Spark! Culture Cave business plan

spark! Culture Cave B u s i n e s s P l a n

Aysegul Kacar Allison Leach Shalini Sardana Lisa WoodsCalifornia College of the Arts | Business of Design | Spring 2012

2 spark! Culture Cave

InduStry OvervIeW

Current Market TrendsChildren are overloaded with entertainment options. From comic books to iPad games, the landscape for toys is vast and varied. Ours is a unique time period in which traditional hands-on games compete with novel interactive software.

yet the ways in which children learn about culture are often via disparate and disconnected experiences. A child’s first encounter with a foreign country might take place in trying a new food or listening to a new song. Maybe he or she will complete a Google search afterwards, or ask a trusted adult to learn more. But chances are, the child’s learning experience is short-lived and incomplete.

Few products on the market take advantage of today’s unparalleled opportunity space to integrate traditional and modern interactive tools in a cultural transmedia learning experience.

The Missing LinkChildren are curious about new cultures and enjoy a mix of entertainment options, from non-tech to tech.

Parents want to teach their children about the world, but have limited knowledge and time.

Culture Cave offers a holistic transmedia learning experience?

Learning

DiscoveryDisconnect

spark! Culture Cave 3


the SOLutIOn: CuLture CAve

Our Value Proposition the spark! Culture Cave is a cultural immersion experience for kids between the ages of 6 and 10.

At the core of this idea is:• an iPad app that features a new traditional story each month.

the culturally-rich story provides context for a wealth of ancillary information, games, and activities included in each app.

• a sound-equipped tent with velcro walls that kids can decorate with a world map, architectural cut-outs, and other country kit materials. this is a place a child can claim as a kids-only cool hangout.

• monthly country-specific activity kits filled with open-ended, and hands-on activities that a child will look forward to

We at spark! believe that the best way to teach kids about culture is through traditional stories enhanced by interactive, open-ended, and hands-on activities that spring from that narrative.

Our Missionto be the leading provider of fun, holistic, immersive and interactive cultural education for children.

Our Visionto help raise the next generation of global citizens.

Our ValuesWe will always put kids first.We will provide multicultural education that is fun and promotes respect.We will encourage children to continuously explore and question.


Current iPad Market (US)

• Parents own approximately 61% of all iPads. • In 2012, parents owned 25.5 million iPads. • Overall iPad ownership is on the rise with a

projected 31% growth by 2014. the total number of iPad-owning parents will likely increase proportionally to 37 million by 2014.

• Approximately 40% of all school children in the uS are between the ages of 5 and 9.

• We thus estimate our total market—iPad owning parents with children between the ages of 5 and 9 in the uS —to be around 10 million.

• Of that population, we will target 1 million people in Phase 1.

Sources: New Media Trend Watch, April 2012The Financial Telegraph, April 2012 National Center for Education Statistics, 2011New Media Trend Watch, April 2012The Financial Telegraph, April 2012

tArGet MArKet

our target market

all iPad owners( 2012 )

iPad owning parents ( 2012 )

projected iPad users ( 2014 )

41.9 million

1 million

25.5 million

60.8 million


reSeArCh

iPad User Experience Trends Among ProfessionalsIDG Connect “iPad for Business Survey 2012,” January 16th, 2012

• 60% of iPads never leave the home (US).• 70% of iPad usage occurs in the living room (US).• 79% of professionals say they “always” use their iPad on the road

(globally).• The proportion of professionals who describe their iPad as a “complete”

or “partial” substitute for TV/DVD players, games consoles and MP3 players ranges between 30% and 40% (globally).

• Nearly 75% say that owning an iPad has reduced the frequency with which they purchase newspapers and books (globally). half say that owning an iPad means they are less likely to purchase films on dvd. these markets for physical media are already in decline. Based on this evidence, tablet computing will likely hasten their demise.

Tablet Spending Trends (US)Adobe Digital Marketing: The Impact of Tablet Visitors on Retail Websites, 2012

• In an analysis of 16.2 billion visits to the websites of more than 150 retailers in 2011, Adobe digital Marketing Insights found that those who visited using a tablet spend over 50% more per purchase than visitors who use smartphones, and over 20% more than visitors who use desktop/laptop computers.

• Tablet visitors appear to spend more because of their demographics, the nature of the tablet user experience, and the environment in which they shop online.

2012 Tablet Market (US)Wired Magazine, January 6, 2012

• Apple holds 73% of the U.S. tablet marketshare.

2012 iPad Demographics (US)Silicon Republic, February 17th, 2012

• A study from The NPD Group suggests that iPad owners are older and richer than other tablet owners.

