Pikrly_BusinessPlan

BUSINESS PLANDAVE TIPTON / GERALD CARVALHO / SID PRIYADARSHI / CHUANG-MING LIU

HTTP://PIKR.LY / [email protected] / @PIKRLY / #BEENCRAFTED

APRIL 2015

Pikrly / Business Plan4 AMIGOS 3

Executive Summary04 Management & Organization22

Brand Strategy17

Company Description06 Expenses & Capitalization25

Products & Services09 Appendix - Business Model32

Marketing Plan & Strategies12 Appendix - Pro forma Financial Planning

33

CONTENTS

Pikrly / Business Plan 4 AMIGOS4

Exec

utive

Summ

mar

y

Over-commercialized websites have made the craft industry just another product market. Talented and passionate craftsmen spend most of their valuable time marketing, not creating. Culture-seeking and enthusiastic patrons are lost looking through tens of thousands of “products” masquerading as fine crafts and cannot find that one item they feel represents the qualities they can cherish for a long time or give confidently as a gift.

O“ Pikrly is a marketplace that

establishes meaningful connections between discriminating patrons and

passionate craftsmen through a process that leverages the unique

interests of both. “


Pikrly is designed to help hardworking, talented craftsmen focus on their passion of creating works that will be valued for their beauty and realize the compensation that is required to continue their work. In this way Pikrly channels the traditional concept of the patron/artist relationship. Pikrly also helps culture-seeking and enthusiastic patrons by learning about them and taking them to that one craft piece that will bring a smile to their face. Pikrly is the proverbial win-win in which artist and patron can remain true to the craft without being tainted by the craftiness often associated with doing business.

Pikrly excels over the competition by providing a beautiful interactive website that is enjoyable to browse. It builds a profile for both the patron and the craftsmen, learning from each and matching them together by passion. While websites such as Etsy, Craigslist or Ebay force the browser to wade through a sea of dollar items and irrelevant listings Pikrly deals in quality delivering artists and craftsmen patrons care about.

Pikrly is a multi-sided platform with a freemium model. The two major customer segments on the platform are patrons and craftsmen. Pikrly will help craftsmen build and promote themselves as a brand and increase the perceived value of their work while exposing them to new business opportunities and long-term client relationships. Pikrly also provides an engaging and immersive experience that brings patrons who care about the craft they purchase being an object they or those to whom they gift their purchase will cherish.

Pikrly differs from our competitors by providing a process driven platform to encourage long-term relationship building and immediate trust establishing between patrons and craftsmen with the goal to attract users by increasing values for both sides.

The global online art market in 2013 was $2.71 billion, and is expected, with a growth rate of 25%, to reach $1I 0.8 billion in 2020. We will have 3,000 craftsmen members by the end of 2018. To support the transaction trajectory, the target Patron/

Craftsman ration will be 10. Hence, by the end of 2018, total patrons will be 30,000,

The total Gross Merchandise Value (GMV) of 2018 will reach $62 million (0.5% of $10.8 billion global Art online sales), and total revenue will reach $3.2 million in the same year. Positive net income is to be expected in the Fourth Quarter of 2018.

In order to create a platform that is truly doing what other platforms don’t it will take a team of people with a diverse and well rounded skill set. We believe we are that team.

Our executive team is composed four members: Gerald Carvalho is our Creative Director with 15-years experience in user experience design and brand strategy; Chuang-Ming Liu is our Operations and Financial Director with 12-years experience in design company operation and management, as well as in-depth knowledge of design research; David Tipton is our Marketing Director and Spokesperson with over 15 years of experience and in-depth knowledge in project management, the crafts industry and marketing. Siddharth Priyadarshi is our Product and Strategy Director specialized in product development and management, as well as product strategic planning.

Our mission is to make Pikrly be the go-to place to find the connection between people’s passion and craft. Through our beautiful and easy to use yet intelligent platform Pikrly seeks to build meaningful connections and long lasting relationships between patrons and craftspeople.


Company Description

Most of craftspeople love what they are doing and want to be recognized for their work. However, the old fashion way of promoting through crafts shows or galleries is not very effective. Currently there is no user-friendly online platform

C

STAT IST ICS SHOW THAT AT LEAST 62 .5 MILL ION PEOPLE IN THE US PART IC IPATED IN ONE OR MORE CRAFT ING ACT IV I T I ES DURING 2012 . 26% OF THEM SOLD THE IR CREAT IONS AT CRAFT SHOWS AND 32% OF THEM SOLD WORKS ONL INE

that can really help craftsmen build their business, connect with patrons and increase the value of their works. Websites, like Etsy, are product driven and do not have an environment encouraging building long-term relationships between crafters and customers. Craftsmen are treated like merchants. Other sites, like craigslist, only provide a flat platform to lifelessly display products and do not allow craftsmen to express themselves. Craftsmen also have to spend a significant amount of time managing multiple social media websites, like Facebook and Pinterest, instead of using the time creating.

On the complementary side of this industry, patrons, or customers, indicate

that it is difficult to find the higher caliber of craft they really like because existing sites don’t do enough to separate it from the mass produced cheaper items. Also there is no channel for them to engage with or learn more about craftsmen with astonishing skills and who they might want to purchase works from. Patrons also told us stories similar to those we heard from craftsman that existing websites do not provide a way to communicate with or learn the stories behind the crafts and the craftsmen.

Over-commercialized websites have made the craft industry just another product market. Talented and passionate craftsmen spend most of their valuable time marketing, not creating, if they want


“I love what I am doing, but I don’t have time and don’t like to deal with the busi-

ness stuff.”

“There are many marketplaces online, but they are so complicated and

I have to manage several of them in order to catch up.”

to be financially self reliant. Culture-seeking and enthusiastic

patrons are lost looking through tens of thousands of “products” masquerading as fine crafts and cannot find that one item they feel represents the qualities they can cherish for a long time or give confidently as a gift.

Our Purpose

Pikrly exists to bring together people devoted to quality and creativity and encourage them to live their passions, share them with each other and the world.

Our Mission

Pikrly is designed to help hardworking, talented craftsmen focus on their passion of creating works that will be valued for their beauty and realize the compensation that is required to continue their work. Pikrly also helps culture-seeking and enthusiastic patrons find that one craft piece that will bring up a smile to their face. Pikrly is the proverbial win-win in which artist and patron can remain true to the craft without being tainted by the craftiness often associated with doing business.

Our Vision

Pikrly will be the go-to place to find the connection between people’s passion and craft.

Our Values

I. We are passionate about our customers.

II. We care for culture, arts, and humanity.

III. We are here to remove roadblocks.IV. We are here to make things that will

remain even when we are long gone.V. We make the connections fun and

meaningful.



Pikrly is a multi-level platform with a freemium model. The two major customer segments on the platform are patrons and craftsmen. Pikrly is the main channel used to serve our customers. We connect them through Pikrly,. Our ultimate goal is to maximize value for both patrons and craftsmen.

