spark! Culture Cave Business Plan


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Throughout the Spring 2012 semester, I worked with three classmates to develop an in-depth proposal for a start-up for my Business of Design class. Our business, called spark!, is a manufacturer of a children's cultural education product called Culture Cave. On this team, I supported graphic design, research, and writing tasks.

After three months of hard work and dedication, we summarized our project in a detailed business plan.

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The spark! Culture Cave is a cultural immersion experience for kids between the ages of 6 and 10.

At the core of this idea is:

• an iPad app that features a new traditional story each month. the culturally-rich story provides context for a wealth of ancillary information, games, and activities included in each app.

• a sound-equipped tent with velcro walls that kids can decorate with a world map, architectural cut-outs, and other country kit materials. this is a place a child can claim as a kids-only cool hangout.

• monthly country-specific activity kits filled with open-ended, and hands-on activities that a child will look forward to

We at spark! believe that the best way to teach kids about culture is through traditional stories enhanced by interactive, open-ended, and hands-on activities that spring from that narrative.

Published in: Design, Education, Business

spark! Culture Cave Business Plan

  1. spark! Culture Cave B u s i n e s s P l a n Aysegul Kacar Allison Leach Shalini Sardana Lisa Woods California College of the Arts | Business of Design | Spring 2012
  2. Industry OverviewCurrent Market TrendsChildren are overloaded with entertainment options. From comic books toiPad games, the landscape for toys is vast and varied. Ours is a unique timeperiod in which traditional hands-on games compete with novel interactivesoftware.Yet the ways in which children learn about culture are often via disparateand disconnected experiences. A child’s first encounter with a foreign Discoverycountry might take place in trying a new food or listening to a new song.Maybe he or she will complete a Google search afterwards, or ask a trusted Disconnectadult to learn more. But chances are, the child’s learning experience isshort-lived and incomplete.Few products on the market take advantage of today’s unparalleledopportunity space to integrate traditional and modern interactive tools in acultural transmedia learning experience.The Missing Link LearningChildren are curious about new cultures and enjoy a mix of entertainmentoptions, from non-tech to tech.Parents want to teach their children about the world, but have limitedknowledge and time.Culture Cave offers a holistic transmedia learning experience?2  spark! Culture Cave
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  5. The Solution: Culture CaveOur Value PropositionThe spark! Culture Cave is a cultural immersion experience for kids betweenthe ages of 6 and 10.At the core of this idea is: • an iPad app that features a new traditional story each month. The culturally-rich story provides context for a wealth of ancillary information, games, and activities included in each app. • a sound-equipped tent with Velcro walls that kids can decorate with a world map, architectural cut-outs, and other country kit materials. This is Our Mission a place a child can claim as a kids-only cool hangout. To be the leading provider of fun, holistic, immersive and interactive cultural • onthly country-specific activity kits filled with open-ended, and m education for children. hands-on activities that a child will look forward to Our VisionWe at spark! believe that the best way to teach kids about culture is through To help raise the next generation of global citizens.traditional stories enhanced by interactive, open-ended, and hands-onactivities that spring from that narrative. Our Values We will always put kids first. We will provide multicultural education that is fun and promotes respect. We will encourage children to continuously explore and question. spark! Culture Cave  5
