house treat columbia 2015
TRANSCRIPT
Yuri BerkovichRoddy ConnerNeeraj KulkarniWilliam Watts
housetreat.com
Online marketplace forhomemade treats
Team 7Interviews today: 21 Total interviews: 89
Provide homemade, healthy food to customers and allow home-based cooks to sell online
Products and ServicesDiners: Web portal to view today’s dishes, pay and pick-up foodCooks: Web portal to add dishes, receive pmt, prep for delivery
Delivered food
Web app devProcessing pmt Validating customers’ identitiesRating system for cooksCust service / feedbackDelivery network
Web hosting
Online pmt processing
Lawyers
Customer service reps
App developersCustomer service repsDelivery network personnel
HostingDevelopment / ManagementAdvertising
Customer service Diners: Working phone line & email households in
large urban areas
Cooks: Home-based cooks who generally prepare dishes just for their families; culinary students who want to market their skills
20% commission per transactionAdvertising conversions
Web app: Allow cooks to post dishes, allow diners to buy dishes, process payments
Day 1
Buyers Sellers Total
Young Professional
Native Food Lover
ModernHousewife
Culinary Art Student
Day 1 4 4 5 4 17
Day 2 6 4 3 2 15
Day 3 5 4 6 4 19
Day 4 5 5 4 3 17
Day 5 4 3 5 9 21
Total 24 20 23 22
CUSTOMER INTERVIEW SUMMARY
89
DAY 1 ASSUMPTIONS ACTIONS FINDINGS DAY 2 UNDERSTANDING
Value: Buyers would buy homemade food rather than from restaurants Face-to-face
interviews with various prospective buyers
1) Trust concerns with cooks
2) Buyers prefer customization
Value: Buyers require more validation on seller’s kitchen, provide seller profiles
Customer Segments:Prospective buyers are working households or holiday shoppers
Higher demand from young professionals and native food lovers
Customer Segments: Prospective buyers are young professionals and native food lovers
Channels: We can sell any kind of food online
Researchedregulatory environment
1) Restricted by jurisdiction
2) Less strict laws only for baked goods
Value: Start with allowing baked goods sales online
DAY 1DAY 2 = PIVOT!
US Urban Households = 90.0M
TotalAvailableMarket$4.3B
Target Market$112M
ServedAvailableMarket$744M
1
2
3
Households in Top 20 Urban
Areas with Income >$80K = 15.5M
Capture 15% of Served Available
Market = 2.3M
Total Estimated Annual Revenue = $112.0M(=$240/year/household x 2.3M households x 20% commission)
MARKET SIZE
• Crowded and highly fragmented food tech space
• HouseTreat is uniquely positioned versus competition
COMPETITIVE LANDSCAPE
Meal DeliveryMobile/Online
Ordering & Delivery
Restaurant Reviews & Search Recipes &
Communities
Provide homemade, healthy food to customers and allow home-based cooks to sell online
Products and ServicesDiners: Web portal to view today’s dishes, pay and pick-up foodCooks: Web portal to add dishes, receive pmt, prep for delivery
Delivered food
Web app devProcessing pmt Validating customers’ identitiesRating system for cooksCust service / feedbackDelivery network
CooksApp developersCustomer service repsDelivery network personnel
HostingDevelopment / ManagementAdvertising
Customer service Diners: Working phone line & email households in
large urban areas
Cooks: Home-based cooks who generally prepare dishes just for their families; culinary students who want to market their skills
Web app: Allow cooks to post dishes, allow diners to buy dishes, process payments
Day 2 Pivot
Web hosting
Online pmt processing
Lawyers
Customer service reps
20% commission per transactionAdvertising conversions
Provide homemade baked goods online
PROFILE: Yuppie Foodie
Roberto, Age 45
Native Food Lover
PROFILE: Aspiring Chefs/Hobbyist
PROFILE: Ethnic/Niche FoodLover
Income: - High disposable income Buying Rationale:- Looking for unique
desserts to enjoy or bring to special events to impress friends
- Seeking a foodie experience as he considers himself a connoisseur and gourmand
Income: - Varied (working class
and professionals)Buying Rationale: - Craves non-mainstream
food from ancestral homeland that is hard to find
- Member of niche group with its own subculture /tastes (e.g. church, military housewives)
Income: - Limited income as a
culinary art studentSelling Rationale: - No platform to practice
craft of cooking- Seek recognition and
confirmation- Want others to try what
they have created
CUSTOMER SEGMENTS
PROFILE: Extra Money Maker
Income:- Limited income as a stay-
at-home, freelancer, retiree, unemployed
Selling Rationale:- Individuals who have
spare time and want to sell to make some extra money
- Consider themselves good cooks but don’t want to work in restaurants/bakeries
Tiffany, Age 20
Culinary Student
Mary, Age 35
Modern Housewife
BUYERS SELLERS
Mike, Age 30
Young Professional
CUSTOMER FEEDBACK
Stay-at-home mom and baker...“I am a stay-at-home mom who has a few savory pies and a few fruit pies that I can make availableen masse. I have a blog that I have not been able to tend to as much as I work away from home now part time and am a mommy. I can get that time back if I can work from home. Tell me more about your plans.”
