See my pitch deck draft at this Google Drive link.
( with emphasis on draft)
And here is a draft company pitch
DRM
Marketing Mesclun Salad [4 grams]
Walk through the marketing campaign of your venture?
Do you have a website and other social media channels up and running?
How and how often will you engage your end user base and audience?
Daily, weekly, monthly, quarterly, annually?
How many 'in-the-field' Marketing professionals do you need to realistically scale according to the timeline you presented?
How important is customer retention to your Venture?
What sort of “churn” is common for ventures in your category and how do you plan to minimize it?
Marketing Campaign:
My marketing campaign will initially involve a deep dive into the product, designing an MVP, Prototype and Beta for high ease-of-use. This will be done in partnership with officials in Somerville, particularly the Director of Constituent Services. Somerville's current Mayor, Joe Curtatone, has a history of close collaboration with the Kennedy School, as well as a history of innovative governance techniques in order to improve city management.
The Director of Constituent Services has a similarly forward-looking attitude, and has requested to collaborate on a potential solution with OrangeCone.
Concentration on product development and execution in partnership with Somerville would seek to develop my first customer champion - a customer that would evangelize my product to all other customers. In this kind of partnership role, I may label Somerville a 'Research Partner', or some other appropriate title.
With an evangelist in my primary subscribing customer type, I would like to create marketing materials around our successes with our Research Partners, and by doing so drive adoption among other similar customers.
Social Media:
I have reserved the Twitter handle @OrangeCone1 , but have not begun Tweeting. I have no active blog or Facebook page currently.
End User engagement:
End Users will be engaged constantly via user-generated content to the system, so daily. Popular Issue reports will likely also get pushed out via Social Media as well, which would at minimum be a weekly occurrence. I'd like to also write a weekly blog regarding data in government, or public space issues, or the like.
Marketing Professionals:
Most of this is based upon my marketing strategy. At the moment, I believe my marketing strategy will consist of taking the purchase decision away from those involved with RFP purchases as much as possible. Initially I will do that with my subscription pricing model, which is designed to price below the purchase funding level required for an RFP.
Beyond this, I will simply attempt to sell in a way that will deliver benefits to local governments, yet take the purchase decisions away from them. One way to do this would be to sell this service to an Association of governments, which would purchase a set amount of licenses for distribution to the cities that belong to them.
Selling to Nonprofits and Universities, Property Management companies, and Utilities would require a shorter selling cycle then selling direct to government.
Therefore, my marketing sales force size will be highly dependent on government procurement processes which could vary at a state and local level. I believe ultimately this will combine with a sort of viral product growth, driven simply by my website, and backed by some amount of customer reps.
Last, a basic rule that follows from this is simply that as business grows, this workforce will likely grow as well.
Customer Retention:
This is KEY to my venture! It's key to long-term success of this venture because the tighter the network of subscribing users, the tighter the coverage will be of each public space that may have reported issues. The tighter the network, the shorter the issue response time-tables will likely be, so this is an ultimate goal of my company.
But more basically, customer retention is key because it will allow me to see if my product is still filling the needs of the customer base that we serve.
And most importantly to potential investors: the will be looking to see if my Life-Time Value / Customer Acquisition Cost ratio is at 3 or higher - a general sign that a tech product is ready to scale. If I'm losing too many customers too soon, or it costs too much to acquire these customers, I will not reach a potentially successful LTV / CAC ratio.
Name your Hero Antipasto [3 grams]
We all have heroes when it comes to different aspects of how we live life...
Who is your Venture Hero?
How have you incorporated his/her ideology into your own story / plan?
What do you intend your legacy to be as a Venture Hero?
Part of my original inspiration for this business idea was generated by watching Meet the Press, the longest-running TV Show in the world, and best summary of the weekly political environment that I think you can get.
I have a 'Meet the Press problem', in that I cannot watch the show without constantly googling all the speakers to see what their experience is, what their biases may be, and generally how much I should listen to these people.
