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.

Minjong Chung1st MS (CS)

Sungjoon Kim1st MS (d-school)

Jeongjin Ku1st MS (EE)

Daniel Poon1st MS (CS)

User Experience design

System Architecture

Front-end building Market research

* 12 international design awards* Co-founded olaworks Inc (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

* 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)

Business Canvas #1

- Powerful sellers

- Server providers

- Variable costs: server and traffic maintenance

costs

- Fixed Cost: rent, salaries

Seller side:

- transaction fees

Buyer side:

- targeted ads

- Maintaining online

buyer/seller

communities and

credibility of

transactions

- Promotion of website

and brand

- Physical resources

(IT infrastructure)

- Existing social

networks -Buyer and

seller communities,

- Brand awareness

- Web & App sales

- Online social

networks

Seller:

- Access to large

online customer

pool

- Bulk sales with

reduced

commission

Buyer:

- Better discounts

- Automated services

- Communities of

buyers and sellers

- Co-creation of value

through customer

feedback

Multi-sided platform

Seller:

Pro-sellers in Amazon

and eBay who sell

electronics

Buyer:

Online shoppers

Key Question for Business Canvass #1

WHO WILL BE OUR CUSTOMERS?

DO THEY FEEL ENOUGH VALUE?

Seller Side Test with a fake E-MAIL

57%showed interest

Give me a quotefor a bulk sale!

Electronics Sellers on

Amazon/Ebay

FAKE CEO(Steve Feiberg)

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 SideInterview with Industry Specialist (LG Electronics)

BestbuyTarget, Walmart Associations of

Regional Big Sellers25% 25

%40%

Main Target

Seller SideInterview with Industry Specialist (eBay)

• Smaller sellers Large sellers already have sufficient traffic

• Older productsSellers may want to clear the out-of-date products with huge discount

User Side

Discount on products Power to choose products

Buyer community feedback

: Online User Survey

Business Canvas #2

- Powerful sellers

- Sellers who need

more traffic

- Server providers

- Variable costs: server and traffic maintenance

costs


Seller side:

- transaction fees

Buyer side:

- targeted ads


buyer/seller

communities and

credibility of

transactions


and brand


(IT infrastructure)

- Existing social

networks -Buyer and

seller communities,

- Brand awareness

- Web & App sales

- Online social

networks

Seller:

- More customer

traffic

- Bulk sales with

reduced

commission

Buyer:

- Better discounts

- Power to choose

product deal

- Buyer community

feedback on

products and sellers


- Communities of

buyers and sellers


through customer

feedback


Seller:

Trustworthy online

sellers with verifiable

websites

Buyer:

Online shoppers who

are willing to wait to

get significant

discounts on products


HOW CAN WE ATTRACT BUYERS?

CUSTOMER ACQUISION COST?

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)

$0 $4.88

$7.52

(COST)

Buyer Demand Test

Business Canvas #3

- Sellers who need

more traffic

-Server providers

Established services

- Online Marketing :

Google/Facebook

-Variable costs: server and traffic maintenance costs


- Online ad campaigns

Seller side:

- transaction fees

Buyer side:

- targeted ads


buyer/seller

communities and

credibility of

transactions


and brand


(IT infrastructure)

- Existing social

networks -Buyer and

seller communities,

- Brand awareness

- Web & App sales

- Online social

networks

- Online advertising

Seller:

- More customer

traffic

- Bulk sales with

reduced

commission

Buyer:

- Better discounts

- Power to choose

product deal

- Buyer community

feedback on

products and sellers


- Communities of

buyers and sellers


through customer

feedback


Seller:

Trustworthy online


websites

Buyer:

Online shoppers who


get significant



HOW CAN WE ATTRACT SELLERS?

COOPERATION WITH SELLERS?

Seller Contact

Deal with sellers failed because no group pricing or discount too low.

Contact popular online sellers 3 products: HD camera, protein drink, videogame Videogame was for pre-order

Most sellers: no group discounts Discounts offered < 10% With shipping and tax still >= Amazon price David vs. Goliath problem

Organize Real Group Deal

Result

To Pivot or Not to Pivot?Although dismayed at seller response, we did not give up.

Deal with sellers disappointing Seller problem intractable? Teaching staff: Pivot or else…

Lost one battle, but not the war! Only contacted larger sellers Sellers need more value Show them a real website

Beaten, but not defeated

What do do?

Filter advice and stay determined!

No Pivot

Yet

Solution 1 : Rapid Implementation

Implement seller & buyer side features to give sellers fuller experience.

