Minjong Chung 1 st MS (CS)

1. OURCRAVE is an online social shopping platform where customers can make their own deals on products or services of their choosing with sellers who can offer them in bulk at a discounted price.

2. User Experience design System Architecture * 12 international design awards * Co-founded olaworksInc (4M series A from Intel & Skylake) * Co-founded 1/2 PROJECT * Software engineer for 3 years (NHN Corp, iconlab Inc.) * Wide range of experience such as online shopping, computer vision, and internet radio Sungjoon Kim 1st MS (d-school) Minjong Chung 1st MS (CS) Front-end building Market research * Cognitive Science major * Developed an iPhone app on iTunes (SpotAlarm) * Ex-medical student * Project manager in network security for 3 years (Comtrue Tech) * Software engineer for 1 year in social network and a social shopping service (Paprika Lab) Daniel Poon 1st MS (CS) Jeongjin Ku 1st MS (EE)

3. Business Canvas #1 Seller: - Access to large online customer pool - Bulk sales with reduced commission Buyer: - Better discounts - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand - Powerful sellers - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller: Pro-sellers in Amazon and eBay who sell electronicsBuyer: Online shoppers • Web & App sales • -Online social networks - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads - Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries

4. Key Question for Business Canvass #1 WHO WILL BE OUR CUSTOMERS? DO THEY FEEL ENOUGH VALUE?

5. Seller Side Test with a fake E-MAIL Give me a quote for a bulk sale! FAKE CEO (Steve Feiberg) Electronics Sellers on Amazon/Ebay 57% showed interest 90% sell products on Amazon • 56% paid 10~20% transaction fee • 22% paid 5~10% transaction fee • 78% agreed it was too much • 33% actually provided discount proportional to group size

6. Seller Side Interview with Industry Specialist (LG Electronics) Main Target Bestbuy Target, Walmart 25% Associations of RegionalBig Sellers 25% 40%

7. Seller Side Interview with Industry Specialist (eBay) • Smaller sellers • Large sellers already have sufficient traffic • Older products • Sellers may want to clear the out-of-date products with huge discount

8. User Side • : Online User Survey Power to choose products Discount on products Buyer community feedback

9. Business Canvas #2 Seller: - More customer traffic - Bulk sales with reduced commission Buyer: - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand • Powerful sellers • Sellers who need more traffic - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller: Trustworthy online sellers with verifiable websitesBuyer: • Online shoppers who are willing to wait to get significant discounts on products • Web & App sales • -Online social networks - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads - Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries

10. Key Question for Business Canvass #2 HOW CAN WE ATTRACT BUYERS? CUSTOMER ACQUISION COST?

11. Buyer Demand Test Best Marketing Channel for having buyers is Facebook Wall : 144 Unique Visits,10 e-mail subscriptions for 3 days Facebook Wall Google Adwords Facebook Ads 5% 0.08% 0.005% (CTR) $7.52 $4.88 $0 (COST)

12. Business Canvas #3 Seller: - More customer traffic - Bulk sales with reduced commission Buyer: - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand • Sellers who need more traffic • Server providers • Established services- Online Marketing : Google/Facebook - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller: Trustworthy online sellers with verifiable websitesBuyer: • Online shoppers who are willing to wait to get significant discounts on products • Web & App sales • Online social networks • Online advertising - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries • - Online ad campaigns

13. Key Question for Business Canvass #3 HOW CAN WE ATTRACT SELLERS? COOPERATION WITH SELLERS?

14. Seller Contact Deal with sellers failed because no group pricing or discount too low. Organize Real Group Deal • Contact popular online sellers • 3 products: HD camera, protein drink, videogame • Videogame was for pre-order Result • Most sellers: no group discounts • Discounts offered < 10% • With shipping and tax still >= Amazon price • David vs. Goliath problem

