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App Project

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by

Jonathan Maxim

on 31 October 2013

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Transcript of App Project

September 30, 2013
STRICTLY CONFIDENTIAL: This document is the property of ActivEarn


AGENDA
Business Model

Product and Service

Market and Competition Analysis

Marketing

Financials

Founding Team

Solving the Motivational Dilemma, Prompting Rapid Adoption
Mobile application that offers (monetary) rewards to individuals for a performed activity
Exclusive rewards offered for certain activities by
Partner Companies

Primary Target Consumer (18 to 49 years old smartphone users)
Sustainable Competitive Advantage -
Easy ROI tracking for Partner Companies
Continual fulfillment for end-users
Key Success Factors
Participating Partner Companies and reward quality
Critical Mass of Users (continuous usage, rewards achieved & claimed)
Value of purchased goods




High Usability


Vision:
Become the leading smartphone application in the United States that motivates people to engage in physical activities while allowing our Partner Companies to support a healthy and fun lifestyle.

Win-Win Situation
Unique and Innovative Concept

Motivation by Rewards

Claim reward


Perform activity


Check criteria


Select Reward


Offer Rewards as an ActivEarn Partner to:
Receive Healthy Lifestyle Brand Image
Scale Brand Awareness
Attract New Customers
Increase Revenue
Easily Measure ROI

Limited Downside for Partners
Variable commission depends on actual sales only
Fixed monthly fee of $99 for high brand exposure on social networks & in the actual application
3 month free promotional trial for partners (applies to monthly fee only)
Client Dashboard
Easily track marketing efforts through simplified metrics
Revenue, Sales Figures, Units Sold etc

Competitors
Competitors operate with a different Business Model
Enormous Market
96m fitness app users expected by 2018 (AE Market =17m)
No clear Leaders: very fragmented Market
Primary Focus: Market development

(1) Exercise Applications (RunKeeper, Gympact)
Huge Market & still growing
Runkeeper: 23m Android downloads
My Fitness Pal: 40m Android downloads
Runtastic 40m Android downloads
(2) Coupon Providers like Groupon
Huge Mobile Advertising Market

Key facts
Source: 1) Pew Internet (2013): iOS & Android only
Source: 2) Mobi Health News (2013)
Smartphone Adoption in the U.S.
high

low

low

high

hard

easy

low

high

Motivation
Features & Functionality
Access & Availability
to Discounts/ Rewards

Exclusiveness & Quality
of Discounts/ Rewards

ActivEarn Positioning Graphs
Launch Nationwide

Cover West Coast and Top US Cities
Long-term (2016)
March 2015

Cover
California

Expand to L.A. and Bay Area

Launch in
San Diego
January 2015

August 2014
March 2014
Two operating systems: Apple and Android

Key facts
Revenues/EBITDA per Quarter (Base Case)
ActivEarn breaks even after 15 months

Pricing & Scenario (Base Case):
# of Smartphone Users in the U.S. already too low, only 13 % growth for the following years used [gap to other studies already 9 million users]
Financial analysis based only on target group [18-49 year old adults]
App usage growth not incorporated
Current physically inactive adults that may use the app, but are not incorporated
Percentage of physical active adults conservative estimate [in comparison to other statistics]
Percentage of target group population conservative estimate [in comparison to other statistics]

Average commission earned < 6 %
Very low initial user base, .75 %
Satiation is reached at 8% of all target group users already [which account for 1,600,000 users on a nationwide basis; in comparison: Runkeeper or Nike exercise apps have been downloaded over 5,000,000 times in the same time period (3 years)]
Average number of monthly earned coupons per user is only 1
Average value per purchased product equals only $25
Fixed monthly fee of $99 very low in comparison to the exposure the company gets by offering rewards on the mobile app
Market Estimation:
Enormous Upside Potential Using Underlying Assumptions Below
Source: 1) According to the Whole Brain Thinking Model (Hermann, 1996)

Founding Team – Mindset & Background
Complementary, Well Educated, & Highly Motivated Team
Q&A
Reward Yourself

STRICTLY CONFIDENTIAL: This document is the property of ActivEarn.


