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Business plan for startup

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  • 1. 
 TABLE
OF
CONTENTS
 
 EXECUTIVE
SUMMARY
 
 
 
 
 
 
 
 
 
 2
 
 REVIEW
OF
THE
MARKET
 
 
 
 
 
 
 
 
 3
 
 
 Business
 
 
 
 
 
 
 
 
 
 3
 
 
 What
business
are
we
in?
 
 
 
 What
have
we
accomplished?
 
 
 
 
 Competitors
 
 
 
 
 
 
 
 
 
 3
 
 
 Who
are
our
competitors?
 
 
 What
have
they
done
recently?
 
 
 Market

 
 
 
 
 
 
 
 
 
 4
 
 
 What
do
we
think
will
happen
next?
 
 STRATEGY
GOAL
AND
EXIT
 
 
 
 
 
 
 
 
 5
 
 
 
 Strategy
Goal
 
 
 
 
 
 
 
 
 
 5
 
 
 What
do
we
want
to
achieve?
 
 
 How
are
we
going
to
do
it?
 
 
 Exit
Plan
 
 
 
 
 
 
 
 
 
 7
 
 
 How
does
this
end/what
happens
next?
 
 APPENDICES
 
 
 
 
 
 
 
 
 
 
 9
 
 
 Legal
and
Administrative
 
 
 
 
 
 
 
 9 CompanyX 1 of 8
  • 2. 
 EXECUTIVE
SUMMARY
 
 CompanyX
provides
hosted
content
services
within
the
online
applications
and
platforms
(OAP)
market
 via
its
ProductX
product.
ProductX
is
a
platform
for
businesses
and
organizations
to
store,
manage,
and
 publish
content
to
the
web
and
mobile
devices.
ProductX
services
are
sold
at
productx.com
and
used
by
 our
customers
on
a
self‐service
basis.
 
 Development
of
ProductX
1.0
began
in
2006
and
was
later
launched
in
the
winter
of
2007.
Soon
 thereafter
we
began
planning
for
ProductX
2.0,
which
after
almost
a
year
of
development
and
iteration
 based
on
customer
feedback
was
launched
in
April
2009.
ProductX
is
currently
in
use
by
over
800
 organizations
of
all
types
and
sizes
and
provides
CompanyX
with
the
necessary
foundation
to
achieve
 our
main
objectives
over
the
next
12
months.
 
 ProductX
customers
include
ad
agencies
(WPP
Group),
universities
(MIT),
large
enterprises
(Ernst
&
 Young),
industry
associations,
non‐profits,
film
producers
(Oliver
Stone),
media
publishers
(Meredith),
 government
agencies
(FDA),
and
many
other
types
of
organizations
that
rely
on
content
for
 communications,
marketing,
and
other
core
business
activities.
 
 Our
customers
have
told
us
there
are
there
primary
reasons
why
they
chose
ProductX
over
the
 competition.
First
is
price:
ProductX
is
the
most
cost
effective
platform
on
the
market.
Second
is
mobile:
 ProductX
supports
the
delivery
of
content
to
all
the
most
popular
mobile
devices.
Third
is
API:
ProductX
 offers
a
built‐for‐developers‐by‐developers
API
that
enables
rapid
integration
with
3rd
party
apps
and
 services.
 

 According
to
a
Forrester
Research
report
published
earlier
this
year,
online
applications
and
platforms
 (OAPs)
generated
revenues
of
$4.1B
in
2008,
up
86%
over
2007,
and
are
expected
to
generate
roughly
 $5.9B
in
2010.
That
same
report
also
predicts
that
OAPs
focused
on
mobile
content
delivery
and
3rd
 party
integrations
will
increase
their
market
share
from
13.4%
in
2008
to
over
22%
by
2010.
 
 Our
goal
is
to
establish
ProductX
as
the
leading
SMB‐focused
online
platform
by
Q4
2010.
We
plan
to
do
 this
by
growing
new
signups
and
customers,
and
maintaining
our
lead
in
product
innovation
and
cost
 effectiveness.
 