Tarril
Vegan baker with a focus on health and customization… “Would love to get involved. I love to bake and I am also a vegetarian so I have been practicingbaking dairy free, gluten free, peanut free goodies without losing the yum factor. It is important to accommodate the many dietary needs, offering fresh products customized to people with specific restrictions.”
Rosie
Customized cake buyer...“I'm a modern mom and busy professional. My five year old son's birthday is next weekend and I wish I could buy him a customized T-Rex cake for his party. Unfortunately I can't find this anywherein grocery stores or bakeries.”
Lisa
Seller
Seller
Buyer
BUYER PRODUCT/MARKET FIT
Purchase homemade baked
goods online
Food as culture
Customer does not have time or expertise to make
the treat himself
Customer can not find these treats elsewhere (e.g. local
restaurants, delis).
Need to find cooks with similar tastes / culture
Ethnic/Niche Buyer
Craves non-mainstream food from his ancestral homeland
Part of niche group with its own subculture/tastes (e.g.
church, military housewives)
Food as experience
Customer does not have time or expertise to make
the treat himself
Needs to impress others with original creations
Wants to be trendy, likes to taste/critique food
An affluent, busy professional / food lover
Looking for unique desserts to enjoy or bring to special events to impress friends
Considers himself a connoisseur and gourmand
Value Proposition Product/Market Fit Customer Segment
SELLER PRODUCT/MARKET FIT
Provide homemade baked goods online
Cooking as a job
Need to earn money while staying at home
Enjoy cooking for themselves and others
Want to take advantage of their free time
Freelancers / Stay-at-home / Unemployed / Retired
Individuals who have spare time and want to sell to make some extra money
Consider themselves good cooks but don’t want to work
in restaurants/bakeries
Cooking as an art
Need to improve their cooking skills to break into good restaurants and/or
open their own
Crave recognition and confirmation
Want others to try what they have created
Aspiring chefs / Hobbyists
Culinary students without a platform to practice
Devoted hobbyists who perfected a particular recipe(s) or created
something novel
Value Proposition Product/Market Fit Customer Segment
HostingDevelopment / ManagementAdvertising
Web app: Allow cooks to post dishes, allow diners to buy dishes, process payments
Day 3Customer
Segmentation & Product Fit
Web hosting
Online pmt processing
Lawyers
Customer service reps
Customer service phone line & email
Web app devProcessing pmt Validating customers’ identitiesRating system for cooksCust service / feedbackDelivery network
CooksApp developersCustomer service repsDelivery network personnel
20% commission per transactionAdvertising conversions
CooksCulinary Student – Aspiring ChefsCulinary students without a platform to practice
Devoted hobbyists who perfected a particular recipe(s)
Extra Money Maker
Individuals who have spare time and want to sell to make some extra money
Consider themselves good cooks
DinersYuppie Foodie –Young ProfessionalLooking for unique desserts to enjoy or bring to special events to impress friends
Ethnic/Niche Food Lover Craves non-mainstream food
Provide homemade baked goods online and delivered
DinersCustomer does not have time or expertise to cook herselfCustomer can not find these treats elsewhereNeeds to impress othersWants to be trendy, likes to taste and critique food
CooksCooking as a job:Need to earn money while staying at homeEnjoys cooking Wants to take advantage of their free time
Cooking as an art:Need to improve their cooking skillsCraves recognitionWant others to try their food
HouseTreat Customers
Buyers
Sellers
Flash Sales(Groupon & Living Social for Buyers)
Social Commerce(Facebook & Twitter
for Buyers)
Dedicated E-Commerce(housetreat.com)
Platform App Store(Apple, Android)
Channels
CHANNELS – THE WEB
AdoptionViral Marketing:
Cooks’ blogs, friendsWord of mouth
Friend Referral Promotions
Media:TV / Radio
Billboards / Printed Ads
SEO:Google AdWords/AdSense
Facebook Ads
Flash Sales:Groupon
LivingSocial
Partners/Affiliates:
Celebrity ChefsCooking channelsCulinary Institutes
Year 1 Budget = ~$30/customer * 100k customers = $3.0M
GET STRATEGY
GET STRATEGY IN ACTION
Unsolicated Call From Food Network Executive Producer...
