Danceture.com Business Plan

Danceture.com Business Plan
Brand Positioning
Danceture.com was conceptualized by Electronic Dance Music (EDM) aficionados that
were frustrated with a gap in the market. Currently, there are no effective and compelling
websites that anyone interested in EDM can go to for the latest information about EDM.
In addition, content on other sites is dry and text-heavy. Danceture.com is a new
approach to keeping users up-to-date with the latest news and stories in a rapidly growing
genre that is increasing in popularity.
We want to provide fellow EDM aficionados with a great source of high-quality and
unique content on everything about EDM – yet keeping it simple for those that only want
news in a particular subset. We also intend to be the “Wikipedia on steroids” of EDM,
with our “Brain” technology indexing content to be the best source of EDM information.
Business Model
We have four primary revenue drivers:
1) Ad Network
Our own advertising network with partner EDM music blogs and event sites, would allow
us to rapidly establish the Danceture brand and generate significant revenue through
advertisers looking to target the dance music community.
2) Display Advertising
We intend to drive our initial revenue through direct sales to local advertisers (City
Guide) as well as enable users to advertise through our self-serve sidebar widget with
fixed 12x12 banner ads. In addition, we will use Google Small Business Solutions in our
beta development phase.
3) Affiliate Marketing
Essential to our brand and our marketing strategy is developing partnerships with
companies that sell products in the EDM genre – event tickets, DJ equipment, and songs.
We can generate a percentage of sales through affiliate marketing by leveraging our
editorial content.
4) Premium Content
Once our site moves beyond the beta phase and is well established and our “Brain” and
guides (city, tech, music) have been developed out with significant high-quality content,
we will offer a premium service that allows downloads of music, access to exclusive
content (such as DJ techniques), as well as downloadable city guides from our site for a
subscription fee.
Management Team
1. Editor-in-chief / Resident Music Guru: Kevin Kaiser
Kevin founded his own music website Dancing Astronaut, which is the precursor to
Danceture. He has written and edited this site for six months and managed all of its
advertising.
2. Finances/Advertising: Alexander Ingram
Alex will soon be graduating with a B.A. degree in Economics from Stanford University.
He founded and served as CEO of the college media website GuruCampus.com, which
aggregated virtually every online college newspaper in the country. He will be working at
Credit Suisse in their Technology, Media, and Telecommunications practice in the fall.
Alex previous served as a summer associate at O’Shaughnessy Asset Management in
Stamford, CT.
3. Advertising/Business Development/Site Design: Tim Lim
Tim is Biomechanical Engineering major with an additional degree in Management
Science and Engineering. He has a strong interest in the Internet industry and will be
working in operations strategy management in Yahoo's SE&O division after graduating
in June. He has previous experience consulting for Booz & Company, an
internet/telecommunications technology company on their broadband strategy, as well as
in product design for the 2010 iPhone division at Apple in Cupertino.
4. Content producers/editors/PR: Stacie Chan and Miranda Simon
Stacie produces content and social media for B-net. She has written for two community
newspapers and did investigative reporting for KNBC L.A.
Miranda has had experience producing content for the online news site Salon.com, where
she also manages part of their social media communications. She has also reported for El
Universal, one of the largest national newspapers in Mexico City.
5. Website coding/maintenance/Business Development: Emmanuel
Emmanuel is a Management Science and Engineering major and has had experience
working with Java, C++ and HTML. Upon graduation Emmanuel will be working at
Google on The Online Sales and Operations (OSO) team.
Product Marketing Strategy
Once we launch the beta version of our site on June 3, 2010, we intend to drive our user
traffic and increase brand recognition through the following strategy:
Initial Growth
1. Advertise through EDM (Electronic Dance Music) blogs on a content sharing
basis.
2. Make use of the Facebook’s social graph.
3. Email subscription and weekly Danceture newsletters: eep fresh, up-to-date
content going to members that is visually exciting and media rich to help to retain
traffic and potentially grow users. Members can forward email newsletters to
friends or email networks
Sustainable growth and growth strategy
1. Develop partnerships with local venues featured in our “city guide” section – we
feature their clubs/bars/lounges in our content with user reviews and original
editorial content, and they feature the Danceture name/brand in their clubs –
similar to Yelp model.
