4
MONTHS
8
ART CENTER DESIGNERS
SINGAPORE
INSEAD
250
INSEAD MBAS confidential copyright- Stella Ahrhembyeol Lee
TRANSDISCIPLINES
Transportation
Graphics
Product
Environmental
confidential copyright- Stella Ahrhembyeol Lee
Heinrich and Esther BaumannSteiner Endowed Fund for Creativity and Business
Since 2005, select Art Center students have been studying alongside MBA students at INSEAD, one of the world’s leading and largest graduate business schools. The joint program teaches:
the role of creativity in business decisions how innovation works the impact design strategy has on corporate management confidential copyright- Stella Ahrhembyeol Lee
COURSES Strategies for Product and Service Development
Re-imagining the ecosystem around mobile computing, each team of 5 MBAs and 1 designer were asked to developing an artifact to extend/improve the functionality/usability of smartphones/tablets/laptops. We looked at opportunities not only from the individual user’s point of view, but also from the market demand point of view. Ultimately presenting a business venture pitch of the final product, FRANK.
Management Decision Making
In this course, I learned how people represent and assess uncertainty, how beliefs and expectations influence perception, and also the interplay of memory and judgment. The final deliverable for the class was a collaborative effort of the MBAs and I to creatively communicate the concepts learnt in class.
Business Planning Workshop
We learned to evaluate innovate ideas from the market demand and financial point of view. I learnt how to structure presentations in order to cohesively communicate ideas to venture capitalist and angels. There was emphasis on not just the idea alone, but the strength of the team, and most importantly “how I am going to make money.” For the final deliverable, I formed a team with 3other MBAs in developing a business plan for the Living Home India’s MODI MAT, and pitched it our NGO partner Ashoka.
Negotiation
Re conceptualizing the art of negotation not as an objective to create win-lose situations, but thinking beyond numbers to create win-win situations. Recognition that value creation is possible for both parties especially in dealing with clients, bosses, colleges, in the work environment where relationship and substance can get mixed up. Once a week, I practiced Value Negotiation tactics learnt in class with randomly paired MBAs and/or actors. We learned to break down the problem by evaluating both sides’ interests, alternative, options, legitimacy, commitment, relationship, and communication.
confidential copyright- Stella Ahrhembyeol Lee
Advertising and Social Media
In this course, we learned the role and impact of social media on how it shifts the relationships between consumers, brands and other stakeholders, and generates new dynamics. We learn through discussion of various case studies the impact of social media on marketing planning and implementation. For our final deliverable, we as a team of MBAs and designer developed a real social media marketing project linking it to marketing objective and overall marketing strategy.
Entrepreneurship in Action
4 day intensive business simulation where teams of MBAs and designer were placed in the shoes of an entrepreneurial team that was competing in a consumer durable market. In the short and fast paced environment, my team had to come up with a company strategy, including brand and market positioning, physical and human capital, and manage operations in order to sustain profitable growth in an increasingly competitive market. The main takeaway from this class was becoming aware of the terminologies and actions required when taking ideas from the design lab to the fast paced market place, and understanding when and where to invest to secure a steady flow of cash.
Psychology in Management
In this class, we learned how social identities affect individuals’ understanding of social and professional events. In organizations individuals are constantly faced with the need to understand and explain the things that happen to them and others. We learn through discussions of case study reading and personal reflections that people sometimes use a social identity, such as gender, ethnicity, or team membership, as a lens through which they interpret these ambiguous events.
Communication in Leadership
Here we learned to understand our body language and the various subconscious gestures individuals make when communicating. We learned our individual communication styles, the pros and cons of our styles, and how we can improve by fixing the smallest gestures we would never have imagined could make a difference. The suggested improvements from the professor were on a one on one basis based on the individual’s body size characteristics.
confidential copyright- Stella Ahrhembyeol Lee
Strategies for Product & Service Development
Project Overview Re-imagining the ecosystem around mobile computing. Develop an innovative artifact that takes advantage of the fact that computing power is becoming mobile. How can you extend/improve the functionality/usability of smartphones/tablet/laptops? Weeks 1~7
Weeks 8~14
Opportunity Identification Field Research Lead User Interview Prototyping Final Design Design Pitch
Brand Mission Team Advisors Market Opportunity Operations Financials Business Venture Pitch
confidential copyright- Stella Ahrhembyeol Lee
Field Research
clubs around Singapore- receiving and sending text and calls in loud and crowded environments
Mapping User Journey
mapping user journey on a nightout club (loud&crowded environment) in order to pin point pain moments and opportunities for new solutions
Arrival AVALON
Communication
Leaving
confidential copyright- Stella Ahrhembyeol Lee
Ideation
Deeper look into pain moments within the journey noting physical, psycological, and emotional objectives, motivations, needs of the user
Prototyping
observing existing products and services, and how new solutions can be introduced to the existing system. Such as drinks, cups, ice, entrance stamps, laser beams, and bar surfaces.