  6. target marketCurrent iPad Market (US) • Parents own approximately 61% of all iPads. projected • n 2012, parents owned 25.5 million iPads. I 60.8 million iPad users ( 2014 ) • verall iPad ownership is on the rise­­­with a O projected 31% growth by 2014. The total number of iPad-owning parents will likely 41.9 million all iPad owners increase proportionally to 37 million by 2014. ( 2012 ) • pproximately 40% of all school children in A the US are between the ages of 5 and 9. • e thus estimate our total market—iPad W owning parents with children between the ages of 5 and 9 in the US­ to be around 10 — 25.5 million iPad owning million. parents • f that population, we will target 1 million O ( 2012 ) people in Phase 1.Sources: 1 million our targetNew Media Trend Watch, April 2012 marketThe Financial Telegraph, April 2012National Center for Education Statistics, 2011New Media Trend Watch, April 2012The Financial Telegraph, April 20126  spark! Culture Cave
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  8. researchiPad User Experience Trends Among Professionals 2012 Tablet Market (US)IDG Connect “iPad for Business Survey 2012,” January 16th, 2012 Wired Magazine, January 6, 2012 • 60% of iPads never leave the home (US). • Apple holds 73% of the U.S. tablet marketshare. • 70% of iPad usage occurs in the living room (US). • 79% of professionals say they “always” use their iPad on the road 2012 iPad Demographics (US) (globally). Silicon Republic, February 17th, 2012 • The proportion of professionals who describe their iPad as a “complete” • study from The NPD Group suggests that iPad owners are older and A or “partial” substitute for TV/DVD players, games consoles and MP3 richer than other tablet owners. players ranges between 30% and 40% (globally). • f survey respondents who have an income of US$100,000 or more, O • Nearly 75% say that owning an iPad has reduced the frequency with 40% owned iPads and 26% owned other types of tablets. which they purchase newspapers and books (globally). Half say that • onsumers who were buying tablets towards the end of last year were C owning an iPad means they are less likely to purchase films on DVD. 50% more likely to have an income of less than US$45,000, while 33% These markets for physical media are already in decline. Based on this were more likely to be under 34 years old, CNET reported. evidence, tablet computing will likely hasten their demise.Tablet Spending Trends (US) 2011 iPad Demographics (US), “The Tablet Revolution,” October 2011Adobe Digital Marketing: The Impact of Tablet Visitors on Retail Websites, 2012 • ighteen months after the introduction of the iPad, 11% of U.S. adults E • In an analysis of 16.2 billion visits to the websites of more than 150 retailers in 2011, Adobe Digital Marketing Insights found that those who now own a tablet computer of some kind. visited using a tablet spend over 50% more per purchase than visitors Apple Headlines, “iPad Statistics,” April 2011 who use smartphones, and over 20% more than visitors who use desktop/ • 7.8 million people own an iPad in the U.S. laptop computers. • iPad owners’ annual income: • ablet visitors appear to spend more because of their demographics, the T nature of the tablet user experience, and the environment in which they 6.4% less than $25K 16.4% $75K to $100K shop online. 11.9% $25K to $50K 49.4% above $100K 15.9% $50K to $75K8  spark! Culture Cave
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  10. Stop-animation setup atthe Children’s CreativityMuseum, San Francisco10  spark! Culture Cave
  11. competition Little National Geographic Children’s Kiwi Crate Culture Cave Passports Magazine for Kids Creativity Museum Monthly magazine with Monthly subscription information about animals, Monthly subscription of Monthly subscription of An interactive art and of materials for arts and science, technology, materials that encourage materials focused on learning technology museum for kids crafts, science activities, archaeology, geography, learning aboutPrimary and open-ended play about other countries and pop culture - plus jokes, foreign cultures For kids ages 3 to 12Offerings games, and activities. For kids ages 5 to 10 For kids ages 3 to 7 For kids ages 5 to 10 Memberships range from For kids ages 6 to 14 $10.95 to $13.95/month $69 to $159/year $19.95/month $35 to $45/month $15.00/10 issues The museum offers many Culture Cave offers Includes a letter from hands-on activities. Founded by a former eBay a dedicated sound- fictional travelers Sam and PayPal executive, a Kids have free online access Membership includes: equipped play space, and Sofia describing their PayPal cofounder, and an to games, videos, photos, iPad-based games and foreign country adventures • e-newsletter ex-Yahoo product manager. “fun stuff” and news. hands-on activities. • exclusive members- Subscription includes only events Kits address specific National Geographic is Kids can share their access to online gamesStrengths developmental areas and activities a well-known and