Based on our primary and secondary research, craftsmen want a single platform where they can share and sell their wares that is simple to use, low cost, and designed to build a long-term relationship with customers. The solution will both validate their work through interactions with patrons as well as generate essential income.

Products & Services

P Patrons are looking for a place to find unique products and support craftsmen. There is a cache in building relationships with craftsmen that reflect their identity and are seen as an extension of their own creativity. Patrons purchase craft items for their beauty and because they admire the skill involved in making the object. The story behind the object or the ideas the work represents increases its value and attraction to the patron. All of this commands a price premium.

No existing marketplace has satisfied these needs..

Our target craftsmen are talented and passionate about the work they create. They define themselves as professional designers and makers of crafts or unique, handmade quality objects. These individuals may range from being early to more mature stages of their creative career,. Some have great confidence and are eager to promote themselves and their work whereas others may be more


THE TWO MAJOR CUSTOMER SEGMENTS ON THE PLATFORM ARE PATRONS AND CRAFTSMEN. P IKRLY IS THE MAIN CHANNEL USED TO SERVE OUR CUSTOMERS. WE CONNECT THEM THROUGH P IKRLY , . OUR ULT IMATE GOAL IS TO MAXIMIZE VALUE FOR BOTH PATRONS AND CRAFTSMEN.


shy or less technically literate and looking for an easy to use site where they can sell their wares. Their works are often considered “folk craft” or “cutting edge.”

Our target patrons are middle class people with higher education and comfortable disposable incomes. They care greatly about the products they purchase, especially the quality, materials, design, and context of their creation. They have a proactive attitude to arts and culture, an independent mindset, and are proactive about pursuing their interests.

Pikrly provides a dynamic one-stop shop for craftsmen who struggle to monetize their passion. Pikrly will help craftsmen build and promote themselves as a brand and increase the perceived value of their work while exposing them to new business opportunities and long-term client relationships.

Pikrly provides an engaging and immersive experience that brings patrons who care about the craft they purchase being an object they or those to whom they gift their purchase will cherish. Pikrly is a marketplace where patrons can feel what they receive in the mail is more than they paid for.

With the help of technology, Pikrly will be able to address both craftsmen’s and patrons’ needs by delivering on the aforementioned value propositions through a dynamic and engaging interface

using our storytelling-based, immersive environment.

Pikrly’s freemium model provides a low cost, easy to use platform to attract and allow craftsmen to use our services for self promotion through guided easy setup and hassle-free maintenance processes. Craftsmen only incur expenses when they sell products or services. Craftsmen can utilize optional paid services to help them make the packaging and shipping process easier, as well as simplifying transactions and payment more secure. With additional fees, craftsmen will have the choice to increase their visibility in the patrons’ search results. With optional paid membership, craftsmen will have access to customer shopping data and market trends that will allow them to enhance their marketing and sales capability. Pikry also offers help to craftsmen with paid membership to analyze and understand the information available, enabling them to build their business as well as increase their brand value.

To ensure the quality of the craftsmen as well as the profile contents, Pikrly offers a guided easy set-up service for all craftsmen. Upon completion of the initial set-up, profile pages and marketplace pages are easy to manage. Craftsmen can also use Pikrly to promote their shows, classes or other upcoming events .

Pikrly sign-up is also free for patrons. On Pikrly, patrons can browse, search, discover, explore, engage, and get to know the talented craftsmen. Once the patron identifies a craftsman they admire, they can follow that craftsman and select an item they love, they can make a direct purchase through the hassle free check-out system. They can also feel confident that the product will arrive on time in perfect condition. Patrons will also be able to hire craftsmen for classes or to request a custom designed item. Pikrly encourages patrons to connect with local craftsmen some of whom may be working in their very neighborhood. The value of an in-person connection has special valuable in this internet era. Through in-person connection or the online remote engagement with craftsmen, long-term relationships can be built which in turn creates a sustainable crafts community.

Patrons will gain confidence in the quality of the works they purchase. This quality control feature fosters the patrons’ desire to collect and see their purchase as a good investment. By the vetting the craftsmen represented on the site, Pikrly establishes a sense of exclusivity that entices people to join. In exchange, Pikrly strengthens the crafter’s brand and expands the crafting communities interconnections, and reach. Market Overview


WITH THE GROWTH OF TECHNOLOGY, UBIQ-UI TOUS INTERNET ACCESS , MOBILE APPL I -CAT IONS , AND ECOMMERCE , CONSUMER SHOPPING BEHAVIOR HAS DRAMAT ICALLY CHANGED FROM BRICK-AND-MORTAR STORES TO THE ONL INE MARKETPLACE

Marketing Plan & Strategies

Market Overview

The Arts and Crafts market can be divided into three distinct categories: High End, Middle Market, and Low End and Reproductions. There are only a small number of buyers and sellers, as well as low inventory for art that falls in the High End category. Our market research shows that current online marketplaces, such as Etsy and Ebay, target the general public and focus on the Low End and Reproduction product category. Others, such as Artsy, Artspace, 1stdibs and Amazon, try to grab the higher end of the Middle Market and compete with physical galleries.

According to research done by the Crafts & Hobby Association, the crafts industry in 2012 was approximately a $29

billion market in the US alone. Patrons attended on averagle 2.5 wholesale markets, 3.7 retail crafts shows and up to 10 crafts fairs annually. Pikrly will be a convenient in-home 24/7 craft gallery for patrons looking for a unique well-made item.

There is significant untapped demand outside these markets. According to surveys, over a third of people who express interest in buying crafts have yet to make a crafts purchase online. The most widespread reasons for consumers to consider buying crafts are the uniqueness and beauty of an object, admiration for the craftsmen’s skill, and interest in supporting these skills through purchases. Among these crafts buyers, 72% of them indicate they would look for crafts on websites that sell or show crafts or directly search online marketplaces.

Those interested in purchasing crafts are undergoing a significant shift from interest in mass produced offerings towards value-centered products, services and experiences that meet emotional – as well as functional needs.

M


Researches found that 97% of potential crafts buyers state they would purchase contemporary craft. Those new to purchasing craft also appear to have a more open mind set, are willing to entertain products with which they are unfamiliar and open to purchasing items from people, cultures, ideas, and lifestyles different from themselves. With its unique value propositions we believe that Pikrly can meet the needs of a changing crafts audience and create an opportunity to engage with this already large and growing market.

Market Prospective

Due to the hand crafted nature of arts and crafts, crafts online sales are still playing catch-up. Although there is still hesitation to purchase higher value craft and art online, a vast amount of investment has still poured into this underdeveloped market.

Based on various researches, the global online crafts market in 2013 was $2.71 billion, and is expected, with a growth rate of 25%, to reach $10.8 billion in 2020. 58% of online crafts buyers are new buyers who have never visited galleries or shows and 9% of them are regular online buyers.

For these reasons, we believe this is the time to get into this fast growing market. According to researchers, in the next three to five years, arts and crafts online platforms will become a new way of browsing, discovering, comparing, and buying for current and prospective patrons.

