Jointbuy E245 final presentation

OURCRAVE is an online social shopping platform where customers can make their own deals on products or services of their choosing with sellers who can offer them in bulk at a discounted price.

User Experience design
System Architecture
* 12 international design awards
* Co-founded olaworksInc
(4M series A from Intel &
Skylake)
* Co-founded 1/2 PROJECT
* Software engineer for 3 years
(NHN Corp, iconlab Inc.)
* Wide range of experience
such as online shopping,
computer vision, and internet
radio
Minjong Chung
1st MS (CS)
Sungjoon Kim
1st MS (d-school)
Front-end building
Market research
* Cognitive Science major
* Developed an iPhone app on
iTunes (SpotAlarm)
* Ex-medical student
* Project manager in network
security for 3 years
(Comtrue Tech)
* Software engineer for 1 year
in social network and a social
shopping service
(Paprika Lab)
Daniel Poon
1st MS (CS)
Jeongjin Ku
1st MS (EE)

Business Canvas #1
Seller: - Access to large online customer pool
- Bulk sales with reduced commission
Buyer: - Better discounts
- Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand
- Powerful sellers
- Server providers
- Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
Multi-sided platformSeller:
Pro-sellers in Amazon and eBay who sell electronicsBuyer:
Online shoppers
Web & App sales
-Online social networks
- Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness
Seller side:- transaction fees
Buyer side:- targeted ads
- Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries

Key Question for Business Canvass #1
WHO WILL BE OUR CUSTOMERS?
DO THEY FEEL ENOUGH VALUE?

Seller Side Test with a fake E-MAIL
Give me a quote
for a bulk sale!
Electronics Sellers on Amazon/Ebay
FAKE CEO
(Steve Feiberg)
57%
showed interest
90%
sell products
on Amazon
56% paid 10~20% transaction fee
22% paid 5~10% transaction fee
78% agreed it was too much
33% actually provided discount proportional to group size

Seller Side
Interview with Industry Specialist (LG Electronics)
Main Target
Bestbuy
Target,
Walmart
25%
Associations of
RegionalBig Sellers
25%
40%

Seller Side
Interview with Industry Specialist (eBay)
Smaller sellers
Large sellers already have sufficient traffic
Older products
Sellers may want to clear the out-of-date products with huge discount

User Side
: Online User Survey
Power to choose products
Discount on products
Buyer community feedback

Business Canvas #2
Seller: - More customer traffic
- Power to choose product deal
- Buyer community feedback on products and sellers
Powerful sellers
Sellers who need more traffic
- Server providers
Trustworthy online sellers with verifiable websitesBuyer:
Online shoppers who are willing to wait to get significant discounts on products
Web & App sales
-Online social networks
- Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries

HOW CAN WE ATTRACT BUYERS?
CUSTOMER ACQUISION COST?

Buyer Demand Test
Best Marketing Channel for having buyers is Facebook Wall
: 144 Unique Visits,10 e-mail subscriptions for 3 days
Facebook Wall
Google Adwords
Facebook Ads
5%
0.08%
0.005%
(CTR)
$7.52
$4.88
$0
(COST)

Business Canvas #3
Server providers
Established services- Online Marketing : Google/Facebook
Web & App sales
Online social networks
Online advertising
Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries
- Online ad campaigns

HOW CAN WE ATTRACT SELLERS?
COOPERATION WITH SELLERS?

Seller Contact
Deal with sellers failed because no group pricing or discount too low.
Organize Real Group Deal
Contact popular online sellers
3 products: HD camera, protein drink, videogame
Videogame was for pre-order
Result
Most sellers: no group discounts
Discounts offered < 10%
With shipping and tax still >= Amazon price
David vs. Goliath problem

To Pivot or Not to Pivot?
Although dismayedat seller response, we did not give up.
What do do?
Deal with sellers disappointing
Seller problem intractable?
Teaching staff: Pivot or else…
Beaten, but not defeated
Lost one battle, but not the war!
Only contacted larger sellers
Sellers need more value
Show them a real website
Filter advice and stay determined!
No Pivot Yet

Solution 1 : Rapid Implementation
Implement seller & buyer side features to give sellers fuller experience.
Site Upgrade Frenzy
Improved site design
Buyer facebook login
Online social networking integration
Seller login and registration
Seller bidding
Seller group deal creation page

Humble beginnings

The Real Deal

Main page
Facebook connect
Deal creation by sellers
Bidding dialog

Solution 2 : More seller value & spamming
Add value for sellers based on mentor and industry expert interviews
Add Seller Value
Low transaction fees
Customer contact information
Cross-selling products
Ad banners
Power to create group deal
The Art of Spam
Massive seller e-mail campaign (16,000 in total)
Stanford takes notice and issues warning (oops)
Enumerate value propositions
Show live website
Hand out registration codes

We made
a single hit
on seller side.

