About UCI Applied Innovation: UCI Applied Innovation is a dynamic, innovative central platform for the UCI campus, entrepreneurs, inventors, the business community and investors to collaborate and move UCI research from lab to market. About the Cove @ UCI: To accelerate collaboration by better connecting innovation partners in Orange County, UCI Applied Innovation created the Cove, a physical, state-of-the-art hub for entrepreneurs to gather and navigate the resources available both on and off campus. The Cove is headquarters for UCI Applied Innovation, as well as houses several ecosystem partners including incubators, accelerators, angel investors, venture capitalists, mentors and legal experts. Follow us on social media: Facebook: @UCICove Twitter: @UCICove Instagram: @UCICove LinkedIn: @UCIAppliedInnovation For more information: cove@uci.edu http://innovation.uci.edu/

1. P R E PA R E D F O R
UCI
03/15/17
B u i l d i n g F o r S c a l e : H o w To S e t
P e r f o r m a n c e B a s e d B u d g e t s

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8. 8
What is e-commerce?

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17. F i x e d
B u d g e t
P e r f o r m a n c e
B u d g e t

18. W h y O p e r a t e O n A P e r f o r m a n c e
B a s e d B u d g e t ?

19. R e d u c e s R i s k + I n c r e a s e s U p s i d e

20. A l l o w s Yo u M a x i m i z e T h e
F u n c t i o n a l i t y O f Yo u r To o l s

21. R e m o v e s C r y s t a l B a l l P r o j e c t i n g

22. A c c e l e r a t e s P r o d u c t M a r k e t F i t
A n d I n c e n t i v i z e s Te s t i n g

23. F o c u s e s O n T h e “ R i g h t G o a l s ” A n d
P e r p e t u a t e s F i n a n c i a l H e a l t h

24. H o w d o y o u b u i l d a p e r f o r m a n c e
b a s e d b u d g e t ?

25. I d e n t i f y A G r o w t h S t r a t e g y
p r o f i t v s . c u s t o m e r s

26. What is the cost of 1 unit
(fulfilled all the way to the customer)
U n d e r s t a n d Yo u r U n i t E c o n o m i c s
Operating Cost Of Necessary Functions Of Sale
Units/Order
Average Order Value
Fuel Profit
COGS

27. S e t Yo u r C PA
Fuel Profit ($) “Goal” Profit ($) Target CPA ($)- =

28. 15
Purchases
CPC
Conversion Rate
AdSpend
X =
.8%X =
$1
AdSpend
~$2,000/Ad Set To Determine Viability
Average CPC = $1 Average CR = .8% 15 Purchases To Optimize
D e t e r m i n e T h e C o s t O f V i a b i l i t y

30. Growth Strategy
Goal: Maintain a 40% Net Result On
Customer Acquisition

31. Unit Economics
1.7
$40
$7
QALO
$28
What is the cost of 1 unit
(fulfilled all the way to the customer)
Necessary Operating Costs
Units/Order
Average Order Value
Fuel Profit
COGS

32. Target CPA
$12
Using FB Default 28 day click and 1 day view
Fuel Profit ($) “Goal” Profit ($) Target CPA ($)- =
$28 $16

33. Ad Spending By Month
0
20000
40000
60000
80000
Ad Spend
January August
$300
$80,000

34. T H A N K Y O U