The online crafts market is not just growing among existing and future crafts buyers and collectors, but also attracting new customers who might not be interested in purchasing crafts and those who only are looking to buy boutique goods and brands. Specific opportunities exist to attract new buyers to crafts by targeting consumers of luxury products who are looking for a new way to express their tastes .

Another reason this is a good time for the online crafts marketplace is the next generation. They will grow up immersed in the internet, mobile apps and online shopping, and will most likely make their first art and crafts purchase online. This is a market for which other sites addressing this market are unprepared. According to surveys, among the online shoppers between 20 to 30 years of age, 22% had never bought from a physical gallery before buying art works online. In addition, 42% of the online shoppers also indicate that they had not purchased items in this price bracket before their first art purchase.

Within this big market, online marketplaces have become the largest point of sales for crafts, accounting for 38% of all transactions. Researches also found that online crafts platforms have matured to meet buyers’ expectations. High satisfaction also is a sign for rapid growth as technological and logistical


barriers are lowered and buyers’ confidence in online crafts purchasing increased.

Competitive Landscape

Due in part to the fast growth of the crafts market, many providers have successfully established a foothold leveraging existing or developing new sites . Some examples of established big companies in this market are Ebay, Etsy, CustomMade, Craigslist and Amazon. Ebay has the longest history in this market by allowing buyers to bid on products. Crafts are one of its categories. Etsy launched in 2005 and established its brand on artistic, handmade crafts. As of December 2014, Etsy had 54 million registered members globally. 1.4 million of them are active sellers, and 19.8 million active buyers. In 2014, Etsy generated revenue of US$195.6 million, but registered a net loss of US$15.2 million. Amazon, the largest online retailer, entered this market in August 2013. The appearance of these big companies in this market is a sign of market validation, as well as a demonstration of the potential of the online crafts market.

Smaller start-ups are also getting into this market, and investors are raising the stakes with new rounds of funding. Some examples of these start-ups are (numbers in parentheses denote venture capital received by these companies) the Grommet ($3.4 million), ArtFire (No VC), Brit + Co ($7.6 million), artsy ($5.6 million), Paddle 8 ($17 million), and Lofty (3 million).

Most of these start-ups are competing in the Low End and Reproduction segment. For example, the average price on Etsy is $29. Each company has its specialties and features attracting various customer segments. A common element of these companies is that they are all product driven. They attract customer traffic by providing a wide selection of products. This is also one of their weaknesses, by providing too much information but no clarity on customer needs. Another weakness is that the shopping experience they provide is cumbersome and non-

engaging. People are more likely to think the experience as a chore then an enjoyable experience that makes them stay, enjoy browsing and lose track of time. They create a marketplace for a one-time seller-buyer relationship and do not encourage building the long-term relationship between craftsman and patron that drives incremental sales. Third, since they are all product driven, products are the focal point, not the artist. This setting does not promote the engagement of the buyers in the entire arts and crafts experience.

Market Niche and Pricing Strategy

Our target segment is between the lower end of Middle Market and the upper side of Low End market. In this niche, our target customers are middle class who have some but limited disposable income. They have their own aesthetic tastes, look for unique items, are familiar with online shopping, and pay great attention to the quality of items they purchase. Our offering - high quality crafts made by passionate artists fits this niche perfectly.

Products on Pikrly will range from $60 to $2,000. There are several reasons for choosing this price range. First, most online crafts marketplaces target low end segments with the plan to increase revenue through mass sales. This strategy lead these websites to be product driven and lacks the possibility for customer engagement and long-term relationship building. Customers in the low price range usually are bargain hunters and care less about the hidden value of the products and services. With a slightly higher starting price, customers are willing to spend the time to learn more about the ideas behind the products and stories behind their creators. With the average price set below $2,000, Pikrly allows customers who are willing, to spend more to own a unique, often one of a kind item.

Gift buying is one of the strongest triggers for the first craft purchase. People who purchase gifts for close friends

Strategy Canvas


High End

Middle Market

Low End Reproductions

Pirkrly’s Niche


and families are willing to spend more time selecting the right gift and make a more substantial investment in the purchase. As mentioned earlier, consumers’ behavior has been shifting. With its high quality crafts, Pikrly will be able to provide a more meaningful alternative in the arena of luxury goods.

With this price range, we will be able to connect craftsmen to patrons through shared interests and tempt both new and legacy patrons to meet their product needs through craft.

Marketing Strategy - Roadmap to grow business

Based on our research, our craftsmen look for a lifestyle that allows them to create beauty while being validated for their

aesthetics with recognition and monetary reward. Our patrons want a platform where they can obtain unique and beautiful crafts and engages them in a rich, profound, exciting, and creative community. Pikrly’s marketing objective is to successfully connect these craftsmen and patrons.

We will reach our customers, deliver our message, attract them to our platform, convert them to our partners and users and retain them for our long-term relationship with the following strategies.

High End

Middle Market

Low End Reproductions

Pirkrly’s Niche


THE GOVAL OF THE BRAND IDENT I TY WAS TO CREATE A LOOK THAT WOULD S IGNAL TO THE BRAND’S CORE AUDIENCE – CRAFT LOVERS

Brand Identity

The goal of the brand identity was to create a look that would signal to the brand’s core audience – Craft Lovers - that Pikrly was as an immersive environment where craftspeople could explore, connect, grow, get discovered and be rewarded for, both financially and by recognition, what they’re passionate about. Craft is a finely honed, skilled expression of one’s passion, a “fruit of labor” imbued with attention to detail and a talent for creation that reaches far beyond the simple manifestation of a physical product. When it came down to connecting the elements of community, growth, passion, history and soulfulness, we were inspired by the Passion Fruit. Over 300 years old, it is known to have healing properties due to its high content of antioxidants, vitamins, minerals and fiber; extracted, it is referred to as “multivitamin

juice”. We replaced the seeds with four hearts representing the four founders and team members of Pikrly. The hearts also represent the love and passion that inspire talented individuals to become fine artisans, mirrored by the love and passion that patrons of taste have for fine goods. Pikrly is much more than simply an online storefront.

Brand Palette

The choice of Orange as the center player in the palette was unanimous and natural, as it’s the color of joy and creativity. It also evokes feelings of warmth, enthusiasm, success, encouragement, determination, fun, fascination, and freedom of expression, all of which underscore our core beliefs of Pikrly’s mission. Orange gemstones are believed to contain some of the fiery energies of red, but are gentler and more soothing, with a more creative spirit, reflective of our craftspeople. Orange gemstones are used to promote personal power and are thought to enhance self-

esteem. Orange is the only color of the spectrum whose name was taken from an object, the popular fruit. This distinction reflects the uniqueness of our crafts people’s art – there is only one unique example of each product represented. Orange as both a color and a fruit also provides a tie-in with our passion fruit logo.

Brand Heritage

Pikrly connects fine craftspeople with patrons of fine taste. A brief review of the history of Craft and Patron illuminates the symbiotic relationship between the two. The origin of the word Craft is from Middle English and Old English cræft, meaning strength, skill.

Examples of usage include

I. An art, trade, or occupation requiring special skill, especially manual skill

II. III. The members of a trade or

profession collectively; a guild.