15. To Pivot or Not to Pivot? Although dismayedat seller response, we did not give up. What do do? • Deal with sellers disappointing • Seller problem intractable? • Teaching staff: Pivot or else… Beaten, but not defeated • Lost one battle, but not the war! • Only contacted larger sellers • Sellers need more value • Show them a real website Filter advice and stay determined! No Pivot Yet

16. Solution 1 : Rapid Implementation Implement seller & buyer side features to give sellers fuller experience. Site Upgrade Frenzy • Improved site design • Buyer facebook login • Online social networking integration • Seller login and registration • Seller bidding • Seller group deal creation page

17. Solution 1 : Rapid Implementation Humble beginnings

18. Solution 1 : Rapid Implementation The Real Deal

19. Solution 1 : Rapid Implementation Main page Facebook connect Deal creation by sellers Bidding dialog

20. Solution 2 : More seller value & spamming Add value for sellers based on mentor and industry expert interviews Add Seller Value • Low transaction fees • Customer contact information • Cross-selling products • Ad banners • Power to create group deal The Art of Spam • Massive seller e-mail campaign (16,000 in total) • Stanford takes notice and issues warning (oops) • Enumerate value propositions • Show live website • Hand out registration codes

21. We made a single hit on seller side.

22. Seller Invitation Result 180 sellers # of sellers who signed up # of deals made by sellers 80 deals (below Amazon price)

23. Seller Invitation Result # of sellers who replied to our email 200 sellers # of sellers who made suggestions on OURCRAVE 50 sellers

24. Seller Invitation Feedback We’ve got two major feedback Who will be in charge of Shipping Cost & Sales Tax ? There are too diverse Product Categories

25. Business Canvas #4 - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand Seller: - More customer traffic • Bulk sales with reduced commission • - Access to customer contact information • Cross-sell their products.- Site advertising- Power to create deals • Buyer: - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers • Sellers who need more traffic • Server providers • Established services- Online Marketing : Google/Facebook • -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller: Trustworthy online sellers with verifiable websitesBuyer: • Online shoppers who are willing to wait to get significant discounts on products • Web & App sales • Online social networks • Online advertising - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries • - Online ad campaigns

26. Key Question for Business Canvass #4 Key Activities for Next Stage Can we make enough money?

27. Key Activity – Seller Management We should manage main feedbacks from sellers by making basic function, 1. Convenient System • Auto Sales Tax Calculator • Bulk List Uploading Function • Notification to Sellers • for relevant cravebags 2. Building credibility • FAQ List for Sellers • Share buyer information • F2F meeting with big sellers 3. More Incentives • Cross selling Option • Seller Advertisement Feature

28. Key Activity – Initial Advertisement By price comparison site and online ads, test our early service model. Then, Crazy deals needed for jumping 2nd Active : Crazy Deals • 20~30 % sales for Promotion Deals • Very very very famous products 1st Passive : Online Ads • Google / Facebook / Yahoo Ads • Price Comparison Site ( very important)

29. Key Activity – Encouraging Buyer’s Viral We will implement incentive system for sharing deals and help buyers communicate with each other in our service Incentive for sharing Buyer Community 14% 22% People who willing to share deals in FB* People who shared deals In FB* • OurCrave Point • Extra Discount • Free shipping or tax Coupon • Live comment on cravebags • Weekly Best cravebag vote • Youtube Ads Competition * OurCrave User Survey in 2/3 weeks

30. Revenue / Cost Source Revenue Cost Product Ads Transaction Fee ( Main ) Float Money Site Maintenance Marketing ( Main ) Customer Support Server/Traffic /Mobie Apps 15% of transaction Ads for buyer Seller Management 3~5% ( paypal) Outsourcing 20%/60days* * google/groupon’s rule, we are asking sellers about this rule.

