Gaming’s Portal to the Social Web Investor Brief Q3/2009 Investor Brief Q3/2009
tribe: (n.) a group of people connected to each other, to a leader and to an idea. ∆ ∆ - Seth Godin, 2008
<ul><li>“ Smart innovators find or assemble a movement of similarly minded individuals and get the tribe excited by a new product, service or message, often via the Internet.” </li></ul><ul><li>Seth Godin </li></ul><ul><li> Author, Marketer, and Agent of Change </li></ul>
is interested in organizing tribes, leading them, and providing like-minded individuals with tools to share, interact, and grow their enthusiasm regardless of community affiliation.
isn’t about creating new social destination. Destinations change all the time. We’re interested in creating and fostering tribes that live inside any destination our members choose. 2003 – 2004 – 2005 – 2006 – 2008
Problem w/ today’s social model: Currently, users interested in who belong to Community A cannot interact with users from Community B who are also interested in . has been really busy developing software to solve this problem.
Sounds great, but does it work? As they say, the proof is in the pudding. So let’s dive into the results of our Beta:
was launched into Beta in Q4/2008 and has seen rapid adoption and strong organic growth across supported social networks. As the name suggests, is focused on giving gaming enthusiasts a habitat to communicate, share, and interact regardless of their gaming platform or community of choice.
<ul><li>Why Gaming? </li></ul><ul><li>Web-savvy, plugged-in demographic of early adopters </li></ul><ul><li>Gamers accustomed to share, interact, and sound-off online </li></ul><ul><li>Largest vertical in Entertainment as of last year </li></ul><ul><li>Fastest growing vertical in Entertainment </li></ul><ul><li>We have existing relationships in the Gaming industry </li></ul><ul><li>We’re passionate about the product </li></ul>
Research shows gamers are most interested in the applications: Lotame Innovative Data Reports: Gamers in Social Media – 01/2009
<ul><li>is already making its mark: </li></ul><ul><li>#1 gaming-oriented application on Facebook </li></ul><ul><li>Home to over 1M self-identified gamers </li></ul><ul><li>W/O a marketing budget, adds minimum 2K users/day </li></ul><ul><li>Have a year’s worth of data on members’ product </li></ul><ul><li>ownership, purchasing history, and demographics </li></ul><ul><li>No current sales staff, but already has revenue. </li></ul>
is monetized, has a rolodex, and is ready to grow. If there were no additional sales this year, we’re still taking home $450k in discounted promotion and development fees from our Beta network of Video Game Publishers. With standard pricing, a sales staff, and an expanded client base, we expect next year’s figures to be much higher.
What’s Next? So, before we hit the phones, flex our rolodex, and step out of Beta, we thought it might be best to take a few breaths, step back, and plan our big move. Onto our growth strategy…
First, we took a look at the competition: We’re well positioned as the only social network player, but at a crucial point in our growth… Web-Service Monthly Active Users Funding Raised or Sale Price ($) XFire.com 255,547 102M (Sale) GamerDNA.com 54,191 3M (Funding/VC) Rupture.com 2,469 15M (Sale) Raptr.com 34,010 12M (Funding/VC) IGN 6,836,000 64M (Sale) GameTrailers 647,145 14M [estimated] (Sale) 62,303 600k (Funding/OE)
Then, we took a look at online marketing spends: And despite the economic slowdown, the iron is hot for us to acquire a significant share of 2010’s spend.
<ul><li>In order to stay competitive and continue growing revenue, </li></ul><ul><li>we need to: </li></ul><ul><li>Hire a seasoned senior management staff </li></ul><ul><li>Hire a proven new business development squad </li></ul><ul><li>Increase our development / engineering team’s size </li></ul><ul><li>Organize our operations to support addl. headcount </li></ul><ul><li>Pay down current debts </li></ul><ul><li>Establish and execute a marketing/advertising plan </li></ul>
Current Senior Staff at : Keith McEwen CFO, Human Resources Director Keith brings extensive financial and accounting experience from his CFO/COO responsibilities at All Canadian ATM Services and CashTeller USA. Prior to his roles with the ATM companies, Keith spent time as both as a Lead Analyst and the Director of Quality in Cardmember Services at Bank One (Chase) in Delaware. Keith received an Engineering B.S. and M.Sc. in Physics from Quebec's Laval University, and holds an International M.B.A. from Toronto's York University. Nick Baumfeld Founder and President Nick has devoted the past several years to building his passion for the gaming industry into various viable business products and services. He founded All Canadian ATM in 1998, a white-label ATM placement firm and grew it to an $800K/year company before selling in 2004. He moved on to found and sell IOGC, Canada’s Gamefly, and two brick-and-mortar gaming retail stores. All of these past endeavors built up experience, a strong following, and the valuable intellectual property (IP) that is now the software behind SocialTribes / GameTribe. Lee's career started with a Lead Developer role creating, designing and developing an online pet tracking system (MyPetID), an oil and gas tracking software bundle (PetroQuick). Lee moved on to a firm known as The Code Shoppe, developing products and growing a web consulting business which has become into the highly successful Icona that continues to thrive today. As CTO and Primary Architect of SocialTribes’ proprietary software, Lee leads a development team that has consistently innovated since early 2008. Lee Babin CTO
Who has signed on with ? Geoffrey Mogilner COO, Investor Relations Director A plugged-in Video games industry veteran, Geoff was a leading Interactive Entertainment Industry sell-side analyst before taking his most recent post as VP of Strategic Planning and Corporate Communications at Midway Games in Chicago. Prior to his foray into the games industry, Geoff was an IT Product Manager and consultant with full-line P/L responsibilities. Geoff received a B.A. in International Relations from Tufts University and holds an M.B.A. in Strategy from the University of Chicago. Taylor Host VP, Sales and Marketing A member of the Video Game and Advertising industries for nearly a decade, Taylor has spent significant time in senior posts on the vendor side leading new business and project teams. He counts Fortune 500 companies like GM, UPS, Target, Nissan, New Balance, and Hasbro among his long list of past clients prior to stepping into his most recent role alongside Geoff Mogilner as Director of Online Marketing for Midway Games. Taylor received a B.A. in Economics and English from Kalamazoo College. Billy Pidgeon Strategy Advisor Gaming Industry Analyst Billy Pidgeon comes to UpIt1 from the market research firm IDC, where he covered the global gaming market since 2006. Billy has more than twenty years in the interactive entertainment industry with extensive experience in product development, management and market research. Billy started his career in the industry as a producer responsible for games as diverse as Sesame Street 123 , The Simpsons and Mortal Kombat at Acclaim. Billy will advise SocialTribes’ GameTribe team in a strategic capacity.