This problem collided one day with some lessons remembered from my MBA program at the University of Virginia - namely, that any place that you have a need that isn't being filled, or any time you ask the question 'why isn't there something like that'? - is the definition of an entrepreneurial possibility.
So when Michael Bloomberg came on the show, and I read his background and how he built Bloomberg and why, and how it changed the Finance Industry with real-time data, I asked the questions I should, as someone with an MBA working in government.
My one main question: if someone brought real-time information to government about what was happening in their cities, what would that look like?
As someone who has had a need to communicate my own, non-emergency needs to government, I saw this particular need as one that could be filled in real-time with existing technology - and that's when I generated the idea for OrangeCone.
I hope that my legacy as a Venture Hero will be one of becoming successful by doing good - giving people a voice about the places they live, and giving governments, nonprofits, transit authorities, and all others that care for public spaces real time information about what's happening in the spaces they manage.
Venture SWOT Jalapeno Poppers [3 grams]
Outline the Functional strengths, weaknesses, opportunities and threats of your venture to date (i.e. a SWOT analysis)
Incorporate Porter's 5 Forces framework in your analysis (you can Google it)
Strengths: My application provides a functionality that is already in the market, but do it in ways the break down barriers to usage, to data access, and to price. On Usage, we break barriers to adoption by providing one application for every public space, instead of one application for each public space or city, which is the current model. On Data Access, we break down data silos by creating one pool of data issues that is simply filtered by user account settings, which allows one issue report to be relevant to many different levels of subscribing users - a city, metro system, nonprofit and Federal Government agencies may all be interested in one particular user report... for example, a particular issue report regarding water or flooding. On Price, we break barriers to entry for subscribers by changing the access to this kind of capability to one that doesn't involve procurement of a unique mobile and web application for each individual city or entity that wants this kind of capability, and we change this by creating a solution and then delivering it on a subscription model. This subverts the RFP government procurement process by decreasing the dollar amount of initial financial outlay.
Weaknesses: Other companies are further ahead in product development and delivery,and are better capitalized than we currently are. So our weakness is financing and a lack of a completed MVP.
Opportunities: We have an opportunity to change the market and become a market leader by creating the next logical step in bringing social networks, apps, and big data to local public spaces.
Threats: Current threats are other competitors currently in the market, who are mostly commercial players. Future threats involve a large tech company deciding that the government and public market is a large or interesting enough market opportunity for a large investment - entry of a large tech player like Google or Facebook would be market changing.
Venture Link Soup [2 grams]
Share a helpful link from your venture due diligence and research process that you found particularly helpful
How did you incorporate the knowledge/link into your own Venture?
Please be sure to share the URL/Video Link
This is the link to a CS50 for MBAs class intended to give Harvard MBAs a good perspective for working in tech companies or startups. I haven't explored it too much, but I will.
The next one is a link to Jeff Bussgang's website. Jeff is a Boston-based VC who started as an entrepreneur in tech. His blog is some pretty good perspective about what VCs value from upcoming entrepreneurs, and also about what is necessary for success.
This next link is a pretty great one - it's 300 Awesome Free Tools for Tech Entrepreneurs. I've used a couple of these things. SquareSpace is obviously one of them, and SquareSpace Free Logo... that was included in my Squarespace membership, but is still free otherwise.
I'm going to use HTML5 UP, which will deliver CSS templates for usage to brand my website and mobile app in a consistent "look".
I tried to use Google Trends, which tracks website visits and gives analytics for free, but it was more difficult than I had time for.
ImageOptimizer looks good, as image size requirements for different things can be specific, and changing things without professional tools is difficult at times.
MemeGenerator could be just clean fun, and could be part of some kind of social marketing campaign.
Optimizely looks to be hugely helpful with A/B Testing of websites and apps, so I'm going to use that during my Prototype testing.
Wharton Game Simulation Sirloin*** [5 grams]
Document your key learnings from the Wharton Startup Game Simulation
Describe the sweet and sour spots of the simulation
What type of compromises did you make during the negotiation process?
