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Global Startup Platform TEAM




Global Startup Platform
OEP Report v.1

     “WHEN ENTREPRENEURSHIP
     BECOMES A LIFESTYLE”



                 07.07.2012
Business Model Report ǀ GSP Team




Project Description ..................................................................................... 3

Marketing.................................................................................................... 4
 Marketing segmentation .................................................................................. 4
 GSP – The Strategy .......................................................................................... 7
   Phase 1: Buzz .............................................................................................. 7
   Phase 2: Targeting ...................................................................................... 8
   Phase 3: Sustenance ................................................................................... 9

Distribution............................................................................................... 10

Partnerships .............................................................................................. 11

Costs ......................................................................................................... 15
 Project Costs ................................................................................................. 15
 NPV Calculation and payback period ............................................................. 17

Sales ......................................................................................................... 17

Revenue Model .......................................................................................... 17
 Problems ....................................................................................................... 17
 Services and Revenue Models ........................................................................ 19
 Revenue Models in detail ............................................................................... 23

Future Research ........................................................................................ 24

About the Team ......................................................................................... 26

Version of the Document ........................................................................... 27

List of Figures ........................................................................................... 27

List of Tables............................................................................................. 27




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                                                   Page: 2
Business Model Report ǀ GSP Team




Project Description

Global Startup Platform is an international online platform for the
entrepreneurs, startup teams, investors/business angels, venture funds,
mentors, universities and research centers that are involved in
entrepreneurship/innovations activities and work on creating ventures.

Our vision – there is no barriers for starting a venture being only online.

Our mission is to develop and stimulate entrepreneurship climate and
ecosystems in efficiency-driven economies1.

Main idea behind is to create an virtual social network/incubator where all
listed users (customers) could meet and find assistance, information, knowledge
on their particular topic about startups, find teams, share connections.

We are creating international virtual community not a physical location such as
Silicon Valley, or Famous Triangle. Unlike existing worldwide online incubators
and platforms our market is primarily Russia, CIS and developing countries
which have lack of entrepreneurship activities or some problems with them
(corruption, absence of mentors or venture capitalists, poor investment climate,
high costs of starting up business, poor access to international or global
markets). Moreover, unlike other virtual incubators we want to create unite
platform where customers could satisfy their needs in several categories of
services:


1 In efficiency driven economies, government focus is (or should be) on getting labor and
capital markets working more properly, attracting foreign direct investment and educating the
workforce to successfully adopt technologies developed elsewhere. The key processes in
moving from the first to the second stage are capital accumulation and technological
diffusion (Wennekers et al., 2005). Even though these conditions are not directly related
to entrepreneurship in the Schumpeterian sense of “creative destruction”, they are
indirectly related since the development of markets will also attract and enable more
opportunity based entrepreneurship. Main examples of these economies are: BRICI countries,
Turkey, Mexico, South Africa, Argentina, etc.




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                               Page: 3
Business Model Report ǀ GSP Team


   1. Funding & Financing (through matching investors and entrepreneurs)
   2. Education of customers (mainly entrepreneurs)
   3. Team Building services
   4. Community / Professional Community / Social Network
   5. Consulting services (e.g. Testing and verifying business model of each
      project that is registered in our platform, promotion, etc)
   6. DataBase of Best Practices & Failures
   7. DataBase of Startup/Business Ideas
   8. Entrepreneur's ToolKit
   9. News
   10.      Investor's Toolkit


Marketing

Entrepreneurship market is a growing market, it has a lot of activities and
passionate young people.


Marketing segmentation

   1. Entrepreneurs:
      • Who they are: Young people, fresh grads and little experience (age 20-
         35, High or unfinished High Education, Blr, Ms, MBA, Engineers, males,
         females).
      • What they want: Fund, mentorship, education, find team mates,
         networking, how to startup in right way, how transfer dreams to real
         life.
      • How they behave: Very active, search for investors and mentors,
         search for teams or partners.



   2. Investors:
      • Who they are: Business men/ women, huge experience (age 30-60,
         MBA, financial background).




Copyright ©2012 GSP team. All rights reserved.
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Business Model Report ǀ GSP Team


      •  What they want: Invest their money in profitable startup.
      •  How they behave: Receive business plans and filter startups then meet
         the teams.
   3. Mentors:
      • Who they are: Serial entrepreneurs, good experience (age 35-50, MBA ,
         hands on experience )
      • What they want: help young entrepreneurs to don’t go in wrong way.
      • How they behave: Discuss with entrepreneurs their business model
         and all problems face the startup team.
   4. Startup Teams
      • Who they are: Young people, fresh grads and little experience (age 20-
         35, Bachelor, Master’s degree, MBA, Engineers).
      • What they want: someone instructs them, Fund, mentorship,
         education, networking, how to startup in right way, how transfer
         dreams to real life.
      • How they behave: Very active, search for investors and mentors,
         search for strategic partners.
   5. Governmental institutions and Agencies.
      • Who they are: NGOs, universities programs and governmental
         organizations
      • What they want: help young entrepreneurs to don’t go in wrong way
         and change economics conditions by encouraging entrepreneurship
         eco-system.
      • How they behave: Organize events, conferences, competitions and
         encouraging entrepreneurship eco-system.

   6. Universities and Research Centers

      To be updated…
Results of brainstorming. Several potential ways of reaching
entrepreneurs. It’s a brainstorming with 12 entrepreneurs about ways to reach
for entrepreneurs.




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                 Page: 5
Business Model Report ǀ GSP Team


      Priority 1 (the highest priority)
      1. Communicate to entrepreneurs and students in the entrepreneurship
      courses throughout the globe. Start from entrepreneurs’ database int
      venture-lab course.
      2. Social media (Facebook, twitter, LinkedIn,….ect).
      3. YouTube videos.
      4. Blog posts periodically on our blog.
      5. Connect with famous blogs and ask them to write about GSP (Mashable,
      techcrunch, readwriteweb,…ect ).
      6. Newspapers (Local and global (New York times, Guardian, …ect)).

      Priority 2

      7. Communicate to entrepreneurs in the existing sites and online
      incubators. Attracting them to our platform.
      8. Hosting or sponsoring offline events (tweet ups, Meetups, Workshops,
      round table discussion, conferences ). Budget will depend on event type
      and event venue.
      9. Communicate with (offline, online) group administrators. Ex: Facebook
      groups administrators.
      10. Competitions.

      Priority 3 (the lowest priority)

      11. English, Russian, Arabic Interfaces.

Reaching Investors

      To be updated…
Reaching Mentors

      To be updated…
Reaching Startup Teams

      To be updated…



Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                 Page: 6
Business Model Report ǀ GSP Team


Reaching Governmental institutions and Agencies

      To be updated…
Reaching Universities and Research Centers

      To be updated…



GSP – The Strategy
Our strategy to start with campaigns don’t need much money so we will use
social media channels (Facebook fan page, twitter account, blog posts, connects
with famous blogs, YouTube videos, Build a character on social media).
After that we will use facebook campaigns and Google adwords.