Brand Strategy


Pikrly connects fine craftspeople with patrons

of fine taste


The origin of the word Patron is via Old French from Latin, “patrōnus” meaning “protector” and “pater”, meaning “father”.

Examples of usage include

I. A person who sponsors or aids artists, charities, etc.; protector or benefactor

II. A customer, especially a regular one.There are three aspects to human creativity: Art, Crafts, and Science.

In broad terms, Art relies upon intuitive sensing, vision and expression, Crafts rely upon sophisticated technique and Science relies upon knowledge. Handicraft is the “traditional” main sector of the crafts; it is a type of work where useful and decorative devices are made completely by hand or by using only simple tools. Usually the term is applied to traditional means of making goods. The individual artisanship of the items is a paramount criterion; items made by mass production or machines are not handicraft goods. Handicraft goods are made with craft production processes. The term “Crafts” is often used to describe the family of artistic practices within the family of “decorative arts” that traditionally are defined by their relationship to functional or utilitarian products, such as sculptural forms in the vessel tradition, or by their use of such natural media as wood, clay, ceramics, glass, textiles and metal.

Pikrly is following an age-old tradition of joining artisans to protectors, to customers. It is only the medium in which this relationship takes place that is new. What is new is Pikrly.

Segmentation

Behavioral and PsychographicPeople who’re passionate and care for crafts

DemographicDiverse global distribution

Brand Identity System

Functional Benefits

I. An affordable online e-commerce platform to showcase the craftsmen work of art

II. Make the artists be easily discoverable – an additional marketing avenue

III. Access to customer shopping data and market trends to enhance their sales capability

IV. Assistance with payment, packaging and shipping efforts

Emotional Benefits

I. AppreciationII. FreedomIII. PassionIV. CommunityV. Warmth


Promotional Strategy

Online Marketing Strategies. Pikrly is an online platform. The most cost effective way to acquire customers is to increase the visibility in search results. We will develop strategies on Keyword Selection, Search Engine Optimization, and paid Online Advertising. We are going to launch our marketing campaign via social media like twitter and Facebook as well as build strategic partnership with Pinterests and Houzz. We will establish relationships with bloggers and other “ influencers” in the industry to allow them to promote themselves as well as introduce our platform and craftsmen to a wider and focused customer base.

Physical Marketing Strategies. Quality craftsmen are our core value, but many of them have not been able to adopt online resources as their sales and marketing platform. We will build strategic partnerships with craft centers, craft guilds, craftsmen coalitions and tech shops to create complementary relationships. At the early stage of Pikrly, we will utilize our network in this industry to create our brand awareness through word of mouth. Through these physical channels, we will reach out to craftsmen

who have little to no knowledge of or hesitate to utilize online platforms. With these strategies we intend to create and enhance the crafts ecosystem not create a competitive environment. We also plan to have a presence at relevent trade shows.

Customer Retention Strategy

Pikrly is a multi-dimensional platform. To keep craftsmen and patrons, we have to provide what they both need, not one side but both sides. With quality craftsmen, patrons will be willing spend their time exploring this exciting industry and make purchases. With buying patrons, quality craftsmen are willing to make the effort to build and improve their profile. We will simultaneously develop, enhance, attract, and satisfy craftsmen and patrons with the following:

I. Acquire quality craftsmenII. Enhance contentsIII. Create and cultivate community IV. Engage patronsV. Assist craftsmen business developmentVI. Develop and improve craftsmen brand imagesVII. Improve product and profile contentsVIII. Online featured showsIX. Annual online and physical showsX. Seasonal Promotions

Strategic Partners

To properly deliver our value proposition to our customers we know we will need to team up with the right people. The following strategic partners will help achieve our goals.

I. Platform Partners: We will use Amazon web services as our IT infrastructure provider. We will engage foreign developers intend to outsource the bulk of for our product development coding and platform engineering to foreign companies in

PIKRLY IS A MULT I -D IMENSIONAL PLATFORM. TO KEEP CRAFTSMEN AND PATRONS, WE HAVE TO PROVIDE WHAT THEY BOTH NEED, NOT ONE S IDE BUT BOTH S IDES .


India, Vimeo for our craftsmen video contents, Square for our online payment, IT advisors to evaluate and manage our IT capacity strategies.

II. Marketing Partners: Our marketing strategy includes physical and online strategies. Hence, we need partners in both domains. For our physical partners, Craft centers and Artist Guilds will help us in getting more craftspeople onboard our online platform. As for our online partners: The visual nature of Pinterest is a way to showcase items for sale in the Pikrly marketplace. Twitter will allow us to engage patrons in real time. Craft bloggers will be our go to partners to reach out to a wider patrons community. Houzz and similar websites will help us on cross industry growth.

III. Operations Partners: UPS will support our packaging and delivery services,

IV. Financial Partners: We will utilize financial advisors for financial planning strategy, and accounting.

CEO

COO CTO CFO

MARKETING DIRECTOR

MARKETING & SALES

BUSINESS DEV.

CUSTOMER SUPPORT

ENGINEERING USER EXPERIENCE

QA

PRODUCT DIRECTOR CREATIVE DIRECTOR FINANCE

HUMAN RESOURCES

ADVISORS


Management & Organization

I. Jared Tolla Dir. Craft Center at UC Davis Campus Recreation and Unions Oversee a crafting facility with 10 studio areas. Domaine Expert/ Adviser Craft Business commerce and Operations

II. Kevin Flores Lead Product Manager, Internet Services-Verizon, Lead Design - “Will I am” Social Platform. Product definition and user experience for consumer and enterprise. Work has resulted in 10+ filed patents. UX and UI expert, Platform Development Expert

III. Keaton Tips Owner The Artillery - business development, strategy and budgeting to managing day-to day operations. Storytelling through Visual Effects, Animation, post production, Craft experience with metal and glass, jewelry

IV. Mary Ledonne VP/CFO at Educational Systemics, Education and the Arts, Content Strategy/ Business Grant proposal writing/ Content Strategy

V. Michael Jay President, Educational Systemics, Inc. Previous:, Founder of Mediaseek Technologies, Software Developer Apple Computer Content Strategy/ Business Grant proposal writing/ Content Strategy

Our Team of Advisors


I. David Tipton Marketing Director and Spokesperson with over 15 years of experience and in-depth knowledge in project management, the crafts industry and marketing

Team members

II. Gerald Carvalho Creative Director with 15-years experience in user

experience design and brand strategy

III. Siddharth Priyadarshi Product and Strategy Director specialized in product development and management, as well as product strategic planning

IV. Chuang-Ming Liu Operations and Financial Director with 12-years experience in design company operation and management, as well as

in-depth knowledge of design research



Estimated expenses and assumptions are as follows. Refer to detail financial plan included in the appendices for additional information and analysis.

I. Cost of Good Sold (COGS): Pikrly is a marketplace and does not carry inventory. COGS, such as transaction process, billing and invoicing, still incurs during each transaction. 0.5% of transaction is assumed.