“I'm a producer for a production company that specializes in TV cooking shows. We have created some of the nations best shows. We were approached by a new network in food and they are looking for new shows. I'm interested in speaking to you about doing a show on your type of cuisine. Please give me a call. “
Donna
Executive Producer - Food Network
HostingDevelopment / ManagementAdvertising (Geotargeting)
Web app: Allow cooks to post dishes, allow diners to buy dishes, process payments
Dedicated E-Commerce WebsitePlatform App StoreSocial CommerceFlash Sales
Day 4Customer Relationships,
Channels & Revenue Streams
Web hosting
Online pmt processing
Lawyers
Customer service reps
Customer service phone line & email
Food BloggersPrinted AdsViral MarketingTargeted SEOFlash SalesPartnerships/Affiliation
CooksCulinary Student – Aspiring ChefsCulinary students without a platform to practice
Devoted hobbyists who perfected a particular recipe(s)
Extra Money Maker
Individuals who have spare time and want to sell to make some extra money
Consider themselves good cooks
DinersYuppie Foodie –Young ProfessionalLooking for unique desserts to enjoy or bring to special events to impress friends
Ethnic/Niche Food Lover Craves non-mainstream food
Provide homemade baked goods online and delivered
DinersCustomer does not have time or expertise to cook herselfCustomer can not find these treats elsewhereNeeds to impress othersWants to be trendy, likes to taste and critique food
CooksCooking as a job:Need to earn money while staying at homeEnjoys cooking Wants to take advantage of their free time
Cooking as an art:Need to improve their cooking skillsCraves recognitionWant others to try their food
Web app devProcessing pmt Validating customers’ identitiesRating system for cooksCust service / feedbackDelivery network
CooksApp developersCustomer service repsDelivery network personnel
20% commission per transactionAdvertising conversions
DELIVERY – PARTNERSHIP OR IN-HOUSE?
Our approach: Outsource Delivery for MVP (incur costs initially), gradually build delivery network
Partnership In-house network
Pros • Develop our MVP more quickly
• Strategic Alliance: Outsource delivery to partners
• Better control cost of delivery (approx. $3 per order)
Cons • Higher cost of delivery per order ($5 - $12)
• MVP release timeline is longer
• Operational overhead
Matching chefs and general public online and through appsFood deliveryRatings, reviewsCustomer serviceMarketing & PRInsurance protection
Physical delivery services (Postmates)
Promotional partnerships :• celebrity chefs• culinary institutes,• TV cooking
programs• Bloggers
IT outsourcing
Insurance for chefs
Website, appsIn-house web developersDelivery personnelSG&A staffIn-house counsel
Web DevelopmentCustomer AcquisitionLoyalty programsSG&A
20% commission on online salesAdvertising conversions
Dedicated E-Commerce WebsitePlatform App StoreSocial Commerce (FB)Flash Sales (Groupon)
Day 5
CooksCulinary Student – Aspiring ChefsCulinary students without a platform to practice
Devoted hobbyists who perfected a particular recipe(s)
Extra Money Maker
Individuals who have spare time and want to sell to make some extra money
Consider themselves good cooks
DinersYuppie Foodie –Young ProfessionalLooking for unique desserts to enjoy or bring to special events to impress friends
Ethnic/Niche Food Lover Craves non-mainstream food
Provide homemade baked goods online and delivered
DinersCustomer does not have time or expertise to cook herselfCustomer can not find these treats elsewhereNeeds to impress othersWants to be trendy, likes to taste and critique food
CooksCooking as a job:Need to earn money while staying at homeEnjoys cooking Wants to take advantage of their free time
Cooking as an art:Need to improve their cooking skillsCraves recognitionWant others to try their food
Food BloggersTargeted SEO (FB, Google)Printed AdsViral MarketingFlash Sales (Groupon)Celebrity ChefsCulinary Institutes
FOCUS ON PARTNERS BIG IDEA – ALL ABOUT THE CUSTOMER
MOCKUP: LISTINGSAssociating a dish with a chef
Having a time where a certain numbers of buyers must be met.
Creating a Kickstarter feel with donations and concept of inspiring home chefs to build their craft.
Reviews | HouseTreat cert.
FLIGHT PATH AFTER LEAN LAUNCHPAD
• Continue growing HouseTreat into the next great company
– Complete MVP (website and app)
– Establish necessary resources and partners: delivery, insurance, packaging, regulatory compliance
– Get first customers into the “funnel”
– Raise funding
– Keep and grow customers
– Iterate product features on customer feedback
TYPE OF BUSINESS: STARTUP
Regulation: targeting jurisdictions that allow…a. Online transactions for private sellers
under the Cottage Farm Law exemptions in each state
b. In-person delivery via our third party delivery system (Postmates)
Disruption
Geo-targeting● Geotargeting select communities and
demographics via FB ads● Providing starter “Kits” for help sellers meet
regsScaling through Seller Agents● “Downline” Commission for mentors who bring
in sellers and serve as a mentor
Repeatable & Scalable
Minimum threshold of sellers & buyers met
Starter Kit built
1) FB Ads @ Community2) Mentor Programs w/commission
Move from closed to open community
Shipping model for established sellers
FIRST YEAR REVENUE MODEL
25
• Customer Acquisition Cost $3.0M
– $30/new customer
– 100k new customers
• Product development $200k
– $100k avg. salary
– 2 full-time developers
• SG&A Personnel $600k
– $120k avg. salary
– Five professionals
Profit
$1.60 per transaction $0.40 per transaction
Operating Expenses
• Target Market– Select US urban markets
– 100k new customers
• Sales $4.8M– $2 commission/transaction
(20% commission, $10 avg. sale)
– 24 transactions/customer/year
– $48/customer/year