Date post: | 01-Nov-2014 |
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Private and confidential
World's Most Trusted Source For Dating:
Your Friends
Trust Stigma Chemistry Time
Social accountability dating
Did you know….
63% of married couples found their mate through a friend (versus 20% found online)
Online dating is the third most popular on the Internet, followed by music and gaming; 40 mil people in the U.S. use online dating sites
64% of people say common interests are the most important factors
71% of those suffering from pre-date doubts use Facebook as a major source of information
Facebook applications are used to flirt with other people (e.g., 44% use Word with Friends to flirt with people)
The SetMeUp platform allows you to meet your friends of friends, allowing you to build relationships through people you
trust and have common interests
The market opportunity is attractive
$239/year Average amount a customer
spends on a dating site per year
$5.5 billion Global market size for online/mobile
dating industry
$7 billion Virtual goods through social media
40 million People in the United States who
have tried online dating
54 million Total number of single people
in the United States
Source: Reuters; Herald News; PC World; Washington Post
42 months Average length of courtship for
marriages that met offline
64% Believe common interests are the
most important factor in beginning a relationship
18.5 months Average length of courtship for
marriages that met online
Get inside the minds of our target market…
Pain Type Pain Points Pain Killers
Stigma • people who use online dating are desperate
• leverage your own social circles to build relationships
Trust • people can’t be trusted on online dating sites
• you’re on Facebook, not an online dating site
Chemistry
• computers don’t set people up…friends do
• you can only be set up through your friends
Time
• messaging back & forth is a waste of time
• post-connection lets you get face-to-face quicker
Our web app Our mobile app
How we acquire customers
•Target age is 18 to 26 (20 mil college students, 4 mil graduate students)
•Can not remember a time before cell phones and the Internet
•Hungry for ways to connect to people
•College students are active on Facebook – check-ins, tags, likes, etc (45 min daily use on Facebook)
Our target market
•College/university focus (soft launch in UGA), then top 20 college roll-out
•States such as Florida, Georgia, Mass, New York, Texas, and Illinois/Ohio
•Nationwide college/university rollout
Go to market strategy
Phase 1 (within first year)
•Begin entry into non-college ecosystems like companies
•Large company ecosystems like GE, Citigroup, Verizon, AT&T, BofA, JPM, Wells Fargo, Coke, Pepsi, HP, EDS, Disney, Accenture, Starbucks, etc.
Phase 2 (year two and beyond)
Our test market was a huge success
A good user traction… …and manageable marketing spend…
…has led to a low COCA
Our approach has been the key driver for success
285 396
662
8 34
$4,529 $4.48
• Recruited 12 interns (300 applicants) and one strategy manager (stipend)
• Attended Student Organization Events • Presented at two career fairs, 12
classes, and 5 sororities/fraternities • Led weekly intern competitions
• Advertised on Facebook • Intern competition • Launch party (incl. corporate sponsors) • Published in school newspaper after
only 4 days of being on campus (targets 40k students)
$0.42 CPC 0.21% CTR
FB Mkting Campaign
801 912
1,014
18-26 26-40
Social accountability dating
Customer Age
Generic players
Com
pany
type
Our key advantage lies in our approach and target market
Over 40+
Our key differentiators…
1
2
3
4
Focus on the college market clusters; Under 26 age crowd
Utilize friends’ recommendations (recos) to drive connections
User interface mirrors the experience on Facebook
Post connection enhances user dating experience
Our revenue model is driven by premium subscription fees and in-app purchases
Revenue drivers
Key assumptions Year 1 Year 2 Year 3 Year 4 Year 5
Total users Facebook user base College & graduation student population
20K 200K 750K 3 mil 7.5 mil
Premium subscription fees
$7/month 4% free-to-paid conversion rate
0 $64K $504K $4.7 mil $15.9 mil
Date search suggestions
$.40-$0.80 per referral 4-5% monthly usage
0 $20K $190K $1.7 mil $5.7 mil
In-app purchases
$2 per purchase 2-3% virtual good conversion rate
0 $30K $201K $1.4 mil $4.2 mil
Total 0 $115K $895K $7.8 mil $25.8 mil
3
1
2
Date suggestions revenue stream is the key to a viral revenue growth path
Post connection referral Revenue arrangement Our key select partners
Driving users to post connections will enhance our viral revenue growth path
10-12% commission on local deals (Avg ~$65 per deal, yields $6-7/deal) 8-10% commission on local deals
Book a date; buy gifts
Book a date; buy gifts
40 cents per dinner date booked Book a dinner date
4-10% on all purchases Book a picnic date; buy gift items
10 cents per movie date booked Book a movie date
10% commission on items booked Buy “after date” gift
A staged approach leads to fast earnings growth
Key Business Levers and Drivers Total users Free-to-paid conversion rate Revenue per paid user per month
Click-through rate Cost-per-click (Average) Average number of connections
Milestone #1: Product development complete; 20K users; $2K revenue bookings
Milestone #4: Reach profitability; begin process to scale business; 3 million users
Milestone #5: 7.5 million users on System M $
M $
Milestone #2: Lock-in early adopters; 200K users; focus on nationwide college students
Milestone #3: Breaks over $1.3 million sales with 750K users and begin targeting non-college student market
$25.8M
$11.7M
$14.1M
$7.8M
$4.2M
$3.5M
$3.2M
$0.9M
($2.0M)
$0.9M $0.1M
($0.8M)
Revenue
Profit
Expenses
Key assumptions 4% free-to-paid conversion rate Premium membership - $5-10 / month 19 average connections per user Over 7 million users 2-3% virtual goods conversion
If successful we’ll be of interest to the following acquirers
Exit timing: 4-5 years
Online dating companies
Facebook platform
Why buy? Gain competitive advantage and take out threat
Why buy? Extend product and/or service offerings
Mobile companies
Why buy? Owning a larger “share of wallet” of customers
Exit valuations have been attractive
Date Amount ($ mil) Purchaser Acquiree
Value per user
Dec 2010 $90 mil* $25.7 / user 3
6
1
4
July 2005 $29 mil Not disclosed
Sept 2012 $10 mil* $21 / user
*Includes earn out and deferred compensation **Company estimates
July 2009 $80 mil $20 / user
2
5
Oct 2011 $190 mil (sold stake)
Not disclosed
Feb 2007 <$10 mil ~$20 / user
Exit value, etc
In five years, we can expect to sell for over $200 million in market value
~$200-$250 mill
Key assumptions 7.5 million accounts 4% free-to-paid conversion Avg $7 per month (premium
membership) $2 avg price for virtual goods 3% conversion rate for virtual
goods sales $.40-$0.80 per date referral; 4-
5% monthly usage
We will need $400K in Seed B capital
Seed B Capital: $400K
Marketing
Technology development
G&A
Private and confidential
Trust Stigma Chemistry Time
Social accountability dating
World's Most Trusted Source For Dating:
Your Friends
Our team has the unique combination of relationship psychology, technology, and online marketing experience
Jay Wadhwani Co-founder & CEO
Abhishek Jain Co-founder &
Director
Francis Cruz Outreach/Recruit
Ty Hill Operations
Kelby Barbosa Graphic
Designer
Elliot Volkman Social Media
Monica Ohara Online marketing
Maranda Donato Blogger / PR
Our Indian outsourced team developed the online and mobile applications