well- • workshops, exhibit favorite work online. such as creating, respected brand. openings and special moving, discovering, performances Parents have access to a Little Passports offers communicating, and caring. National Geographic has • museums store discounts rich online community. parents an “Agent been in business for 35 years Opportunity.” • carousel rides discounts Activities encourage and has strong brand loyalty. Activities are designed for Agents earn up to 30% parent involvement • birthday party discounts both parent and child, as of all personal sales. at the museum well as for the child only. The museum has limited hours from Wednesdays to Kiwi Crate doesn’t address Little Passports mostly Sundays, 10am to 4pm. cultural education. appeals to girls. National Geographic’s Culture Cave costs magazine has little Activities are not more than mostWeaknesses Kiwi Crate has no integrated Little Passports has minimal content and lots of designed to involve both subscription products digital component, no online digital content, no advertising for candy, parents and kids. for kids. online community, and no sharing community, and no video games, and movies. dedicated play space for kids. dedicated play space for kids. The Museum doesn’t address cultural education. spark! Culture Cave  11
  12. Product 1 Sign Up Online  We offer 3 monthly subscription levels.Kids like cool hangouts, they want your iPad, andthey love getting surprises.Imagine teaching kids about cultures from aroundthe world in a cool hangout, through interactiveiPad games and many fun hands-on-activities.Here’s how it works: 2 Receive your Setup Kit  Your Setup Kit will arrive in a 3 Receive your Monthly Country Kit The Monthly Kit couple of weeks. It includes the Culture Cave tent, a world map, a includes a traditional story, hands-on activities, and an iPad app passport, and instructions for the iPad app. secret story code. Each month, a new country is featured.12  spark! Culture Cave
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  15. productThe Unique iPad AppUnlike other subscription products for kids on the market, the Culture CaveApp leverages the iPad’s video, audio, interaction, and camera functionalityto deliver an immersive and holistic cultural educational experience. The Coolest of Hangouts No other subscription service offers Culture Cave’s tent—a place kids can claim as their own, and where they can enjoy an immersive audio experience.A Variety of Proven Activities A Vibrant Online CommunityKids can do Culture Cave activities on their own or with their parents or The Culture Cave website hosts a Forum for parents to share experiencesfriends. Our activities are created by native country experts and then vetted and ideas, a Gallery for kids to upload their favorite works, and a Culturalby educators, parents, and kids. Event Calendar to learn about upcoming happenings. spark! Culture Cave  15
  16. consumer journey map DISCOVER EVALUATE DECIDE Google search Choose a plan Other parents (3-, 6-, or 12-months) Facebook mentions spark! website 30-day money back guarantee Twitter mention Mommy blogs Choose 1 of 3 countries Mommy blogs Free spark! app sample (Phase 3 retail) and other bloggers Customer testimonials Scholastic catalog spark! representative in person Google SEO spark! information packet Parent’s YouTube videos Exterior packaging Experience (Phase 3 retail) Trial subscription for educators iTunes App Store search result spark! local launch event spark! blog spark! community upload page Press releases for media mention (NYT, SF Gate, etc.) Friend mention YouTube video Child’s School event Experience Teacher mention Parent mention16  spark! Culture Cave
  17. CONFIRM OUT-OF-BOX USE SHARE Parents note kids are more Comment on spark! forumOpen access to spark! forum Easy to set up and get started informed and inquisitive Facebook/YouTube/Twitter Confirmation High parental involvement mentions email from spark! Activities bring parents and Both kid(s) and kids together Blog posts 1-week welcome parent(s) involved notification postcard Kids sharing with parents spark! community upload page Thrill of “gift” coming in the mail their creations iTunes review Simple tasks child can do Using code to download new country app word-of-mouth Carrying case for the tent and accessories Parents arrange playdates with Review country on spark! other “Culture Cavers” website 30-minute setup Teacher recommendations Download app Watch online video on tablet for setting up tent Both kid(s) and parent(s) involved Thrill of “gift” package coming in the mail spark! Gallery (showcase of Simple tasks child can do kid-generated work) Kids sharing activities 1-week welcome Carrying case for the tent with each other word-of-mouth notification postcard and accessories spark! Culture Cave  17