 To
date
we
have
raised
roughly
$4M
in
Seed
and
Series
A
financing
from
a
small
group
of
professional
 angel
investors.
We
are
seeking
to
raise
$3M
in
Series
B
financing
to
achieve
our
objectives
over
the
next
 12
months.
 
 Internet
entrepreneur
and
CompanyX
CEO
Bob
B.
founded
the
company
in
the
winter
of
2005
with
a
 vision
for
how
the
Internet
was
going
to
greatly
enhance
the
role
of
content
as
a
communications
and
 marketing
tool.
From
its
inception,
the
CompanyX
leadership
team
has
included
CTO
John
D.,
SVP
 Marketing
Jane
T.,
and
a
development
staff
of
four.
All
members
of
the
CompanyX
leadership
team
 attended
Massachusetts
Institute
of
Technology. CompanyX 2 of 8
  • 3. REVIEW
OF
THE
MARKET
 
 Business
 ‐ What
business
are
we
in?
 
 CompanyX
provides
hosted
content
services
within
the
online
applications
and
platforms
(OAPs)
market
via
 its
ProductX
product.

ProductX,
is
a
web
platform
for
businesses
and
organizations
to
store,
manage,
and
 publish
content
to
the
web
and
mobile
devices.

ProductX
services
are
sold
at
productx.com
and
used
by
our
 customers
on
a
self‐service
basis.
 
 ‐ What
have
we
accomplished?
 
 Development
of
ProductX
1.0
began
in
2006
and
was
later
launched
in
the
winter
of
2007.

Soon
thereafter
 we
began
planning
for
ProductX
2.0,
which
after
almost
a
year
of
development
was
launched
in
April
2009.


 ProductX
2.0
is
currently
in
use
by
organizations
of
all
types
and
sizes
and
provides
CompanyX
with
the
 necessary
foundation
to
achieve
our
main
objectives
over
the
next
12
months.
 
 Competitors
 ‐ Who
are
our
competitors?
 
 ProductX’s
direct
competitors
are
other
SMB‐focused
content
platform
providers
(SMBs)
such
as
 CompetitorA,
CompetitorB,
CompetitorC,
and
CompetitorD.

ProductX’s
indirect
competitors
are
the
market‐ leading
content
platform
providers
and
include
CompetitorE,
CompetitorF,
CompetitorG,
and
CompetitorH.
 
 ‐ What
have
they
done
recently?
 o Product 
 There
has
been
very
little
product
development
or
innovation
on
the
part
of
SMBs
over
the
past
6
months.

 With
the
exception
of
one
or
two
players,
SMB’s
generally
continue
to
position
their
products
as
cheaper,
 slimmed‐down
versions
of
the
market
leaders’
platforms.

Most
are
well
behind
in
offering
even
the
most
 basic
features
and
services
found
in
ProductX
or
the
market‐leading
platforms
(i.e.,
automated
encoding,
 high‐definition
publishing,
comprehensive
APIs,
etc.).
 
 Market
leaders
have
continued
to
focus
heavily
on
advertising
tools
and
services,
including
hooks
into
 partner
networks,
syndication
features,
and
3rd
party
ad
server
integration.

Market
leaders
now
offer
HD
or
 close‐to‐HD
(commonly
referred
to
as
high‐quality,
or
HQ)
publishing
features
and
are
or
will
soon
be
 focusing
on
simple
mobile
publishing.

Many
challenges
still
exist
when
it
comes
to
mobile,
however
increased
 demand
on
the
part
of
customers
and
their
end‐users
is
forcing
the
market
leaders
to
move
in
this
direction.
 
 o Go‐to‐market 
 From
a
business
standpoint,
we
have
seen
a
lot
of
slimming‐down
(eliminating
free/subsidized
offerings)
and
 re‐focusing
occur
over
the
last
9
months.

The
primary
trend
we
currently
see
is
a
re‐balancing
of
go‐to‐ market
strategies:
a
shift
away
from
pure
content
monetization
(the
coupling
of
content
content
with
 advertisements)
towards
what
we
refer
to
as
audience
monetization
(a
focus
on
content
accessibility
and
 quality).

Both
groups
–
SMBs
and
market
leaders
‐
are
engaging
in
this
shift.