2. Ad Network, blog growth, EDM network. As our site is a “one stop EDM shop”,
we can leverage our content network and continue to grow through the users that
visit specific niches in EDM and want to branch to other niches. For example, an
online user that frequents EDM music mix sites might be interested in a club or
the latest equipment, and through our network discover our site and become a
regular user. With funding to launch an Ad Network, we will have significantly
greater leverage as we grow our advertising network in a very targeted genre, so
we can provide advertisers with targeted, specific and relevant users (and vice
versa) to translate to high CPMs, high CPCs and high CTRs.
3. Building brand image through EDM networks – enthusiasts, clubbers, DJs,
electronic equipment suppliers/buyers, and associated networks – is key. Through
our high quality content and unique editorial reviews, we intend to draw traffic
and retain traffic, as well as enhance our reputation as THE online destination for
all things EDM.
Competition
Several “general” EDM online sites exist in the market: DJMag.com, residentadvisor.net,
theuntz.com, and mixmag.net.
1. www.djmag.com
DJmag.com is the online version of "DJ magazine". Its paper edition is very popular, and
is a monthly magazine dedicated to Electronic Dance Music and DJs. The magazine is
translated in to Portuguese, Polish, Ukrainian, Lithuanian, Chinese, Bulgarian, and
Italian.
Strengths
The paper magazine has a significant subscriber base, and has styled itself as "the world's
largest selling dance music magazine.” It currently claims sales of 27,500 copies out of a
total circulation of 32,250 (with 5,000 given away free). The content on its website
mirrors that of its paper version.
Shortcomings
While the brand is established, there are many shortcomings with the website. The
navigation of the site is difficult and the content is not interactive. Information feels
impersonal, and with the confusing layout the experience is not very engaging or
compelling. The forum is limited, and it does not seem to translate well to social
networks, hence limiting online growth.
Poor website monetization: The website is highly dependent on paper magazine
subscribers wanting a simple online transcription of the magazine content and monetizes
predominantly through subscriptions.
Poor site structure: Further exploration of the site shows that search doesn't return very
relevant results for music, seems to be more event based.
2. MOG Music Network
MOG is a vertical ad network that targets a wide variety of music blogs. MOG does not
focus on the electronic dance music space.
Our Competitive Advantage
Better for users
Danceture.com intends to aggressively enter the dance music niche and provide fresh and
up-to-date content with an attractive and simple user interface, with compelling and
media rich content that is personalized – users can sign in and indicate what aspects of
EDM they are interested in, and the feeds using our “BRAIN” keyword system will pull
news and stories that are relevant to them.
Better for advertisers/affiliates
With each user’s preferences easily visible on the site from their news preferences, as
well as clear navigation through our music, events, brain and technology pages, our
advertisers will be able to reach more relevant customers and hence drive higher
conversions.
3-year timeline for Danceture
Year 1
The core focus in our first year is to develop our content, which will drive our site traffic
growth. We will build Danceture’s brand recognition in the EDM community and
establish our site as a compelling and high quality content-rich source for EDM
aficionados. We want to ensure that site navigation is fully functional, build our “Brain,”
increase our user base, and develop our user input through the “Brain.”
We will generate revenue in year 1 through several channels. Firstly, direct sales through
Doubleclick for small businesses, where we will have a sales team to reach out to
advertisers. In addition we would reach out to affiliate sales partners, and advertise their
products on our site.
We will market our site through social networks as well as EDM blogs and similar sites
to achieve our year 1 goal of reaching 40,000 unique visitors per month by the end of the
first year.
Year 2
Once the brand is more established and we have significant user and site traffic, we then
turn to our Ad Network. At this point, Danceture will be a recognizable name in the EDM
community, and given our revenue streams from advertising and affiliate programs, we
will build out an Ad Network (requiring substantial investment as highlighted in the
financial plan. We will hire a full sales team to drive this growth, and focus on the real
value proposition – providing the link between our relevant and high-spending users (and
those on network blogs/sites as well) and the advertisers that want to reach the EDM
community.
Year 2 is when our true value proposition comes into play, as we will leverage our users
and our network to expand and capture a highly monetizeable community for potential
advertisers.
Year 3
After 2012 we plan a continued expansion of our Ad Network, and by leveraging our
rapid user growth and established brand name we will continue to offer additional
services that will improve the user experience. We will offer exclusive and custom
content such as in-house electronic dance music mixes and live event recordings. We
want to develop direct relationships with hardware manufacturers such as Pioneer and
offer improved incentive structures to buy through Danceture.com by offering increased
promotional discounts to our users, and eventually exploring branding our own
recommended equipment that we review on our website. Once our content and users are
established with our core products we want to improve the user experience by providing
more premium and exclusive content.