  Phase 1: Buzz

Objective:
  • 15,000 entrepreneurs to know what GSP is
  • To generate buzz and curiosity surrounding launch
  • Build a character to help us to build a community
  • Make minds image GSP is a virtual entrepreneurship world
  • Get people talking and sharing on Social media
  • Push people to visit our Blog (5k/month)
  • Push teams to create accounts on GSP (5k/month)
  • Push VCs to create accounts (10/month)
  • Push mentors to create accounts (50/month)
  • Push NGOs to create accounts (10/month)

Vehicles
  - Facebook Fan page
  - Twitter account
  - Connect on twitter hashtags
  - YouTube videos
  - Facebook fan page for character



Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                  Page: 7
Business Model Report ǀ GSP Team


   -   Character twitter account
   -   Blog posts
   -   Connect with others active blog in entrepreneurship
   -   Website connected with facebook and twitter.
   -   Newsletter
   -   Attending offlines events

Tracking Performance Tools:
  • Develop potential customer’s database.
  • Klout tools
  • Website grader
  • Alexa
  • Google trends/ insights
  • Google adwords
  • Key word grader


  Phase 2: Targeting

Objective:
  • Talk about features and start to explain what GSP is
  • Focus on how GSP satisfy users needs
  • Push for users to use GSP (creating accounts 15%)
  • Increase Blog traffic rate (increase visiting blog 15%)
  • Hire volunteers or ambassadors (30-100 in our target regions)
Vehicles
  - Facebook Ads campaigns
  - Google Adwords
  - Organizing Tweet ups and meet ups
  - Facebook Fan page
  - Twitter account
  - Connect on twitter hashtags
  - YouTube videos
  - Facebook fan page for character
  - Character twitter account



Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                 Page: 8
Business Model Report ǀ GSP Team


   -   Blog posts
   -   Connect with others active blog in entrepreneurship
   -   Website connected with facebook and twitter
   -   Newsletter
   -   Attending offlines events


Tracking Performance Tools:
  • Increase potential customers database by 15%.
  • Klout tools
  • Facebook fans , twitter followers, no# of sharing YouTube videos
  • Website grader
  • Alexa
  • Google trends/ insights
  • Google adwords
  • Key word grader


  Phase 3: Sustenance

Objective:
  • Strong push for users to GSP (increase creating accounts 15%)
  • Mentoring sessions and workshops (offline workshop/ month)
  • Attending conferences
  • Sponsor offline events (Big one per year at least, it depends on budget)
  • GSP is big entrepreneurship community
  • Hire big numbers of volunteers or ambassadors (100-300 in our target
     regions)
Vehicles
  - Ads on famous blogs and entrepreneurship website.
  - Sponsoring and attending offline events
  - Sponsoring online events
  - Facebook Ads campaigns
  - Google Adwords
  - Facebook Fan page




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                    Page: 9
Business Model Report ǀ GSP Team


   -   Twitter account
   -   Connect on twitter hashtags
   -   YouTube videos
   -   Facebook fan page for character
   -   Character twitter account
   -   Blog posts
   -   Connect with others active blog in entrepreneurship
   -   Website connected with facebook and twitter.
   -   Newsletter


Tracking Performance Tools:
  • Increase potential customers database by 15%.
  • Klout tools
  • Facebook fans , twitter followers, no# of sharing YouTube videos
  • Website grader
  • Alexa
  • Google trends/ insights
  • Google adwords
  • Key word grader
  • Number of attending events and number of sponsoring events



Distribution

We will depend on our website as a direct channel to distribute our services
and our social networks and blog as indirect channels to distribute our services.
Our distribution channels will not be costly because it will manage by us
but campaigns will be costly. To be updated…




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                     Page: 10
Business Model Report ǀ GSP Team


Partnerships

Our project requires partners. The purposes of having partners are:
   • Develop and expand our mentors, investors, startups and entrepreneurs
     database;
   • Get more users/customers interested in our project;
   • Promote and market our project and services we offer.
We distinguished several categories of partners that we will deal with:
   1. Governmental institutions and organizations.
   2. Professional organizations which are supporting entrepreneurs and SMEs.
   3. Physical incubators.
   4. Online incubators which have lack of services we are going to develop.
   5. Online Web-Projects that are providing useful tools to the entrepreneurs.
   6. Universities / Research Institutes.
First of all let us state that these are hypotheses that need to be tested and
validated out in the future more clearly. However, there are evidences coming
from interviews we made in Russia that there is an interest in the partnering
first of all in the governmental institutions side. Below you will find analysis of
entrepreneurship ecosystem (in particular technoparks) and why governmental
institutions will require partnering with our project.




                                        Table 1 – Techno parks’ situation in Russia

                    Current Situation                  Future Situation

                    Techno park is business            Techno park is a service center;
                    hotel     for    innovation        range of services for residents
Positioning
                    companies; place where             starting    from       business
                    resident could cheaply rent        development ending up with




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                       Page: 11
Business Model Report ǀ GSP Team


                    an office                           business management




                    Projects are managed by
                                                        Projects   are     managed      be
Management          officials without business
                                                        professionals
                    experience

                                                        There are tools for efficient and
                    There is weak collaboration
                                                        effective    collaboration   with
Collaboration       with    Universities   and
                                                        research       institutes     and
                    research institutes
                                                        universities

                                                        Efficient and effective startup
                    Focus on the physical
Innovation                                              ecosystem is developed for
                    infrastructure, but not on
Efficiency                                              residents of techno parks through
                    innovations their selves
                                                        the whole life cycle of the startup

                    Weakly standardized models
                                                        Creating an enabling environment
Commercializing     of   co-financing   techno
                                                        for private-public partnership
                    park’s startups


Below we will summarize in the table main information about partners.




                                              Table 2 – Partners List of GSP Project




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                        Page: 12
Business Model Report ǀ GSP Team


                                                                             Are      they
                                                                                                                   How many
Partners      in                                                             potentially                                        Which of them we need Main                  potential
                   Can we reach out and What information                  do               If so, under what terms partners did
Russian                                                                      interested in                                      to target first to be able partners       from the
                   talk to a few of them? they need?                                       and conditions?         you    meet
Market                                                                       partnering                                         to get to others?          category
                                                                                                                   with?
                                                                             with you?

                                         1. These partners need                             To provide them services                                        1.      Ministry   of
                                         information where to                               for uniting more than 20                                        Telecommunications
Governmental
                   Yes. Through NVision invest money                                        techno parks in Russia.               1. NVISION Group          2. NVision Group
institutions
                   Group    and  Russian 2.    How   to    make Yes.                        Create one unified social 0           2.  Russian       Venture 3. Skolkovo
and
                   Venture Company.      innovation   ecosystem                             network/database of these             Company
organizations                                                                                                                                               4. Russian       Venture
                                               more       efficient      and                residents and startups
                                               effective.                                   inside the techno parks.                                        Company

Professional                                   1.     How       to    make
                                               innovation        ecosystem                  Stimulate growth of the               1. OPORA                  1. OPORA
organizations
                                               more       efficient    and No               innovations in Russia,
which      are                                                                                                                    2. Venture Funds and 2. Venture Funds and
               Yes.                            effective.                                   developing    ecosystems. 0
supporting                                                                 information                                            Business        Angel Business      Angel
                                                                                            Providing them tools for
entrepreneurs                                  2. How to protect and                                                              Associations          Associations
                                                                                            that development.
and SMEs                                       stimulate growth of SMEs.
                                               1. Where to invest money.
                                               2. How to choose right                                                                                       1. HSE
                                               projects     for   the                       1. Online instrument to
                                                                                            create startups / team                                          2. ANH
                                               competition.
Physical                                                                      No            building / entrepreneur’s                                       3.
                   Yes.                        3.   How       to      attract information                                0        1. HSE
incubators                                                                                  toolkits / social network of                                    http://technocup.ru/
                                               investors.                                   entrepreneurs, investors,                                       4. etc
                                               4. How to minimize costs                     mentors.
                                               of the filtering and
                                               choosing process.
                                                                                            1.     Receiving      more            1.
                                               1. Where to invest money.
                                                                                            successful startups/startup           http://startuppoint.ru/
Online                                         2. How to choose right No                    ideas.                                                          There are plenty of
                   Yes.                        projects     for   the information                                         0       2.
incubators                                                                                  2. Filtering startup ideas                                      them in Russia.
                                               competition.                                                                       http://startupforum.ru/
                                                                                            coming to them through
                                               3.     How     to      attract               scientific way.                       3. http://glavstart.ru/

Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                             Page: 13
Business Model Report ǀ GSP Team

                                               investors.                               3. Attracting new investors       4.      http://greenfield-
                                               4. How to minimize costs                 and mentors.                      project.ru/
                                               of the filtering and
                                               choosing process.