II. Office Rent: Office of Pikrly is planned to locate in San Francisco Mission District. The average rent in said neighborhood is $5 per square feet. 1,000 square feet of office space is expected.

III. Equipment & Furniture: We plan not to build our own servers. Hence, only expenses for general office equipment, such as desktop computers, laptops, tablets, and printers, and furniture are expected.

Expenses & Capitalization

IV. Cloud Services: We plan to utilize Amazon Web Services as our cloud service provider. Various levels of capacity were planned according to expected user and traffic growth.

V. General Operations: Items included are general overhead, such as utilities, office supplies, communication, tax services, bookkeeping, insurance, and miscellaneous ongoing expenses, outsourced customer services, and legal services.

VI. Marketing: Two major subcategories are included: general company marketing expenses and customer acquisition costs (CAC). General company marketing expenses included tasks for customer brand awareness, advertising, company promotion, etc., and are assumed based on the company growth stages. CAC are allocated for tasks directly related to customer conversion. Currently, $2 and $8 are assumed for each converted

craftsmen and patrons respectfully and CAC will be adjusted along with the growth of the customer base.

VII. Product Development (Consultants & Contractors): All of the website developing, coding and design will be outsourced to consultants and contractors located in the US or foreign countries. Co-founders will perform product and project management tasks in the following three years. Expenses in this category are solely for contracted projects, and costs for management is part of co-founders’ daily task and included in the salary.

VIII. Salary: All salary and benefits of in-house staff is included under this category. Employee benefits are estimated 35% of base salary. Founders will not be compensated in the Incubating stage, Q3 and A4 of 2015, and will be compensated by salary plus MBO bonus. Salary plus commission will compensate sales staff.

PIKRLY UT I L I ZES THE FREEMIUM MODEL . I T IS FREE TO EVERY CRAFTSMAN WHO JOINS US AND USES OUR PLATFORM TO PROMOTE H IS BUSINESS.


IX. Contingency: 20% of above expenses are assumed as reserved funds for contingency.

Pikrly utilizes the freemium model. It is free to every craftsman who joins us and uses our platform to promote his business. It is essentially free to sign up with Pikrly if craftsmen simply want to have a place to showcase work. Expenses will only incur when craftsmen want to sell, provide services, and promote themselves. Doing so provides incentives for craftsmen signing up for the service and to expand our user base.

Revenue streams

I. Commission: Commission will be charged for each transaction. The percentage is charged at 4%. Slightly higher than 3.5% at Etsy. No listing fee will be charged. Low commission is to lower craftsmen’s expense if they simply want to use Pikrly as their sales platform.

II. Paid Membership: It is free to sign-up with Pikrly and utilize the content rich media as a platform to showcase each craftsmen’s work. Craftsmen have the option to join as member. Being a member, craftsmen will have access to the massive data collected from his or her own customers, as well as all sales trends on our platform. Members do not just have access to the customer and sales data, but will be able to learn how to utilize these data to promote their business and increase sales. Membership will cost craftsmen 0.15%, for Standard Members, and 0.25%, for Pro Members, of their total transaction. The target enrollment is set at 60% of total craftsmen users. As a result, paid membership will bring 0.12% of total transaction to revenue.

III. Advertising/Listing Fee: This is also an optional service to craftsmen, and to increase visibility in search results. This

service will cost. 1% of total transaction will be charged to craftsmen. The target enrollment is set at 35%, and, as a result, this service will bring in 0.32% of total transaction ton revenue.

IV. Shipping Assistance Fee: This is an optional service to craftsmen to utilize our shipping/packaging partners’ services. Revenue is generated when craftsmen utilize this service. 70% of craftsmen will be expected to utilize this service and we charge 1% of transaction from product sales. As a result, this service is expected to bring 0.64% of total transaction to revenue.

V. Payment Process Fee: This is an optional service for craftsmen to use our check-out service. This service will ease craftsmen’s burden on collecting payments from patrons and setting up and managing other accounts. We will collect payments from patrons and craftsmen will simply get a monthly check. We will charge 1% of transaction on top of our payment system partner’s charges. We expect 50% of craftsmen will utilize this service, which will bring 0.54% of total transaction to revenue.

Financial Plan

Our financial foundation is built on the number of registered craftsmen, and the number of craftsmen utilizing our additional service. Our goal is to steadily increase the registered craftsmen, and encourage them to utilize our services to mitigate the burdens of running their own shop, and to promote their work. We expect the total Gross Merchandise Value (GMV) of 2018 will reach $62 million (0.5% of $10.8 billion global Art online sales), and total revenue will reach $3.2 million.

The main cost drivers of Pikrly are the marketing and customer acquisition expenses, and salaries of the employees.


Our revenue is expected to be 5.670% of total GMV. For craftsmen, their expense is $0 if not signing-up for optional services, and 5.88%, or $425 per quarter, if fully utilizing services provided by Pikrly.

In the process of building user base, we expect having positive net income in the fourth quarter of 2018. We will be seeking funding of $250,000 now to further develop Pikrly

website in 2015 to launch in the first quarter of 2016, additional funding of $1,250,000 by 2016, 1,500,000 by 2017, and 500,000 by 2018 to continue the growth of the company.


OUR THREE-YEAR INCOME STATEMENT AND BALANCE SHEET ARE L ISTED BELOW, AND THE DETA IL F INANCIAL ANALYSIS CAN BE FOUND IN THE APPENDIX AND ALSO ONL INE AT : H T T P : / / G O O . G L / 9 P Z 2 V U

Three-year Balance Sheet

ASSETS 2015 20016 2017 2018CURRENT ASSETS CASH AND CASH EQUIV. $218,400 $403,097 $1,106,298 $1,866,881

NET RECEIVABLE

SHORT-TERM INVESTMENT

INVENTORY

GOODWILL

OTHER RECEIVABLE

OTHERS

TOTAL CURRENT ASSET $218,400 $403,097 $1,106,298 $1,866,881

NON-CURRENT ASSET

EQUIPMENT

ACCUMULATED AMORTIZATION

TOTAL NON-CURRENT ASSETS $0 $0 $0 $0

TOTAL ASSET $218,400 $403,097 $1,106,298 $1,866,881

LIABILITY AND EQUITY 2015 2016 2017 2018CURRENT LIABILITIES

ACCOUNTS PAYABLE

SHORT TERM DEBT

TOTAL CURRENT LIAB. $0 $0 $0 $0

LONG-TERM LIAB.

N/A

TOTAL LONG-TERM LIAB. $0 $0 $0 $0

TOTAL LIABILITIES $0 $0 $0 $0

EQUITY

COMMON STOCK $250,000 $1,500,000 $3,000,000 $3,500,000

FOUNDERS’ STOCK $50,000 $50,000 $50,000 $50,000

NET INCOME -$81,600 -$1,065,303 -$796,799 $260,583

RETAINED EARNINGS $0 -$81,600 -$1,146,903 -$1,943,702

TOTAL EQUITY $218,400 $403,097 $1,106,298 $1,866,881

TOTAL LIAB. AND EQU. $218,400 $403,097 $1,106,298 $1,866,881


2015 2016 2017 2018 REVENUE $0 $135,413 $894,949 $3,195,498

COGS $0 $677 $4,475 $15,977

GROSS PROFIT $0 $134,736 $890,474 $3,179,521

% OF REV. % OF REV. % OF REV.