Describe your counterparties and their inherent motivations
Be sure to differentiate how this Simulation differs from Reality
If you did the Simulation again, do you think you could garner additional value (economic or otherwise) based on your wisdom during the first round
My key learning is that the time pressure of the game pushed me into acting in ways I would never act in real life. The big example here is that I would never have entered into an employment contract without negotiating terms.
I brought a lot to the table as an tech product guy, so I would have normally asked for more equity and salary. And in reality, even though I was hired, if I felt I wasn't hired at a fair rate, I would leave, because I would feel underappreciated.
In reality, most of the game I took on a Founder's role within the company, and I arranged the two deals that got our team to our funding number. Specifically, we received interest and an investment from one of our two investors. The combined investment came in under our goal amount of $5M, which the investor did not know because it was not communicated to him.
After anchoring on a certain set of terms, we accepted those terms to get closer to our goal. However, because we were still short, I proposed he double his investment in order to double his equity stake... and this was accepted by the investor, getting our firm to our funding number and increasing our firm's chances of success.
Counterparty motivations were my employer, who sought to minimize the equity distributed. And, Investors, who sought to both maximize equity per dollar invested, as well as a motivation to get us to our target funding amount for this round of financing.
This situation differs from reality because the time pressure would allow each team to actually do the math on each investment and the valuation numbers, instead of having to rely on doing math on the fly. I found it also difficult to deal with Founders without a sense of what they needed, and those without a sense of how to run a meeting and make a decision. It seemed like when speaking in groups, investors would simply walk away, and many times would not have a yes / no / lets speak later decision.
If I did this situation again, I would engage more aggressively due to the time pressure and split attention spans of most founders.
TAM 2.0 [3 grams]
Through hypothesis testing and retesting, has the the total addressable market for your venture changed?
Distinguish between the long-term total potential market vs. the sub-set of that market that is "addressable" by your venture in its first year or two
My TAM has actually changed. I have been thinking of OrangeCone as an app that is primarily for Local Executive Government subscribers. As I got to thinking about what the idea actually is as an app that can collect pictures about a place, geo-located them, and visualize and route those reported issues, it became clear that these capabilities and the mobile / web app would not be any different if my TAM expanded from Local Executive Governments to simply any institution that takes care of any public space in the US.
So my new TAM is:
•23,418 Local Executive Governments in the US
•7383 State Legislative Offices in US
•7000 Universities
•15 Metro systems servicing ~3.8 B per year
•384 Primary Airports in US, servicing ~743M per year
Experiment Time [2 grams]
How have you interacted with your end user and customer?
Direct contact or indirect observation?
What did you unearth?
What sort of sensitivity analyses did you think through?
I've presented my idea to a Cambridge City Councilman, a special assistant to the Mayor of Somerville MA, a Director of Constituent Services in Somerville, a former Chief of Staff to Mayor Menino of Boston, and a Candidate for City Council in Newton in the past six months.
All of these interactions have occurred in person, and have been conversations about the potential of an idea like this. I did not utilize my website and web application as displays or demonstrations of the idea.
I unearthed many things!
Mayor Menino's former Chief of Staff wasn't really a big fan of the idea, but he was coming from a city that already had that capability through their own mobile app, that was the inspiration for my application. He was also concerned that there were also other commercial players in the market, and could not see that my application - which is designed to serve everyone in the US - is different from companies that simply develop mobile applications for individual municipalities. I took his feedback with a grain of salt, because the day I met with him he and his whole family was recovering from colds, and Mayor Menino had just passed as well. I met with him on his first day back. Regardless, I will reengage in the future, post-MVP.
Many have been very enthusiastic about the potential behind OrangeCone - in fact, all other individuals listed above have been enthusiastic about bringing this capability to bear within local governments.
These conversations and others led me to both think through both the technical tools that I construct my mobile application on, and the capabilities that would be included within the mobile application. Shifting the technical tools utilized has shifted my cost structure a bit.