Why?

Because
there
are
a
lot
 more
businesses
and
organizations
that
need
tools
to
store,
manage,
and
publish
their
content
than
need
 tools
to
monetize
it.
 
 CompanyX 3 of 8
  • 4. Market
 ‐ What
do
we
think
will
happen
next?
 o Market
actions? 
 Despite
macro
economic
conditions,
there
is
clearly
sustained
and
in
many
areas
substantial
growth
within
 the
online
content
applications
and
platforms
market
(OAPs).

According
to
an
AnalystX
report
published
 earlier
this
year,
OAPs
generated
revenues
of
$4.1B
in
2008,
up
86%
over
2007,
and
are
expected
to
generate
 roughly
$5.1B
in
2010.


That
same
report
also
predicts
that
the
market
share
of
content
advertising
platforms
 (i.e.,
market
leaders)
will
drop
from
41%
in
2008
to
39%
by
2010,
while
the
share
of
platforms
focused
on
 content
encoding,
organization,
and
integration
services
(i.e.,
ProductX)
will
increase
from
12.4%
in
2008
to
 over
20%
by
2010.

 
 Such
volcanic
growth
is
affecting
OAP
business
models
and
go‐to‐market
strategies.

As
previously
 mentioned,
content
monetization
can
no
longer
be
a
platform
provider’s
sole
focus.


Given
the
increased
 importance
of
revenue
generation,
market
leaders
and
SMBs
appear
to
be
diversifying
their
strategies
by
also
 serving
businesses
and
organizations
that
have
no
need
to
monetize
their
content,
but
do
have
a
need
to
 “deal”
(i.e.,
store,
encode,
manage,
publish)
with
web
content.
 
 We
call
this
general
need
“audience
monetization”
‐
furthering
core
business
objectives
(most
commonly
 attracting
and
retaining
users)
through
content
quality
and
access.

We
see
this
as
the
beginning
of
a
major
 long‐term
opportunity
because
it
applies
to
so
many
organizations
of
different
types
and
sizes.

ProductX
has
 been
focused
on
audience
monetization
since
day
one
and
is
very
well
positioned
to
take
advantage
of
the
 growth
occurring
within
this
sector
of
the
market.
 
 o New
solutions
and
competitors? 
 New
solutions
and
competitors
will
continue
to
be
very
limited
over
the
next
12
months.

We
expect
the
only,
 if
any,
new
things
are
going
to
come
from
players
already
operating
within
the
space
who
have
adequate
 resources
to
re‐align
or
further
focus
their
offering
toward
what
they
see
as
the
primary
opportunity.

 
 o Competitor
actions? 
 Both
market‐leaders
and
the
SMBs
will
likely
continue
to
adjust
their
strategies
based
on
what
they
perceive
 as
the
primary
market
opportunity
and
as
the
result
of
continued
tectonic
shifts
within
the
greater
online
 content
value
chain.

However,
we
believe
most
players,
if
they’re
still
here,
are
fairly
well
locked
into
the
 particular
strategy
they’ve
chosen
to
pursue.
 
 It
is
clear
that
the
market
leaders,
supported
by
deals
with
major
media
publishers,
will
continue
to
pursue
 long‐term
strategies
focused
on
content
monetization.

Their
near‐term
focuses
are
on
gaining
market‐share
 and
generating
revenue,
and
range
from
going
after
every
major
media
publisher
in
the
world
(CompetitorE),
 to
serving
as
the
foundation
for
“content
everywhere”
initiatives
(CompetitorF),
to
powering
social
networks
 and
consumer
brand
websites
(CompetitorG).
 
 The
SMB
market
is
a
much
different
story
and
an
area
where
we
expect
many
players
to
experience
 significant
challenges
over
the
next
12
months.

Specifically,
we
believe
SMB
platform
providers
who
are
1)
 not
targeting
or
able
to
service
large,
marquee
customers
and/or
2)
are
in
the
process
of
playing
catch‐up
 with
their
products
will
have
the
hardest
time
growing
their
businesses
over
this
period.