                                               1. How to develop their                                                                                 There are plenty of
Online                                         services.                                                                  1. http://freshle.com        them. We need to try to
Autonomation                                                             No             1. Increasing number of                                        establish          the
             Yes.                              2. How to attract new information                                0         2. venture-lab.org
Tools/ Web-                                                                             users/customers                                                partnerships in order
Projects                                       customers      /      new                                                  3. stanford ecorner          not to invent the
                                               marketing strategies.                                                                                   bicycle.
                                                                                                                          1. Moscow           State
                                                                                                                             Technical University
                                                                                        1. Educational courses on         2. Moscow        Physical
                                               1. How to increase quality               entrepreneurship                     Technical University
Universities /                                 of education of graduates Yes, to     be 2. Startup Teams                  3. Moscow             State There are plenty of
Research       Yes.                                                                                                   0
Institutes                                     2. How to attract new tested             3. Collaborative Research            University               them in Russia.
                                               students / professors                    Projects               on         4. Saint      Petersburg
                                                                                        Entrepreneurship                     University    (Global
                                                                                                                             Entrepreneurship
                                                                                                                             Monitor Team)




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                       Page: 14
Business Model Report ǀ GSP Team


Costs


Project Costs
We calculated our project costs for one year with following assumptions:
   • Time period - 2 years. First year – discovery, validation phases, prototype;
     2 year – seed financing, developing the project.
   • Core team will receive small compensation after the seed financing in the
     second year around $50 000 on average.
   • Some extra web developers and designers could be hired.
   • First investment will be in the advertisement and necessary hardware and
     software.
   • Team will meet minimum twice and visit entrepreneurship conferences.
                                                               Table 3 – Project Costs
№ Category                   Price, $              Units   Metrics Total, $
Hardware
1 Server                     $          3 000,00   2,00    piece    $         6 000,00
2 Backup Systems             $          1 000,00   1,00    piece    $         1 000,00
    Disaster       Recovery $           1 500,00   1,00    piece    $         1 500,00
3
    Systems
4 Disk Storage               $          2 000,00   2,00    piece    $         4 000,00
5 UPS                        $             50,00   1,00    piece    $            50,00
6 Router                     $           500,00    1,00    piece    $           500,00
7                                                                   $               -
Software
8 Hosting                    $           200,00    1,00    year     $           200,00
10 Domain Name               $              9,00   1,00    year     $             9,00
11 Web Site Maintenance      $          1 250,00   1,00    year     $         1 250,00
    Security                 $          1 000,00   1,00    piece    $         1 000,00
12 (Nortel.Access),
    Firewalls
13 Archiving                 $          1 000,00   1,00    piece    $         1 000,00
14 Application Licenses      $           200,00    5,00             $         1 000,00
    Project         specific                                        $               -
15
    Software tools
Marketing

Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                            Page: 15
Business Model Report ǀ GSP Team

№  Category                Price, $             Units   Metrics Total, $
   Advertising, marketing, $             0,50   2000,00         $        1 000,00
16
   and promotion costs
Administrative costs
17 Insurance                                                      $            -
18 Labour Costs            $        50 000,00   10,00    year     $    500 000,00
                           $           100,00   150,00   hours    $     15 000,00


19 Design



20 Programming               $        100,00    150,00   hours    $     15 000,00
21 Travel expenses           $       2 000,00   10,00    year     $     20 000,00
   Office management and     $       1 000,00   12,00    units    $     12 000,00
22
   administration
23 Conferences               $       1 000,00   10,00    units    $     10 000,00
   Team                      $       1 000,00   10,00    units    $     10 000,00
24
   recognition/celebration
25 Taxes                     $     174 600,00   1,00     year     $    174 600,00
                                                                  $    600 509,00


The Costs section is still too abstract, however, we have put a foundation and
determined main categories of the costs that we will have. Main drivers of costs
are labor costs and taxes. They also represent main challenges here. Thus we
need to think how to minimize these costs.




Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                       Page: 16
Business Model Report ǀ GSP Team




NPV Calculation and payback period

To be updated…


Sales

To be updated…


Revenue Model


Problems

Our revenue model completely linked to the RoadMap of the Services we are
going to introduce and develop; and to the Problems we are going to solve. In
the problems side we used inductive logic, thus we determined main problems
in the industry that exists globally, and then we looked at Russian market
problems. We believe that it represents huge opportunities because:
   1) Level of entrepreneurship there is very low (one of the lowest among 54
      countries that are monitored by GEM, 2012).
   2) Domestic market is pretty strong (according to the World Bank Russian
      have 11th place in terms of GDP, 2011).
   3) Russia is one of the strongest countries with more than 60 mln active
      internet users.
   4) Russian population is quite big having around 144 mln people.
Main problems that were indicated by our team and which are relevant to our
project are presented in the table below.




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Business Model Report ǀ GSP Team

                                                                                                                                                              Table 4 – Main Problems GSP tries to solve
                                                                                                                      Governmental     Other Incubators Universities    and
                                                                               Startup
№    Problem                                               Entrepreneurs                    Investors Mentors         Institutions and (Physical   and Research Centers
                                                                               Teams
                                                                                                                      Agencies         Virtual)

1.   Barriers to market entry – 1,97.2                     Yes                 Yes
     Access to financing (Virtually inaccessible to
2.   young companies to obtain investment Yes                                  Yes
     through public offering on the market) – 2,02.
     Team       selection,  organization    and
     management (Low availability of skilled
3.                                               Yes                           Yes
     personnel – 61%; Low availability of highly
     qualified management – 32%)
4.   Startup Management                                    Yes                 Yes
     Business Model (discovery, validation, testing,
5.                                                   Yes                       Yes
     building, etc)
6.   Bureaucracy – 1,83                                                                                               Yes                                             Yes
     The introduction of scientific and technical
7.                                                                                                                    Yes                                             Yes
     developments – 1,9.
     Elementary and secondary education (does
     not sufficiently encourage creativity of
8.                                                                                                                    Yes                                             Yes
     students, self-sufficiency and personal
     initiative, entrepreneurial skills) – 2,14.
     Startups and Teams Selection for Investing
9.                                                                                          Yes                       Yes                    Yes
     and Funding


Our current investigation didn’t touch Investors, Mentors and Incubators problems deeply. This is the field for the future research: for proposing hypotheses and testing them.
However, problems for Governmental Institutions dealing with Innovations and Entrepreneurs are quite clear.




2Problems are listed with the scores they got in the Reports that were analyzed in the Market Research. 0 – 5 scale: 0 – high importance, 5 – low importance; 0 – 100% scale: 0% – low importance, 100% - highest
importance

Copyright ©2012 GSP team. All rights reserved.
Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                                  Page: 18
Business Model Report ǀ GSP Team


Services and Revenue Models

After careful analysis of Market Research3 of the services (around 45
different services we got) we figured out following basic categories of the
services in which our customers are interested in:
    1. Funding & Financing
    2. Education
    3. Team Building
    4. Community / Professional Community / Social Network
    5. Consulting
    6. DataBase of Best Practices & Failures
    7. DataBase of Startup/Business Ideas
    8. Entrepreneur's ToolKit
    9. News
    10.       Promotion
    11.       Investor's Toolkit


The most popular categories are first 8 (which received internal scores
from 19 to 16). These eight categories consist of services that are shown in
the table below. We decided to put only 15 services in order to be focused
and implement services step by step (that will be implemented in
accordance with developed Roadmap of the project). However, we will test
and reconsider them and their priorities again after finishing of
Competitor’s Analysis Phase.