Originally, I thought my mobile application would feed data to a business intelligence tool called Microstrategy, and this decision would make the Microstrategy tool the major cost driver of your company. In addition to this, along with the benefits of the business intelligence capability as a positive, it would link OrangeCone on a semi-permanent basis, which might include some element of future switching costs, to one other company in a customer-type relationship, instead of a partner relationship.
After conducting client interviews, I conclude my MVP does not have to have particularly sophisticated business intelligence tools, and that instead I should simply construct relatively simple performance metric and management tools outside of the Microstrategy platform.
Further, I actually unearthed that there is a large market need this kind of management tools in local governments, which has caused many of those I spoke with to indicate an interest in partnering with me through creation of the OrangeCone MVP and Beta.
Simulation Sundae [3 grams]
- To prepare for the Startup Game Simulation, consider that you will be thrown into a situation where you will have relatively little knowledge about the market, competition, and other players until the Startup Game begins. What do you think the key issues are that you will face if you are a Founder? What if you are an Investor? What if you are a Key Employee? What will you seek to optimize given limited time and asymmetric information?
Founder key issues are Product, People, and Funding oriented generally.
Product knowledge is rooted in the market, and knowledge of the market is rooted most primally in the number of conversations with customers. So, as a Founder, to get my Product closer to Product-Market fit, I'm going to try to have a lot of conversations with my potential customers regarding the needs that my customer and product might be able to fulfill.
At the same time as I become more aware of what an improved product is, I will need to seek out people that have the skill sets and the passion to build and sell a product within a company like mine. So I will seek out conversations with many potential employees.
Funding will become an issue at the same time that you need to build a technical product, and at the time that you want to hire staff. Therefore I will seek out Venture Capitalists and other funding mechanisms to potentially invest in my company.
As an Investor, I'm concerned with the same three things - Product, and People. Because I bring money to the game, I want to know if the product has achieved Product-Market Fit, and if it has not, what might be required to do this. I'm concerned with the people involved in the company, and with they currently have all of the general skills required to build the product as a founding team, and if they do not, if they have access to networks of people with those skillsets.
As a Key Employee, I'm concerned with Product only. Therefore, I want to have an ability to communicate well with others at the company, have a good knowledge of the market generally, and have the ability to establish rapport and actively engage with current and potential customers.
Timelining and Milestoning Souffle [3 grams]
Describe the key milestones for your venture and how you plan to meet each one
MVP completion: Completion of my MVP is currently only a funding issue, requiring a less than $10K investment - OR, it's a time issue, as I'm constructing the mobile application by coding it myself, which requires a longer time-frame, because I'm teaching myself how to code in order to construct this initial MVP product. If I code the application myself, no particularly large investment will be required. And because I've had conversations with between five and ten customers at local governments, I have direction for the creation of the MVP for this initial client - local executive governments.
As I iterate my MVP to construct a Beta, I will need to conduct user interviews with between 25 and 50 customers. These will all be at local executive governments, legislative government offices, utilities, police and fire departments, and universities - my initial customer base.
Beta completion: Sufficient perspective for completion of the Beta will be between 25 and 50 customers within each of the buckets above - local executive governments, legislative government offices, utilities, police and fire departments, and universities. Again, if constructing it myself, the cost of this will be greatly reduced. If I'm not constructing it myself, I will need either funding or partners with the ability to construct the Beta.
Costing Carrot Cake (CCC) [2 grams]
Is your venture heavy with respect to fixed costs or variable costs?
Walk me through the cost line items (COGS vs SG&A vs others)
Right now, I'm transitioning my technical model from one that is dependent on business intelligence provider Microstrategy as the analytic tool that will analyze the collected issue data to one in which I create a much simpler MVP. This decision is substantially driving down my Fixed Costs for Administrator fees, as well as driving down Variable Costs by saving me a $66 fee per user (!), for those utilizing the business intelligence tools for my subscribing users.
