team vogue final
TRANSCRIPT
Instant, personalized and unbiased beauty recommendations from experts you can trust!
Team Vogue presents
Website: http://www.beauty-insight.com Facebook: http://www.facebook.com/beautyinsightTwitter: http://www.twitter.com/beauty_insightYouTube: http://www.youtube.com/thebeautyinsight
Kathryn KaganMitesh BohraCarter ReueShino Yamamoto
Beauty Insight – As of Today
Team Vogue Business ConceptInitial Business
Concept • Provide personalized
recommendations of the best beauty products from a range of different price points by industry experts
• Revenue from product sales and online advertisement
• A start-up with a similar concept (ShoeDazzle) recently received $40 million in funding
Size of The Opportunity
• Untapped business opportunity in beauty recommendation services and online product sales
• Target Addressable Market $12.6 billion
• Served Available Market $6 billion
Team
•10+ years experience in advertising, sales & marketing in the beauty industry
Background
•Business concept
•Industry knowledge
•Network with beauty experts
•Public relations
Expertise & Team Role
•Co-founder and President of InfoBeans
•Board of Directors at InnovizeTech
Background
•Technology•Management •Entrepreneurship experience
Expertise & Team Role
•Naval officer•IT and Operations at Stryker Medical
Background
•Sales•Customer relations
•Operations
Expertise & Team Role
•Product marketing, business development at Microsoft
Background
•Marketing•Project Management
Expertise & Team
Role
Kathryn Kagan Mitesh Bohra Carter Reue Shino Yamamoto
The Start - Business Model Canvas (1/5) Key Partners Key Activities Value Proposition
Customer Relationships
Customer Segments
Cost Structure
Revenue
Streams
COSMETIC & SUPPLY COMPANIES
PUBLISHING HOUSESBeauty/Fashion/Gossip magazinesFASHION HOUSESRunway showsBeauty trendsSOCIAL NETWORKING
CUSTOMIZED SERVICECustomizing the perfect combination of products for clients. Tracking purchases to understand the evolution of their usage and be able to offer them precisely what they need and want. CREDIBILITY
RANGE OF PRODUCTSOffering the best products across different price points to create the perfect “product prescription”
INTERACTIVE SERVICECombination of self-service and personal customer service ONLINE COMMUNITYCustomer “experts” feedback and recommendations
CAPTURING CUSTOMER PREFERENCES
PERSONALIZED SERVICEBuild behind-the-scenes staff to provide one-on-one instant messaging with customers. INDUSTRY EXPERTSAccess to excellent artists and well-trained staff with unsurpassed product knowledge. ONLINE PLATFORM
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
ADVERTISING (60%)
MARGINS ON SALE OF PRODUCTS
DIRECTDelivery of products and servicesCREATE AWARENESSPR through key partners. Print, TV, online media and industry makeup artists
Key Resources Channels
BEAUTY ENTHUSIASTSThose who love products and know that that this is THE place to get all of their favorite items and the hottest new trendHIGH MAINTENANCEClients who demand personal attention and customization for their beauty routineBEAUTY ADVERSETimid clients who are not sure what to purchase and need some direction. They want to have the category paired down
Untapped business opportunity in beauty recommendation services and online product sales
Target customers are: ‒ Beauty enthusiasts‒ High maintenance ‒ Beauty adverse
Lessons Learned in Aug 2011WHAT WE THOUGHT WHAT WE DID WHAT WE FOUND
Conducted market analysis for the US market:
‒ TAM $12.6 billion‒ SAM $6 billion
Validated business opportunities through:
‒ >530 online surveys ‒ Personal interviews with
91 women‒ 13 beauty experts
recruited Developed the initial web site
design
Our value proposition resonates with Women:
‒ Personalized, unbiased beauty recommendations for products within your budget from beauty experts you can trust
Larger addressable market:‒ Women in 18-44‒ High frequency‒ Already