 
 “Solutions
providers
like
ProductX
operate
inside
a
high
growth
content
applications
segment,
with
 contract
wins
spanning
a
wide
spectrum
of
publishing
verticals.
In
2009
and
2010,
all
brands
are
 media
brands,
with
the
common
strategic
imperative
of
expanding
audience
reach
cost
effectively
and
 efficiently
and
increasing
revenue.
Digital
is
a
must
have
exploitation
window
that
is
expected
to
 contribute
to
the
bottom
line.
That’s
why
OAP
providers
have
grown
through
the
market
downturn,
 and
are
forecast
to
continue
that
path
beyond
2010
as
publishers
focus
more
intently
on
digital
brand
 value.”

­
Chief
Analyst
@
AnalystX
Research
 
 CompanyX 4 of 8
  • 5. With
growth
comes
fracturing.

Two
years
ago
virtually
all
OAP
providers
(market
leaders
and
SMBs)
were
 focused
on
a
single
goal:
selling
web
content
solutions
to
major
media
publishers.

Since
then
all
have
been
 forced
to
make
significant
adjustments
in
order
to
establish
their
own
market
niches.

While
the
total
market
 may
appear
crowded,
ProductX
is
the
only
platform
purely
focused
from
its
inception
on
audience
 monetization.

So
long
as
we
are
able
to
pursue
the
strategy
plan
laid
out
below,
we
do
not
believe
any
 competitor
–
market
leader
or
SMB
–
will
be
able
to
match
ProductX
on
price
or
value.

 
 STRATEGY
GOAL
AND
EXIT
 
 Strategy
Goal
 ‐ What
do
we
want
to
achieve?
 
 Our
goal
is
to
establish
ProductX
as
the
leading
SMB
web
content
platform
by
Q1
2010.

We
plan
to
do
this
 through
growing
new
signups
and
customers,
and
maintaining
our
lead
in
product
innovation
and
cost
 effectiveness.
 
 o Short‐term? 
 The
short
term
has
been
the
last
6
months
(5/1/08
through
11/30/08).

Over
that
period
we
have
done
a
 handful
of
things
to
support
our
long‐term
goals
including
tightening
up
and
optimizing
ProductX
2.0,
 promoting
ProductX
2.0
to
build
brand
recognition
and
increase
market
share
(i.e.,
in
the
form
of
new
signups
 and
customers),
and
raising
Series
B
growth
capital
to
scale
business
development,
sales,
and
product
 development
activities.
 
 o Long‐term? 
 The
long
term
is
going
to
be
the
next
12
months
(12/1/08
to
11/30/09).

In
anticipation
of
raising
our
Series
 B
financing
by
early
December
’08,
our
primary
focuses
over
the
following
12
months
are
going
to
be:
1)
 continue
to
promote
ProductX
2.0
to
build
brand
recognition
and
increase
market
share
(i.e.,
in
the
form
of
 new
signups
and
customers),
2)
develop
and
launch
ProductX
3.0
to
maintain
our
lead
as
the
SMB
market
 innovator,
and
3)
raise
growth
capital
to
further
scale
and/or
sell
ProductX.
 
 • Cash 
 We
believe
it’s
going
to
take
$3M
in
Series
B
financing
to
achieve
our
main
objectives
over
this
period.

Use
of
 proceeds
breaks
down
into
three
primary
categories:
 
 Business
Development/Marketing:
Employ
PR
and
online
advertising
campaigns,
and
develop
affiliate
 marketing/partner
programs
to
grow
new
signups
and
customers
 Product
Development:

Launch
ProductX
3.0
to
maintain
lead
in
the
areas
of
encoding,
web/mobile
 publishing,
reporting,
and
developer
tools


 Team:

Adding
people
capacity
in
the
areas
of
business
development,
finance,
customer
support,
and
 system
administration
to
support
growth
objectives
 
 • Customer 
 Making
sure
our
marquee
customers
are
satisfied
and
that
we
are
maintaining
our
guarantee
of
a
consistently
 high
quality
of
service
to
all
customers
is
critical
to
our
long‐term
objectives
of
increasing
customer
retention
 and
reinforcing
ProductX’s
brand
as
a
standard
bearer
for
performance
and
reliability.