  18. Branding Color Palette spark! Logo spark! Brand Attributes Culture Cave Logo cheerful inspiring insightful curious surprising creative silly trustworthy spark! Brand Typeface Brandon Grotesque: Thin Light Regular Medium Bold Black18  spark! Culture Cave
  19. MARKETINGOur Website AwardsOne of the main touchpoints where our customers will learn information To raise awareness for Culture Cave and earn our customers’ trust, we willabout us and interact with us will be our website. In addition to product enter top toy competitions such as:details about the Culture Cave, we will also prominently feature: • Parent’s Choice Award • videos and photos from our customers • Good Housekeeping’s Best Toy Awards • a Gallery for kids to upload their favorite work • National Parenting Center Awards • private Forum for parents to actively contribute to the Culture Cave a community by sharing their stories and experiences. This sharing will We will also strive to be featured in the top app lists of premier tech product allow us to get feedback directly from our users to improve our product. review destinations such as: • a Cultural Event Calendar for upcoming events and announcements • Wired’s App Guide • a blog • CNET.comSocial MediaFacebook, Twitter, YouTube, and Pinterest Eventsspark! Culture Cave will use the power of social networks to raise awareness We will participate in different activities and events throughout the yearamong our future customers. Facebook and Twitter will be utilized to such as storytelling events, play dates, and school book fairs, as well as majorinform people about promotions, surprise packages, events and activities. toy, technology and educational conferences.Social sharing will be encouraged via multiple social media channels withconveniently located buttons. A public YouTube channel will be created for iTunesour customers to post videos about their unique experiences. We will have an iTunes App Store page for downloading our basic app. spark! Culture Cave  19
  20. marketingAdvertisingspark! Culture Cave will run advertisements in different media channelssuch as travel and family magazines, mommy blogs, Scholastic catalog andchildren-focused websites.Complimentary sample kitsWe will reach out to top media reviewers and educators and provide themwith free samples to test our product and generate buzz.Word-of-MouthOur customers will also learn about us through different personalsocial circles such as from children’s classmates, teachers, friends, andother families. “Imagine traveling all over the world from the same place!”20  spark! Culture Cave
  21. BUSINESS MODELWho do we serve? Our Core Capabilities• Elementary school kids •W e are excellent UX designers who have unique international backgrounds for building multicultural education.• Parents of elementary school kids who have a high disposable income • e are modern strategists who know how to integrate familiar media W• Elementary school teachers, administrators, and librarians with emerging technologies in an innovative way. •W e are culturally-sensitive education planners whose enthusiasm forWhat do we provide? teaching kids about new countries respects the inherently complex• Holistic and interactive cultural learning experiences for children nature of cultures.• Our products educate kids about other cultures while they have fun Our key partners • Content creators: authors, editors, illustrators, and programmers. • Manufacturers of physical materials: tent, arts and crafts, etc. • istributors: in addition to our own website, we will be selling our product D through Amazon and Scholastic catalog. spark! Culture Cave  21
  22. BUSINESS MODELHow we provide our product One week before shipment, the parent and child will receive a welcome postcard informing them that their initial Culture Cave package is on its way.Our distribution channels When the package arrives, the parent and child will receive a code to download the Culture Cave app. In addition to downloading each month’sTo begin, we will sell Culture Cave through our own website, Scholastic country story on the app, the parent and child can also access the Culturecatalog and Amazon. As business picks up, we will increase our tablet Cave community using the app.compatibility to include non-iPad platforms. Finally, we will extend ourdistribution channels to