Because i'm transitioning away from Microstrategy to an in-sourced solution for CRM, Performance Management / Metrics, and leaving out Business Intelligence / Data Analytics from my MVP, this is vastly decreasing Fixed Costs
My cost line items now are: COGS will be payments to a new software provider, AlphaAnywhere, for an overall service of hosting the mobile and web application that is based upon overall user volume limits, however it's based upon user volume of users utilizing the application at the same time (i.e. number of applications hitting the server at one time) and not the overall number of users with access to the application.
This cost structure is different for different tiers, and is cheaper than Microstrategy, but a consultation with that firm is necessary for a solid number. Other than that, the website hosting fee is only $16 per month.
I take no salary, and have no office, have no other staff, currently.
Story Time [2 grams]
Describe your founding story (or "myth")
What inspired you and how did you develop this vision?
Like many entrepreneurs, I've created a product and service that fulfills a need that I have that is not fulfilled - the ability to easily speak to government in real time.
OrangeCone is born out of a story that takes place during my early grade school, over a trip my younger brother Mike and I took with my parents to New Orleans. My dad was there for a conference of Emergency Physicians, and my mom, brother and I used the opportunity to explore Jackson Square, down in the French Quarter.
We were having a fine time eating sugar-coated beignets and feeding the pigeons, and we did some food shopping. My helpful brother was carrying a shopping bag for my mom as we walked in Jackson Square.
That particular week, Jackson Square was having some slate repaired, and benches were unscrewed from fasteners and set aside.
Without Orange Cones indicating a need for caution around the fasteners, my brother did not notice them, and he tripped on one bench fastener and fell and hit his head on another. His serious injury required an immediate trip to the hospital and surgery to repair his injury - a high price to pay for helping our mom!
Fast-forward to just recently in my Arlington, Virginia neighborhood and I notice the same thing: a street lamp has been removed for repair, and the screw fasteners in the sidewalk had not been covered or protected!
I realized that even twenty years later, there was still not a fluid, easy-to-use method to communicate that I have a need as a citizen to my government and fellow citizens.
So, I decided to try to create a way... and that's OrangeCone.
TAM Slam [3 grams]
Summarize the total addressable market for your venture
Distinguish between the long-term total potential market vs. the sub-set of that market that is "addressable" by your venture in its first year or two
My initial customer will be local executive governments in the US. Currently, there are 295 governments that serve more then 100 thousand citizens each, which includes ~63 million people if you do not include the 10 most populous US cities.
My initial target market is these medium and small cities that do not have a satisfactory way to source citizen issues, and do not have the funds or the know-how to create their own solution.
If I assume that I can capture 50% of this market, that is ~147 governments.
If I assume that half of these 147 governments will order an Enterprise subscription for 100 users at $80 per user per month, that will give $590K Revenue per month and $7.08M per year.
If I assume the other half of the 147 governments captured will select the Pay Per User option at $100 per user per month for 50 users per government on average, this will give us revenues of ~$4.43M per year.
This gives a Total Addressable Market of ~$11.5 million per year for the initial customer type - Local Executive Governments.
Once this initial customer is served, other customers will become viable, including: State and Federal Executive governments and Agencies, State and Federal Legislative governments, Nonprofits, and Media organizations.
Ultimately, this product can and should be utilized in the international market as well.
BMC Plate*** [5 grams]
Document your business model canvas
Present your canvas graphically, in the format reviewed in EF1 (MLD829M) by Osterwalder and Pigneur http://www.businessmodelgeneration.com/canvas/bmc
Specify your top three hypotheses:
One related to a customer segment you are serving
One related to your value proposition to that segment
One related to some other component of the canvas
Customer Segment hypothesis: I currently believe that governments will pay a subscription fee for a real-time information service such as OrangeCone, because they already pay for real-time information through TV monthly subscriptions.
Value Proposition hypothesis: I believe that the value of OrangeCone is such that a two-sided market - of both citizens utilizing the app for free to report issues, and subscribing users can be created
Value Proposition hypothesis: One recognized, branded mobile application that is useful for reporting to government in any geographic area will be utilized more than current single-city based mobile applications - both by citizens, who only need to utilize one application for this function, and by government clients with varying needs, who struggle to make use of bucketed government data.