following: – Linux: an open source operating system. – Apache: The world’s most widespread web server. – MySQL: An open source database engine powering the most scalable websites in the world – PHP: A general purpose programming language, designed for web development. Facebook and Yahoo use PHP for their web development.Strategic PartnershipWe are negotiating a strategic partnership with Woopra (woopra.com). Woopra is a real-timeweb analytics system and quite comprehensive. We see that Woopra can help greatly indeveloping certain components/modules that can save a lot of time, and save ourdevelopment resources for other tasks.The main goal of the partnership is to have Woopra expand on their traffic analytics reportand generate a custom report that will serve as our blog audit report to be published when ablog signs up on Blog SouQ, and create live audit and performance reports for Blog SouQinvestors.Technical OverviewBlog Souq software components:Trading EngineA high performance distributed trading engine that allows trading stocks in real time. Theonly interface to this system is through the web portal.Blog SouQ Backend PortalThis backend will be accessed by Blog SouQ’s team to manage information on the portal,manage bloggers, manage investors, and access internal reports and any other portalmanagement future.Blog SouQ PortalThis will be the destination where bloggers and investors go to accomplish their goals. Alldevelopment will be designed from ground up for internationalization capabilities so that 32 | P a g e
  34. 34. when the business development unit decides to introduce the service in a new language, it’llbe merely a task of translating the interface rather than a rewrite or a huge change in thesoftware.The portal is divided into the following sections:Sign Up:Bloggers and investors sign up. If a blogger decides to sign up, the portal takes the bloggerthrough a series of steps to explain the IPO process and Blog SouQ’s regulations.Listed Blogs:This section will show all listed blogs. The investor can choose to view basic (free) or in-depth (paid) live information about any blog including our audit report. All relevant historicaland trading information can be found as well.Payment Module:An online payment system that integrates with payment gateways to allow investors totransfer payments to Blog SouQ. Payment methods may include credit cards, PayPal or wiretransfer.Trading Area:From this section, the investor can buy/sell shares.Corporate Information:Information about Blog SouQ, the team, investment opportunities, financial reports …etcSupport:Support area with FAQs, knowledge base, guides, and possibility to contact support team forany other enquiry.Blogger Area:Blog owners will have an area to manage the settings and trading information of their blogs.This also allows owners to communicate with investors. It’ll also include any alerts, or up todate news regarding blogs.Investor Area:This will be similar to the “portfolio” section of traditional trading platforms. Investors cansee their portfolio and other relevant information in this section. A detailed report ofrevenues and revenue earned for investors will be shown in this area as well.User RequirementsAny user with basic computer skills can fully use Blog SouQ as either a blogger or investor.The online system is accessible using any browser on any computer.Development MethodologyDevelopment will follow an iterative incremental process called SCRUM for managing oursoftware development activities. Scrum is a "process skeleton," which contains sets ofpractices and predefined roles. 33 | P a g e
  35. 35. SCRUM has the following attributes: – Scrum is an agile process to manage and control development work. – Scrum is a wrapper for existing engineering practices. – Scrum is a team-based approach to iteratively, incrementally develop systems and products when requirements are rapidly changing. Blog Souq needs to identify and implement features very quickly in order to serve the exponentially growing blogsphere. – Scrum is a process that controls the chaos of conflicting interests and needs. – Scrum is a way to improve communications and maximize co-operation. – Scrum is a way to detect and cause the removal of anything that gets in the way of developing and delivering products. Efficient and focused development means the success or failure of Blog SouQ. Using SCRUM ensures that we are focused and any obstacles are acted upon instantly and resolved. – Scrum is a way to maximize productivity. – Scrum is a way for everyone to feel good about their job, their contributions, and that they have done the very best they possibly could. Employees’ satisfaction is top priority to Blog SouQ’s management team. We need to make sure everyone is happy and they are well appreciated and trusted. From the previous attributes, we can see that SCRUM is very suitable for Blog SouQ’s dynamic small team. It also copes very well with requirement changes and the nature of Blog SouQ web development. In a nutshell, SCRUM is all about delivering a high quality running product every 30 days increment. This works very well with the web trend of release early, release often. Bloq SouQ intends to release new development changes every one month. The SCRUM process (source: controlchaos.com) 34 | P a g e
  36. 36. D.3. Identifying Costs / Manufacturing and OperationsPre-Startup CostAs explained below in the startup summary, our startup cost will be basically covering BlogSouQ expenses for 6 months before we hire any employees. Founders will be working fulltime on it. This will include the following items: Item Cost Founders Salaries (2,000 per each x 3 x 6 months) $36,000 Incubator office rent (including fully furnished offices, internet and utilities) $1,200 Patent filing and legal consultation fees $20,000 Others $2,800 Total $60,000Operating CostThe detailed operating costs over the next five years are provided in the financial section.Following is the summary: Positions Year1 Year2 Year3 Year4 Year5 Payroll Totals 203,490 283,815 549,007 603,907 664,298 Capital Totals 0 0 0 0 0 Expenses Total 21,751 74,051 166,551 305,551 462,551 Total ($) 225,241 357,866 715,557 909,458 1,126,849 35 | P a g e