Improved site design Buyer facebook login Online social networking integration Seller login and registration Seller bidding Seller group deal creation page

Site Upgrade Frenzy

Solution 1 : Rapid ImplementationHumble beginnings

Solution 1 : Rapid ImplementationThe Real Deal

Deal creation by sellers Bidding dialog

Main page Facebook connect

Solution 1 : Rapid Implementation

Solution 2 : More seller value & spammingAdd value for sellers based on mentor and industry expert interviews

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

Low transaction fees Customer contact information Cross-selling products Ad banners Power to create group deal

Add Seller Value

The Art of Spam

We made a single hit

on seller side.

Seller Invitation Result

# of sellers who signed up180 sellers

# 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 OURCRAVE50 sellers

Seller Invitation FeedbackWe’ve got two major feedback

Shipping Cost & Sales Tax ?

Who will be in charge of

too diverseThere are

Product Categories

Business Canvas #4

- Sellers who need

more traffic

-Server providers



Google/Facebook

-Payment Gateway :

Paypal

- Customer Service

(Front side

webservice) : Self

- Customer Service

(Product side) :

Sellers

- Delivery : Sellers




Seller side:

- transaction fees

Buyer side:

- targeted ads


buyer/seller

communities and

credibility of

transactions


and brand


(IT infrastructure)

- Existing social

networks -Buyer and

seller communities,

- Brand awareness

- Web & App sales

- Online social

networks


Seller: - More customer traffic

-Bulk sales with reduced commission

- Access to customer contact information

- Cross-sell their products.- Site advertising- Power to create deals

Buyer: - Better discounts

- Power to choose product deal

- Buyer community feedback on products and sellers


- Communities of

buyers and sellers


through customer

feedback


Seller:

Trustworthy online


websites

Buyer:

Online shoppers who


get significant



Key Activities for Next Stage

Can we make enough money?

Key Activity – Seller ManagementWe should manage main feedbacks from sellers by making basic function,

1. Convenient System

2. Building credibility

• Auto Sales Tax Calculator

• Bulk List Uploading Function

• Notification to Sellers for relevant cravebags

• Cross selling Option

• Seller Advertisement Feature

• FAQ List for Sellers

• Share buyer information

• F2F meeting with big sellers

3. More Incentives

Key Activity – Initial AdvertisementBy price comparison site and online ads, test our early service model. Then, Crazy deals needed for jumping

1st Passive : Online Ads

2nd Active : Crazy Deals

• Google / Facebook / Yahoo Ads

• Price Comparison Site ( very important)

• 20~30 % sales for Promotion Deals

• Very very very famous products

Key Activity – Encouraging Buyer’s ViralWe will implement incentive system for sharing deals and help buyers communicate with each other in our service

Incentive for sharing Buyer Community

• OurCrave Point

• Extra Discount

• Free shipping or tax Coupon

22% 14%People who willing to share deals in FB*

People who shared dealsIn FB*

* OurCrave User Survey in 2/3 weeks

• Live comment on cravebags

• Weekly Best cravebag vote

• Youtube Ads Competition

Revenue / Cost Source

Revenue Cost

Product Ads

Transaction Fee ( Main )

Float Money

Site Maintenance

Marketing ( Main )

Customer Support

15% of transaction

3~5% ( paypal)

Server/Traffic/Mobie Apps

Outsourcing20%/60days*

* google/groupon’s rule, we are asking sellers about this rule.

Ads for buyerSeller Management

Income Estimation

Year 1 Year 2 Year 3Number of transactions 100 1000 4000Number of transactions 2 deals / week 3deals/day 10deals/day

Ads Revenue $8,213 $164,250 $657,000 Transaction Revenue $7,500 $300,000 $2,400,000

Float Revenue $1,000 $53,333 $533,333Maintenance Cost $1,000 $83,000 $410,000

Customer Service Cost $3,288 $32,877 $131,507Marketing Cost $40,000 $360,000 $800,000

Net income -$27,575 $41,707 $2,248,826

• TRANSACTION FEE IS MAIN REVENUE

• MARKETING COEST IS MAIN COST

• BREAK-EVEN IS 3 DEALS/DAY

*Appendix in Blogs

*

Business Canvas Final

- Sellers who need

more traffic

-Server providers



Google/Facebook

- Payment Gateway :

Paypal

- Customer Service

(Front side

webservice) : Self

- Customer Service

(Product side) :

Sellers





Seller side:

- transaction fees

Buyer side:

- targeted ads

- float money

- Growing and maintaining online buyer/seller communities and credibility of transactions- Promotion of website and brand

- Establishing credibility


(IT infrastructure)

- Existing social

networks -Buyer and

seller communities,

- Brand awareness

- Web & App sales

- Online social

networks


Seller: - More customer traffic

-Bulk sales with reduced commission

- Access to customer contact information

- Cross-sell their products.- Site advertising- Power to create deals

Buyer: - Better discounts

- Power to choose product deal

- Buyer community feedback on products and sellers


- Communities of

buyers and sellers


through customer

feedback


Seller:

Trustworthy online


websites

Buyer:

Online shoppers who


get significant


Key Lessons

APPENDIX : FULL BM HISTORY

Business Canvas – Week 1

- Powerful sellers

- Server providers

- Variable costs: server and traffic maintenance costs

- Fixed costs: rent, salaries

Seller side:

- transaction fees

Buyer side:

- targeted ads

- Platform/Network

management (maintaining

online buyer/seller

communities and credibility)

- promotion of website and

brand

- Physical resources (IT

infrastructure)

- Existing social networks -

Buyer and seller communities,

- Brand awareness

- Web & App sales

- Online social networks

Seller :

- More customer traffic

- Bulk sales

- Lower transaction fees

Buyer :

- Better discounts


- Communities of buyers and

sellers

- Co-creation of value through

customer feedback


Seller : pro-sellers on Amazon

and eBay

Buyer :

Online shoppers


- Powerful sellers

- Server providers



Seller side:

- transaction fees

Buyer side:

- targeted ads

- Platform/Network


online buyer/seller



brand


infrastructure)



- Brand awareness

- Web & App sales


Seller :


- Bulk sales


- Brand name marketing

Buyer :

- Better discounts

- Power to choose product

deal



sellers


customer feedback


Seller : pro-sellers on Amazon

and eBay

Buyer :

Online shoppers


- Powerful sellers

- Regional sellers

- Server providers



Seller side:

- transaction fees

Buyer side:

- targeted ads

- Platform/Network


online buyer/seller



brand


infrastructure)



- Brand awareness

- Web & App sales


Seller :


- Bulk sales



Buyer :

- Better discounts


deal

- Buyer community

feedback on products and

sellers



sellers


customer feedback


Seller :

Sellers on Amazon and eBay

Buyer :

Online shoppers who are

willing to wait to get significant



- Sellers who need more

traffic

- Regional sellers

- Server providers



Seller side:

- transaction fees

Buyer side:

- targeted ads

- Platform/Network


online buyer/seller



brand


infrastructure)



- Brand awareness

- Web & App sales



Seller :


-Bulk sales



Buyer :

- Better discounts


deal

- Buyer community


sellers



sellers


customer feedback


Seller :


Buyer :






traffic

- Regional sellers

- Server providers



- Online ads

Seller side:

- transaction fees

Buyer side:

- targeted ads

- Platform/Network


online buyer/seller



brand


infrastructure)



- Brand awareness

- Web & App sales



Seller :


- Bulk sales



- Access to customer

contact information

- Ability to cross-sell

products

- Site advertising

Buyer :

- Better discounts


deal

- Buyer community


sellers



sellers


customer feedback


Seller :


Buyer :






traffic

- Regional sellers

- Server providers



- Online ads

Seller side:

- transaction fees

Buyer side:

- targeted ads

- float money

- Platform/Network


online buyer/seller



brand


infrastructure)



- Brand awareness

- Web & App sales





sellers


customer feedback


Seller :


Buyer :




Seller :


- Bulk sales



contact information

- Cross-sell their products.

- Site advertising

- Power to create deals

Buyer :

- Better discounts


deal

- Buyer community


sellers



traffic

- Regional sellers

- Server providers



Google/Facebook

-Payment Gateway : Paypal

- Customer Service (Front

side webservice) : Self

- Customer Service (Product

side) : Sellers




- Online ads

Seller side:

- transaction fees

Buyer side:

- targeted ads

- float money

- Platform/Network


online buyer/seller


- Promotion of website and

brand


infrastructure)



- Brand awareness

- Web & App sales





sellers


customer feedback


Seller : Sellers on Amazon and

eBay

Seller:

Trustworthy sellers with

verifiable websites.

Buyer :




Seller :


- Bulk sales



contact information


- Site advertising


Buyer :

- Better discounts


deal

- Buyer community


sellers



traffic



Google/Facebook

-Payment Gateway : Paypal

- Customer Service (Front

side webservice) : Self

- Customer Service (Product

side) : Sellers




- Online ads

Seller side:

- transaction fees

Buyer side:

- targeted ads

- float money

- Platform/Network


and growing online

buyer/seller communities

and credibility)

- Promotion of website and

brand

- Establishing credibility


infrastructure)



- Brand awareness

- Web & App sales





sellers


customer feedback


Seller:

Trustworthy sellers with

verifiable websites.

Buyer :




Seller :


- Bulk sales



contact information


- Site advertising


Buyer :

- Better discounts


deal

- Buyer community


sellers

Jointbuy E245 final presentation

Education

Transcript of Jointbuy E245 final presentation