buying/researching online
Business Model Canvas (2/5)Key Partners Key Activities Value
PropositionCustomer
RelationshipsCustomer Segments
Key Resources Channels
Cost Structure
Revenue
Streams
COSMETIC & SUPPLY COMPANIES
PUBLISHING HOUSESBeauty/Fashion/Gossip magazinesFASHION HOUSESRunway showsBeauty trendsSOCIAL NETWORKING
Personalized, unbiased recommendations for products priced for your needs from beauty experts you can trust
CREDIBILITY
RANGE OF PRODUCTSOffering the best products across different price points to create the perfect “product prescription”
INTERACTIVE SERVICECombination of self-service and personal customer service ONLINE COMMUNITYCustomer “experts” feedback and recommendations
CAPTURING CUSTOMER PREFERENCES
PERSONALIZED SERVICEBuild behind-the-scenes staff to provide one-on-one instant messaging with customers
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
SUBSCRIPTION MODEL OR PAY-PER-USEADVERTISING (60%) MARGINS ON SALE OF PRODUCTS
DIRECTDelivery of products and servicesCREATE AWARENESSPR through key partners. Print, TV, online media and industry makeup artists
BEAUTY ENTHUSIASTS Women 18-44, urban, already buying and/or researching online, into cosmetics
HIGH MAINTENANCE FREQUENCYClients who demand personal attention and customization for their beauty routine.BEAUTY ADVERSETimid clients who are not sure what to purchase and need some direction. They want to have the category paired down.
INDUSTRY EXPERTSAccess to excellent artists and well-trained staff with unsurpassed product knowledge. Chemist, Dermatologist, Ingredient’s specialistONLINE PLATFORM
Primary target customers are:
‒ High frequency
Channel: ‒ Women want to access
services on mobile ‒ Women search for
beauty recommendations
Revenue stream: ‒ Subscription & Pay-per-
use would work the best
Lessons Learned in Sep 2011 Validated hypothesis
through: ‒ 40 customer
interviews ‒ Beta customer
onboarding ‒ >5 expert interviews
(i.e. Google, Bare Essentials, Smashbox)
Promotion to drive traffic: ‒ Daily beauty tips on
Facebook page
Another primary customer target identified:
‒ High frequency‒ Less frequent, high
volume Channel:
‒ Women want to access services at home/private
‒ They don’t search, trust community feedback and word of mouth the most
Revenue stream‒ Other revenue model
might work better (prepay)
WHAT WE THOUGHT WHAT WE DID WHAT WE FOUND
Business Model Canvas (3/5)Key Partners Key Activities Value
PropositionCustomer
RelationshipsCustomer Segments
Key Resources Channels
Cost Structure
Revenue
Streams
COSMETIC & SUPPLY COMPANIES
PUBLISHING HOUSESBeauty/Fashion/Gossip magazinesFASHION HOUSESRunway showsBeauty trendsSOCIAL NETWORKING
Personalized, unbiased recommendations for products priced for your needs from beauty experts you can trust
INTERACTIVE SERVICECombination of self-service and personal customer service ONLINE COMMUNITYCustomer “experts” feedback and recommendations
CAPTURING CUSTOMER PREFERENCES
PERSONALIZED SERVICEBuild behind-the-scenes staff to provide one-on-one instant messaging with customers
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
SUBSCRIPTION MODEL OR PAY-PER-USEOffer complementary consultation for the first-time users. Charge fee to access on-going services.
DIRECTWeb site (no mobile yet) CREATE AWARENESSUser community, social mediaPR through key partners. Print, TV, online media and industry makeup artists.
Women 18-44, urban, already buying and/or researching online, into cosmetics
HIGH VOLUME & HIGH FREQUENCYClients who demand personal attention and customization for their beauty routine
INDUSTRY EXPERTSAccess to excellent artists and well-trained staff with unsurpassed product knowledge, as well as skincare specialists such as dermatologist. CREATIVE & UX TEAMONLINE PLATFORM
We are doing well! We could make this work.
Have multiple revenue streams.