!
Current Offering
!
Danceture has not yet been incorporated. We seek to raise $125,000 in capital to develop
our site and content and to begin a direct sales effort for our advertising inventory. The
capital will largely be used to build out the site’s infrastructure, hire an engineer, and
fund a capable direct sales team.
Summary - Income Statement
2010
121,312
130,787
2011
935,761
865,167
2012
4,350,194
1,330,167
Expense/Revenue Margin
108%
92%
31%
Operating Profit (EBITDA)
Operating Income Margin
-9,475
-8%
70,594
8%
3,020,028
69%
Cumulative EBITDA
-9,475
61,119
3,081,147
Investing Income
Capital Expense
-
-
Earnings Before Taxes
-9,475
70,594
3,020,028
Income Taxes @40%
-3,790
28,238
1,208,011
Earnings
Net Margin
-9,475
-8%
42,356
5%
1,812,017
42%
Revenue
Expenses
-
Ending Cash
Cash Flow from Operations
MONTHLY
June
Revenues
Expenses
Net Income
Revenues
Expenses
Net Income
0
10
-10
July
7,021
7,510
-489
August
14,042
22,267
-8,225
2010
September
21,063
25,100
-4,038
October
23,531
25,100
-1,569
November
26,288
25,400
888
December
29,368
25,400
3,968
Net Cash Provided
from Financing
Activities
125,000
Beginning Cash
Ending Cash
125,000
124,990
124,990
124,501
124,501
116,276
116,276
112,238
112,238
110,669
110,669
111,557
111,557
115,525
59,347
64,500
-5,153
2011
June
66,987
75,333
-8,346
July
75,659
75,333
325
August
85,511
80,750
4,761
September
96,716
79,750
16,966
October
109,471
79,750
29,721
November
124,006
85,167
38,840
December
140,586
85,167
55,420
January
36,779
67,167
-30,388
Februrary
41,418
64,083
-22,665
March
46,668
54,083
-7,416
April
52,612
54,083
-1,472
May
115,525
85,137
85,137
62,472
62,472
55,056
55,056
53,585
53,585
48,432
48,432
40,086
40,086
40,411
40,411
45,172
45,172
62,138
62,138
91,860
91,860
130,700
130,700
186,119
January
159,519
101,833
57,686
Februrary
181,164
91,833
89,331
March
205,936
97,250
108,686
April
234,321
102,667
131,654
May
266,884
108,083
158,801
2012
June
304,286
108,083
196,203
July
347,298
112,083
235,215
August
396,824
116,250
280,574
September
453,922
121,667
332,255
October
519,834
121,667
398,167
November
596,018
121,667
474,351
December
684,188
127,083
557,105
186,119
243,805
243,805
333,136
333,136
441,822
441,822
573,476
573,476
732,277
732,277
928,480
928,480
1,163,695
1,163,695
1,444,268
1,444,268
1,776,524
1,776,524
2,174,691
2,174,691
2,649,042
2,649,042
3,206,147
Net Cash Provided from
Financing Activities
Beginning Cash
Ending Cash
Revenues
Expenses
Net Income
Net Cash Provided from
Financing Activities
Beginning Cash
Ending Cash
Revenue Summary
YEARLY
Affiliates
Advertising
Ad Network
TOTAL
2010
29,158
92,154
0
121,312
2011
187,079
591,262
157,419
935,761
2012
707,128
2,234,873
1,408,194
4,350,194
MONTHLY
June
Affiliates
Advertising
Ad Network
TOTAL
0
0
0
0
July
1,688
5,333
0
7,021
August
3,375
10,667
0
14,042
2010
September
5,063
16,000
0
21,063
October
5,656
17,875
0
23,531
November
6,318
19,969
0
26,288
December
7,059
22,309
0
29,368
Affiliates
Advertising
Ad Network
TOTAL
January
7,886
24,924
3,969
36,779
Februrary
8,810
27,844
4,764
41,418
March
9,842
31,107
5,718
46,668
April
10,996
34,752
6,864
52,612
May
12,284
38,824
8,239
59,347
2011
June
13,724
43,373
9,890
66,987
July
15,332
48,456
11,871
75,659
August
17,128
