TABLE OF CONTENTS
EXECUTIVE SUMMARY 2
REVIEW OF THE MARKET 3
What business are we in?
What have we accomplished?
Who are our competitors?
What have they done recently?
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?
Legal and Administrative 9
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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
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
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
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.
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REVIEW OF THE MARKET
‐ 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.
‐ 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?
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.
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.
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‐ 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
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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
‐ 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
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
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.
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
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.
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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.
“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
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
Reporting: Ensure ProductX captures and presents usage data that’s meaningful to our customers’
Developer Tools: Continue to ensure ProductX remains the most web developer‐friendly content
platform on the market
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.
1x system administrator
1‐2x front‐end/web app developer
1x QA/testing staff
1x customer support staff
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Since the launch of ProductX 1.0 in late ’07, we have owned and maintained all ProductX physical production
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.
"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.
‐ 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.
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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
Attn: Bob B., CEO
1222 Broad Street
New York, NY 10011
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