                                               Table 5 – Main GSP tries to solve



3 GSP Market Research v.4 19.06.2012 http://www.slideshare.net/VRyzhonkov/global-
startup-platformmarket-research-reportventure-lab-2012
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      Page: 19
Business Model Report ǀ GSP Team

                                                                        Phase of the
        Category        of
№                            Service name and description               Implementati Revenue Model          Customers (who pays money)           Comment
        Service
                                                                        on (1 – 3)
1.                                                                                                                                   Our company will charge each startup team /
        Funding          & Find VC, Venture Fund, Business Angel 1                      Brokerage, % of Startup teams, entrepreneurs
                                                                                                                                     entrepreneur for the successful investor’s
        Financing          service                                                      the Deal        through investors
                                                                                                                                     funding.
2.                           Startup   Education   for increasing                                                                           Advertising will be presented only on the
        Education            Knowledge on Entrepreneurship and 1                        Advertising         Startup Teams and Entrepreneurs pages of the Platform devoted to the education
                             Entrepreneur's Skills                                                                                          of startups and entrepreneurs.
3.                                                                                      Community    /
                                                                                        Donations from
                             Team    building     (finding,   selection, 1                             Startup Teams and Entrepreneurs
        Team Building                                                                   the users
                             matching, etc)
                                                                                        or Advertising
4.      Community      /                                                                Community    /
        Professional     Networking    among       entrepreneurs, 1                                    Startup Teams, Entrepreneurs,
                                                                                        Donations from
        Community      / mentors, business angels and investors                                        Investors, Mentors
                                                                                        the users
        Social Network
5.                                                                                                          Startup teams, Virtual Incubators,
        Consulting           Testing new products and services          1               Freemium
                                                                                                            Governmental Institutions
6.                                                                                      Brokerage, % of
        Consulting           Develop business strategies                2               the   Deal   or Virtual incubators, Startup Teams
                                                                                        Freemium
7.      DataBase of Best "Online database of advices, draft                             Community    /
        Practices     & business ideas, predeveloped business 2                         Donations from Startup Teams, Entrepreneurs
        Failures         plans;                                                         the users
8.      DataBase of Best                                                                Community    /
                         Cases of best practices, successes, rules, 2                   Donations from Startup Teams, Entrepreneurs
        Practices     &
                         failures, hints and tips. Their analysis.
        Failures                                                                        the users
9.                                                                                                                                               Data about consumers and their consumption
                                                                                        Subscription     ->                                      habits are valuable, especially when that
        DataBase      of
                                                                        2               Freemium         or Startup Teams, Entrepreneurs         information is carefully analyzed and used to
        Startup/Busines Business Models' creation
        s Ideas                                                                         Infomediary                                              target marketing campaigns. Independently
                                                                                                                                                 collected data about producers and their
                                                                                                                                                 products are useful to consumers when

     Copyright ©2012 GSP team. All rights reserved.
     Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                     Page: 20
Business Model Report ǀ GSP Team

                                                                          Phase of the
       Category         of
№                            Service name and description                 Implementati Revenue Model       Customers (who pays money)        Comment
       Service
                                                                          on (1 – 3)
                                                                                                                                             considering a purchase. Some firms function as
                                                                                                                                             infomediaries (information intermediaries)
                                                                                                                                             assisting buyers and/or sellers understand a
                                                                                                                                             given market.
10.    DataBase         of                                                               Brokerage, % of Investors,    Startup      Teams,
                             Startup Fair (Buy/Sell a startup)            2
       Startups                                                                          the Deal        Entrepreneurs
11.                                                                                      Subscription   ->
       DataBase         of                                                                                 Startup Teams, Entrepreneurs,
                             Startups' Catalogue                          3              Freemium       or
       Startups                                                                                            Investors
                                                                                         Infomediary
12.    Entrepreneur's        Project Progress      Evaluation    Tool   / 3                                Startup Teams, Entrepreneurs,
                                                                                         Freemium
       ToolKit               Metrics                                                                       Virtual Incubators
13.    Entrepreneur's                                                     3              Freemium          Startup Teams, Entrepreneurs
                        Communication Management Tool
       ToolKit
14.    Entrepreneur's                                                     3              Freemium          Startup Teams, Entrepreneurs
                        Weekly and Daily Reporting Tool
       ToolKit
15.    Community      /
       Professional                                                       3              Advertising       Startup Teams, Entrepreneurs
                        Find Mentor
       Community      /
       Social Network




    Copyright ©2012 GSP team. All rights reserved.
    Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team.                       Page: 21
^f–n /¯½f°n




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                      Figure 1 – Global Startup Platform Services Matrix
We believe that existing problems dictates following distribution of
services that should be implemented within our project. The more
important ones for us are:
1. Team Building
2. Education
3. Social Network
4. Consulting
5. Financing / Fund raising
Market Research Report ǀ GSP Team


Revenue Models in detail
Each of the service will have it’s own revenue model. This will be described
in the future versions of the Report.


This part of our project is still under development. The most important
challenge here is:
      “Is it possible to apply different revenue models in the same web site /
      platform for different services or not?”
In order to arrive to the answer to this question we should test and find
answers for each service to the following questions:
1. How will customers pay you and how much are they willing to pay?
2. Is a subscription model better than a one-time payment?
3. Is it better to rent to them or sell?
4. Does a freemium model make sense and if so, what features will people
   pay to upgrade for? Run some tests with customers to see what the best
   revenue model would be.
5. Are you planning to make money through advertising? If so, contact a
   few potential advertisers and see if they are interested and how much
   they would pay you.
6. How many users do you need for them to be interested in advertising on
   your site. Try to think outside of the box and not just rely on advertising-
   based business models.
7. It's great if you can have a few different potential revenue streams to
   test out. Are there other ways you might charge for the product or
   service?
8. Which might yield the most revenue? How do you know?
9. Did you walk through the entire process of how exactly a dollar moves
   from the customer's hands to the startup?
10.   Did the team brainstorm alternative possibilities?
11. If it was a monthly subscription, could they get a few paying
   subscribers?


Copyright ©2012 GSP team. All rights reserved.                            Page: 23
Prepared by Ryzhonkov Vasily, GSP Team.
Market Research Report ǀ GSP Team


12. Are the users and the paying customers different (like for Google)? If
   so, were both sides tested?
13.If the revenue model is lead generation, did the company actually try to
   get paid for generating a few leads?


Future Research

Marketing
    1. We need to define more carefully profiles of our customers (in
       more specific way).
    2. We need to define 3 more profiles of customers: Startup Teams,
       Governmental Institutions, Physical/Online Incubators
    3. Our goals should be established with the SMART4 criteria.
    4. We need to establish tools for measuring marketing activities
    5. We need to state the ways how we will reach our customers
       except entrepreneurs.

Distribution
      1. Section should be updated

Partnerships
     1. We need to test our hypotheses for several partners.
     2. We need to contact them and understand their needs more
        carefully.
     3. We need to understand what we could propose them.

Costs, Sales
     1. To be updated constantly – on monthly basis.
     2. NPV and Payback evaluation should be included

Revenue Model
    1. To be reconsidered after accomplishing Competitor’s Analysis.
    2. To solve main challenge of our project – could we introduce
       several services with different business models.