Lessons Learned in Oct 2011 Revisited our business
model: ‒ Explored simpler
revenue models, like ‘Freemium’
‒ Explored facial recognition technologies (i.e. ModiFace or open source)
Continued customer validation:
‒ 20 more women interviewed
‒ Receiving feedback and beauty questions on FB
Continued promotion on: ‒ Twitter, Slideshare in
addition to Facebook Started building the
website
Scalable business model:
‒ Requires a “Recommendation rules-engine” that accumulates expertise from beauty experts
‒ Automated instant recommendations requires almost zero marginal cost
Revenue model: ‒ Offer pre-paid
subscription and timed auto-shipments
How would this scale? Too many revenue models
would confuse the customer.
WHAT WE THOUGHT WHAT WE DID WHAT WE FOUND
WHAT WE DIDN’T THINK
Business Model Canvas (4/5) – MAJOR PIVOTKey Partners Key Activities Value
PropositionCustomer
RelationshipsCustomer Segments
Key Resources Channels
Cost Structure
Revenue
Streams
FACIAL RECOGNITION & ONLINE MAKEUP TECHNOLOGY
COSMETIC & SUPPLY COMPANIES
SOCIAL MEDIAFriends and friends of friends
Build a massive beauty ontology, taxonomy and attributes cross-linked with products in the industry
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
FREEMIUM
DIRECTWeb site Mobile apps later
Women 18-44, urban, already buying and/or researching online, into cosmetics buying in high volume or high frequency who demand personal attention and customization for their beauty routine
Beauty industry experts with unsurpassed product knowledge, as well as skincare specialists such as dermatologist
CREATIVE & UX TEAM
RULES ENGINE
INSTANT, personalized, unbiased recommendations for products priced for your needs from beauty experts you can trust
A minimal viable products for step 1-3 is required for product validation (i.e. get paying customers)
More interactive content is needed to drive more traffic to the site
Possible archetype in 13-20 age segment
Lessons Learned in Nov 2011 Developed additional
features: ‒ Call to actions for step
1-3 ‒ Beauty experts page
Developed promotion content:
‒ Ran FB promotion for the new archetype
‒ Video make-up tutorials
Participated in the Columbia Venture Fair in NY
‒ 3 VCs asked for follow-up
Conducted customer validation event:
‒ 20 women at Stryker (approx. 15 mins each)
13-20 is not the right set yet
Women “loved” the concept
They were thrilled to hear about automated facial features recognition and makeup effects
We need to make the profile capture more dynamic and specific to the target variations
We need seed funding to proceed!
WHAT WE THOUGHT WHAT WE DID WHAT WE FOUND
Business Model Canvas (5/5)Key Partners Key Activities Value
PropositionCustomer
RelationshipsCustomer Segments
Key Resources Channels
Cost Structure
Revenue
Streams
FACIAL RECOGNITION & ONLINE MAKEUP TECHNOLOGY
COSMETIC & SUPPLY COMPANIES
SOCIAL MEDIAFriends and friends of friends
Build a massive beauty ontology, taxonomy and attributes cross-linked with products in the industry
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
FREEMIUM
DIRECTWeb site Mobile apps later
Women 18-44, urban, already buying and/or researching online, into cosmetics buying in high volume or high frequency who demand personal attention and customization for their beauty routine
$$$ NEED SEED MONEYBeauty industry experts with unsurpassed product knowledge, as well as skincare specialists such as dermatologist
CREATIVE & UX TEAM
RULES ENGINE
INSTANT, personalized, unbiased recommendations for products priced for your needs from beauty experts you can trust
Women are more interested in the look and the “how to” than in products
Women 13-20, urban, researching online
Getting out of the building is vital to shaping business model
Blogging works – 58 posts, 24 comments from mentors
Get expert advice whenever possible (i.e. teaching team, mentors, industry experts)
Don’t afraid to change the business model if it makes sense (i.e. Jim’s advice for facial recognition technology)
You can build MVP at low cost; Have a working MVP is a key to get customer validation started and to get VCs interested
Teamwork, teamwork, teamwork
Lessons Learned – Final ThoughtsWHAT WE LEARNED VIABILITY OF
BUSINESS CONCEPTWHAT’S NEXTBEYOND THE
COURSE Feedback from VC confirmed that our business model is unique
We need $250K to develop a beauty recommendation engine and test the viability of our business model with early adaptors
We plan to follow up with VCs from the venture fair as well as others to seek funding
“Great concept, no one else in the space is doing this and it really fills a need. If you get an offer from Sephora or Ulta-take it! They could easily try to replicate your idea and would rather pay you than take the time to and money to recreate it themselves.”