54,134
14,249
85,511
September
19,135
60,477
17,103
96,716
October
21,378
67,564
20,530
109,471
November
23,883
75,481
24,643
124,006
December
26,681
84,326
29,579
140,586
Affiliates
Advertising
Ad Network
TOTAL
January
29,808
94,207
35,505
159,519
Februrary
33,301
105,246
42,617
181,164
March
37,203
117,579
51,155
205,936
April
41,562
131,357
61,403
234,321
May
46,432
146,749
73,703
266,884
2012
June
51,873
163,945
88,468
304,286
July
57,952
183,155
106,191
347,298
August
64,742
204,617
127,464
396,824
September
72,329
228,594
152,999
453,922
October
80,804
255,381
183,649
519,834
November
90,273
285,306
220,440
596,018
December
100,851
318,738
264,600
684,188
Costs Summary
YEARLY
Staffing
Legal
Ad Network Setup
iPhone Application
Server / IT
Total
Staffing
Legal
Ad Network Setup
iPhone Application
Server / IT
Total
Staffing
Legal
Ad Network Setup
iPhone Application
Server / IT
Total
2010
121,667
8,000
0
0
1,120
130,787
2011
776,667
10,000
20,000
20,000
38,500
865,167
2012
1,224,167
10,000
0
0
96,000
1,330,167
MONTHLY
January
46,667
10,000
10,000
Februrary
52,083
March
52,083
April
52,083
500
67,167
2,000
64,083
2,000
54,083
2,000
54,083
5,000
2,000
64,500
January
85,833
10,000
Februrary
85,833
March
91,250
April
96,667
May
102,083
6,000
101,833
6,000
91,833
6,000
97,250
6,000
102,667
6,000
108,083
2010
September
25,000
October
25,000
November
25,000
December
25,000
100
22,267
100
25,100
100
25,100
400
25,400
400
25,400
July
68,333
August
73,750
September
73,750
October
73,750
November
79,167
December
79,167
5,000
2,000
75,333
5,000
2,000
80,750
6,000
79,750
6,000
79,750
6,000
85,167
6,000
85,167
2012
June
102,083
July
102,083
August
106,250
September
111,667
October
111,667
November
111,667
December
117,083
6,000
108,083
10,000
112,083
10,000
116,250
10,000
121,667
10,000
121,667
10,000
121,667
10,000
127,083
June
Staffing
Legal
Ad Network Setup
iPhone Application
Server / IT
Total
May
57,500
0
July
7,500
August
14,167
8,000
10
10
10
7,510
2011
June
68,333
10,000
5,000
2,000
75,333
Visitor Projections
YEARLY
Unique Visitors
Linear Growth
Geometric Growth
Pageviews
Linear Growth
(Average)
High
Medium
Low
Geometric Growth
(Average)
High
Medium
Low
2010
2011
2012
MONTHLY
348,619
143,990
2,490,138
923,847
4,880,670
3,491,988
5,926,527
8,715,481
5,577,908
3,486,192
42,332,338
62,253,437
39,842,200
24,901,375
82,971,382
122,016,738
78,090,712
48,806,695
Geometric Growth
New Visitors
Linear Growth
Geometric Growth
2,447,832
15,705,405
59,363,803
3,599,754
2,303,842
1,439,901
23,096,183
14,781,557
9,238,473
87,299,711
55,871,815
34,919,884
Pageviews
Linear Growth
(Average)
High
Medium
Low
Geometric Growth
(Average)
High
Medium
Low
January
Unique Visitors
Linear Growth
Geometric Growth
New Visitors
Linear Growth
Geometric Growth
Pageviews
Linear Growth
(Average)
High
Medium
Low
Geometric Growth
(Average)
High
Medium
Low
March
April
July
2010
September
October
November
December
0
16,601
33,202
49,803
66,404
83,005
99,605
0
8,333
16,667
25,000
27,929
31,202
34,858
16,601
8,333
16,601
8,333
16,601
8,333
16,601
2,929
16,601
3,273
16,601
3,656
0
0
0
0
282,216
415,023
265,615
166,009
564,431
830,046
531,229
332,018
846,647
1,245,069
796,844
498,027
1,128,862
1,660,092
1,062,459
664,037
1,411,078