Effortless functionality
Social Feed
Ranking & Data
Filter Rewards
Easy-to-use
Further team members
Development Agency: Transcend Consulting Group, iStrategyLabs
Partners
Experienced IT-experts for the technical realization of ActivEarn
Interns for a range of functions
online marketing, sales and administration
Network

Reward Yourself!
Investor Presentation
AGENDA
Business Model

Product and Service

Market and Competition Analysis

Marketing

Financials

Founding Team

BUSINESS MODEL
People lack the motivation to perform physical activities
Contemplating the next workout or run, people often take the easy way out
What provides the nudge needed to follow through and go on a run or a bike ride?
Solving the Motivational Dilemma, Prompting Rapid Adoption
BUSINESS MODEL
Business Idea in Detail
Revenue Model
Revolutionizing Fitness
BUSINESS MODEL
Effortless Reward Selection, Full App Functionality
PRODUCT - USER PERSPECTIVE
Easily Attract New Customers, Promote Brand Engagement
PRODUCT - PARTNER PERSPECTIVE
AGENDA
Business Model

Product and Service

Market and Competition Analysis


Marketing

Financials

Founding Team

MARKET ANALYSIS
Extremely High US Market Potential for ActivEarn
3 – 13 % commission on total purchase price of every transaction
Fixed: Partner Companies (Sponsors) pay a small monthly fee of $99
Substantial additional future revenue sources (e.g. white label software, data mining, advertising)

Revolutionary Mobile Application that offers monetary rewards to individuals for exercising/working out
Rewards motivate individuals to excel and perform better in physical activities
Rewards are exclusive, high-quality
Users value rewards because they worked hard to achieve them
Easily visible rankings among user base, friends
Social connections create further motivation, competition
Our Unique Solution
Problem

Innovate
Take
Features
Improve Features
Product Strategy
MARKET ANALYSIS
ActivEarn Offers Exclusive, High-Quality Rewards & Fosters Motivation
AGENDA
Business Model

Product and Service

Market and Competition Analysis

Marketing

Financials

Founding Team

MARKET ANALYSIS
Aggressive Marketing Strategy as Growth Engine
Integrated Marketing Strategy
Problem
Oriented Marketing
Online
Media
Public
Relations
GROWTH STRATEGY
ActivEarn is Highly Scalable
AGENDA
Business Model

Product and Service

Market and Competition Analysis

Marketing

Financials

Founding Team

Highly profitable and scalable business model
• KPIs FY3 (Base Case):
• Revenues: $19m
• EBITDA: $14.9m
• Users: 1.6m (8% of target group users)


• $124,840 seed financing required to develop and launch products
• $840,000 total financing required to run the business til month 15, with positive cash flow thereafter

Enormous upside potential
• FY3 (Best Case):
EBITDA: $48m
Users: 2.7m (12%)
• FY3 (Worst case):
EBITDA: $0.5m
Users: 780.000 (4%)
FINANCIAL PROJECTIONS
PRUDENCE IN ESTIMATIONS
AGENDA
Business Model

Product and Service

Market and Competition Analysis

Marketing

Financials

Founding Team

AGENDA
Niklas Knape (CEO & CFO)
Age: 27, from Germany
Master in Management (Mannheim)
Planning & Coordination Talent
Entrepreneurial, Financial Skills
Global Social Network
Jonathan Maxim (CMO & CTO)
Age: 26, from D.C.
Master in Business (SDSU)
5 years marketing experience
Charismatic
Presentation Skills
Addison Garza (CEO & CFO)
Age: 26, from San Diego
Bachelor in Business (SDSU)
8 years Experience in Real Estate
Investor Network
THANK YOU
ActivEarn
619 467 9625
info@ActivEarn.com

THANK YOU
PRICING & SCENARIOS
PRICING & SCENARIOS
Summary Income Statement FY1 until FY3

STAFFING
Required Financing
ACTIVEARN: REWARD YOURSELF
Recent graduate, working full time in San Diego
Loves to run as a healthy outlet
Meet Craig, 26 years
Where ActivEarn Fits In
Craig uses ActivEarn to:
Track workouts
Monitor/meet exercise goals
Compare results with his friends
The biggest reason he uses ActivEarn?
Craig gets rewards for each workout
Rewards like
Discounts on dinner out with friends
Deals on work out clothing
Tasty treats like frozen yogurt
Runkeeper
Groupon
ActivEarn
Runtastic
Nike Run
Gympact
Full transcript