BabylandiaAn online marketplace to buy and sell used

baby gear in a way that is easy, safe and cheap

T a n y a B e j a J e n n i f e r R o u b a u d T h o m a s S t a c k

T e a m 2 8 , C o h o r t 5

C U S T O M E R I N T E R V I E W S L A S T 2 4 H : 8T O D A T E : 8 7

1

Day 1 Canvas 2

Posting

Activity

• Seller posts ad on site

Pain points

• Inefficient to take photos with phone and transfer to computer, then upload to site

Connecting Transaction

• Buyers and sellers connect

• Unresponsive sellers

• Wasted time on already sold items

• Unestablished level of trust between buyers and sellers

• Buyer pays seller for item

• Sketchy sellers, buyers worried about safety

• Product does not match advertising

• Delivery and logistical issues interfere with getting transaction completed

Old Process

Search

• Buyers search for goods

• Hard to find what you are looking for

• Questionable quality

• Have to use PC, not great for mobile apps

3

Day 1 Key Initial Thoughts

1

Website would provide parents with a means of disposing of and monetizing baby products that are still in reasonably good condition

Business Opportunity

Untapped market for the exchange of used, high-ticket, durable

baby products

1 1

Our buyers and sellers would come

from different socioeconomic

classes

2Creating a niche

marketplace with some social elements

would create an element of trust for buyers and sellers

3

BuyersLower & middle socioeconomic classes

SellersMiddle & upper socioeconomic classes

Daycares

Environment / Community

4

Day 2 Canvas5

Day 2 Key Insights – 1/2

There is a real opportunity to provide

a platform that is trusted to transact used

baby gear

1

Only target mothers

2

First and second time mothers have very

different attitudes as it pertains to purchasing

used baby products

3

• Current alternatives are not satisfying

Proceed with idea!

• Purchases are not household decisions

Focus exclusively on mothers as target customers

• First time mothers are apprehensive to buy used products

• Second time mothers are enthusiastic

First adopters would certainly be second time mothers

6

Day 2 Key Insights – 2/2

Safety, quality and cleanliness are key

product features

4

There are multiple ways that moms connect already

5

Ad compliance team to ensure sufficient information on positing

Lots of pictures to assess features

Some items will not be sold (ie. Car seats)

• Blogs• Facebook groups• Geography-specific

groups (ie. UWS moms)• Characteristic-specific

groups (ie. Twin moms)

Leverage these channels to acquire new customers

7

Day 3 Canvas8

Day 3 Key Insights

Lower socioeconomic classes are not potential

customers

1

The range of items that interests buyers goes

beyond high-ticket products

2Some stores/associations

offer to used products but target mainly very lower socioeconomic

households and are not dedicated

3

• They are not tech savvy• They are often not

banked and/or afraid to transact online

Eliminate from target segment

• Toys, clothes and books are also used items that are actively searched by moms

The platform won’t limit the type of articles proposed but will create categories for ensure ease of use

• These alternatives are not commonly used by our segments due to unsatisfying customer experiences

Demand is hereThe ThredUp shipping

model can be used for some of our customers

Iteration Pivot

9

Day 4 Canvas10

Day 4 Key Insights – 1/2

Social connections help foster a sense

of trust

Buyers and sellers have similar profiles

The majority of customers prefer

mobile app channel

1 2 3

• Different socioeconomic status is not as salient as originally hypothesized

• All buyers are also sellers

• Most sellers are also buyers

Revise customer archetype

• People are more willing to transact with own social circle regardless of geography

• A platform that shows social connections via social media is very attractive

Provide social media log in functionality

Expand site beyond Columbia community

• Web channel is not as important as originally thought

Develop mobile app from the onset

Pivot Pivot

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Day 4 Key Insights – 2/2

Seller guarantee is an attractive feature for both sellers and

buyers

4

• Ability to signal quality of product / accuracy of posting is attractive for some buyers/sellers

Provide “opt-in” feature

Pivot

People are willing to pay for this platform

5

• Willingness to pay varies depending on good transacted

• Pay per listing is preferred

Nail down a dollar amount

Dollar amount needs to be “small”

12

Babylandia

Value Prop

• Easy to navigate mobile platform

• Ads compliance team verifies that ad has sufficient product information

• Easy to search functionality

• Logical categorization of goods to simplify search

• Dedicated marketplace exclusively focused on baby space eliminates time spent on undesired items

• Social network linkage instills trust and signals quality of product

• Opt in seller guarantee feature instills signals quality of product

• Opt in delivery feature simplifies logistics

• Internal customer service team to handle complaints, should they arise

Process Improvements

Posting

Activity • Seller posts ad on site

Pain points

• Inefficient to take photos with phone and transfer to computer, then upload to site

Connecting Transaction

• Buyers and sellers connect

• Unresponsive sellers

• Wasted time on already sold items

• Unestablished level of trust between buyers and sellers

• Buyer pays seller for item

• Sketchy sellers, buyers worried about safety

• Product does not match advertising

• Delivery and logistical issues interfere with getting transaction completed

Search

• Buyers search for goods

• Hard to find what you are looking for

• Questionable quality

• Have to use PC, not great for mobile apps

13

Day 5 Canvas14

Day 5 Key Insights

There are important tradeoffs between

revenue models

Need to refine features of mobile

app

1 2

• Some potential customers value a messaging platform to connect with sellers

• General feedback indicates that incorporating blog element unnecessary

Refine mobile app based on customer preferences

Pay-per Listing Model• Prevents buyers and

sellers from bypassing the service

• Dissuades small ticket transactions and leaves money on the table for high ticket transactions

Transaction Model• Could potentially be

more profitable• Does not capture

haggling which is important to buyers

• More prone to users bypassing site altogether

Key next step in figuring out business plan!