• Of survey respondents who have an income of US$100,000 or more, 40% owned iPads and 26% owned other types of tablets.

• Consumers who were buying tablets towards the end of last year were 50% more likely to have an income of less than US$45,000, while 33% were more likely to be under 34 years old, Cnet reported.

2011 iPad Demographics (US)Journalism.org, “The Tablet Revolution,” October 2011

• Eighteen months after the introduction of the iPad, 11% of U.S. adults now own a tablet computer of some kind.

Apple Headlines, “iPad Statistics,” April 2011

• 7.8 million people own an iPad in the U.S.• iPad owners’ annual income:

6.4% less than $25K 11.9% $25K to $50K 15.9% $50K to $75K

16.4% $75K to $100K 49.4% above $100K


Stop-animation setup at the Children’s Creativity Museum, San Francisco


COMPetItIOn

Kiwi Crate Little Passports

National Geographic Magazine for Kids

Children’s Creativity Museum Culture Cave

Primary Offerings

Monthly subscription of materials for arts and crafts, science activities,

and open-ended play

For kids ages 3 to 7

$19.95/month

Monthly subscription of materials focused on learning

about other countries


$10.95 to $13.95/month

Monthly magazine with information about animals,

science, technology, archaeology, geography,

and pop culture - plus jokes, games, and activities.


$15.00/10 issues

An interactive art and technology museum for kids


Memberships range from $69 to $159/year

Monthly subscription of materials that encourage

learning about foreign cultures


$35 to $45/month

Strengths

Founded by a former eBay and PayPal executive, a

PayPal cofounder, and an ex-yahoo product manager.

Kits address specific developmental areas

such as creating, moving, discovering,

communicating, and caring.

Activities encourage parent involvement

Includes a letter from fictional travelers Sam

and Sofia describing their foreign country adventures

Subscription includes access to online games

and activities

Little Passports offers parents an “Agent

Opportunity.”Agents earn up to 30%

of all personal sales.

Kids have free online access to games, videos, photos,

“fun stuff” and news.

national Geographic is a well-known and well-

respected brand.

national Geographic has been in business for 35 years and has strong brand loyalty.

the museum offers many hands-on activities.

Membership includes:• e-newsletter

• exclusive members-only events

• workshops, exhibit openings and special

performances• museums store discounts• carousel rides discounts• birthday party discounts

at the museum

Culture Cave offers a dedicated sound-

equipped play space, iPad-based games and

hands-on activities.

Kids can share their favorite work online.

Parents have access to a rich online community.

Activities are designed for both parent and child, as well as for the child only.

Weaknesses

Kiwi Crate doesn’t address cultural education.

Kiwi Crate has no integrated digital component, no

online community, and no dedicated play space for kids.

Little Passports mostly appeals to girls.

Little Passports has minimal online digital content, no

sharing community, and no dedicated play space for kids.

national Geographic’s magazine has little content and lots of

advertising for candy, video games, and movies.

the museum has limited hours from Wednesdays to

Sundays, 10am to 4pm.

Activities are not designed to involve both

parents and kids.

the Museum doesn’t address cultural education.

Culture Cave costs more than most

subscription products for kids.


PrOduCt

2 Receive your Setup Kit your Setup Kit will arrive in a couple of weeks. It includes the Culture Cave tent, a world map, a passport, and instructions for the iPad app.

3 Receive your Monthly Country Kit the Monthly Kit includes a traditional story, hands-on activities, and an iPad app secret story code. each month, a new country is featured.

1 Sign Up Online We offer 3 monthly subscription levels.

Kids like cool hangouts, they want your iPad, and they love getting surprises.

Imagine teaching kids about cultures from around the world in a cool hangout, through interactive iPad games and many fun hands-on-activities.

here’s how it works:


PrOduCt

A Variety of Proven ActivitiesKids can do Culture Cave activities on their own or with their parents or friends. Our activities are created by native country experts and then vetted by educators, parents, and kids.

The Unique iPad Appunlike other subscription products for kids on the market, the Culture Cave App leverages the iPad’s video, audio, interaction, and camera functionality to deliver an immersive and holistic cultural educational experience. The Coolest of

Hangoutsno other subscription service offers Culture Cave’s tent—a place kids can claim as their own, and where they can enjoy an immersive audio experience.

PrOduCt

A Vibrant Online Communitythe Culture Cave website hosts a Forum for parents to share experiences and ideas, a Gallery for kids to upload their favorite works, and a Cultural event Calendar to learn about upcoming happenings.