2,075,115
1,328,073
830,046
1,693,294
2,490,137
1,593,688
996,055
0
0
0
0
141,667
208,333
133,333
83,333
283,333
416,667
266,667
166,667
425,000
625,000
400,000
250,000
474,801
698,237
446,872
279,295
530,438
780,055
499,235
312,022
592,594
871,461
557,735
348,585
2011
June
May
August
July
August
September
October
November
December
116,206
38,943
132,807
43,506
149,408
48,604
166,009
54,300
182,610
60,663
199,211
67,771
215,812
75,712
232,413
84,584
249,014
94,496
265,615
105,569
282,216
117,939
298,817
131,759
16,601
4,085
16,601
4,563
16,601
5,098
16,601
5,695
16,601
6,363
16,601
7,108
16,601
7,941
16,601
8,872
16,601
9,911
16,601
11,073
16,601
12,370
16,601
13,820
1,975,509
2,905,160
1,859,303
1,162,064
2,257,725
3,320,183
2,124,917
1,328,073
2,539,940
3,735,206
2,390,532
1,494,083
2,822,156
4,150,229
2,656,147
1,660,092
3,104,371
4,565,252
2,921,761
1,826,101
3,386,587
4,980,275
3,187,376
1,992,110
3,668,803
5,395,298
3,452,991
2,158,119
3,951,018
5,810,321
3,718,605
2,324,128
4,233,234
6,225,344
3,984,220
2,490,138
4,515,449
6,640,367
4,249,835
2,656,147
4,797,665
7,055,390
4,515,449
2,822,156
5,079,881
7,470,412
4,781,064
2,988,165
662,033
973,578
623,090
389,431
739,610
1,087,661
696,103
435,064
826,276
1,215,112
777,672
486,045
923,098
1,357,497
868,798
542,999
1,031,266
1,516,567
970,603
606,627
1,152,108
1,694,277
1,084,337
677,711
1,287,111
1,892,811
1,211,399
757,124
1,437,933
2,114,608
1,353,349
845,843
1,606,429
2,362,395
1,511,933
944,958
1,794,668
2,639,218
1,689,100
1,055,687
2,004,966
2,948,479
1,887,027
1,179,392
2,239,905
3,293,978
2,108,146
1,317,591
January
Unique Visitors
Linear Growth
Geometric Growth
New Visitors
Linear Growth
Geometric Growth
Pageviews
Linear Growth
(Average)
High
Medium
Low
Geometric Growth
(Average)
High
Medium
Low
Februrary
June
Unique Visitors
Linear Growth
Februrary
March
April
2012
June
May
July
August
September
October
November
December
315,417
147,199
332,018
164,447
348,619
183,717
365,220
205,245
381,821
229,295
398,422
256,163
415,023
286,180
431,624
319,715
448,225
357,178
464,826
399,032
481,427
445,790
498,028
498,028
16,601
15,439
16,601
17,249
16,601
19,270
16,601
21,528
16,601
24,050
16,601
26,869
16,601
30,017
16,601
33,534
16,601
37,464
16,601
41,854
16,601
46,758
16,601
52,237
5,362,096
7,885,435
5,046,679
3,154,174
5,644,312
8,300,458
5,312,293
3,320,183
5,926,527
8,715,481
5,577,908
3,486,193
6,208,743
9,130,504
5,843,523
3,652,202
6,490,958
9,545,527
6,109,137
3,818,211
6,773,174
9,960,550
6,374,752
3,984,220
7,055,390
10,375,573
6,640,367
4,150,229
7,337,605
10,790,596
6,905,981
4,316,238
7,619,821
11,205,619
7,171,596
4,482,248
7,902,036
11,620,642
7,437,211
4,648,257
8,184,252
12,035,665
7,702,825
4,814,266
8,466,468
12,450,688
7,968,440
4,980,275
2,502,375
3,679,963
2,355,176
1,471,985
2,795,600
4,111,177
2,631,153
1,644,471
3,123,186
4,592,920
2,939,469
1,837,168
3,489,157
5,131,113
3,283,913
2,052,445
3,898,013
5,732,371
3,668,718
2,292,949
4,354,777
6,404,084
4,098,614
2,561,634
4,865,065
7,154,508
4,578,885
2,861,803
5,435,148
7,992,865
5,115,434
3,197,146
6,072,033
8,929,460
5,714,854
3,571,784
6,783,547
9,975,804
6,384,514
3,990,322
7,578,435
11,144,757
7,132,645
4,457,903
8,466,468
12,450,688
7,968,440
4,980,275