The Chinese Daily Deal Market in October 2011 - Warm Deals & Shanghai's Quali...
TrueBeat Final Presentation
1.
2. • Product Overview
• Request for Funding
• Segments
• Selling Strategy
• Process Flow
• CSR Initiative
• Financial Analysis
Thursday, July 08, 2010 Opassa Corporation 2
3. • TrueBeat: The Musicians’ Companion
• A fully colored LCD screen that enables performers to see live scores during
playback
• Recording from other digital devices using the MIDI-IN and MIDI-OUT jacks
• Customizable tempos with different queues and paces ranging from 30 to 470
BPM
• A built in microphone allowing users to tune their instruments with single notes
or specified chords
• Amplified playback to any speaker or microphone accessory with its standard
audio input and output
• Competition
Yamaha ClickStation Roland Dr. Beat 90 Korg Beatlab
Retail Price: $179 Retail Price: $222 Retail Price: $130
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5. • NPV: $3.2 Million
Net Present Value:
• Investor IRR: 71%
Project $4,737,487
Investors $3,182,947
• Terminal Value: $7.1 Million $1,554,540
Friends, Family
and Mgmt
• Paid in Capital: $2.15 Million
IRR:
Project 77%
Investors 71%
Friends, Family 96%
and Mgmt
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6. Segmentation Market Breakdown
Teachers
86,000
1% All-Stars Internet
754,000 Dealers
13% 14%
Band
Geeks Indepen.
5,160,00 Dealers
0 46%
86% Large
Retail
Dealers
40%
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7. Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Branded Guitar Picks
Branded Drum Sticks
Branded Bumper Stickers
Brochures
YouTube Videos Release
Banner Ads
TrueBeat Giveaway
Large Marching Competitions
Medium Marching Competitions
Small Marching Competitions
Drum Corps World Ad
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15. Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
POP Display in
key Retailers
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16. Sales by Channel
100
90
80
70
60
Percent
50
40
30
20
10
0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
% Direct Online % B2B Online % B2B Retail
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17. Yearly ACV Indirect Selling
• Independent Retailers
25 • Online E-tailers
• Guitar Center
• Sam Ash
20
15
Independent
Total ACV
10
E-Tailer
5
Large Retailer
0
0 2 4 6 8
-5
Year
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18. • Discovery
• Online, free PDFs of educational value
• Instructional videos and tutorials
• Main SEO/SEM Tactics
• Keywords generated through Wordtracker:
• Music Education
• Music Theory
• MIDI
• Google Analytics
• Partnerships with links to our websites
• Bands of America
• Youth Education in the Arts
• Investments in website design, graphic designer, flash
videos, banner ads online
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19. San Francisco, CA
Fort Worth, TX
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20. RESEARCH &
OFFICE SPACE DEVELOPMENT
6,500 ft2 PRODUCTION
AREA
5,500 ft2
SALES
BREAK ROOM RAW MATERIALS FINISHED GOODS
& WIP HOLDING AREA HOLDING AREA
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22. Cycle Time
Capacity Utilization
Capacity
100
250,000
250
80
200,000
200
Percentage
Seconds
60
150,000
150
Units
40
100,000
100
20
50,000
50
0
0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
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23. Environmental:
•ISO 14000
Suppliers who uphold global
standards for environmental
sustainability.
VH1 Save the Music:
•Has helped 1.4 million students across
the country by creating more than
1,700 music education programs
•Unique product ID on box
•$10 will be donated for every
registered product ID
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25. • Funding Request
• First 6 months: $650,000
• First 3 years: $1,500,000
• Price Sensitivity Analysis
• We are able to decrease our price up to 15% while remaining NPV positive
• At Terminal Value 0, Investor IRR= 46%
Net Income
Cash Flows
12000000
$6,000,000
10000000
$5,000,000
8000000
$4,000,000
6000000
$3,000,000
Net Income
$2,000,000
4000000 Cash Flows
$1,000,000
2000000
0$-
$(1,000,000) 0 2 44 5 6 78
-2000000 0 1 2 3
Year
6
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26. • 95% likelihood NPV will above $0
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27. • 90% likelihood of an IRR above 30%
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28. Risks Solutions
China trade policies, Back up suppliers in U.S.