 
 CompanyX 5 of 8
  • 6. • Prospect 
 Non‐marquee
prospects
–
those
that
are
likely
to
sign
up
for
a
ProductX
account
on
their
own
–
are
managed
 in
a
largely
automated
manner
via
resources
and
systems
at
http://ProductX.com.


 
 Marquee
customers
–
larger
companies/name
brands
that
are
not
likely
to
sign
up
for
a
ProductX
account
on
 their
own
–
are
currently
managed
by
CompanyX
CEO
Bob
B..


 
 Growing
our
non‐marquee
and
marquee
pipeline
‐
the
former
via
increased
public
relations
and
direct
 marketing
and
the
latter
by
increasing
the
capacity
of
our
direct
sales
development
team
‐
is
a
chief
focus
and
 an
area
where
we
will
be
devoting
a
significant
portion
of
our
Series
B
proceeds.
 
 • Product 
 “Of
all
the
solutions
we
tested,
ProductX
was
the
only
one
that
provided
us
with
the
tools
we
need
to
 enhance
our
grad
and
undergrad
programs,
both
in
and
out
of
the
classroom.”
–
Web
Services
Manager
 @
UniversityX
 
 Planning
for
the
development
of
ProductX
3.0
will
begin
in
Q4
’08,
with
the
launch
planned
for
Q2
’09.

Unlike
 ProductX
2.0,
which
replaced
virtually
every
aspect
of
the
1.0
application
and
platform,
ProductX
3.0
is
going
 to
build
on
the
foundation
that
was
laid
with
the
2.0
launch
in
April
of
this
year.

All
areas
of
the
ProductX
 application
and
platform
will
get
some
attention,
however
the
primary
areas
of
focus
for
3.0
are
going
to
be
 encoding,
web
and
mobile
publishing,
analytics,
and
developer
tools.

With
the
exception
of
analytics
(an
area
 where
we
have
some
catching
up
to
do),
these
are
all
areas
where
ProductX
is
a
leader
and
that
our
 customers
have
told
us
weighed
heavily
in
their
decision
to
choose
ProductX
over
our
competitors.
 
 Encoding:

Continue
to
ensure
ProductX
can
decode
from/encode
to
more
formats
than
any
other
 platform
on
the
market
 Publishing:

Further
improve
the
ProductX
Player’s
support
for
mobile
devices
and
user
 customization
 Reporting:

Ensure
ProductX
captures
and
presents
usage
data
that’s
meaningful
to
our
customers’
 businesses
 Developer
Tools:

Continue
to
ensure
ProductX
remains
the
most
web
developer‐friendly
content
 platform
on
the
market
 
 • People 
 We
believe
continuing
to
maintain
an
agile
and
lean
team
is
critical.

Over
this
period
we’re
going
to
be
 looking
to
add
two
to
three
additional
engineers
(likely
a
system
admin
and
another
front‐end/web
app
 developer)
and
a
couple
QA/customer
support
staff.

Additionally,
we
are
looking
to
fill
some
blind
spots
in
 the
areas
of
business
development/marketing
and
finance
by
hiring
a
head
of
marketing
and
a
CFO.
 
 o Engineering  1x
system
administrator  1‐2x
front‐end/web
app
developer o QA/Support  1x
QA/testing
staff  1x
customer
support
staff o Management  SVP
Marketing  CFO 
 CompanyX 6 of 8
  • 7. • Infrastructure 
 Since
the
launch
of
ProductX
1.0
in
late
’07,
we
have
owned
and
maintained
all
ProductX
physical
production
 infrastructure.

 
 Prior
to
the
launch
of
ProductX
2.0
in
April
of
’08
we
doubled
production
capacity
and
are
now
able
to
 support
between
3‐4x
the
current
number
of
ProductX
customers.

This
infrastructure
–
all
of
which
is
housed
 at
a
collocation
facility
managed
by
TelecomX
–
can
be
further
scaled
on
an
as‐needed
basis
to
serve
up
to
10x
 the
current
number
of
ProductX
customers.
 