OFFICE RENT $0 $80,000 59.1% $80,000 8.9% $80,000 2.5%

EQUIPMENT & FURNITURE $0 $27,000 19.9% $6,500 0.7% $3,500 0.1%

CLOUD SERVICES $0 $1,331 1.0% $2,524 0.3% $4,218 0.1%

GENERAL OPERATIONS $8,000 $19,000 14.0% $10,000 1.1% $157,006 4.9%

MARKETING $0 $79,265 58.5% $285,412 31.9% $973,725 30.5%

PRODUCT DEVELOPMENT $60,000 $110,000 81.2% $80,000 8.9% $80,000 2.5%

SALARY $0 $683,438 504.7% $941,625 105.2% $1,134,000 35.5%

CONTIGENCY (20% OF TOTAL EXP.) $13,600 $200,007 147.7% $281,212 31.4% $486,490 15.2%

OPERATING EXPENSES $81,600 $1,200,040 886.2% $1,687,273 188.5% $2,918,938 91.3%

OPERATING INCOME -$81,600 -$1,065,30 -786.7% -$796,799 -89.0% $260,583 8.2%

Pikrly Annual Income Statement

NUMBER OF USERS - CRAFTSMEN

NUMBER OF USERS - PATRONS

GMV GROSS PROFIT

OPERATING INCOME STAGES GOALS

2015

0

0

$0

-$81,600

2016

345

3,450

$134,736

$1,065,303

2017

840

8,400

$890,474

-$796,799

2018

3,002

3,020

$3,179,521

$260,583

Incubation Foundation

Pilot Hyper-growth


Timeline and Trajectory

T H E G R O W T H O F P I K R LY I N T H E F O L L O W I N G T H R E E Y E A R I S D I V I D E D I N T O F O U R S T A G E S :

INCUBATING (2015 Q3 AND Q4)

PILOT PROGRAM (2016 Q1)

FOUNDATION (2016 Q2 - 2017 Q2)

HYPER GROWTH (2017 Q3 - 2018 Q4)


During the Incubating, we will continue our customer development process with customer interviews, prototyping, testing, and iteration. The Pikrly website will also be developed using contracted developers supervised by co-founders. In the first quarter of 2016, a pilot program will be rolled out with closed craftsmen users but with open registration for patron users to strategically test our patron acquisition strategies. This pilot program will be focused in the Bay Area close to our headquarter for immediate responses for any unforeseen situations.

Starting in the second quarter of 2016, Pikrly will be rolled out to major cities in the US, with the following sequence: Seattle, Houston, Boston, Indianapolis, Los Angeles, Miami, Chicago, New York, Columbus (IN), San Antonio, Philadelphia, Charlotte, Washington DC, Jacksonville (FL), Phoenix, Dallas and

Memphis. We plan to introduce Pikrly to two new cities each quarter and will speed up depending on the progress. By the end of the second quarter of 2017, Pikrly will be seen in the cities mentioned above. By the end of 2018, Pikrly will open nationwide.

Our target on user growth for the second quarter of 2016 is to acquire one new craftsmen a day, and with the expectation to have 120 craftsmen users by July, 2016. In the following quarters, we plan to speed up the growth of craftsmen from one per day, to three new users every two days. With this growth rate, we expect to have 345 craftsmen users by the end of 2016. In the following quarters, the target of new customer growth will be from 20% per quarter to 35% per quarter by second quarter of 2018. Our target is to reach 40% new user growth per quarter by the third quarter of 2018. With the expectation, we will have 3,000. To support the craftsmen and transaction trajectory, the target Patron/Craftsman ration is expected to be 10. Hence, by the end of 2018, total patrons will be 30,000.

D

Appendix - Business Model Canvas

Craftsmen: • Talentedandpassionateabout

worktheycreate.

• Definethemselvesasprofessionaldesignersandmakersofcraftorofunique,handmadeobjects

• Maybeattheirearlytomaturestagesincreativecareer,andhavegreatconfidenceandeagertopromotethemselvesandtheirwork.

• Worksareconsideredcontemporaryor“cuttingedge.”

Patrons:• Middleclasswithhigher

educationandcomfortabledisposableincome.

• Caregreatlyaboutproductstheypurchase,especiallytheirquality,materials,design,contextincreationandstoriesbehind

• Haveproactiveattitudetoartsandculture,andalsowhohaveindependentmindsetandareopenandwillingtopursuetheirinterests.

• PIKR.LY

• OnlineSearchEngine

• SocialMedia

• CraftsmenOrganizations

• TradeShows

• Commission: 4% of Total Transactions• Paid Membership (Optional): 0.2% of Total Transaction • Advertising Listing Fee (Optional): 1% of Total Transaction• Shipping Assistance Fee (Optional): 1% of Total Transaction• Payment Process Fee (Optional): 0.375% of Total Transaction

• Cost of Good Sold• Office Rent• Equipment & Furniture• Cloud Services• General Operations• Marketing• Product Development

• Salary• Contingency

Craftsmen: • Adynamicone-stopshop

connectscraftsmenwhostruggletomonetizetheirpassion,leadingtobusinessopportunitiesandalong-termclientrelationship.

• Helpcraftsmenbuildandpromotethemselvesasabrand,andfurthertoincreasetheperceivedvalueoftheirwork.

Patrons:• Anengagingandimmersive

experiencethatbringspatronswhocareaboutthecrafttheypurchasebeingtheonethingthattheywillcherish.

• Provideamarketplacewherepatronscanfeelwhattheyreceiveinthemailismorethanwhattheypayfor.

Platform Partners:• AmazonWebServices• Vimeo• Square• ITadvisors• ThirdPartyDevelopers

Marketing Partners:• CraftCenters• CraftGuilds• Pinterest• Twitter• Craftbloggers• Houzz

Operations Partners:• UPS

• FinancialAdvisors

Craftsmen:• Alowcostplatform

• Easysetupandmaintenance

• Optionalservicesforoperationsandbusinessdevelopment

Patrons:• Qualitycraftsmen

• Trustedcontents

• Storyfocusedcraftsmenprofile

• Dynamicrichmediainterface

• EngagingCommunityBuilding

• Productdevelopment

• Craftindustryeco-systemdevelopmentandengaging

• Contentcreation

• Craftsmenprofilebuilding

• Industryexperts

• Qualitycraftsmen

• Salesteams

• Contentcreators

• Online-physicalchannelsliaisons


Appendix - Income Statement (Annual & Quarterly)