COnSuMer jOurney MAP

Other parentsFacebook mentions

twitter mentionMommy blogs

and other bloggersScholastic catalog

Google SeOyoutube videos

trial subscription for educatorsitunes App Store search result

spark! local launch eventspark! blog

spark! community upload pagePress releases for media

mention (nyt, SF Gate, etc.)

DISCOVER

Parent’s Experience

Friend mentionyoutube videoSchool event

teacher mentionParent mention

Child’s Experience

Google searchspark! websiteMommy blogs

Free spark! app sampleCustomer testimonials

spark! representative in personspark! information packet

exterior packaging (Phase 3 retail)

EVALUATE

Choose a plan (3-, 6-, or 12-months)

30-day money back guaranteeChoose 1 of 3 countries

(Phase 3 retail)

DECIDE


easy to set up and get startedhigh parental involvement

Both kid(s) and parent(s) involved

Thrill of “gift” coming in the mailSimple tasks child can doCarrying case for the tent

and accessories30-minute setup

download appWatch online video on

tablet for setting up tent

OUT-OF-BOX

Parents note kids are more informed and inquisitive

Activities bring parents and kids together

Kids sharing with parents their creations

using code to download new country app

Parents arrange playdates with other “Culture Cavers”

USE

Comment on spark! forumFacebook/YouTube/Twitter

mentionsBlog posts

spark! community upload pageitunes review

word-of-mouthreview country on spark!

websiteteacher recommendations

SHARE

Both kid(s) and parent(s) involved

Thrill of “gift” package coming in the mail

Simple tasks child can doCarrying case for the tent

and accessories

spark! Gallery (showcase of kid-generated work)

word-of-mouthKids sharing activities

with each other

Open access to spark! forumConfirmation

email from spark!1-week welcome

notification postcard

CONFIRM

1-week welcome notification postcard


BrAndInG

Color Palette

Brand AttributesCulture Cave Logo

Brand Typeface

spark! Logo

cheerful inspiring insightful curious surprising creative

silly trustworthy

Brandon Grotesque: Thin Light regular

Medium Bold Black

spark!

spark!


MArKetInG

Awardsto raise awareness for Culture Cave and earn our customers’ trust, we will enter top toy competitions such as:

• Parent’s Choice Award• Good housekeeping’s Best toy Awards• national Parenting Center Awards

We will also strive to be featured in the top app lists of premier tech product review destinations such as:

• Wired’s App Guide• Cnet.com

Events We will participate in different activities and events throughout the year such as storytelling events, play dates, and school book fairs, as well as major toy, technology and educational conferences.

iTunes We will have an itunes App Store page for downloading our basic app.

Our WebsiteOne of the main touchpoints where our customers will learn information about us and interact with us will be our website. In addition to product details about the Culture Cave, we will also prominently feature:

• videos and photos from our customers• a Gallery for kids to upload their favorite work• a private Forum for parents to actively contribute to the Culture Cave

community by sharing their stories and experiences. this sharing will allow us to get feedback directly from our users to improve our product.

• a Cultural event Calendar for upcoming events and announcements• a blog

Social MediaFacebook, Twitter, YouTube, and Pinterestspark! Culture Cave will use the power of social networks to raise awareness among our future customers. Facebook and twitter will be utilized to inform people about promotions, surprise packages, events and activities. Social sharing will be encouraged via multiple social media channels with conveniently located buttons. A public youtube channel will be created for our customers to post videos about their unique experiences.


MArKetInG

“Imagine traveling all over the world from the

same place!”

Advertisingspark! Culture Cave will run advertisements in different media channels such as travel and family magazines, mommy blogs, Scholastic catalog and children-focused websites.

Complimentary sample kitsWe will reach out to top media reviewers and educators and provide them with free samples to test our product and generate buzz.

Word-of-MouthOur customers will also learn about us through different personal social circles such as from children’s classmates, teachers, friends, and other families.


BuSIneSS MOdeL

Our Core Capabilities • We are excellent UX designers who have unique international

backgrounds for building multicultural education.• We are modern strategists who know how to integrate familiar media

with emerging technologies in an innovative way. • We are culturally-sensitive education planners whose enthusiasm for

teaching kids about new countries respects the inherently complex nature of cultures.

Our key partners• Content creators: authors, editors, illustrators, and programmers.

• Manufacturers of physical materials: tent, arts and crafts, etc.

• Distributors: in addition to our own website, we will be selling our product through Amazon and Scholastic catalog.

