Cycle 18 Final transcript

Final meeting Cycle 18 Brian Sugar, Brian Frizzel, Steve Miller, Sharon Bush, Jason Zielke, Wendy White Eagle, Matt Klein, Bob Okabe, Scot Oldach Overall Printed financials for audience and self Adsense vs. Adwords actual results Traffic actual results How does Technology solve the problem – is the solution clear Levels of credibility Follow directions Act on feedback Attentive to details Depth of understanding Credible research Insight HelloTeach What’s the source of those numbers? (opportunity/market size slide) 187 visitors, 5 people sign up .09% ctr How do you make money? Is there a membership fee for those 5 people? Who is going to be creating lesson plans? How do your traffic estimates compare to your competition? WATCH CUTOFFs (Subscripti, Partnersh) Are you going to be selling ad inventory? Lots of ads to sell. We are (WRONG) Where in your financial model do you account for the labor involved with selling those ads. Income standpoint, please articulate your numbers on the financial model. So, $45K in subscription sales in year 1? How many people translate into those sales? (CAN’T ANSWER - NO FINANCIAL MODEL ON HAND!!!??!!) SPECIFICALLY TOLD LAST WEEK BY BOB TO HAVE ANOTHER SLIDE WITH A 5 YEAR P&L like the RFP SAYS. Do you have any data on what it takes to get someone to sign up for a subscription – where is your evidence for the 3% sign up rate? What does scholastic do? Publishing Why would they want to buy a business that is advertising based? They don’t run advertising based models – they’re strategy is counter to this. They are a walled garden. Alan, have you talked to anyone yet? Yesterday CPS (tea speaker – no independent effort). Initially overlooked CPS. So he would be a link to what specifically? We want to be on WTTW, with his backing we could present a compelling argument (what argument?) McGraw-Hill is also for leverage and credibility? Content too. Have you done any polling of teachers? Yes – survey (why not mentioned before in support of the subscription model?????!!??) In terms of the multiple on exit, where did it come from? (23 million on slide vs. 29million in print) 1.5x …. (can’t answer what the formula is or where it came from!??!). Covers expenses in first two years – here they are only 675K, what is extra? Contingency. 35% ownership, what is the thought process here? Alex – average from searching. What was the source of that? What is the barrier to entry and competition? Is there anything proprietary and protectable? Don’t know yet. I don’t see how this solves the problem you mentioned up front? Yeah we missed out on that (???), we don’t know why they quit and need to do more research. Your premise is that your competition is half-assed, but you said your product offering is half-assed. Confidence. I see turn-over, I have kids in CPS, I get the problems. You have to create a compelling story about how you will solve the problem. Not everyone here knows the depth of the problem either. Started off well, personal connection. Wasn’t enough for us. Chatademics No assumptions discussed on financial model How much money are you seeking? 862K Does that valuation align with industry multiples? Couldn’t find any Did you look into other multiples? How did you come up with the multiple? 2-3 users signed up now (??) The people you interviewed, were they experts in this space? Sell to ThinkGlobal schools? How much money do they have? Why would they acquire you? (DID NOT LISTEN TO FEEDBACK LAST TIME) Are they for-profit? Yes (NO THEY ARE NON-PROFIT) What are you going to use the money for? Three employees for 3 years??? The margins are not believable. What are the roles in the company? How many people does it take to build this site? 1 Who are you working with? What professors are going to be involved? Wallace – I trust him personally (?) I don’t understand why chatting is going to help me. I don’t think I would be talking about learning, I would be talking about sports, what makes you believe this will work? Students will help others. We want the administration involved (WHAT?? THAT WAS REJECTED BY BOB LAST WEEK) Is this going to be an online classroom? (THE AUDIENCE DOES NOT KNOW WHAT THE SOLUTION IS) If you can show success at preventing drop out rates it’s a great business model. How are you going to make money? XclusiveXperience One person (“jerry”) emailed us. $200 budget, this coming Saturday. We planned an experience for him – discount for him for dinner. Second city, Millenium park, Restaurant, Tavern. Total was $120 for him. The bar chart doesn’t make sense – has to be more money than that spent on leisure. The scale is likely wrong. The dept of labor site was in thousands. THAT’S BILLIONS! ADWORDS ADSENSE COMBINED ON MARKETING STRATEGY SLIDE (ADSENSE IS NOT ADVERTISING FOR YOU ITS INCOME FOR YOU!!!!!!!!!!!!!!!!!!!!!) Ian.com partnership. How did you come up with that list of competitors? BOB SPECIFICALLY SAID ADVANCED CONCIERGE SERVICES ARE YOU COMPETITION – NO MENTION HERE. How much pricing? $300/year based on personal assistant. Roughly 25-30/hr for personal assistant. It takes about an hour to do this once per month. Personalized membership you have automated