2015

$0 $135,413 $894,949 $3,195,498

$0 $677 $4,475 $15,977

$0 $134,736 $890,474 $3,179,521

% of Revenue % of Revenue % of Revenue

Office Rent $0 $80,000 59.1% $80,000 8.9% $80,000 2.5%

Equipment & Furniture $0 $27,000 19.9% $6,500 0.7% $3,500 0.1%

Cloud Services $0 $1,331 1.0% $2,524 0.3% $4,218 0.1%

General Operations $8,000 $19,000 14.0% $10,000 1.1% $157,006 4.9%

Marketing $0 $79,265 58.5% $285,412 31.9% $973,725 30.5%

Product Development (Consultants & Contractors) $60,000 $110,000 81.2% $80,000 8.9% $80,000 2.5%

Salary $0 $683,438 504.7% $941,625 105.2% $1,134,000 35.5%

Contigency (20% of Total Expense) $13,600 $200,007 147.7% $281,212 31.4% $486,490 15.2%$81,600 $1,200,040 886.2% $1,687,273 188.5% $2,918,938 91.3%

-$81,600 -$1,065,303 -786.7% -$796,799 -89.0% $260,583 8.2%

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

$0 $0 $3,542 $18,672 $32,676 $80,523 $154,604 $154,666 $193,566 $392,112 $455,868 $512,885 $718,240 $1,508,505

$0 $0 $18 $93 $163 $403 $773 $773 $968 $1,961 $2,279 $2,564 $3,591 $7,543

$0 $0 $3,525 $18,579 $32,513 $80,120 $153,831 $153,893 $192,599 $390,151 $453,589 $510,321 $714,649 $1,500,962

Percentage of Revenue 8075% 1454% 913% 427% 226% 257% 229% 127% 124% 126% 107% 62%

Office Rent $0 $0 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000

Equipment & Furniture $0 $0 $21,000 $2,000 $2,500 $1,500 $1,000 $3,000 $1,000 $1,500 $1,000 $1,500 $1,000 $0

Cloud Services $0 $0 $665 $222 $222 $222 $1,262 $420 $420 $420 $1,686 $844 $844 $844

General Operations $4,000 $4,000 $6,000 $6,000 $4,000 $3,000 $2,500 $2,500 $2,500 $2,500 $22,613 $25,379 $35,340 $73,674

Marketing $0 $0 $5,460 $12,840 $21,430 $39,535 $49,056 $57,688 $76,908 $101,760 $136,410 $182,065 $274,000 $381,250

Product Development (Consultants & Contractors) $30,000 $30,000 $30,000 $30,000 $25,000 $25,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000

Salary $0 $0 $155,250 $155,250 $175,500 $197,438 $197,438 $227,813 $248,063 $268,313 $268,313 $288,563 $288,563 $288,563

Contigency (20% of Total Expense) $6,800 $6,800 $47,675 $45,262 $49,730 $57,339 $58,251 $66,284 $73,778 $82,899 $94,004 $107,670 $127,949 $156,866

$40,800 $40,800 $286,050 $271,574 $298,382 $344,033 $349,507 $397,705 $442,669 $497,392 $564,026 $646,020 $767,696 $941,196

-$40,800 -$40,800 -$282,525 -$252,996 -$265,870 -$263,913 -$195,676 -$243,812 -$250,071 -$107,240 -$110,437 -$135,700 -$53,047 $559,766

Pikrly Annual Income Statement

2016 2017 2018

Revenue

COGS

Gross Profit

Operating Expenses

Operating Income

Pikrly Quarterly Income Statement

2015 2016 2017 2018

Revenue

COGS

Gross Profit

Operating Expenses

Operating Income



Appendix - Revenue Breakdown

15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4

Growth Rate 1 1 1.5 20% 20% 25% 35% 35% 35% 40% 40%

Patron/Craftsman Ratio 10

Number of Registered Craftsmen 0 0 30 120 210 345 414 497 622 840 1,134 1,531 2,144 3,002

Number of Registered Partons 0 0 300 1,200 2,100 3,450 4,140 4,970 6,220 8,400 11,340 15,310 21,440 30,020

Base Line (Service) $500 $1,000 $1,000 $1,000 $2,000 $2,000 $2,000 $2,000 $2,500 $2,500 $2,500 $2,500

Base Line (Product) $1,500 $2,000 $2,000 $2,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000

Seasonal Factor 1.2 1.0 1.0 1.5 1.2 1.0 1.0 1.5 1.2 1.0 1.0 1.5

GMV from Services per Craftsman per Quarter $600 $1,000 $1,000 $1,500 $2,400 $2,000 $2,000 $3,000 $3,000 $2,500 $2,500 $3,750

GMV from Products per Craftsman per Quarter $1,800 $2,000 $2,000 $3,000 $4,800 $4,000 $4,000 $6,000 $4,800 $4,000 $4,000 $6,000

Total GMV per Craftsman per Quarter $2,880 $3,000 $3,000 $6,750 $8,640 $6,000 $6,000 $13,500 $9,360 $6,500 $6,500 $14,625

Total GMV from Service Provided $18,000 $120,000 $210,000 $517,500 $993,600 $994,000 $1,244,000 $2,520,000 $3,402,000 $3,827,500 $5,360,000 $11,257,500

Total GMV from Product Sold $54,000 $240,000 $420,000 $1,035,000 $1,987,200 $1,988,000 $2,488,000 $5,040,000 $5,443,200 $6,124,000 $8,576,000 $18,012,000

Total GMV $0 $0 $72,000 $360,000 $630,000 $1,552,500 $2,980,800 $2,982,000 $3,732,000 $7,560,000 $8,845,200 $9,951,500 $13,936,000 $29,269,500

% Enrollment

PossibleRevenue

% of Total GMV

QuarterlyCraftsmenPossible

Expenses

CraftsmenExpense

% of TotalTransaction

CraftsmenSavings

Commission: Free Member 4.50% 40.0% 1.80% $325 4.50%

Commission: Standard Member 4.00% 30.0% 1.20% $289 4.00% $36

Commission: Pro Member 3.50% 30.0% 1.05% $253 3.50% $72

Total Commission 100.0% 4.05%

Advertising/Listing: Free Member 1.00% 5% 0.05% $72 1.00%

Advertising/Listing: Standard Member 0.90% 10.0% 0.09% $65 0.90% $7

Advertising/Listing: Pro Member 0.90% 20.0% 0.18% $65 0.90% $7

Advertising/Listing (All members) 35.0% 0.32%

Shipping Assistance: Free Member 1.00% 30.0% 0.30% $39 0.53%

Shipping Assistance: Standard Member 0.90% 20.0% 0.18% $35 0.48% $4

Shipping Assistance: Pro Member 0.80% 20.0% 0.16% $31 0.43% $8

Shipping Assistance Fee 70.0% 0.64%

Payment Process Fee: Free Member 1.00% 20.0% 0.20% $72 1.00%

Payment Process Fee: Standard Member 0.90% 20.0% 0.18% $65 0.90% $7

Payment Process Fee: Pro Member 0.80% 20.0% 0.16% $58 0.80% $14

Payment Process Fee 50.0% 0.54%

Standard Membership 0.15% 30.0% 0.05% $11 0.15% $54

Pro Membership 0.25% 30.0% 0.08% $18 0.25% $102

Paid Membership 60.0% 0.12%

Total Possible Percentage of Revenue from GMV 5.670%

Total Commission $0 $0 $2,916 $14,580 $25,515 $62,876 $120,722 $120,771 $151,146 $306,180 $358,231 $403,036 $564,408 $1,185,415