31. Income Estimation * • TRANSACTION FEE IS MAIN REVENUE • MARKETING COEST IS MAIN COST • BREAK-EVEN IS 3 DEALS/DAY *Appendix in Blogs

32. Business Canvas Final Seller: - More customer traffic • Bulk sales with reduced commission • - Access to customer contact information • Cross-sell their products.- Site advertising- Power to create deals • Buyer: - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers • Sellers who need more traffic • Server providers • Established services- Online Marketing : Google/Facebook • - Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback • Growing and maintaining online buyer/seller communities and credibilityof transactions- Promotionof website and brand • - Establishing credibility Multi-sided platformSeller: Trustworthy online sellers with verifiable websitesBuyer: • Online shoppers who are willing to wait to get significant discounts on products • Web & App sales • Online social networks • Online advertising - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness Seller side:- transaction fees Buyer side:- targeted ads - float money • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries • - Online ad campaigns

33. Key Lessons

34. APPENDIX : FULL BM HISTORY

35. Business Canvas – Week 1 Seller : - More customer traffic - Bulk sales- Lower transaction feesBuyer : - Better discounts - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Powerful sellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller :pro-sellers on Amazon and eBayBuyer :Online shoppers - Web & App sales - Online social networks - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries Seller side:- transaction fees Buyer side:- targeted ads

36. Business Canvas – Week 2 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts - Power to choose product deal - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Powerful sellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller :pro-sellers on Amazon and eBayBuyer :Online shoppers - Web & App sales - Online social networks - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries Seller side:- transaction fees Buyer side:- targeted ads

37. Business Canvas – Week 3 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts - Power to choose product deal - Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Powerful sellers • -Regionalsellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller : Sellers on Amazon and eBayBuyer :Online shoppers who are willing to waitto get significant discounts on products - Web & App sales - Online social networks - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries Seller side:- transaction fees Buyer side:- targeted ads

38. Business Canvas – Week 4 • Seller : - More customer traffic • Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts • - Power to choose product deal • - Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Sellers who need more traffic • -Regionalsellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller : Sellers on Amazon and eBayBuyer :Online shoppers who are willing to waitto get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries Seller side:- transaction fees Buyer side:- targeted ads

39. Business Canvas – Week 5 - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand Seller : - More customer traffic - Bulk sales- Lower transaction fees- Brand name marketing - Access to customer contact information - Ability to cross-sell products - Site advertising Buyer : - Better discounts - Power to choose product deal - Buyer community feedback on products and sellers • - Sellers who need more traffic • -Regionalsellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller : Sellers on Amazon and eBayBuyer :Online shoppers who arewilling to waitto get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries - Online ads Seller side:- transaction fees Buyer side:- targeted ads

40. Business Canvas – Week 6 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Access to customer contact information - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand • - Sellers who need more traffic • -Regionalsellers • - Server providers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller : Sellers on Amazon and eBayBuyer :Online shoppers who arewilling to waitto get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries - Online ads Seller side:- transaction fees Buyer side:- targeted ads - float money

41. Business Canvas – Week 7 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Access to customer contact information - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- Promotion of website and brand • - Sellers who need more traffic • - Regionalsellers • - Server providers • Established services- Online Marketing : Google/Facebook -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platformSeller :Sellers on Amazon and eBay Seller: Trustworthy sellers with verifiable websites.Buyer :Online shoppers who arewilling to waitto get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries - Online ads Seller side:- transaction fees Buyer side:- targeted ads - float money

42. Business Canvas – Week 8 Seller : - More customer traffic - Bulk sales- Lower transaction fees- Access to customer contact information - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers - Platform/Networkmanagement (maintaining and growing online buyer/seller communities and credibility)- Promotion of website and brand - Establishing credibility • - Sellers who need more traffic • Established services- Online Marketing : Google/Facebook -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback Multi-sided platform Seller: Trustworthy sellers with verifiable websites.Buyer :Online shoppers who are willing to wait to get significant discounts on products - Web & App sales - Online social networks - Onlineadvertising - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries - Online ads Seller side:- transaction fees Buyer side:- targeted ads - float money