Shipping is critical for some but not for

others

3

• The value of shipping depends on the distance between buyers and sellers

Provide an “opt-in” shipping for those who wish

Partner model (Uber, Shyp)

Pivot

15

Next Steps

Nail down revenue model

Validate that fee per posting is preferred alternative

Accurately quantify seller willingness to pay

Key insight: sellers’ willingness to pay depends on profit margin which is very different across product categories

Finalize additional revenue streams (priority search & premium listing features)

Build a MVP

Complete mobile app

Recruit engineers

Complete design and structure of app

Shipping partnerships

Initiate conversations with potential shipping partners

Shyp, Uber, FedEx

Better assess cost structure

Accurately quantify cost of mobile app and initial human capital expenditure

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Appendix17

Sarah is a full time mother. She is in her mid thirties. Her husband is a hedge fund manager that is rarely with the kids. She is part of the PTA committee in her children’s school. She loves yoga and Juice Generation.

She loves shopping for her kids and constantly needs to get rid of no longer needed stuff. She’d rather not throw it out on the street.

Nancy is a working mother. She is in her mid thirties. Her husband is a sales executive; she works at IBM. She enjoys jogging and watching movies at home.

She would love to sell the baby gear that she no longer needs and is taking up space in her 2 bedroom apartment. She is also a bargain hunter and always looking for good deals online.

She is busy and wants a hassle-free experience.

Tara is a second time mother. She works 40 hours a week as a trainer. Her husband is a high school teacher. She enjoys going to the park with her kids.

She loves good deals and does not want to spend money unnecessarily. She would love to buy used baby gear that is safe, clean, and in good condition.

Customer Archetypes

Seller Seller/Buyer Buyer

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The eight most-desired second-hand products according to our potential buyers

Strollers Cribs High-chairs Swings

Dressers Toys Clothes

1

5

2

6

3

7

4

Books8

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What they need to do

Buyers

• Buy baby gear for their babies

Sellers

• Dispose of no longer wanted baby gear and by eventually monetizing the process

What are their painsWhat are their

expected benefitsWhat we offer

• Baby gear is expensive• Unsatisfying customers’

experiences with generalist websites (Craigslist is sketchy, eBay is expensive and not dedicated, doesn’t seem like the right place for baby products

• Limited storage space• Existing selling options

are not satisfying• Donate is not always easy

(delivery is time-consuming)

• Unsatisfying customers’ experiences with generalist websites (Craiglist is sketchy, Ebayis expensive and not dedicated)

• Save money

• Get a refund on initial investment

• Dispose of cumbersome and no longer used baby’s equipment

• Cheaper/quality products

• Trustworthy environment through display of social connections

• Return to sellers option• Secure opt-in online

payment (Paypal)

• Ease of use• Mobile technology• Door-to-door service• Secure payment• Free and secure opt-in

online payment (Paypal)

What we learned from our customers and how we responded to their feedback

20

How our value proposition matches our customer’s expected benefits

21

Hypothesis tested (Day 4) – see results on Canvas Day 4

22

Hypotheses tested (Day 3)

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Hypotheses tested (Days 1 & 2) – 1/2

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Hypotheses tested (Days 1 & 2) – 2/2

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Babylandia

Generalist sites or stores to buy used products

Hand-me-downs from friends and family

New baby product retailers

Home or paid storage

Charitable donations

Trash

Competitive Landscape26

Channel Revenue Model

• Mobile application

• Android and iPhone compatible

• Downloadable in iTunes or Play Store

Option 1

• $2 listing fee

Option 2

• 3% of transaction price

Additional Revenue Streams

• $10 for priority search

• Premium listing features

• $1 Different font size

• $1 Different background color

Channel and Revenue Model27

Get Strategyhttp://www.entrepreneur.com/article/229305

1. Build a microsite. This one or two-pager showcases your app to the web audience.

11. Post on Pinterest.

2. Build a teaser website. Do this a month or two before your launch to collect email addresses of people who would like to know when the app launches.

12. Recruit customers personally. Visit day care center, new baby product stores and used baby product stores.

3. Start a blog. Attach it to your microsite. Write interesting content that will draw people to your website.

13. Run a contest. A random person every week can win a promo code to download your app for free if it is a paid one.

4. Share content. Use Twitter, Facebook, Google+ and LinkedIn profiles to promote the app several times in a week.

14. Create a Facebook group.

5. Create a product video. Make it creative, funny, thought-provoking or personal.

15. Get speaking opportunities.

6. Get press, tons of it. 16. Be obsessive about resolving negative reviews.

7. Pitch to app review websites. Sites like 148apps, AppStoreApps andAppAdvice can generate a lot of buzz for your app if they mention it.