Drew Baird, Vice PresidentStar Avenue Capital
User feedback has been positive, at 464 FB Likes, we believe there is consumer interest in this and it is worth pursuing as a business
The fun journey has just begun…
Thank You• Steve for challenging us to do better all the
way through • Jim for the come-to-Jesus moment! • Oren for providing unique advice and getting
it! • Jon for the great advice from a VC
perspective! • Bhavik for keeping us on track
Teaching Team
• Rashmi and Adi for making yourselves available throughout the course and providing valuable, honest feedback Mentors
• Jeremiah for introducing us to April and her team at Google
• All for helping us with the survey and interviews Classmates
The JourneyBusiness Model Canvas
The Start - Business Model Canvas (1/5) Key Partners Key Activities Value Proposition
Customer Relationships
Customer Segments
Cost Structure
Revenue
Streams
COSMETIC & SUPPLY COMPANIES
PUBLISHING HOUSESBeauty/Fashion/Gossip magazinesFASHION HOUSESRunway showsBeauty trendsSOCIAL NETWORKING
CUSTOMIZED SERVICECustomizing the perfect combination of products for clients. Tracking purchases to understand the evolution of their usage and be able to offer them precisely what they need and want. CREDIBILITY
RANGE OF PRODUCTSOffering the best products across different price points to create the perfect “product prescription”
INTERACTIVE SERVICECombination of self-service and personal customer service ONLINE COMMUNITYCustomer “experts” feedback and recommendations
CAPTURING CUSTOMER PREFERENCES
PERSONALIZED SERVICEBuild behind-the-scenes staff to provide one-on-one instant messaging with customers. INDUSTRY EXPERTSAccess to excellent artists and well-trained staff with unsurpassed product knowledge. ONLINE PLATFORM
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
ADVERTISING (60%)
MARGINS ON SALE OF PRODUCTS
DIRECTDelivery of products and servicesCREATE AWARENESSPR through key partners. Print, TV, online media and industry makeup artists
Key Resources Channels
BEAUTY ENTHUSIASTSThose who love products and know that that this is THE place to get all of their favorite items and the hottest new trendHIGH MAINTENANCEClients who demand personal attention and customization for their beauty routineBEAUTY ADVERSETimid clients who are not sure what to purchase and need some direction. They want to have the category paired down
Business Model Canvas (2/5)Key Partners Key Activities Value
PropositionCustomer
RelationshipsCustomer Segments
Key Resources Channels
Cost Structure
Revenue
Streams
COSMETIC & SUPPLY COMPANIES
PUBLISHING HOUSESBeauty/Fashion/Gossip magazinesFASHION HOUSESRunway showsBeauty trendsSOCIAL NETWORKING
Personalized, unbiased recommendations for products priced for your needs from beauty experts you can trust
CREDIBILITY
RANGE OF PRODUCTSOffering the best products across different price points to create the perfect “product prescription”
INTERACTIVE SERVICECombination of self-service and personal customer service ONLINE COMMUNITYCustomer “experts” feedback and recommendations
CAPTURING CUSTOMER PREFERENCES
PERSONALIZED SERVICEBuild behind-the-scenes staff to provide one-on-one instant messaging with customers
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
SUBSCRIPTION MODEL OR PAY-PER-USEADVERTISING (60%) MARGINS ON SALE OF PRODUCTS
DIRECTDelivery of products and servicesCREATE AWARENESSPR through key partners. Print, TV, online media and industry makeup artists
BEAUTY ENTHUSIASTS Women 18-44, urban, already buying and/or researching online, into cosmetics
HIGH MAINTENANCE FREQUENCYClients who demand personal attention and customization for their beauty routine.BEAUTY ADVERSETimid clients who are not sure what to purchase and need some direction. They want to have the category paired down.