4   SMART – Specific, Measurable, Achievable, reliable, Timeable



    Copyright ©2012 GSP team. All rights reserved.                    Page: 24
    Prepared by Ryzhonkov Vasily, GSP Team.
Market Research Report ǀ GSP Team


     3. To detail all business models we put in the Revenue Model section
        (how much money could we get, what features could be sold, what
        not, etc).
     4. Many of our models consider Entrepreneurs and Startup Teams as
        main customers. However, these users aren’t able to pay much.
        Preliminary research shows that only 30% of the entrepreneurs
        are willing to pay for the services.

Our revenue model completely linked to the RoadMap of the Services we
are going to introduce and develop.
After careful analysis of the services (around 45 different services) we got
after Marketing Research we found following basic categories of the
services in which our customers are interested in:




Copyright ©2012 GSP team. All rights reserved.                         Page: 25
Prepared by Ryzhonkov Vasily, GSP Team.
Market Research Report ǀ GSP Team



About the Team


                  Vasily Ryzhonkov (Founder and Team Lead) aka the
                  LifeStyler
                  vryzhonkov@gmail.com
                  Russia, Italy


Mounir El Ogbani (Software
Developer) aka The Technophile
perbook@gmail.com
Morocco


                  Naveen Bagrecha (Universal team member)
                  aka                  The                   Wiz-Kid
                  naveenbagrecha2@gmail.com
                  India


Pavel Puchenkov (Designer,
Software Developer) aka The
Schmozer
paul.softdeveloper@gmail.com
Russia, New Zealand



                  Rajat     Pal   (Marketing)    aka   The    Brain
                  creativerajat@gmail.com
                  India, UK


Peter     Tamer    (Marketing,
Networking) aka the Showman
Egypt



Copyright ©2012 GSP team. All rights reserved.                  Page: 26
Prepared by Ryzhonkov Vasily, GSP Team.
Market Research Report ǀ GSP Team




Version of the Document

1.0   – Draft of the document. 07.07.2012


List of Figures

Figure 1 – Global Startup Platform Services Matrix


List of Tables

Table 1 – Techno parks’ situation in Russia
Table 2 – Partners List of GSP Project
Table 3 – Project Costs
Table 4 – Main Problems GSP tries to solve
Table 5 – Main GSP Services matched with Revenue Models




Copyright ©2012 GSP team. All rights reserved.            Page: 27
Prepared by Ryzhonkov Vasily, GSP Team.

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Global Startup Platform_Business Model Report_2012

