house treat columbia 2015

Yuri BerkovichRoddy ConnerNeeraj KulkarniWilliam Watts

housetreat.com

Online marketplace forhomemade treats

Team 7Interviews today: 21 Total interviews: 89

Provide homemade, healthy food to customers and allow home-based cooks to sell online

Products and ServicesDiners: Web portal to view today’s dishes, pay and pick-up foodCooks: Web portal to add dishes, receive pmt, prep for delivery

Delivered food

Web app devProcessing pmt Validating customers’ identitiesRating system for cooksCust service / feedbackDelivery network

Web hosting

Online pmt processing

Lawyers

Customer service reps

App developersCustomer service repsDelivery network personnel

HostingDevelopment / ManagementAdvertising

Customer service Diners: Working phone line & email households in

large urban areas

Cooks: Home-based cooks who generally prepare dishes just for their families; culinary students who want to market their skills

20% commission per transactionAdvertising conversions

Web app: Allow cooks to post dishes, allow diners to buy dishes, process payments

Day 1

Buyers Sellers Total

Young Professional

Native Food Lover

ModernHousewife

Culinary Art Student

Day 1 4 4 5 4 17

Day 2 6 4 3 2 15

Day 3 5 4 6 4 19

Day 4 5 5 4 3 17

Day 5 4 3 5 9 21

Total 24 20 23 22

CUSTOMER INTERVIEW SUMMARY

89

DAY 1 ASSUMPTIONS ACTIONS FINDINGS DAY 2 UNDERSTANDING

Value: Buyers would buy homemade food rather than from restaurants Face-to-face

interviews with various prospective buyers

1) Trust concerns with cooks

2) Buyers prefer customization

Value: Buyers require more validation on seller’s kitchen, provide seller profiles

Customer Segments:Prospective buyers are working households or holiday shoppers

Higher demand from young professionals and native food lovers

Customer Segments: Prospective buyers are young professionals and native food lovers

Channels: We can sell any kind of food online

Researchedregulatory environment

1) Restricted by jurisdiction

2) Less strict laws only for baked goods

Value: Start with allowing baked goods sales online

DAY 1DAY 2 = PIVOT!

US Urban Households = 90.0M

TotalAvailableMarket$4.3B

Target Market$112M

ServedAvailableMarket$744M

1

2

3

Households in Top 20 Urban

Areas with Income >$80K = 15.5M

Capture 15% of Served Available

Market = 2.3M

Total Estimated Annual Revenue = $112.0M(=$240/year/household x 2.3M households x 20% commission)

MARKET SIZE

• Crowded and highly fragmented food tech space

• HouseTreat is uniquely positioned versus competition

COMPETITIVE LANDSCAPE

Meal DeliveryMobile/Online

Ordering & Delivery

Restaurant Reviews & Search Recipes &

Communities

Provide homemade, healthy food to customers and allow home-based cooks to sell online

Products and ServicesDiners: Web portal to view today’s dishes, pay and pick-up foodCooks: Web portal to add dishes, receive pmt, prep for delivery

Delivered food


CooksApp developersCustomer service repsDelivery network personnel


Customer service Diners: Working phone line & email households in

large urban areas

Cooks: Home-based cooks who generally prepare dishes just for their families; culinary students who want to market their skills


Day 2 Pivot

Web hosting


Lawyers



Provide homemade baked goods online

PROFILE: Yuppie Foodie

Roberto, Age 45

Native Food Lover

PROFILE: Aspiring Chefs/Hobbyist

PROFILE: Ethnic/Niche FoodLover

Income: - High disposable income Buying Rationale:- Looking for unique

desserts to enjoy or bring to special events to impress friends

- Seeking a foodie experience as he considers himself a connoisseur and gourmand

Income: - Varied (working class

and professionals)Buying Rationale: - Craves non-mainstream

food from ancestral homeland that is hard to find

- Member of niche group with its own subculture /tastes (e.g. church, military housewives)

Income: - Limited income as a

culinary art studentSelling Rationale: - No platform to practice

craft of cooking- Seek recognition and

confirmation- Want others to try what

they have created

CUSTOMER SEGMENTS

PROFILE: Extra Money Maker

Income:- Limited income as a stay-

at-home, freelancer, retiree, unemployed

Selling Rationale:- Individuals who have

spare time and want to sell to make some extra money

- Consider themselves good cooks but don’t want to work in restaurants/bakeries

Tiffany, Age 20

Culinary Student

Mary, Age 35

Modern Housewife

BUYERS SELLERS

Mike, Age 30

Young Professional

CUSTOMER FEEDBACK

Stay-at-home mom and baker...“I am a stay-at-home mom who has a few savory pies and a few fruit pies that I can make availableen masse. I have a blog that I have not been able to tend to as much as I work away from home now part time and am a mommy. I can get that time back if I can work from home. Tell me more about your plans.”

