2. Introducing HotWax HotWax is a website building system Requires no geek expertise No coding No knowledge of Servers, FTP, Databases, etc Virtually anyone can build and maintain a HotWax website.
3. What makes HotWax different? Current world: 2 kinds of websites Built and maintained by experts / geeks Very simple, restrictive “fill-in-the blanks” websites Such as those offered by Intuit, GoDaddy, and others Problems: The website owner has little control Custom built websites are very expensive “Simple” websites allow for extremelylimited modification
4. What makes HotWax different? Why can’t a super-cool website be simple to create and maintain? Why must one learn about HTML, Javascript, FTP, etc? The HotWax goal: Website software as simple to use as a word processor Unexpectedly robust features User in full control of content and design No code needed ever
5. A "disruptive innovation" HotWax offers Superior features Servers an untapped/underserved market segment Provides comparable results at a vastly reduced price Analogue: Desktop publishing Removing the need for the trained expert
6. Why the name "HotWax"? In the Olden Days, printers laid out pages by pasting blocks of type, photos, logos, etc on to a big blank flat The adhesive was hot melted wax: Easy to use Easy to control The HotWax interface is influenced by the directness and simplicity of using a hot wax layout
7. Building a website with HotWax User creates own sandbox website Free for 15-60 days Instructions and instructional videos HotWax includes pre-loaded themes Colors, fonts, page designs, etc HotWax includes pre-loaded frameworks Typical pages set up for doctors, lawyers, artists, etc More than 50 blocks for adding text, pictures, maps, slideshows, etc. etc Drag and drop to add, move delete pages or page elements
8. The HotWax Product Offering HotWax will provide hosted websites Budget: $29.99/mo Pro: $49.99/mo Discounts for advance payment HotWax goal is to have 80% of subscribers purchase the Pro plan
10. Marketing HotWax Evangelizing to create a community Model: Macintosh Create sense of superiority and coolness Provide methods for community to communicate Online chats “Click to share my stuff” – users can offer items on their sites to other HotWax users
11. Marketing HotWax Making News Use news outlets to generate interest “20 websites in an hour” – Seminar event at conventions 20 novice users build websites using HotWax First event: 27 August, Asheville TED convention
13. Building Community = Sales You want to share / Show-off what you build Experienced users – “ninjas” Opinion leaders who want to evangelize for: Bragging rights Part-time work HotWax word of mouth already spreading in Asheville Plan: 50 HotWax Websites by 31 October
14. Corporate Structure S Corp: Net revenue disbursed to shareholders on a regular basis Shareholders holding 5% or more will be on Board of Directors Business goal: Maximize cashflow and revenue disbursement to shareholders
15. Summary of Business Goals $1 Million in annual Free Cash Flow for shareholder disbursementwithin 3 years Year 1: 1 new subscriber / day $ 35 / mo average subscription Year 2: 2 new subscribers / day $ 37 / mo average subscription Year 3: 3 new subscribers / day $ 39 / mo average subscription
19. Goal: New Subscribers Active Websites, July 2010 07/2010 87 million +10 million 10 million New Websitesin One Year
20. Comparison / Reality Check Comparable Business Data Hard/impossible to find accurate numbers No public records of subscriber to Homestead, Godaddy, Google Sites, Yahoo Sites etc. Different Business Model/Product Creates a new market for a new type customer
21. Comparison / Reality Check Squarespace.com A highly flexible website building system Also with public revenue records(!) Main difference from HotWax Squarespace requires a goodly amount of technical expertise Good results but hard to get started
22. Comparisons / Reality Check Squarespace.com joined the INC 500 in first 3 years (#339) $ 2.2 million annual revenue after 3 years
23. Summary of ExpectedSubscriber Revenue End Year 1: Yearly revenue -- $153,300 End Year 2: Yearly revenue -- $ 482,895 End Year 3: Yearly revenue -- $ 1,014,080
25. Additional Revenue Sources “Ninjas” HotWax trained consultants Ninjas pay for training -- +/- $250/ninja HotWax provides client leads Ninjas a likely source of new subscribers Setup Fees Possible: equal to 1 month subscription Add ons and Extras Email provision – users get unlimited email, email addresses Sales of domain names, etc New product offerings HotWax Mobile “DreamWeaver” on the web
26. Expenses Expenses are very low Low cost servers or cloud computing Current new Goliath server can handle about 550 websites $159/month, include backbone connections Cloud computing costs even less Tech support Assume about $15 / year per subscriber Revenue from setup charges will more than cover support Salaries Officers will take equity and dividends in lieu of salaries Support staff primarily 1099 consultants or offshore Marketing Primarily low-cost social and viral marketing Ninjas will be key drivers of subscription revenue
28. Funding Goals Seeking $50 – $100K To be applied to marketing and operational expenses Marketing: commission advances and advertising Tech support: salary, equipment Operations: salaries for maintenance, servers Business expenses: facility/utilities/etc Anticipate cash flow positive by end of year 1
29. Investment opportunity Convertible Bond Fixed rate security Secured senior debt 36 month maturity – full return of principal Dividend: 12% / year Paid monthly or annually Convertible at any time to preferred stock 1 Bond = 1% total outstanding shares of stock Preferred means– no dilution in event of later offerings Investment amount: $10,000/bond Bondholders will be informed in advance of other capital events that might affect the value of shares, and will be given advance opportunity to convert to stock
30. Investment opportunity – Option 2 Preferred Stock No dilution in event of later offerings Each Preferred share = 2% of outstanding shares Investment amount: $10,000/preferred share