include existing stand-alone retail stores, and create After experiencing our products and services, members can visit the spark!a Culture Cave retail store. website to write their feedback and comments in private forums and share their videos and photos.How our customers will discover us One week after the last country kit has shipped, the parent and child will receive a goodbye postcard to thank them for their service and encourage • spark!’s website subscription renewal. • Social media (Facebook, Twitter, Pinterest, YouTube) • Events (from school book fairs to major toy, technology and educational Our Competitive Advantage conferences) • Scholastic magazine How we are different • spark! Culture Cave is a unique experience shared by both the child and parent. While many culture-related products have only one means of • iTunes App Store interaction, our product is accessible on various levels (multisensory and • Ads and reviews in various media channels multimedia), as well as accessible in different environments (the tent, the home, or even the car). • Word-of-mouthHow our customers will interact with us Our sustainable advantageAfter submitting an order, the parent will receive a confirmation email with Other companies could reproduce the Culture Cave tent, activities, or thea link to spark!’s website for online access to discussion forums and other iPad app individually. However, they cannot offer the seamless connectionactivities. between our physical and digital components created by a valuable team of writers and artists native to each country. This holistic approach is our valuable asset.22  spark! Culture Cave
  23. Subscription Plans How we make moneyWe offer three subscription plans. Customers have the option of purchasing We charge our customers for the initial setup kit, as well as monthly countryeither a 3-month, 6-month, or annual subscription. packages and tablet content. Our major costs include: 3 months 3 countries $45 per kit • Software application development • Website development • Payroll • Marketing 6 months 6 countries $40 per kit • Fees to Scholastic catalog for distribution • aterials (tent, Velcro background, country kit materials, and passport) M • ulfillment (packing, mailing, assembly, and warehousing) F • Content development • Platform compatibility and version updates 12 months 12 countries $35 per kit • Patents for our technology and tent spark! Culture Cave  23
  24. FINANCIALS Annual Budget YEAR ONE YEAR TWO Revenue $ 499, 875 $ 999,750 Service Costs $ 156,000 $ 312,000 Overhead costs Salary and $ 195,000 $ 195,000 Administration Marketing $ 78,000 $ 117,000 Vendor Relations $ 74,981 $ 149,962 Support $14,996 $29,993 Total Costs $518,978 $803,955 Annual Income ($19,103) $195,795 Startup Costs $207,000 — Gross Profit Margin — 24%24  spark! Culture Cave
  25. Revenue ProjectionsThe average price for a kit is $40.Having shipped 250 kits per week by the end of Year 1, spark! Culture Cavewill generate $499,875 in revenue.With an estimated of growth rate of 100%, revenue is projected to reach $1million by the end of Year 2. Due to this growth, spark!’s annual income willincrease from a loss of $19,103 to a net profit of $234,795. Budget Distribution for Year One Budget Distribution for Year Two 6% Salaries and Administration 3 2 0% Salaries and Administration 15% Marketing and Public Relations 12% Marketing and Public Relations 14% Vendor Relations 15% Vendor Relations 3% Support 3% Support 3 0% Cost of Services 31% Cost of Services 0% Annual Income 20% Annual Income spark! Culture Cave  25
  26. COMPANY GROWTHPlan of Action Future ProjectionsPHASE 1 End of Year OneIn Phase One, we are planning to sell our product to middle-class parents We plan to sell 12,500 kits in Year One.who live in the US and own an iPad, at a cost of $12 a kit and a goal of 250kit sales per week. We will be selling through our own website, Scholastic End of Year Twomagazine, and Amazon. We plan to double our sales to 25,000 kits in Year Two.PHASE 2In Phase Two, we will develop software compatibility with other tablets andestablish partnerships with gaming platforms such as Wii. We will introducea Netflix-style queue to allow parents and kids to arrange their own list ofcountries.PHASE 3As our business picks up, we will extend our distribution channels to includeretail stores such as bookstores, airports stores, museum stores, toy stores and Airportsspecialty stores - and eventually implement a stand-alone Culture Cave store. Museum Gift Stores More Countries Toy Stores Queue PHASE 1 PHASE 2 PHASE 326  spark! Culture Cave