INDUSTRY EXPERTSAccess to excellent artists and well-trained staff with unsurpassed product knowledge. Chemist, Dermatologist, Ingredient’s specialistONLINE PLATFORM
Business Model Canvas (3/5)Key Partners Key Activities Value
PropositionCustomer
RelationshipsCustomer Segments
Key Resources Channels
Cost Structure
Revenue
Streams
COSMETIC & SUPPLY COMPANIES
PUBLISHING HOUSESBeauty/Fashion/Gossip magazinesFASHION HOUSESRunway showsBeauty trendsSOCIAL NETWORKING
Personalized, unbiased recommendations for products priced for your needs from beauty experts you can trust
INTERACTIVE SERVICECombination of self-service and personal customer service ONLINE COMMUNITYCustomer “experts” feedback and recommendations
CAPTURING CUSTOMER PREFERENCES
PERSONALIZED SERVICEBuild behind-the-scenes staff to provide one-on-one instant messaging with customers
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
SUBSCRIPTION MODEL OR PAY-PER-USEOffer complementary consultation for the first-time users. Charge fee to access on-going services.
DIRECTWeb site (no mobile yet) CREATE AWARENESSUser community, social mediaPR through key partners. Print, TV, online media and industry makeup artists.
Women 18-44, urban, already buying and/or researching online, into cosmetics
HIGH VOLUME & HIGH FREQUENCYClients who demand personal attention and customization for their beauty routine
INDUSTRY EXPERTSAccess to excellent artists and well-trained staff with unsurpassed product knowledge, as well as skincare specialists such as dermatologist. CREATIVE & UX TEAMONLINE PLATFORM
Business Model Canvas (4/5) – MAJOR PIVOTKey Partners Key Activities Value
PropositionCustomer
RelationshipsCustomer Segments
Key Resources Channels
Cost Structure
Revenue
Streams
FACIAL RECOGNITION & ONLINE MAKEUP TECHNOLOGY
COSMETIC & SUPPLY COMPANIES
SOCIAL MEDIAFriends and friends of friends
Build a massive beauty ontology, taxonomy and attributes cross-linked with products in the industry
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
FREEMIUM
DIRECTWeb site Mobile apps later
Women 18-44, urban, already buying and/or researching online, into cosmetics buying in high volume or high frequency who demand personal attention and customization for their beauty routine
Beauty industry experts with unsurpassed product knowledge, as well as skincare specialists such as dermatologist
CREATIVE & UX TEAM
RULES ENGINE
INSTANT, personalized, unbiased recommendations for products priced for your needs from beauty experts you can trust
Business Model Canvas (5/5)Key Partners Key Activities Value
PropositionCustomer
RelationshipsCustomer Segments
Key Resources Channels
Cost Structure
Revenue
Streams
FACIAL RECOGNITION & ONLINE MAKEUP TECHNOLOGY
COSMETIC & SUPPLY COMPANIES
SOCIAL MEDIAFriends and friends of friends
Build a massive beauty ontology, taxonomy and attributes cross-linked with products in the industry
VALUE DRIVENStaff (most expensive)Overhead for websiteCOGS
FREEMIUM
DIRECTWeb site Mobile apps later
Women 18-44, urban, already buying and/or researching online, into cosmetics buying in high volume or high frequency who demand personal attention and customization for their beauty routine
$$$ NEED SEED MONEYBeauty industry experts with unsurpassed product knowledge, as well as skincare specialists such as dermatologist
CREATIVE & UX TEAM
RULES ENGINE
INSTANT, personalized, unbiased recommendations for products priced for your needs from beauty experts you can trust
Women are more interested in the look and the “how to” than in products
Women 13-20, urban, researching online