  • 1. Global Startup Platform TEAM Global Startup Platform OEP Report v.1 “WHEN ENTREPRENEURSHIP BECOMES A LIFESTYLE” 07.07.2012
  • 2. Business Model Report ǀ GSP Team Project Description ..................................................................................... 3 Marketing.................................................................................................... 4 Marketing segmentation .................................................................................. 4 GSP – The Strategy .......................................................................................... 7 Phase 1: Buzz .............................................................................................. 7 Phase 2: Targeting ...................................................................................... 8 Phase 3: Sustenance ................................................................................... 9 Distribution............................................................................................... 10 Partnerships .............................................................................................. 11 Costs ......................................................................................................... 15 Project Costs ................................................................................................. 15 NPV Calculation and payback period ............................................................. 17 Sales ......................................................................................................... 17 Revenue Model .......................................................................................... 17 Problems ....................................................................................................... 17 Services and Revenue Models ........................................................................ 19 Revenue Models in detail ............................................................................... 23 Future Research ........................................................................................ 24 About the Team ......................................................................................... 26 Version of the Document ........................................................................... 27 List of Figures ........................................................................................... 27 List of Tables............................................................................................. 27 Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 2
  • 3. Business Model Report ǀ GSP Team Project Description Global Startup Platform is an international online platform for the entrepreneurs, startup teams, investors/business angels, venture funds, mentors, universities and research centers that are involved in entrepreneurship/innovations activities and work on creating ventures. Our vision – there is no barriers for starting a venture being only online. Our mission is to develop and stimulate entrepreneurship climate and ecosystems in efficiency-driven economies1. Main idea behind is to create an virtual social network/incubator where all listed users (customers) could meet and find assistance, information, knowledge on their particular topic about startups, find teams, share connections. We are creating international virtual community not a physical location such as Silicon Valley, or Famous Triangle. Unlike existing worldwide online incubators and platforms our market is primarily Russia, CIS and developing countries which have lack of entrepreneurship activities or some problems with them (corruption, absence of mentors or venture capitalists, poor investment climate, high costs of starting up business, poor access to international or global markets). Moreover, unlike other virtual incubators we want to create unite platform where customers could satisfy their needs in several categories of services: 1 In efficiency driven economies, government focus is (or should be) on getting labor and capital markets working more properly, attracting foreign direct investment and educating the workforce to successfully adopt technologies developed elsewhere. The key processes in moving from the first to the second stage are capital accumulation and technological diffusion (Wennekers et al., 2005). Even though these conditions are not directly related to entrepreneurship in the Schumpeterian sense of “creative destruction”, they are indirectly related since the development of markets will also attract and enable more opportunity based entrepreneurship. Main examples of these economies are: BRICI countries, Turkey, Mexico, South Africa, Argentina, etc. Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 3
  • 4. Business Model Report ǀ GSP Team 1. Funding & Financing (through matching investors and entrepreneurs) 2. Education of customers (mainly entrepreneurs) 3. Team Building services 4. Community / Professional Community / Social Network 5. Consulting services (e.g. Testing and verifying business model of each project that is registered in our platform, promotion, etc) 6. DataBase of Best Practices & Failures 7. DataBase of Startup/Business Ideas 8. Entrepreneur's ToolKit 9. News 10. Investor's Toolkit Marketing Entrepreneurship market is a growing market, it has a lot of activities and passionate young people. Marketing segmentation 1. Entrepreneurs: • Who they are: Young people, fresh grads and little experience (age 20- 35, High or unfinished High Education, Blr, Ms, MBA, Engineers, males, females). • What they want: Fund, mentorship, education, find team mates, networking, how to startup in right way, how transfer dreams to real life. • How they behave: Very active, search for investors and mentors, search for teams or partners. 2. Investors: • Who they are: Business men/ women, huge experience (age 30-60, MBA, financial background). Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 4
  • 5. Business Model Report ǀ GSP Team • What they want: Invest their money in profitable startup. • How they behave: Receive business plans and filter startups then meet the teams. 3. Mentors: • Who they are: Serial entrepreneurs, good experience (age 35-50, MBA , hands on experience ) • What they want: help young entrepreneurs to don’t go in wrong way. • How they behave: Discuss with entrepreneurs their business model and all problems face the startup team. 4. Startup Teams • Who they are: Young people, fresh grads and little experience (age 20- 35, Bachelor, Master’s degree, MBA, Engineers). • What they want: someone instructs them, Fund, mentorship, education, networking, how to startup in right way, how transfer dreams to real life. • How they behave: Very active, search for investors and mentors, search for strategic partners. 5. Governmental institutions and Agencies. • Who they are: NGOs, universities programs and governmental organizations • What they want: help young entrepreneurs to don’t go in wrong way and change economics conditions by encouraging entrepreneurship eco-system. • How they behave: Organize events, conferences, competitions and encouraging entrepreneurship eco-system. 6. Universities and Research Centers To be updated… Results of brainstorming. Several potential ways of reaching entrepreneurs. It’s a brainstorming with 12 entrepreneurs about ways to reach for entrepreneurs. Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 5
  • 6. Business Model Report ǀ GSP Team Priority 1 (the highest priority) 1. Communicate to entrepreneurs and students in the entrepreneurship courses throughout the globe. Start from entrepreneurs’ database int venture-lab course. 2. Social media (Facebook, twitter, LinkedIn,….ect). 3. YouTube videos. 4. Blog posts periodically on our blog. 5. Connect with famous blogs and ask them to write about GSP (Mashable, techcrunch, readwriteweb,…ect ). 6. Newspapers (Local and global (New York times, Guardian, …ect)). Priority 2 7. Communicate to entrepreneurs in the existing sites and online incubators. Attracting them to our platform. 8. Hosting or sponsoring offline events (tweet ups, Meetups, Workshops, round table discussion, conferences ). Budget will depend on event type and event venue. 9. Communicate with (offline, online) group administrators. Ex: Facebook groups administrators. 10. Competitions. Priority 3 (the lowest priority) 11. English, Russian, Arabic Interfaces. Reaching Investors To be updated… Reaching Mentors To be updated… Reaching Startup Teams To be updated… Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 6
  • 7. Business Model Report ǀ GSP Team Reaching Governmental institutions and Agencies To be updated… Reaching Universities and Research Centers To be updated… GSP – The Strategy Our strategy to start with campaigns don’t need much money so we will use social media channels (Facebook fan page, twitter account, blog posts, connects with famous blogs, YouTube videos, Build a character on social media). After that we will use facebook campaigns and Google adwords. Phase 1: Buzz Objective: • 15,000 entrepreneurs to know what GSP is • To generate buzz and curiosity surrounding launch • Build a character to help us to build a community • Make minds image GSP is a virtual entrepreneurship world • Get people talking and sharing on Social media • Push people to visit our Blog (5k/month) • Push teams to create accounts on GSP (5k/month) • Push VCs to create accounts (10/month) • Push mentors to create accounts (50/month) • Push NGOs to create accounts (10/month) Vehicles - Facebook Fan page - Twitter account - Connect on twitter hashtags - YouTube videos - Facebook fan page for character Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 7
  • 8. Business Model Report ǀ GSP Team - Character twitter account - Blog posts - Connect with others active blog in entrepreneurship - Website connected with facebook and twitter. - Newsletter - Attending offlines events Tracking Performance Tools: • Develop potential customer’s database. • Klout tools • Website grader • Alexa • Google trends/ insights • Google adwords • Key word grader Phase 2: Targeting Objective: • Talk about features and start to explain what GSP is • Focus on how GSP satisfy users needs • Push for users to use GSP (creating accounts 15%) • Increase Blog traffic rate (increase visiting blog 15%) • Hire volunteers or ambassadors (30-100 in our target regions) Vehicles - Facebook Ads campaigns - Google Adwords - Organizing Tweet ups and meet ups - Facebook Fan page - Twitter account - Connect on twitter hashtags - YouTube videos - Facebook fan page for character - Character twitter account Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 8