the match? Basic membership is it free? No, its $300/year (NO – BASIC IS BASED ON PARTNER REVENUE SHARING) Product sales are the basic membership services (NO – ITS PAY PER SERVICE) Purple is gross profit?? (largest bar on chart – confusing) Income strategy – who is giving money? Talk me through the various revenue streams (Where are they on this page!?! Waving the financials) Marcus does not have the financials in front of him and does not walk them through the model Product sales aren’t any of these categories? Merged into membership – we produce a product – the experience. If I buy an experience you are going to charge me. One-time purchases of the service - $25/experience. Pay by the drink. No multiple How can you get over the hurdle? I won’t pay until I know the service is good. Do I get a free trial? Who is going to put together these experiences? Marcus is knowledgeable and an experience planner. First year staff is 8 people (plan says 3). Are you really going to plan 28K events? 100 events per day? How are you going to do that with only 13 people? We have to rework the numbers (NO YOU DON’T – YOU ALREADY SAID 1 hour per event – that means 13 people can do 100 events per 8 hour day) Congrats on your first customer. Goes a long way. It’s a free suggestion right now. What has prepared you to receive $700K? all-nighters. We come from background of entrepreneurship. We’ve made things happen. Bob – can I get a copy of that market pie chart Debrief Bob – all three - you like your ideas, the hard work shows. Be more aggressive at selling them. They were light. You are selling a business ideas. When you didn’t know something, you didn’t fake it – good. Acknowledged when you didn’t know. Wendy – disconnect with how you make money. If your ideas don’t work, what are your fallback plans. Steve – lack of details. Need more details. Needs lots of detail. Things need to be fleshed out more. Matt – understand only so many hours in a day. But you will find yourself in challenges like this. Every single assumption will be challenged. Due diligence. You have to know every single assumption inside and out. Don’t accept ideas as enough. Facts to support conclusions. Bob – even worse are investors who think they know your space. If I have it wrong, you have to know that level of detail to convince me. CircuitCity is a strategic partner? They are going out of business in a few weeks. Erodes credibility completely. How can they be a strategic partner and how have you not even googled them to see where they are?? You need to be the smartest people in the room on it. Matt – have sources. Credible sources of information. Steve – you are always selling. Everyday of your career this same things applies. Everyday you need to be in the details and back up your arguments with credibly sourced information. Wendy – materials should match. Handouts didn’t match the slides. Brian F – competitor analysis. Must show how are you different – SHOW. Telling does nothing. The same will apply to job interviews and everywhere in your career. Brian S – perceptions. When people ask you questions, don’t try and dodge. Not responsive at times, looked down and hope the question goes away. Steve – I was here yesterday. Gave suggestions. I can think of specific examples that were ignored and not modified. Things that I thought were wrong/mismatched. When I saw it was still wrong today, I called you on it in front of the group. Looked like you were taking notes, but they didn’t get in. Brian S – what you accomplished in such a short period of time is amazing. I would put this head to head with many mba students. Be proud. Wendy – your link between management team and operating results was not clear. Bob – all of you had partners. That’s a good thing. Its important to know why this is a good thing for them. Prove to me that CPS is really going to want this and why. Partnerships take time. Investments take time. We would dance for 20 days after this. Steve – a partnership by definition means both parties get something out of it. Jason – analytical skills. Understanding the business world and business models. Challenge assumptions. Learn to sell/close. Great job by Tiffany/Queen explaining technical terms an acronyms. Brian S – do as much due diligence on the people in the room as possible. Transferrable skills. Bob – learn where you will be motivated and excited. This program is a platform to find the skills and passion. Debriefing the Debrief One Word Keep it going for real Hooray for… Data Analysis 1) overall result, 2) specific area strengths – we did x% better than last cycle on y a. historical context/relative performance per item – we were the best ever on y/we were the best in the last 3 cycles on y 3) specific areas for improvement – we did z% worse than last cycle on w a. historical context/relative performance I saw… (slam book) Relieved KNowledge Diligence Excited Fun Proud Resiliency Procrastination

A Measurable Impact

Initial placement rate:
90%
Industry retention rate:
81%
College attendance rate:
55%
Alumni actively engaged in their communities:
72%
Average 12-month earnings before program:
$10,790
Average 12-month earnings after program:
$44,010