restrictions, and regulations Constant communication with
Chinese suppliers
Damage to the facility Insurance
Chase Production Planning Adequate safety Stock
Moore’s Law- Quickly outdated High quality supplies
hardware
Threats from competition Price skimming, software
updates
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29. • High IRR -> high return for investors
• Specific target market ->Word of mouth is important
• Price skimming to achieve increased purchase intent
• Keep costs low to ensure profitability
• Incorporate IS into operations to avoid
miscommunication
• Continual software updates to stay ahead
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30. Thank You So Much For Coming
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31. ACV ARM9 Micropressor and Moore’s Law
Operations Software Awareness Year 1
Administrative Software
Balance Sheet
Cash Flow Statement
Income Statement
Supply Chain
Base Case
Projected Sales in Units
House of Quality
Aggregate Plan
Make/Buy Analysis
Staffing Hierarchy
Base Cases
Purchase Intents
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41. Bases Model - Base Case
Band-Geeks Teachers All-Stars
Unit Price $ 215 $ 215 $ 215
Target Users 5,160,000 86,000 754,000
Total Adjusted Purchase Intent Trial 40.53% 42.54% 45.19%
Awareness 4.43% 0.77% 1.79%
Awareness generated from Competition 0.00% 0.00% 0.00%
Total Awareness 4.43% 0.77% 1.79%
ACV 9.60% 9.60% 9.60%
Trial Rate (Total Adj Trial x Awareness x ACV) 0.17% 0.03% 0.08%
Trial Users (Trial Rate x Target Users) 8,898 27 587
Units at Trial 1 1 1
Total Trial Units 8,897 27 587
Loss to Competition 0% 0% 0%
Total Trial Units after loss to Competition 8,897 27 587
Total Trial Units per Year 9,512
Revenue realized at Retail Price $ 2,045,103
% Distribution Unit Price
Gross Sales from Direct Online $ 1,082,268 52.92% $215
Gross Sales from B2B Online $ 75,670 7.04% $113
Gross Sales from B2B Retail $ 430,377 40.04% $113
Gross Revenue $ 1,588,316
Total Marketing Push Expenses $ 341,943
Total Marketing Pull Expenses $ 40,000
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53. Bases Model - Base Case
Year 1
Band-Geeks Teachers All-Stars
$ $ $
Unit Price 215.00 215.00 215.00
Target Users 5,160,000 86,000 754,000
Total Adjusted Purchase Intent Trial 40.53% 42.54% 45.19%
Awareness 4.43% 0.77% 1.79%
Awareness generated from Competition 0.00% 0.00% 0.00%
Total Awareness 4.43% 0.77% 1.79%
ACV 9.60% 9.60% 9.60%
Trial Rate (Total Adj Trial x Awareness x ACV) 0.17% 0.03% 0.08%
Trial Users (Trial Rate x Target Users) 8,898 27 587
Units at Trial 1 1 1
Total Trial Units 8897.90 27.12 587.08
Loss to Competition 0% 0% 0%
Total Trial Units after loss to Competition 8897.90 27.12 587.08
Total Trial Units per Year 9512.11
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54. Year 2
Band Geeks Teachers All Stars
TRIAL UNITS
Target Users 5160000 86000 754000
Total Adjusted Trial (Adj. Def + Adj. Prob) 40.55% 42.61% 45.24%
Awareness 8.57% 0.82% 2.36%
ACV 14.40% 14.40% 14.40%
Trial Rate (Total trial x Awareness x ACV) 0.005005946 0.000502583 0.001535
Trial Users (Trial Rate x Target Users) 25830.68219 43.22214528 1157.753
Units at Trial 1 1 1
Total trial Units 25830.68219 43.22214528 1157.753
Loss To Competition
Total Trial Units Per Year 27031.6576
Revenue: $5,811,806.38
Units after loss to competition 21625.3
Final Revenue $4,649,445.11
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55. Year 3
Band Geeks Teachers All Stars
TRIAL UNITS
Target Users 5160000 86000 754000
Total Adjusted Trial (Adj. Def + Adj. Prob) 41.89% 44.39% 47.21%
Awareness 12.85% 0.86% 2.98%
ACV 23.20% 23.20% 23.20%
Trial Rate (Total trial x Awareness x ACV) 0.01248436 0.000888759 0.0032661
Trial Users (Trial Rate x Target Users) 64419.2946 76.43325886 2462.6402
Units at Trial 1 1 1
Total trial Units 64419.2946 76.43325886 2462.6402
Loss To Competition
Total Trial Units Per Year 66958.36804
Revenue: $13,726,465.45
Units after loss to competition 53566.7
Final Revenue $10,981,172.36
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56. Year 4
Band Geeks Teachers All Stars
TRIAL UNITS
Target Users 5160000 86000 754000
Total Adjusted Trial (Adj. Def + Adj. Prob) 41.89% 44.39% 47.21%
Awareness 17.15% 0.93% 3.61%
ACV 27.60% 27.60% 27.60%
Trial Rate (Total trial x Awareness x ACV) 0.019823588 0.001143078 0.0047
Trial Users (Trial Rate x Target Users) 102289.7138 98.30470903 3543.73
Units at Trial 1 1 1
Total trial Units 102289.7138 98.30470903 3543.73
Loss To Competition
Total Trial Units Per Year 105931.7481
Revenue: $21,716,008.35
Units after loss to competition 84745.4
Final Revenue $17,372,806.68
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57. Year 5
Band Geeks Teachers All Stars
TRIAL UNITS
Target Users 5160000 86000 754000
Total Adjusted Trial (Adj. Def + Adj. Prob) 45.43% 48.19% 47.43%
Awareness 21.45% 1.00% 4.23%
ACV 32.00% 32.00% 32.00%
Trial Rate (Total trial x Awareness x ACV) 0.0311773 0.001546706 0.0033876
Trial Users (Trial Rate x Target Users) 160875.06 133.0167366 2554.2808
Units at Trial 1 1 1
Total trial Units 160875.06 133.0167366 2554.2808
Loss To Competition
Total Trial Units Per Year 163562.3563
Revenue: $28,623,412.34
Units after loss to competition 130849.9
Final Revenue $22,898,729.88
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58. Year 6
Band Geeks Teachers All Stars
TRIAL UNITS
Target Users 5160000 86000 754000
Total Adjusted Trial (Adj. Def + Adj. Prob) 45.43% 48.19% 47.43%
Awareness 25.75% 1.07% 4.86%
ACV 34.40% 34.40% 34.40%
Trial Rate (Total trial x Awareness x ACV) 0.040235643 0.001778751 0.007924642
Trial Users (Trial Rate x Target Users) 207615.917 152.9725626 5975.180327
Units at Trial 1 1 1
Total trial Units 207615.917 152.9725626 5975.180327
Loss To Competition
Total Trial Units Per Year 213744.0699
Revenue: $37,405,212.23
Units after loss to competition 170995.3
Final Revenue $29,924,169.79
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