Seller Invitation Result
180 sellers
# of sellers who signed up
# of deals made by sellers
80 deals
(below Amazon price)

Seller Invitation Result
# of sellers who replied to our email
200 sellers
# of sellers who made suggestions on OURCRAVE
50 sellers

Seller Invitation Feedback
We’ve got two major feedback
Who will be in charge of
Shipping Cost & Sales Tax ?
There are
too diverse
Product Categories

Business Canvas #4
Bulk sales with reduced commission
- Access to customer contact information
Cross-sell their products.- Site advertising- Power to create deals
Server providers
-Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers
Web & App sales
Online advertising

Key Activities for Next Stage
Can we make enough money?

Key Activity – Seller Management
We should manage main feedbacks from sellers by making basic function,
1. Convenient System
Auto Sales Tax Calculator
Bulk List Uploading Function
Notification to Sellers
for relevant cravebags
2. Building credibility
FAQ List for Sellers
Share buyer information
F2F meeting with big sellers
3. More Incentives
Cross selling Option
Seller Advertisement Feature

Key Activity – Initial Advertisement
By price comparison site and online ads, test our early service model. Then, Crazy deals needed for jumping
2nd Active : Crazy Deals
20~30 % sales for Promotion Deals
Very very very famous products
1st Passive : Online Ads
Google / Facebook / Yahoo Ads
Price Comparison Site ( very important)

Key Activity – Encouraging Buyer’s Viral
We will implement incentive system for sharing deals and help buyers communicate with each other in our service
Incentive for sharing
Buyer Community
14%
22%
People who willing to share deals in FB*
People who shared deals
In FB*
OurCrave Point
Extra Discount
Free shipping or tax Coupon
Live comment on cravebags
Weekly Best cravebag vote
Youtube Ads Competition
* OurCrave User Survey in 2/3 weeks

Revenue / Cost Source
Revenue
Cost
Product Ads
Transaction Fee ( Main )
Float Money
Site Maintenance
Marketing ( Main )
Customer Support
Server/Traffic
/Mobie Apps
15% of transaction
Ads for buyer
Seller Management
3~5% ( paypal)
Outsourcing
20%/60days*
* google/groupon’s rule, we are asking sellers about this rule.

Income Estimation
*
TRANSACTION FEE IS MAIN REVENUE
MARKETING COEST IS MAIN COST
BREAK-EVEN IS 3 DEALS/DAY
*Appendix in Blogs

Business Canvas Final
Bulk sales with reduced commission
Cross-sell their products.- Site advertising- Power to create deals
Server providers
- Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers
Growing and maintaining online buyer/seller communities and credibilityof transactions- Promotionof website and brand
- Establishing credibility
Web & App sales
Online advertising
- float money

Key Lessons

APPENDIX : FULL BM HISTORY

Business Canvas – Week 1
Seller : - More customer traffic
- Bulk sales- Lower transaction feesBuyer : - Better discounts
- Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand
- Powerful sellers
- Server providers
Multi-sided platformSeller :pro-sellers on Amazon and eBayBuyer :Online shoppers
- Web & App sales
- Online social networks
- Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
- Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries

- Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts
- Powerful sellers
- Server providers
Multi-sided platformSeller :pro-sellers on Amazon and eBayBuyer :Online shoppers
- Web & App sales

- Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts
- Powerful sellers
-Regionalsellers
- Server providers
Multi-sided platformSeller :
Sellers on Amazon and eBayBuyer :Online shoppers who are willing to waitto get significant discounts on products
- Web & App sales

Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts
- Sellers who need more traffic
-Regionalsellers
- Server providers
Sellers on Amazon and eBayBuyer :Online shoppers who are willing to waitto get significant discounts on products
- Web & App sales
- Onlineadvertising

- Bulk sales- Lower transaction fees- Brand name marketing
- Ability to cross-sell products
- Site advertising
Buyer : - Better discounts
-Regionalsellers
- Server providers
Sellers on Amazon and eBayBuyer :Online shoppers who arewilling to waitto get significant discounts on products
- Web & App sales
- Onlineadvertising
- Online ads

- Bulk sales- Lower transaction fees- Access to customer contact information
- Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers
-Regionalsellers
- Server providers
Sellers on Amazon and eBayBuyer :Online shoppers who arewilling to waitto get significant discounts on products
- Web & App sales
- Onlineadvertising
- Online ads
- float money

- Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- Promotion of website and brand
- Regionalsellers
- Server providers
Established services- Online Marketing : Google/Facebook -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers
Multi-sided platformSeller :Sellers on Amazon and eBay
Seller:
Trustworthy sellers with verifiable websites.Buyer :Online shoppers who arewilling to waitto get significant discounts on products
- Web & App sales
- Onlineadvertising
- Online ads
- float money

- Platform/Networkmanagement (maintaining and growing online buyer/seller communities and credibility)- Promotion of website and brand
- Establishing credibility
Established services- Online Marketing : Google/Facebook -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers
Multi-sided platform
Seller:
Trustworthy sellers with verifiable websites.Buyer :Online shoppers who are willing to wait to get significant discounts on products
- Web & App sales
- Onlineadvertising
- Online ads
- float money

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Jointbuy E245 final presentation

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