Shares: (Ownership) Shares: (Voting) Nick Baumfeld 80% Billy Pidgeon 5% Keith McEwen 5% Taylor Host 5% Geoffrey Mogilner 5% Nick Baumfeld 2 Keith McEwen 1 Taylor Host 1 Geoffrey Mogilner 1
2009 Projected P/L: Upit1/SocialTribes Projected IS (USD [,000]) Assumptions: Staffing: Assumes additional senior staff to be added in August 2009. Operations: Assumes legal and business consulting, laptops / associated software, and mobile phones/plans for senior staff. New Business Development: Assumes no more than 7 trips and corresponding incidentals. Advertising/Marketing: Assumes development of promotional and new business materials. Revenues: Assumes projects and orders already completed or scheduled, but does not include any possible new business development through the end of 2009. We are set to operate at a loss of $35k for 2009. Feasibly, any extra activities could lead to a posted profit by the end of 2009. Expenses 2009 414 Lbabin 84 Bweisbart 48 Thost 42 Gmogilner 42 Nbaumfeld 42 Kmcewen 42 Consulting 10 Commissions/Sales Staff 23 Production Staff 25 Operations 25 Consulting 7 Computer Hardware 8 Computer Software 4 Telecom. 3 New Business Development 45 Travel 35 Misc. Expenses 10 Technical Production 30 Consulting 30 Advertising/Marketing 23 Misc. Expenses 4 Total Expenses 485 Revenues 2009 License 10 Promotions 240 Hosting / Development 41 Rev-Apps 159 Total Revenues 450 Total Expenses 485 Net Profit (35)
5-year Projected BS: Assumptions: Capitalized Soft Assets: Portion of development and advertising expenses from the Projected Income Sheet were moved to the Balance Sheet for 5 year straight line depreciation Angel money: covers shortfall for 2010 on the B/S Carrying costs: interest paid to investor loans (including Angel money). Assume average rate will be 15% Projected Balance Sheet (2008–2012) [ USD (,000) ] ASSETS 2008 2009 2010 2011 2012 Cash and Short Term Deposits 2.162 18 0 0 3316.9 Long Term Investments 0 42 42 0 0 ProprietaryAssets: Member Base 28.867 32.827 42.827 67.827 117.827 Platform 50 100 120 150 200 Stats Card 30 40 50 75 100 Avatar Builder 0 25,000 30 50 75 Survey Engine 0 5,000 10 10 10 Current Depreciated Value 98 159 173 228 317 TOTAL ASSETS 100 219 215 228 3,634 LIABILITIES SHORT TERM Due Wages 120 120 100 0 0 Investor Loans Gerald Cook 14.4 0 0 0 0 Wayne McEwen 0 20 20 0 0 Mike Cataldi 194 205 205 0 0 Larry Regan 0 155 155 0 0 "Angel" 0 0 241 0 0 208 380 621 0 0 LONG TERM Shareholder Loans Nbaumfeld 134.9 211.1 211.1 211.1 0.0 Kmcewen 14.6 19.8 19.8 16.8 0.0 TOTAL LIABILITY 477.9 730.9 951.9 227.9 0.0 SHAREHOLDER EQUITY Capital Stock 0.1 0.1 0.1 0.1 0.1 Opening Retained Earnings 0.0 -378.0 -511.8 -737.2 0.3 Gain/Loss -378.0 -133.9 -225.5 737.4 3544.8 Closing Retained Earnings -378 -512 -737 0 3545 TOTAL EQUITY -378 -512 -737 0 3545
What does the future hold for ? Because we’ve built our software as functional shell, we envision moving into other industries beyond gaming. Depending on how fast we can ramp up out of Beta, we could begin adding new verticals by the end of 2010.
We’ll have our third-eye on a few other markets:
Thanks for taking time to hear us out! If you would like to know more about or our product, feel free to contact: Keith McEwen [email_address] 302-999-9112
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