confidential copyright- Stella Ahrhembyeol Lee
Business Venture Pitch Nov. 2012 confidential copyright- Stella Ahrhembyeol Lee
MISSION CREATE SPONTANEOUS REAL WORLD INTERACTION BETWEEN BETWEEN 21ST CENTURY SINGLES OUT ON THE TOWN confidential copyright- Stella Ahrhembyeol Lee
TEAM
Stella Lee
Ben Pasquier
Su Mei Ho
Claudia Tapia
CEO, CDO
CFO
COO
CMO
design, branding
consulting, finance
policy development
marketing brand strategy
social sector spending
ADVISORY BOARD Kedar Kale
Anshul Babbar
Team lead in Altair engineering.
Manager at Evalueserve with experience of
entrepreneurship experience
building offshore research teams for corporate and professional services clients
confidential copyright- Stella Ahrhembyeol Lee
OPPORTUNITY IDENTIFICATION
confidential copyright- Stella Ahrhembyeol Lee
problem scenario
AT THE BAR TONIGHT. SEE SOMEONE YOU LIKE? WANT TO START A CONVERSATION? SAYING HI CAN BE...
DAUNTING DISTRACTING INTIMIDATING COMPETITIVE CONFIDENCE SHATTERING confidential copyright- Stella Ahrhembyeol Lee
problem scenario
WHAT IF YOU COULD CHAT ANONYMOUSLY WITH ANYONE SO YOU COME THROUGH AND NOT YOUR NERVES?
confidential copyright- Stella Ahrhembyeol Lee
identifying the opportunity
BUYING DRINKS
BUYING DRINKS TO MEET PEOPLE
confidential copyright- Stella Ahrhembyeol Lee
MEETING NEW PEOPLE
main concept
PRODUCT OFFERING
confidential copyright- Stella Ahrhembyeol Lee
product offering
FRANK reinvents the
“can I buy you a drink?� experience by initiating conversations between singles without having to exchange numbers. At the same time boosting bar sales.
confidential copyright- Stella Ahrhembyeol Lee
FRANK’s journey
ORDER A
FRANK
LIGHT FLASH WHEN LINKED
SCAN QR CODE TO AUTOMATICALLY START FRANK APP
TYPE IN A MESSAGE
confidential copyright- Stella Ahrhembyeol Lee
HAVE FRANK SENT OVER VIA BARTENDER
FRANK’s journey
GIRL RECEIVES DRINK AND FRANK
ALERT FOR MESSAGE RECEIVED
BEGIN INITIAL CONVERSATIONS
confidential copyright- Stella Ahrhembyeol Lee
product specifics
ADAPTABLE FTS VARIOUS DRINKS
confidential copyright- Stella Ahrhembyeol Lee
product specifics
WATERPROOF FOR DRINK SPILLS AND WET ENVIRONMENTS
SUCTION PADS FOR EXTRA STABILITY
confidential copyright- Stella Ahrhembyeol Lee
product specifics
LIGHT UP FEEDBACK - PHONE LINKED - MESSAGE RECIEVED
HANGING FEATURE ADAPTABLE TO VARIOUS CUP SIZES AND BOTTLES
confidential copyright- Stella Ahrhembyeol Lee
product specifics
MAGNETIC SURFACE REPLACE QR CODE MAGNETS TO REUSE DEVICE
QR CODE
FOR LINKING PHONE TO DEVICE confidential copyright- Stella Ahrhembyeol Lee
market opportunity
MARKET OPPORTUNITY
confidential copyright- Stella Ahrhembyeol Lee
industry data
45,000
BARS and NIGHTCLUBS
$20
BILLION = 1000
Source: Euromonitor National Club Industry Association of America
ANNUAL SALES REVENUE
1300
CUSTOMERS PER BAR EACH WEEK
75%
SINGLE confidential copyright- Stella Ahrhembyeol Lee
industry data
MAJOR SOURCES OF REVENUE IN BARS
others
8%
wine
7% food & non-alcoholic beverages
35% 20%
30%
distilled spirits & hard liquor Source: National Club Industry Association of America
confidential copyright- Stella Ahrhembyeol Lee
beer
Brand Strategy
TARGET
SINGLES
MINGLES
JINGLES
individuals in their late teens and early 20s who are exploring their relationships.
older singles, couples, and social groups with a common interest
business travelers on expense accounts, vacationers, and empty nesters.