  • 9. Business Model Report ǀ GSP Team - Blog posts - Connect with others active blog in entrepreneurship - Website connected with facebook and twitter - Newsletter - Attending offlines events Tracking Performance Tools: • Increase potential customers database by 15%. • Klout tools • Facebook fans , twitter followers, no# of sharing YouTube videos • Website grader • Alexa • Google trends/ insights • Google adwords • Key word grader Phase 3: Sustenance Objective: • Strong push for users to GSP (increase creating accounts 15%) • Mentoring sessions and workshops (offline workshop/ month) • Attending conferences • Sponsor offline events (Big one per year at least, it depends on budget) • GSP is big entrepreneurship community • Hire big numbers of volunteers or ambassadors (100-300 in our target regions) Vehicles - Ads on famous blogs and entrepreneurship website. - Sponsoring and attending offline events - Sponsoring online events - Facebook Ads campaigns - Google Adwords - Facebook Fan page Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 9
  • 10. Business Model Report ǀ GSP Team - Twitter account - Connect on twitter hashtags - YouTube videos - Facebook fan page for character - Character twitter account - Blog posts - Connect with others active blog in entrepreneurship - Website connected with facebook and twitter. - Newsletter Tracking Performance Tools: • Increase potential customers database by 15%. • Klout tools • Facebook fans , twitter followers, no# of sharing YouTube videos • Website grader • Alexa • Google trends/ insights • Google adwords • Key word grader • Number of attending events and number of sponsoring events Distribution We will depend on our website as a direct channel to distribute our services and our social networks and blog as indirect channels to distribute our services. Our distribution channels will not be costly because it will manage by us but campaigns will be costly. To be updated… Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 10
  • 11. Business Model Report ǀ GSP Team Partnerships Our project requires partners. The purposes of having partners are: • Develop and expand our mentors, investors, startups and entrepreneurs database; • Get more users/customers interested in our project; • Promote and market our project and services we offer. We distinguished several categories of partners that we will deal with: 1. Governmental institutions and organizations. 2. Professional organizations which are supporting entrepreneurs and SMEs. 3. Physical incubators. 4. Online incubators which have lack of services we are going to develop. 5. Online Web-Projects that are providing useful tools to the entrepreneurs. 6. Universities / Research Institutes. First of all let us state that these are hypotheses that need to be tested and validated out in the future more clearly. However, there are evidences coming from interviews we made in Russia that there is an interest in the partnering first of all in the governmental institutions side. Below you will find analysis of entrepreneurship ecosystem (in particular technoparks) and why governmental institutions will require partnering with our project. Table 1 – Techno parks’ situation in Russia Current Situation Future Situation Techno park is business Techno park is a service center; hotel for innovation range of services for residents Positioning companies; place where starting from business resident could cheaply rent development ending up with Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 11
  • 12. Business Model Report ǀ GSP Team an office business management Projects are managed by Projects are managed be Management officials without business professionals experience There are tools for efficient and There is weak collaboration effective collaboration with Collaboration with Universities and research institutes and research institutes universities Efficient and effective startup Focus on the physical Innovation ecosystem is developed for infrastructure, but not on Efficiency residents of techno parks through innovations their selves the whole life cycle of the startup Weakly standardized models Creating an enabling environment Commercializing of co-financing techno for private-public partnership park’s startups Below we will summarize in the table main information about partners. Table 2 – Partners List of GSP Project Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 12
  • 13. Business Model Report ǀ GSP Team Are they How many Partners in potentially Which of them we need Main potential Can we reach out and What information do If so, under what terms partners did Russian interested in to target first to be able partners from the talk to a few of them? they need? and conditions? you meet Market partnering to get to others? category with? with you? 1. These partners need To provide them services 1. Ministry of information where to for uniting more than 20 Telecommunications Governmental Yes. Through NVision invest money techno parks in Russia. 1. NVISION Group 2. NVision Group institutions Group and Russian 2. How to make Yes. Create one unified social 0 2. Russian Venture 3. Skolkovo and Venture Company. innovation ecosystem network/database of these Company organizations 4. Russian Venture more efficient and residents and startups effective. inside the techno parks. Company Professional 1. How to make innovation ecosystem Stimulate growth of the 1. OPORA 1. OPORA organizations more efficient and No innovations in Russia, which are 2. Venture Funds and 2. Venture Funds and Yes. effective. developing ecosystems. 0 supporting information Business Angel Business Angel Providing them tools for entrepreneurs 2. How to protect and Associations Associations that development. and SMEs stimulate growth of SMEs. 1. Where to invest money. 2. How to choose right 1. HSE projects for the 1. Online instrument to create startups / team 2. ANH competition. Physical No building / entrepreneur’s 3. Yes. 3. How to attract information 0 1. HSE incubators toolkits / social network of http://technocup.ru/ investors. entrepreneurs, investors, 4. etc 4. How to minimize costs mentors. of the filtering and choosing process. 1. Receiving more 1. 1. Where to invest money. successful startups/startup http://startuppoint.ru/ Online 2. How to choose right No ideas. There are plenty of Yes. projects for the information 0 2. incubators 2. Filtering startup ideas them in Russia. competition. http://startupforum.ru/ coming to them through 3. How to attract scientific way. 3. http://glavstart.ru/ Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 13
  • 14. Business Model Report ǀ GSP Team investors. 3. Attracting new investors 4. http://greenfield- 4. How to minimize costs and mentors. project.ru/ of the filtering and choosing process. 1. How to develop their There are plenty of Online services. 1. http://freshle.com them. We need to try to Autonomation No 1. Increasing number of establish the Yes. 2. How to attract new information 0 2. venture-lab.org Tools/ Web- users/customers partnerships in order Projects customers / new 3. stanford ecorner not to invent the marketing strategies. bicycle. 1. Moscow State Technical University 1. Educational courses on 2. Moscow Physical 1. How to increase quality entrepreneurship Technical University Universities / of education of graduates Yes, to be 2. Startup Teams 3. Moscow State There are plenty of Research Yes. 0 Institutes 2. How to attract new tested 3. Collaborative Research University them in Russia. students / professors Projects on 4. Saint Petersburg Entrepreneurship University (Global Entrepreneurship Monitor Team) Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 14
  • 15. Business Model Report ǀ GSP Team Costs Project Costs We calculated our project costs for one year with following assumptions: • Time period - 2 years. First year – discovery, validation phases, prototype; 2 year – seed financing, developing the project. • Core team will receive small compensation after the seed financing in the second year around $50 000 on average. • Some extra web developers and designers could be hired. • First investment will be in the advertisement and necessary hardware and software. • Team will meet minimum twice and visit entrepreneurship conferences. Table 3 – Project Costs № Category Price, $ Units Metrics Total, $ Hardware 1 Server $ 3 000,00 2,00 piece $ 6 000,00 2 Backup Systems $ 1 000,00 1,00 piece $ 1 000,00 Disaster Recovery $ 1 500,00 1,00 piece $ 1 500,00 3 Systems 4 Disk Storage $ 2 000,00 2,00 piece $ 4 000,00 5 UPS $ 50,00 1,00 piece $ 50,00 6 Router $ 500,00 1,00 piece $ 500,00 7 $ - Software 8 Hosting $ 200,00 1,00 year $ 200,00 10 Domain Name $ 9,00 1,00 year $ 9,00 11 Web Site Maintenance $ 1 250,00 1,00 year $ 1 250,00 Security $ 1 000,00 1,00 piece $ 1 000,00 12 (Nortel.Access), Firewalls 13 Archiving $ 1 000,00 1,00 piece $ 1 000,00 14 Application Licenses $ 200,00 5,00 $ 1 000,00 Project specific $ - 15 Software tools Marketing Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 15
  • 16. Business Model Report ǀ GSP Team № Category Price, $ Units Metrics Total, $ Advertising, marketing, $ 0,50 2000,00 $ 1 000,00 16 and promotion costs Administrative costs 17 Insurance $ - 18 Labour Costs $ 50 000,00 10,00 year $ 500 000,00 $ 100,00 150,00 hours $ 15 000,00 19 Design 20 Programming $ 100,00 150,00 hours $ 15 000,00 21 Travel expenses $ 2 000,00 10,00 year $ 20 000,00 Office management and $ 1 000,00 12,00 units $ 12 000,00 22 administration 23 Conferences $ 1 000,00 10,00 units $ 10 000,00 Team $ 1 000,00 10,00 units $ 10 000,00 24 recognition/celebration 25 Taxes $ 174 600,00 1,00 year $ 174 600,00 $ 600 509,00 The Costs section is still too abstract, however, we have put a foundation and determined main categories of the costs that we will have. Main drivers of costs are labor costs and taxes. They also represent main challenges here. Thus we need to think how to minimize these costs. Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 16
  • 17. Business Model Report ǀ GSP Team NPV Calculation and payback period To be updated… Sales To be updated… Revenue Model Problems Our revenue model completely linked to the RoadMap of the Services we are going to introduce and develop; and to the Problems we are going to solve. In the problems side we used inductive logic, thus we determined main problems in the industry that exists globally, and then we looked at Russian market problems. We believe that it represents huge opportunities because: 1) Level of entrepreneurship there is very low (one of the lowest among 54 countries that are monitored by GEM, 2012). 2) Domestic market is pretty strong (according to the World Bank Russian have 11th place in terms of GDP, 2011). 3) Russia is one of the strongest countries with more than 60 mln active internet users. 4) Russian population is quite big having around 144 mln people. Main problems that were indicated by our team and which are relevant to our project are presented in the table below. Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 17