Tarril

Vegan baker with a focus on health and customization… “Would love to get involved. I love to bake and I am also a vegetarian so I have been practicingbaking dairy free, gluten free, peanut free goodies without losing the yum factor. It is important to accommodate the many dietary needs, offering fresh products customized to people with specific restrictions.”

Rosie

Customized cake buyer...“I'm a modern mom and busy professional. My five year old son's birthday is next weekend and I wish I could buy him a customized T-Rex cake for his party. Unfortunately I can't find this anywherein grocery stores or bakeries.”

Lisa

Seller

Seller

Buyer

BUYER PRODUCT/MARKET FIT

Purchase homemade baked

goods online

Food as culture

Customer does not have time or expertise to make

the treat himself

Customer can not find these treats elsewhere (e.g. local

restaurants, delis).

Need to find cooks with similar tastes / culture

Ethnic/Niche Buyer

Craves non-mainstream food from his ancestral homeland

Part of niche group with its own subculture/tastes (e.g.

church, military housewives)

Food as experience

Customer does not have time or expertise to make

the treat himself

Needs to impress others with original creations

Wants to be trendy, likes to taste/critique food

An affluent, busy professional / food lover

Looking for unique desserts to enjoy or bring to special events to impress friends

Considers himself a connoisseur and gourmand

Value Proposition Product/Market Fit Customer Segment

SELLER PRODUCT/MARKET FIT

Provide homemade baked goods online

Cooking as a job

Need to earn money while staying at home

Enjoy cooking for themselves and others

Want to take advantage of their free time

Freelancers / Stay-at-home / Unemployed / Retired

Individuals who have spare time and want to sell to make some extra money

Consider themselves good cooks but don’t want to work

in restaurants/bakeries

Cooking as an art

Need to improve their cooking skills to break into good restaurants and/or

open their own

Crave recognition and confirmation

Want others to try what they have created

Aspiring chefs / Hobbyists

Culinary students without a platform to practice

Devoted hobbyists who perfected a particular recipe(s) or created

something novel

Value Proposition Product/Market Fit Customer Segment



Day 3Customer

Segmentation & Product Fit

Web hosting


Lawyers


Customer service phone line & email




CooksCulinary Student – Aspiring ChefsCulinary students without a platform to practice

Devoted hobbyists who perfected a particular recipe(s)

Extra Money Maker


Consider themselves good cooks

DinersYuppie Foodie –Young ProfessionalLooking for unique desserts to enjoy or bring to special events to impress friends

Ethnic/Niche Food Lover Craves non-mainstream food

Provide homemade baked goods online and delivered

DinersCustomer does not have time or expertise to cook herselfCustomer can not find these treats elsewhereNeeds to impress othersWants to be trendy, likes to taste and critique food

CooksCooking as a job:Need to earn money while staying at homeEnjoys cooking Wants to take advantage of their free time

Cooking as an art:Need to improve their cooking skillsCraves recognitionWant others to try their food

HouseTreat Customers

Buyers

Sellers

Flash Sales(Groupon & Living Social for Buyers)

Social Commerce(Facebook & Twitter

for Buyers)

Dedicated E-Commerce(housetreat.com)

Platform App Store(Apple, Android)

Channels

CHANNELS – THE WEB

AdoptionViral Marketing:

Cooks’ blogs, friendsWord of mouth

Friend Referral Promotions

Media:TV / Radio

Billboards / Printed Ads

SEO:Google AdWords/AdSense

Facebook Ads

Flash Sales:Groupon

LivingSocial

Partners/Affiliates:

Celebrity ChefsCooking channelsCulinary Institutes

Year 1 Budget = ~$30/customer * 100k customers = $3.0M

GET STRATEGY

GET STRATEGY IN ACTION

Unsolicated Call From Food Network Executive Producer...