confidential copyright- Stella Ahrhembyeol Lee
competitive landscape
meeting people
ordering drinks
digital
physical
confidential copyright- Stella Ahrhembyeol Lee
buying drinks & meeting people
product differentiation
humorous emotional element added to the act of texting & buying one another drinks tangibility to mobile communication plain drinks
communication medium
confidential copyright- Stella Ahrhembyeol Lee
Operations
OPERATIONS
confidential copyright- Stella Ahrhembyeol Lee
target location
15 MOST POPULAR CITIES FOR NIGHTLIFE PORTLAND NEW YORK
SAN FRANCISCO
LAS VEGAS
LOS ANGELES
NASHVILLE AUSTIN
= cities with most male singles
PROVIDENCE
CHICAGO
DENVER
NEW ORLEANS
SAVANNAH
HOUSTON MIAMI
Source: American Community Survey US Census Buereau Online survey by Travel and Leisure website National Geographic Magaizine confidential copyright- Stella Ahrhembyeol Lee
BOSTON
target location
YEAR 2 Las Vegas Portland
640
400
800
500 880
YEAR 1 Los Angeles San Fransico YEAR 3 Austin
*numbers based on 20% of bars in each city
confidential copyright- Stella Ahrhembyeol Lee
roll out phases
YEAR 1
YEAR 2
YEAR 3
target locations: Los Angeles, San Francisco product & brand developement (software, marketing, customer service) contract manufacturing partner for Frank secure pilot bar locations sales & marketing: set up distribution channels expansion of target location: Las Vegas, Portland analysis of product feed back develope product extension secure purchase orders in next locations sales & marketing: set up distribution channels in next locations expansion of target location: Austin, Houston launch of new product secure purchase orders sales & marketing: set up distribution channels in next locations confidential copyright- Stella Ahrhembyeol Lee
Financials
FINANCIALS
confidential copyright- Stella Ahrhembyeol Lee
business model
$100 p/month upfront subscription fee 1year contract
+ $1.10 p/FRANK purchase & download by bar customer
confidential copyright- Stella Ahrhembyeol Lee
Revenue Stream
YEAR 1
YEAR 2
YEAR 3
228
1,089
1,680
$68,400
$326,700
$504,000
$164,755
$786,922
$1,213,984
$233,155
$1,113,622
$1,717,984
# OF ACTIVE CLIENTS SUBSCRIPTION INCOME REVENUE SHARING REVENUE
REVENUE $500,000.00 $450,000.00 $400,000.00 $350,000.00
REVENUE SHARING calcultation
$300,000.00 $250,000.00 $200,000.00 $150,000.00 $100,000.00 $50,000.00 $0.00 1
2
3
4
5
6
7
8
9
10
11
12
13
1400 ppl per bar every week 1:1 ratio of male to female 75% of them are single penetrate 10% of male penetrate 1% of female
confidential copyright- Stella Ahrhembyeol Lee
Costing
PRODUCT COSTING
APP DEVELOPMENT
INJECTION MOLD CASTING
$0.55
YEAR 1
LED LIGHT BULB 5mm
$0.09
YEAR 2
SUCTION PAD 10mm
$0.16
YEAR 3
PROTECTION PACKAGING
$0.05
BATTERY CR2032
$0.05 $0.90
SUB-TOTAL
50% manufactuing markup
$0.45
customs, shipping, distribution channel markup
$2.00
SUB-TOTAL
$18,000 $9,000 $9,000
= $3.35
$3.35 * physical device only
confidential copyright- Stella Ahrhembyeol Lee
Costing
YEAR 1
YEAR 2
YEAR 3
$4,000
$4,000
$4,000
$136,740
$514,020
$674,400
ADMINISTRATION EXPENSE
$31,200
$31,200
$31,200
R&D EXPENSE
$18,000
$9,000
$9,000
MATERIAL COST
$68,740
$328,333
$506,520
$888,553.50
$1,225,120
MARKETING EXPENSE SALES EXPENSE
COST
$258,628
confidential copyright- Stella Ahrhembyeol Lee
Revenue Stream
YEAR 1
($25,527)
PROFIT TAXES 30% NET INCOME
YEAR 2
YEAR 3
$227,069
492,865
$68,120
$147,859
$158,948
$345,005
PROFIT $160,000.00 $140,000.00 $120,000.00 $100,000.00 $80,000.00 $60,000.00 $40,000.00 $20,000.00
Profit beginning
$0.00 -$20,000.00
1
2
3
4
5
6
7
8
9
10
11
12
13
-$40,000.00
confidential copyright- Stella Ahrhembyeol Lee
Year 1 Fourth Quarter
Company Valuation
enterprise value
$1.4 MILLION
*no growth after 4 years and only value 5 additional years of cash flow confidential copyright- Stella Ahrhembyeol Lee
Funding
investment
$50,000
$25,000- 1st quarter $25,000- 2nd quarter
ownership
IRR
ROI
10%
70%
189%
confidential copyright- Stella Ahrhembyeol Lee
Business Venture Pitch Nov. 2012
confidential copyright- Stella Ahrhembyeol Lee