17. Make good use of App Store Optimization.

8. Contact bloggers who would care. 18. Contact admins of related Facebook pages. Look for pages with 100k+ likes and reach out to their admins. Then give them a compelling reason to mention it.

9. Apply for awards. Look into awards such as the Kiip Build Fund orThe Mobileys.

19. Consider offering a promotional price. If your app is a pay-to-download one, consider a promotional pricing of $0.99 during the launch time. This price point encourages impulse purchases.

10. Create a six-second how-to series. 20. Integrate social within the app. This will make it obvious to users to share with others.

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Possible Items to Sell

Low End High End Median Resalable? Value after HC

Gear

Infant Car Seat $60 $150 $105 Y $52.50

Convertible Car Seat $80 $300 $190 Y $95.00

Basic Stroller $70 $900 $485 Y $242.50

Double Stroller $100 $300 $200 Y $100.00

Snap-on Stroller Frame $40 $90 $65 Y $32.50

Jogging Stroller $100 $300 $200 Y $100.00

Play Yard $59 $150 $105 Y $52.25

Baby Backpack $40 $300 $170 Y $85.00

Front Carrier $25 $120 $73 Y $36.25

Sling or Wrap Carrier $29 $60 $45 Y $22.25

Diaper Bag $25 $200 $113 N $56.25

Activity Equipment

Swing $85 $120 $103 Y $51.25

Bouncer/bouncy seat $30 $70 $50 Y $25.00

Activity Center $70 $80 $75 Y $37.50

Play mat/gym $25 $80 $53 Y $26.25

Doorway jumper $30 $40 $35 Y $17.50

Nursery

Crib $120 $850 $485 Y $242.50

Changing Table $80 $250 $165 N $82.50

Glider or Rocker $189 $600 $395 Y $197.25

Bassinet $50 $260 $155 Y $77.50

Co-sleeper $130 $200 $165 Y $82.50

Hamper $20 $60 $40 Y $20.00

Basic Bedding/Blankets $60 $70 $65 N $32.50

Coordinated crib bedding set $50 $600 $325 N $162.50

Mobile $20 $55 $38 Y $18.75

Dresser $80 $500 $290 Y $145.00

Lamp $24 $70 $47 Y $23.50

Decorations $100 $200 $150 Y $75.00

Crib Mattress $60 $140 $100 N $50.00

Baby Monitor $40 $60 $50 Y $25.00

Low End High End Median Re-saleble? Value after HC

Feeding

Bottles and nipples $60 $60 $60 N $30.00

Highchair $60 $250 $155 Y $77.50

Utensils $10 $15 $13 N $6.25

Plates and Bowls $10 $10 $10 N $5.00

Cups and Sippy Cups $15 $20 $18 N $8.75

Burp Cloths (6) $10 $10 $10 N $5.00

Bottle Brush (2) $8 $8 $8 N $4.00

Bibs (10) $10 $12 $11 N $5.50

Breastfeeding

Electric breast pump $150 $350 $250 Y $125.00

Manual breast pump $30 $30 $30 N $15.00

Milk storage bags, breast pads, etc. $70 $75 $73 N $36.25

Nursing Bras (3) $75 $75 $75 N $37.50

Nursing Pillow $24 $44 $34 N $17.00

Bathing/Grooming

Baby Towel with hood (2) $16 $26 $21 N $10.50

Infant Bathtub $20 $20 $20 N $10.00

Tub for older baby $15 $15 $15 N $7.50

Baby washcloths (5) $10 $10 $10 N $5.00

Brush and Comb $8 $8 $8 N $4.00

Baby nail clippers $3 $3 $3 N $1.50

Other

Childproofing Supplies $40 $45 $43 Y $21.25

Safety gates (2) $100 $140 $120 Y $60.00

Diaper Pail $25 $25 $25 N $12.50

Diaper Pail refills (16) $96 $96 $96 N $48.00

Pacifiers (6) $8 $8 $8 N $4.00

Humidifier $29 $69 $49 Y $24.50

Birth Announcements (50) $50 $50 $50 N $25.00

Baby Scrapbook $12 $40 $26 N $13.00

Photo Printing Costs $127 $127 $127 N $63.50

Miscellaneous Toys $500 $1,000 $750 Y $375.00

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Market Size

Children < 5yrs old in NYC = 540,878

Assume 1/5 of that = new babies born per year = 108,176

Estimates of Spending on child in first year range from $10-14k. We estimate ~$6,600 is resalable (see Appendix).

With a 50% haircut on the resale price, that gives a Target Addressable Market (TAM) of ~$360 million.

Assuming 50% of babies have parents online and willing to resell goods, Served Available Market (SAM) = ~$180 million.

Want to target low-middle income segment for buyers and low-upper middle income segment for sellers so assume 75% of SAM = Target Market (TM) of $135 million.

TAM = $360M

SAM = $180M

TM = $135M

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Original Website Mock-up

Pivoted to mobile

app!

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