  • 18. Business Model Report ǀ GSP Team Table 4 – Main Problems GSP tries to solve Governmental Other Incubators Universities and Startup № Problem Entrepreneurs Investors Mentors Institutions and (Physical and Research Centers Teams Agencies Virtual) 1. Barriers to market entry – 1,97.2 Yes Yes Access to financing (Virtually inaccessible to 2. young companies to obtain investment Yes Yes through public offering on the market) – 2,02. Team selection, organization and management (Low availability of skilled 3. Yes Yes personnel – 61%; Low availability of highly qualified management – 32%) 4. Startup Management Yes Yes Business Model (discovery, validation, testing, 5. Yes Yes building, etc) 6. Bureaucracy – 1,83 Yes Yes The introduction of scientific and technical 7. Yes Yes developments – 1,9. Elementary and secondary education (does not sufficiently encourage creativity of 8. Yes Yes students, self-sufficiency and personal initiative, entrepreneurial skills) – 2,14. Startups and Teams Selection for Investing 9. Yes Yes Yes and Funding Our current investigation didn’t touch Investors, Mentors and Incubators problems deeply. This is the field for the future research: for proposing hypotheses and testing them. However, problems for Governmental Institutions dealing with Innovations and Entrepreneurs are quite clear. 2Problems are listed with the scores they got in the Reports that were analyzed in the Market Research. 0 – 5 scale: 0 – high importance, 5 – low importance; 0 – 100% scale: 0% – low importance, 100% - highest importance Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 18
  • 19. Business Model Report ǀ GSP Team Services and Revenue Models After careful analysis of Market Research3 of the services (around 45 different services we got) we figured out following basic categories of the services in which our customers are interested in: 1. Funding & Financing 2. Education 3. Team Building 4. Community / Professional Community / Social Network 5. Consulting 6. DataBase of Best Practices & Failures 7. DataBase of Startup/Business Ideas 8. Entrepreneur's ToolKit 9. News 10. Promotion 11. Investor's Toolkit The most popular categories are first 8 (which received internal scores from 19 to 16). These eight categories consist of services that are shown in the table below. We decided to put only 15 services in order to be focused and implement services step by step (that will be implemented in accordance with developed Roadmap of the project). However, we will test and reconsider them and their priorities again after finishing of Competitor’s Analysis Phase. Table 5 – Main GSP tries to solve 3 GSP Market Research v.4 19.06.2012 http://www.slideshare.net/VRyzhonkov/global- startup-platformmarket-research-reportventure-lab-2012 Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 19
  • 20. Business Model Report ǀ GSP Team Phase of the Category of № Service name and description Implementati Revenue Model Customers (who pays money) Comment Service on (1 – 3) 1. Our company will charge each startup team / Funding & Find VC, Venture Fund, Business Angel 1 Brokerage, % of Startup teams, entrepreneurs entrepreneur for the successful investor’s Financing service the Deal through investors funding. 2. Startup Education for increasing Advertising will be presented only on the Education Knowledge on Entrepreneurship and 1 Advertising Startup Teams and Entrepreneurs pages of the Platform devoted to the education Entrepreneur's Skills of startups and entrepreneurs. 3. Community / Donations from Team building (finding, selection, 1 Startup Teams and Entrepreneurs Team Building the users matching, etc) or Advertising 4. Community / Community / Professional Networking among entrepreneurs, 1 Startup Teams, Entrepreneurs, Donations from Community / mentors, business angels and investors Investors, Mentors the users Social Network 5. Startup teams, Virtual Incubators, Consulting Testing new products and services 1 Freemium Governmental Institutions 6. Brokerage, % of Consulting Develop business strategies 2 the Deal or Virtual incubators, Startup Teams Freemium 7. DataBase of Best "Online database of advices, draft Community / Practices & business ideas, predeveloped business 2 Donations from Startup Teams, Entrepreneurs Failures plans; the users 8. DataBase of Best Community / Cases of best practices, successes, rules, 2 Donations from Startup Teams, Entrepreneurs Practices & failures, hints and tips. Their analysis. Failures the users 9. Data about consumers and their consumption Subscription -> habits are valuable, especially when that DataBase of 2 Freemium or Startup Teams, Entrepreneurs information is carefully analyzed and used to Startup/Busines Business Models' creation s Ideas Infomediary target marketing campaigns. Independently collected data about producers and their products are useful to consumers when Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 20
  • 21. Business Model Report ǀ GSP Team Phase of the Category of № Service name and description Implementati Revenue Model Customers (who pays money) Comment Service on (1 – 3) considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market. 10. DataBase of Brokerage, % of Investors, Startup Teams, Startup Fair (Buy/Sell a startup) 2 Startups the Deal Entrepreneurs 11. Subscription -> DataBase of Startup Teams, Entrepreneurs, Startups' Catalogue 3 Freemium or Startups Investors Infomediary 12. Entrepreneur's Project Progress Evaluation Tool / 3 Startup Teams, Entrepreneurs, Freemium ToolKit Metrics Virtual Incubators 13. Entrepreneur's 3 Freemium Startup Teams, Entrepreneurs Communication Management Tool ToolKit 14. Entrepreneur's 3 Freemium Startup Teams, Entrepreneurs Weekly and Daily Reporting Tool ToolKit 15. Community / Professional 3 Advertising Startup Teams, Entrepreneurs Find Mentor Community / Social Network Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily, Peter Asad, GSP Team. Page: 21
  • 22. ^f–n /¯½f°n ,– E°Ŵnf f– E ¾ f° /°€¯f° ^ n nn °°– /° ¾ƌ¾ fff¾ € d ¾ Wfnn¾ Ǝ f ¾ W¯° ^ n ¯½ df¯ °– °¾ °– fff¾ € °f°n°– $ ^f ½¾$ ¾°¾¾ °°– /f¾ ,– ^nf E °½° ƌ¾ d nf° °n ^f–n Figure 1 – Global Startup Platform Services Matrix We believe that existing problems dictates following distribution of services that should be implemented within our project. The more important ones for us are: 1. Team Building 2. Education 3. Social Network 4. Consulting 5. Financing / Fund raising
  • 23. Market Research Report ǀ GSP Team Revenue Models in detail Each of the service will have it’s own revenue model. This will be described in the future versions of the Report. This part of our project is still under development. The most important challenge here is: “Is it possible to apply different revenue models in the same web site / platform for different services or not?” In order to arrive to the answer to this question we should test and find answers for each service to the following questions: 1. How will customers pay you and how much are they willing to pay? 2. Is a subscription model better than a one-time payment? 3. Is it better to rent to them or sell? 4. Does a freemium model make sense and if so, what features will people pay to upgrade for? Run some tests with customers to see what the best revenue model would be. 5. Are you planning to make money through advertising? If so, contact a few potential advertisers and see if they are interested and how much they would pay you. 6. How many users do you need for them to be interested in advertising on your site. Try to think outside of the box and not just rely on advertising- based business models. 7. It's great if you can have a few different potential revenue streams to test out. Are there other ways you might charge for the product or service? 8. Which might yield the most revenue? How do you know? 9. Did you walk through the entire process of how exactly a dollar moves from the customer's hands to the startup? 10. Did the team brainstorm alternative possibilities? 11. If it was a monthly subscription, could they get a few paying subscribers? Copyright ©2012 GSP team. All rights reserved. Page: 23 Prepared by Ryzhonkov Vasily, GSP Team.
  • 24. Market Research Report ǀ GSP Team 12. Are the users and the paying customers different (like for Google)? If so, were both sides tested? 13.If the revenue model is lead generation, did the company actually try to get paid for generating a few leads? Future Research Marketing 1. We need to define more carefully profiles of our customers (in more specific way). 2. We need to define 3 more profiles of customers: Startup Teams, Governmental Institutions, Physical/Online Incubators 3. Our goals should be established with the SMART4 criteria. 4. We need to establish tools for measuring marketing activities 5. We need to state the ways how we will reach our customers except entrepreneurs. Distribution 1. Section should be updated Partnerships 1. We need to test our hypotheses for several partners. 2. We need to contact them and understand their needs more carefully. 3. We need to understand what we could propose them. Costs, Sales 1. To be updated constantly – on monthly basis. 2. NPV and Payback evaluation should be included Revenue Model 1. To be reconsidered after accomplishing Competitor’s Analysis. 2. To solve main challenge of our project – could we introduce several services with different business models. 4 SMART – Specific, Measurable, Achievable, reliable, Timeable Copyright ©2012 GSP team. All rights reserved. Page: 24 Prepared by Ryzhonkov Vasily, GSP Team.
  • 25. Market Research Report ǀ GSP Team 3. To detail all business models we put in the Revenue Model section (how much money could we get, what features could be sold, what not, etc). 4. Many of our models consider Entrepreneurs and Startup Teams as main customers. However, these users aren’t able to pay much. Preliminary research shows that only 30% of the entrepreneurs are willing to pay for the services. Our revenue model completely linked to the RoadMap of the Services we are going to introduce and develop. After careful analysis of the services (around 45 different services) we got after Marketing Research we found following basic categories of the services in which our customers are interested in: Copyright ©2012 GSP team. All rights reserved. Page: 25 Prepared by Ryzhonkov Vasily, GSP Team.
  • 26. Market Research Report ǀ GSP Team About the Team Vasily Ryzhonkov (Founder and Team Lead) aka the LifeStyler vryzhonkov@gmail.com Russia, Italy Mounir El Ogbani (Software Developer) aka The Technophile perbook@gmail.com Morocco Naveen Bagrecha (Universal team member) aka The Wiz-Kid naveenbagrecha2@gmail.com India Pavel Puchenkov (Designer, Software Developer) aka The Schmozer paul.softdeveloper@gmail.com Russia, New Zealand Rajat Pal (Marketing) aka The Brain creativerajat@gmail.com India, UK Peter Tamer (Marketing, Networking) aka the Showman Egypt Copyright ©2012 GSP team. All rights reserved. Page: 26 Prepared by Ryzhonkov Vasily, GSP Team.
  • 27. Market Research Report ǀ GSP Team Version of the Document 1.0 – Draft of the document. 07.07.2012 List of Figures Figure 1 – Global Startup Platform Services Matrix List of Tables Table 1 – Techno parks’ situation in Russia Table 2 – Partners List of GSP Project Table 3 – Project Costs Table 4 – Main Problems GSP tries to solve Table 5 – Main GSP Services matched with Revenue Models Copyright ©2012 GSP team. All rights reserved. Page: 27 Prepared by Ryzhonkov Vasily, GSP Team.