  37. 37. D.4. Risks and RegulationsTeam RiskBeing a small startup company, employees might not feel job security. Staff members mightfind a better job offer and simply leave us any time. To overcome this problem, we plan tointroduce an ownership structure for our employees, and we already included an option poolof shares above in the company’s ownership structure section.In addition, while developing our application, we will insist on having a content managementsystem that allows any team member to catch up with previous efforts and continue on theplanned schedule. This way we will not have serious problems with essential team membersleaving the company any time.Regulations RiskOne of our biggest challenges is complying with several different public investmentregulations in different countries. Especially in Jordan, where there are previous publicinvestment companies that were shut down by the government because of continuouslychanging regulations. To mitigate this risk, we are consulting with an international lawyer torecommend the best country to register Blog SouQ. However, we can always operate fromJordan as a registered regional office of the mother company to take advantage of the lowsalaries and high quality of technical professionals.Another legal issue is related to the tax authorities. Although blogs are individual non-officialbusiness, but some countries require financial records of all income resources of citizenseven if conducted online. So we will be archiving all financial transactions on our systemsand provide annual reports to individuals and/or government authorities.Execution RiskTo reduce time to market, to avoid reinventing the wheel, and to avoid any serious executingrisk, our developers will not start building the solution from scratch.As detailed above, we have partnered with a blogs analytics company that has been operatingin the market for 3 years. They have already developed, tested and promoted their webanalytic application. We are negotiating with them a partnership agreement in which they addmore components to their system that are required for Blog SouQ’s operations regardingfinancial auditing of blogs for a share of revenues. Then we will integrate the new releaseinto Blog SouQ. Our technology partner will get a percentage from our auditing reportsrevenues.Online trading platforms are not a new concept hence will depend on existing open sourcecomponents that could be customized to suit Blog SouQ’s business functions.In other words, our developers will be working on integration and customization more thandeveloping totally new web technologies from scratch. This will ensure simplifying andaccelerating our execution plan. 36 | P a g e
  38. 38. Technology RiskWe are aware of the need to run an IT infrastructure audit and web applications audit onperiodic basis to ensure that our technology infrastructure is perfectly maintained and up todate.Blog SouQ platforms will be developed using the latest web and software technologies withtop level experts hired to work on it. Our internal HR strategy will offer developers ongoingtraining to be familiar with any new technologies that emerge in the market and couldcontribute to the development of Blog SouQ platforms to keep us ahead of any new entrycompetitor.Capitalization RiskDelay in raising required investment will not affect our commitment and persistence topursue our dream. However, this delay will affect our time to market and our ability toacquire needed resources to develop a high quality application.To mitigate this risk, and in parallel with pursuing seed VC investment, we are targetingrequired funds from grant programs and business plan competitions. 37 | P a g e
  39. 39. E. MARKETING AND SALESE.1. Marketing PlanCompany MessageAll our marketing efforts will be targeting blog readers, the buyers and potential investors.Blog owners will be targeted by our direct sales operation because they are the sellers, theones who will pay our commission.Building on Blog SouQ’s mission, we will emphasize the concept of empowering people todevelop the Blogsphere ecosystem in our marketing message.As a blog reader, Blog SouQ will help you to participate in sustaining, developing andpromoting your favorite blogs. It will also enable you to invest in and promote those blogs.Strategic Position and Brand BuildingOur suggested slogan is: “Invest in blogs that you love”. This slogan will encourage both:blog readers to invest in their beloved blogs and it will encourage blog owners to promoteBlog SouQ indirectly by asking their readers to invest in their blogs.We have developed a free branding tool to ensure that Blog SouQ will be known forinvestment in blogs within a very short period of time. In our direct sales communication viaemail and VoIP calls, we will encourage them to add a specially designed button with BlogSouQ logo on it in their blog pages saying:“Love this blog? Invest in it”.Marketing Strategy, 4Ps Product: (Solution) We believe that a product is all about solving a problem. For blog owners, Blog SouQ simplifies the process of accessing public investments. Blog SouQ offers new investment opportunities to the public. Investors can buy and trade blog-shares in a safe, secure and friendly online environment. Our legally safe trading process can guarantee protecting everyone’s rights. Our secured payment tools will create trust in conducting business deals. Our interactive, friendly and easy to use interface will allow any user with little financial and technology literature to use and benefit from our services Place: (Accessibility) Our market and all related services will be fully conducted online. Thus, it could be accessed from anywhere any time, even from mobile phones. There are no special technical requirements that can’t be easily attained, and no desktop installation will be required. In addition, blog readers will find links to our market in their favorite blogs that directs them to those specific blogs charts. They will also have the ability to receive price alarms based on their choice on their mobile phones or their emails. 38 | P a g e

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