 Going
forward,
the
main
infrastructure
focuses
are
going
to
be
on
setting
ourselves
up
for
further
scalability
 (from
10x
to
500x)
and
maintaining
a
consistently
high
quality
of
service.

In
order
to
achieve
both
of
these
 objectives,
we
intend
to
partner
and
integrate
with
a
content
delivery
network
(CDN).

We
are
currently
in
 discussions
with
a
number
of
CDNs
(CDNA,
CDNB,
CDNC,
and
CDND)
with
the
goal
of
establishing
a
one
or
 more
partnerships
by
the
end
of
Q1
’190
and
having
ProductX
fully
integrated
with
their
systems
by
the
end
 of
Q2
’09.
 
 • Brand 
 "Clients
want
to
do
more
with
less
investment
[…]
there
is
a
trend
toward
low‐touch,
highly
scalable
 and
efficient
systems
and
corresponding
pricing
models
that
keep
billing
fees
low
and
overhead
costs
 down
to
attract
multiple
client
verticals”
–Chief
Analyst
@
AnalystX
Research
 
 Continuing
to
build
the
ProductX
brand
as
“the
most
cost‐effective
platform
for
storing,
managing
and
 publishing
content
to
the
web
and
mobile
devices”
and
also
drive
an
increasing
number
of
prospective
 customers
to
http://productx.com
is
a
top
priority.

To
do
this
we
will
be
continuing
to
work
with
our
PR
 agency
(CommunicationsX)
to
generate
press
and
recognition
around
our
customer
and
product
successes,
 secure
speaking
engagements,
and
attend
industry
events.

Further,
we
will
be
engaging
a
direct
marketing
 agency
to
handle
email,
mail,
and
online
advertising
campaigns
along
with
any
joint
marketing
campaigns
 conducted
with
ProductX
partners
such
as
PartnerA
and
PartnerB.


 
 Exit
Plan
 ‐ How
does
this
end/what
happens
next?
 
 Our
exit
goal
is
to
position
ProductX
in
a
manner
that
allows
us
to
explore
a
sale
to
a
strategic
acquirer.

We
 believe
the
conditions
will
likely
be
right
for
exploring
a
sale
beginning
in
12‐18
months.

 
 
 CompanyX 7 of 8
  • 8. APPENDIX
‐
LEGAL
AND
ADMINISTRATIVE
 
 The
CompanyX
(“Company”)
Strategy
Plan
is
confidential
and
proprietary
to
the
Company.

Protection
of
the
 Company's
concepts,
trade
secrets,
business
models,
and
other
confidential
information
is
of
paramount
 interest
to
the
Company.

In
order
to
protect
the
confidentiality
of
such
information
and
the
Strategy
Plan
for
 the
benefit
of
the
Company
and
all
investors,
the
recipient
of
a
copy
of
the
Strategy
Plan
or
other
Company
 information
agrees
to
maintain
the
confidentiality
of
the
Strategy
Plan
and
such
information
and
to
not
 disclose
such
information
or
documentation
to
any
third
party,
or
use
the
information
or
documentation
for
 any
purpose
other
than
the
evaluation
of
the
Company
with
respect
to
the
possibility
of
an
investment
in,
or
 business
relationship
with,
the
Company.

 

 This
Strategy
Plan
and
any
matters
related
to
the
Strategy
Plan,
the
Company,
or
any
use
or
disclosure
of
the
 Strategy
Plan
shall
be
governed
by
the
laws
of
the
state
in
which
the
Company
was
formed
or
has
its
primary
 business
office.
The
courts
within
such
state
shall
have
exclusive
jurisdiction
to
adjudicate
any
matters
 related
to
this
Strategy
Plan,
including
the
protection
of
the
Company's
confidential
and
proprietary
 information
from
improper
disclosure
or
use.

 

 If
you
desire
further
information
regarding
the
Company
or
its
Strategy
Plan,
you
may
contact
the
Company
 as
follows:


 

 Address:


 CompanyX


 Attn:
Bob
B.,
CEO


 1222
Broad
Street

 New
York,
NY
10011


 

 Phone:


 212‐234‐6660


 

 E‐mail:


 bob@CompanyX.com CompanyX 8 of 8

×