“I'm a producer for a production company that specializes in TV cooking shows. We have created some of the nations best shows. We were approached by a new network in food and they are looking for new shows. I'm interested in speaking to you about doing a show on your type of cuisine. Please give me a call. “

Donna

Executive Producer - Food Network

Chef

Customer

Baked Goods

Payment

Fees

REVENUE FLOW CHART

Delivery

Order

Order

HostingDevelopment / ManagementAdvertising (Geotargeting)


Dedicated E-Commerce WebsitePlatform App StoreSocial CommerceFlash Sales

Day 4Customer Relationships,

Channels & Revenue Streams

Web hosting


Lawyers


Customer service phone line & email

Food BloggersPrinted AdsViral MarketingTargeted SEOFlash SalesPartnerships/Affiliation



Extra Money Maker












DELIVERY – PARTNERSHIP OR IN-HOUSE?

Our approach: Outsource Delivery for MVP (incur costs initially), gradually build delivery network

Partnership In-house network

Pros • Develop our MVP more quickly

• Strategic Alliance: Outsource delivery to partners

• Better control cost of delivery (approx. $3 per order)

Cons • Higher cost of delivery per order ($5 - $12)

• MVP release timeline is longer

• Operational overhead

Matching chefs and general public online and through appsFood deliveryRatings, reviewsCustomer serviceMarketing & PRInsurance protection

Physical delivery services (Postmates)

Promotional partnerships :• celebrity chefs• culinary institutes,• TV cooking

programs• Bloggers

IT outsourcing

Insurance for chefs

Website, appsIn-house web developersDelivery personnelSG&A staffIn-house counsel

Web DevelopmentCustomer AcquisitionLoyalty programsSG&A

20% commission on online salesAdvertising conversions

Dedicated E-Commerce WebsitePlatform App StoreSocial Commerce (FB)Flash Sales (Groupon)

Day 5



Extra Money Maker









Food BloggersTargeted SEO (FB, Google)Printed AdsViral MarketingFlash Sales (Groupon)Celebrity ChefsCulinary Institutes

FOCUS ON PARTNERS BIG IDEA – ALL ABOUT THE CUSTOMER

MOCKUP: LISTINGSAssociating a dish with a chef

Having a time where a certain numbers of buyers must be met.

Creating a Kickstarter feel with donations and concept of inspiring home chefs to build their craft.

Reviews | HouseTreat cert.

MOCKUP: CHEF PROFILE

FLIGHT PATH AFTER LEAN LAUNCHPAD

• Continue growing HouseTreat into the next great company

– Complete MVP (website and app)

– Establish necessary resources and partners: delivery, insurance, packaging, regulatory compliance

– Get first customers into the “funnel”

– Raise funding

– Keep and grow customers

– Iterate product features on customer feedback

APPENDIX

TYPE OF BUSINESS: STARTUP

Regulation: targeting jurisdictions that allow…a. Online transactions for private sellers

under the Cottage Farm Law exemptions in each state

b. In-person delivery via our third party delivery system (Postmates)

Disruption

Geo-targeting● Geotargeting select communities and

demographics via FB ads● Providing starter “Kits” for help sellers meet

regsScaling through Seller Agents● “Downline” Commission for mentors who bring

in sellers and serve as a mentor

Repeatable & Scalable

Minimum threshold of sellers & buyers met

Starter Kit built

1) FB Ads @ Community2) Mentor Programs w/commission

Move from closed to open community

Shipping model for established sellers

FIRST YEAR REVENUE MODEL

25

• Customer Acquisition Cost $3.0M

– $30/new customer

– 100k new customers

• Product development $200k

– $100k avg. salary

– 2 full-time developers

• SG&A Personnel $600k

– $120k avg. salary

– Five professionals

Profit

$1.60 per transaction $0.40 per transaction

Operating Expenses

• Target Market– Select US urban markets

– 100k new customers

• Sales $4.8M– $2 commission/transaction

(20% commission, $10 avg. sale)

– 24 transactions/customer/year

– $48/customer/year

house treat columbia 2015

Documents

homemade food

healthy food

todays dishes

homebased cooks

large urban areas cooks

web portal

native food loverschannels

home based cooks