Who do we serve?• Elementary school kids• Parents of elementary school kids who have a high disposable income• Elementary school teachers, administrators, and librarians

What do we provide? • Holistic and interactive cultural learning experiences for children • Our products educate kids about other cultures while they have fun


BuSIneSS MOdeL

How we provide our productOur distribution channelsto begin, we will sell Culture Cave through our own website, Scholastic catalog and Amazon. As business picks up, we will increase our tablet compatibility to include non-iPad platforms. Finally, we will extend our distribution channels to include existing stand-alone retail stores, and create a Culture Cave retail store.

How our customers will discover us

• spark!’s website• Social media (Facebook, twitter, Pinterest, youtube)• events (from school book fairs to major toy, technology and educational

conferences)• Scholastic magazine• Amazon.com• itunes App Store• Ads and reviews in various media channels • Word-of-mouth

How our customers will interact with usAfter submitting an order, the parent will receive a confirmation email with a link to spark!’s website for online access to discussion forums and other activities.

One week before shipment, the parent and child will receive a welcome postcard informing them that their initial Culture Cave package is on its way. When the package arrives, the parent and child will receive a code to download the Culture Cave app. In addition to downloading each month’s country story on the app, the parent and child can also access the Culture Cave community using the app. After experiencing our products and services, members can visit the spark! website to write their feedback and comments in private forums and share their videos and photos. One week after the last country kit has shipped, the parent and child will receive a goodbye postcard to thank them for their service and encourage subscription renewal.

Our Competitive AdvantageHow we are differentspark! Culture Cave is a unique experience shared by both the child and parent. While many culture-related products have only one means of interaction, our product is accessible on various levels (multisensory and multimedia), as well as accessible in different environments (the tent, the home, or even the car).

Our sustainable advantageOther companies could reproduce the Culture Cave tent, activities, or the iPad app individually. however, they cannot offer the seamless connection between our physical and digital components created by a valuable team of writers and artists native to each country. this holistic approach is our valuable asset.


How we make moneyWe charge our customers for the initial setup kit, as well as monthly country packages and tablet content.

Our major costs include:

• Software application development • Website development• Payroll• Marketing• Fees to Scholastic catalog for distribution• Materials (tent, velcro background, country kit materials, and passport)• Fulfillment (packing, mailing, assembly, and warehousing) • Content development • Platform compatibility and version updates • Patents for our technology and tent

Subscription PlansWe offer three subscription plans. Customers have the option of purchasing either a 3-month, 6-month, or annual subscription.

3 months

6 months

12 months

$45 per kit

$40 per kit

$35 per kit

3 countries

6 countries

12 countries


FInAnCIALS

Annual Budget

YEAR ONE YEAR TWO

revenue $ 499, 875 $ 999,750

Service Costs $ 156,000 $ 312,000

OVERHEAD COSTS

Salary and Administration $ 195,000 $ 195,000

Marketing $ 78,000 $ 117,000

vendor relations $ 74,981 $ 149,962

Support $14,996 $29,993

total Costs $518,978 $803,955

Annual Income ($19,103) $195,795

Startup Costs $207,000 —

Gross Profit Margin — 24%


Revenue ProjectionsThe average price for a kit is $40. having shipped 250 kits per week by the end of year 1, spark! Culture Cave will generate $499,875 in revenue. With an estimated of growth rate of 100%, revenue is projected to reach $1 million by the end of year 2. due to this growth, spark!’s annual income will increase from a loss of $19,103 to a net profit of $234,795.

Budget Distribution for Year Two

36% Salaries and Administration 15% Marketing and Public relations 14% vendor relations 3% Support 30% Cost of Services 0% Annual Income

20% Salaries and Administration 12% Marketing and Public relations 15% vendor relations 3% Support 31% Cost of Services 20% Annual Income

Budget Distribution for Year One


COMPAny GrOWth

Future ProjectionsEnd of Year OneWe plan to sell 12,500 kits in year One.

End of Year TwoWe plan to double our sales to 25,000 kits in year two.

Plan of ActionPHASE 1In Phase One, we are planning to sell our product to middle-class parents who live in the US and own an iPad, at a cost of $12 a kit and a goal of 250 kit sales per week. We will be selling through our own website, Scholastic magazine, and Amazon.

PHASE 2In Phase two, we will develop software compatibility with other tablets and establish partnerships with gaming platforms such as Wii. We will introduce a netflix-style queue to allow parents and kids to arrange their own list of countries.

PHASE 3As our business picks up, we will extend our distribution channels to include retail stores such as bookstores, airports stores, museum stores, toy stores and specialty stores - and eventually implement a stand-alone Culture Cave store.

PHASE 1 PHASE 2 PHASE 3

Airports

MuseumGift Stores

Toy Stores

Queue

More Countries

Spark! Culture Cave business plan

Design

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