Advertising/Listing (All members) $0 $0 $0 $1,152 $2,016 $4,968 $9,539 $9,542 $11,942 $24,192 $28,305 $31,845 $44,595 $93,662

Shipping Assistance Fee $0 $0 $346 $1,536 $2,688 $6,624 $12,718 $12,723 $15,923 $32,256 $34,836 $39,194 $54,886 $115,277

Payment Process Fee $0 $0 $194 $972 $1,701 $4,192 $8,048 $8,051 $10,076 $20,412 $23,882 $26,869 $37,627 $79,028

Paid Membership $0 $0 $86 $432 $756 $1,863 $3,577 $3,578 $4,478 $9,072 $10,614 $11,942 $16,723 $35,123

Revenue $0 $0 $3,542 $18,672 $32,676 $80,523 $154,604 $154,666 $193,566 $392,112 $455,868 $512,885 $718,240 $1,508,505

Pikrly Revenue Breakdown

Member Count

Expected Revenue from Individual (Talents) Members

GMV Breakdown

Revenue


Appendix - Operation Expenses Breakdown

% of GMV 0.5%Total

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

ExpenseTotal

Expense

COGS $18 $93 $163 $403 $773 $773 $968 $1,961 $2,279 $2,564 $3,591 $7,543

Total COGS $0 $0 $18 $93 $163 $403 $773 $773 $968 $1,961 $2,279 $2,564 $3,591 $7,543

SquareFootage $ per SF Monthly

1000 $5 $5,000

#Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense

Office Rental 1 $20,000 1 $20,000 1 $20,000 1 $20,000 1 $20,000 1 $20,000 1 $20,000 1 $20,000 1 $20,000 1 $20,000 1 $20,000 1 $20,000

Fixed Costs Sub-Total $0 $0 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000

Equipment & Furniture Unit $

Computer $1,500

Printer $2,000

#Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense

Computer 6 $9,000 $0 1 $1,500 1 $1,500 0 $0 2 $3,000 0 $0 1 $1,500 0 $0 1 $1,500 0 $0 0 $0

Printer 1 $2,000 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0

Misc Equipment & Furniture $10,000 $2,000 $1,000 $0 $1,000 $0 $1,000 $0 $1,000 $0 $1,000 $0

Equipment & Furniture Subtotal $0 $0 $21,000 $2,000 $2,500 $1,500 $1,000 $3,000 $1,000 $1,500 $1,000 $1,500 $1,000 $0

Upfront Monthly

AWS m3.medium for 1st year $443 $55.48

AWS m3.large for 2nd year $842 $105.12

AWS m3.xlarge for 3rd year $1,683 $210.97

#Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense #Total

Expense

Amazon Web Service $0 $0 $665 $222 $222 $222 $1,262 $420 $420 $420 $1,686 $844 $844 $844

Cloud Service Sub-Total $0 $0 $665 $222 $222 $222 $1,262 $420 $420 $420 $1,686 $844 $844 $844

% of GMVTotal

Expense % of GMVTotal













ExpenseOverhead (utilities, supplies, communication, taxservices, bookkeeping, insurance, perks andmiscellaneous ongoing expenses) $1,000 $1,000 $3,000 $3,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 0.05% $4,423 0.05% $4,976 0.05% $6,968 0.05% $14,635Customer Service (assumed to be covered byemployees in year 1 and 2. Outsourced in year 3. 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.0% $0 0.2% $17,690 0.2% $19,903 0.2% $27,872 0.2% $58,539Legal Services (assumed higher start-up expensesand regular legal services as needed.) $3,000 $3,000 $3,000 $3,000 $2,000 $1,000 $500 $500 $500 $500 $500 $500 $500 $500

General Operations Subtotal $4,000 $4,000 $6,000 $6,000 $4,000 $3,000 $2,500 $2,500 $2,500 $2,500 $22,613 $25,379 $35,340 $73,674

Marketing $3,000 $3,000 $4,000 $4,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000

Customer Acquisition (Craftsman) $2.0 $60 $2.0 $240 $3.0 $630 $3.0 $1,035 $4.0 $1,656 $4.0 $1,988 $4.0 $2,488 $4.0 $3,360 $5.0 $5,670 $5.0 $7,655 $5.0 $10,720 $5.0 $15,010

Customer Acquisition (Parton) $8.0 $2,400 $8.0 $9,600 $8.0 $16,800 $10.0 $34,500 $10.0 $41,400 $10.0 $49,700 $11.0 $68,420 $11.0 $92,400 $11.0 $124,740 $11.0 $168,410 $12.0 $257,280 $12.0 $360,240

Marketing Sub-Total $0 $0 $5,460 $12,840 $21,430 $39,535 $49,056 $57,688 $76,908 $101,760 $136,410 $182,065 $274,000 $381,250

Product Development (Consultants & Contractors) $30,000 $30,000 $30,000 $30,000 $25,000 $25,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000

Product Development Sub-Total $30,000 $30,000 $30,000 $30,000 $25,000 $25,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000

Pikrly Operation Expenses Breakdown

15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4

COGS

Office Rent

Office Rental

Equipment & Furniture

Cloud Services

General Operations

Marketing

Product Development (Consultants & Contractors)


Appendix - Balance Sheet

Assets 2015 2016 2017 2018 Liability and Equity 2015 2016 2017 2018

Current Assets Current Liabilities

Cash and Cash Equivalents $218,400 $403,097 $1,106,298 $1,866,881 Accounts Payable - - - -

Net Receivable - - - - Short Term Debt - - - -

Short-Term Investment - - - - Total Current Liabilities $0 $0 $0 $0

Inventory - - - - Long-Term Liabilities

Goodwill - - - - N/A - - - -

Other Receivable - - - - Total Long-Term Liabilities $0 $0 $0 $0

Total Current Asset $218,400 $403,097 $1,106,298 $1,866,881

Non-Current Asset Equity

Equipment - - - - Common Stock $250,000 $1,500,000 $3,000,000 $3,500,000

Accumulated Amortization - - - - Founders' Stock $50,000 $50,000 $50,000 $50,000

Net Income -$81,600 -$1,065,303 -$796,799 $260,583

Retained Earnings $0 -$81,600 -$1,146,903 -$1,943,702

Total Non-current Asset $0 $0 $0 $0 Total Equity $218,400 $403,097 $1,106,298 $1,866,881

Total Asset $218,400 $403,097 $1,106,298 $1,866,881 Total Liabilities and Equity $218,400 $403,097 $1,106,298 $1,866,881

Pikrly Balance Sheet

SPRING 2015 / VENTURE STUDIOS / MICHAEL FOXMBA IN DESIGN STRATEGY / CALIFORNIA COLLEGE OF THE ARTS

© PIKRLY 2015

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