Date post: | 19-Aug-2015 |
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Ritu Narayan, GSB Maayan Yavne, GSB Yang Zi Dong, MS&E Eric Lam, CS
Be a parent, not a chauffeur
Li1ee Journey
Busy Parents Child Transportation
Initial Hypothesis Child Transportation is the #1 reason why parents have to scale down their career
In the beginning
Customer segments: our ini;al hypothesis
Children Drivers
Ambitious working professional moms who do not like to rely on ongoing social reciprocity
Children from ages 8 - 15 Individuals from trusted
professions working in shifts who need supplemental
income
Busy Parents
We enable point-to-point transportation of kids for their after-school activities
Value proposi;on: our ini;al hypothesis
=
Peace-of-mind Trustworthy transportation service
+
Reduced hassle Dedicated face-time
Business Model Canvas -‐ Week 2
Experienced scheduling/dispatching/driving Understood pickup/drop-off complexity Realized significance of child experience
So we got out of the building...
Meet Yash
“Outstanding customer service”
“Recommend: 5 - absolutely” “It will be great to know in advance who is picking up”
Meet Riley
“Text info was very helpful”
“An inefficient route from Pinewood to Home” “My only concern was how a change might impact you”
Meet Ben
Our Real Users
Parents want to change their exis;ng solu;on only during transi;ons: Nanny leaves, parents take more demanding job, kid transi6ons from
elementary to middle, new a9er-‐school ac6vity
Where we went wrong...
Windows of opportunity are correlated with breakdown of current solu6on
Parents value our service against their exis6ng op6ons on a cost-‐basis -‐ they do not calculate opportunity costs
Doub6ng our ini6al value proposi6on Need to find segments for whom our service holds the highest value
Exploring other Value Proposi;ons
Full concierge services for busy parents
Dry Cleaning Groceries
Cooking Transportation
New hypotheses for value-‐based customers segments
Schools
Transportation Companies
Activity Centers
Benefit Aggregators HR Consultancies
HR (Benefits) HR (Recruitment)
Corporations
Independent Drivers
Business Model Canvas -‐ Week 6
Where we were wrong
Schools
Transportation Companies
Activity Centers Benefit Aggregators HR Consultancies
HR (Benefits) HR (Recruitment)
Corporations
Independent Drivers
Long Term Solution
Where we were right?
liftee.webflow.com
Facebook advertising
There is a strong need for child transportation
20 Pilot Signups
280 Unique Visitors
“When are you launching?”
“I’m calling other parents”
Where we were right?
© 2012 Steve Blank from the Startup Owner’s Menu
New hypothesis to test value based pricing
Price Conscious -‐ Carpooling -‐ Leverage driver plaOorms
Aspira;onal-‐Value -‐ Trust and safety -‐ Social valida;on
Drivers -‐ Value advanced scheduling -‐ Value addi;onal leads
Child -‐ DelighOul child experience -‐ Handoff/pickup concierge
Business Model Canvas: Week 9
So we got out of the building...
Will charge by hour, no Uber pricing for advanced scheduling
Use Uber only to fill in on demand down 6me
Price per ride expecta6on below break even
We recruited Uber type driver: Commercial license and insurance
We signed up a carpool ride
Enjoyed Service, Convenience, and Flexibility
We delivered the ride for carpool parents
Cost ($50 per hour) > Price per ride ($20 for ½ hour carpool)
Influenced parents to provide high NPS
Liked personalized experience of car, chat, and music in car
Where are we now?
Kids have an influence on reten6on
Kids can be delighted by paying aUen6on to their
preferences
Parents love ease and convenience of LiVee
Parents are great referrals, LTV can be high $800
Pricing needs to work for ongoing repeat use
LiVee driver persona: Reliable, Kids friendly, and can act as concierge
Needs valid license and insurance coverage
Driver Parent Rela6onship Advance scheduling Deligh\ul and high trust
family experience
Should think Advance scheduling = Lower cost
MVP -‐ Schedule a ride
Sarah schedules a ride
Mike delivers the ride
MVP -‐ Track and Rate your ride
Sarah tracks Jenny’s ride
Sarah rates Mike aVer the ride
5
Are we ready for investment?
Refine Parent and Driver segments
Validate unit economics
Road Ahead: Run more Pilots to
Validate mul6 kids per car, carpool viability
Investment Readiness Level
http://www.youtube.com/watch?v=skwSCA7ZDHY
Journey Video
Appendix
Market Sizing Estimate (High Performance Individuals)
Number of Full time Working Women in the US
43,200,000
Top 10% income 4,320,000
US Average fertility Rate 2.1 kids/women
Kid Activities/week 2
Weeks per year 50
Mobile ownership 61%
Average Price per Trip $20
% Strong interest - willingness to Pay 10%
TAM: $18.1 B
SAM: $11.1 B
TM: $1.11 B
Es;mated Market Size
Compe;;ve landscape?
Metrics What it means for us Value
Lifetime Value
50% of our overall families estimated to be under subscription plan given repeat and predictable nature of school and activity rides. This gives us a high LTV per user
$800 per family
Price per ride
Fixed price + Mileage + Time Average distance = 5 miles, Average time = 30 minutes
$22 per ride per kid (Assumption)
Cost per ride
Driver pay (assuming driver has own vehicle, is licensed and insured, is paying for gas)
$17 per ride per kid (Assumption, still validating driver fit vs. cost)
Margin per ride
We expect people to pay comparable price of Uber X and additional 15-20% premium for trust and safety for kids.
20% over driver cost per ride
Customer Acquisition Cost
Referral, online, and direct sales to grow customer base
$20- 50 per user (online vs. offline sales)
Metrics that maXer
Metrics What it means for us Value
Number of Referrals
Referrals from existing families will reduce marketing cost and increase loyal base
2 referrals per current family per year
Number of new family sign ups
Grow customer base - same city area, expand to new cities
10 new family per week
% of families in subscription
At least 2 rides per week for 10 months in a year 50%
Churn Number of customers leaving per year and not returning back
20%
Operational Cost
We will have an ongoing cost of insurance for driver, background checks, direct sales, customer support, and R&D
Insurance - around $2000 per year per driver Background check - $30 per driver, Direct Sales - $ 50,000 per year, Customer Support - $10 per call, R&D - 500k
Metrics that maXer contd..
Assumptions:
● Number of kids per family: 2 ● Number of months in year: 10 ● % Family in Subscription: 50 ● # Pay per use rides per family per
month : 4 ● # Subscription rides per family per
month: 20 ● Average Price per ride: $20 ● % Liftee commission: 20%
Financial and Opera;ons Timeline