STRATEGIC BUSINESS PLAN

E X E C U T I V E S U M M A RY

Business 4
C o m p et it i o n 4
M a r ket Re s e a r c h 4
Management 5
M a r ket i n g 5
Finance 6

BUSINESS DESCRIPTION

B u s i n e s s O ve r v i e w 8
M i s s i o n S t at e m e n t 9
Vi s i o n S t at e m e n t 9
C o r e Va l u e s 1 0

C O M P E T I T I V E A N A LYS I S

C o m p et it o r P r o fi l i n g 1 2
S WOT A n a l y s i s 1 3
C o m p et it o r S u m m a r y 1 4

P R O D U C T M A R K E T R E S E A RC H
M A N AG E M E N T T E A M P L A N
MARKETING PLAN
FINANCIAL PLAN
N OT E S

C u st o m e r D e m a n d 1 6
C u st o m e r P r o fi l i n g 1 7
L e a d e r s h i p Ro l e s 1 9
Pe r s o n n e l 2 0
B et a M a r ket i n g 2 2
F i n a l M a r ket i n g 2 3
Re ve n u e & W e b C o st s 2 5
O p e r at i n g E x p e n s e s 2 6
Financial Summary 27
Appendices 29
Re fe r e n c e s 3 1

Chapter

EXECUTIVE SUMMARY

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Business

Flair.com, Inc. will create the first Rewards Based Online Video Sharing Platform. Flair will be a web-based organization that will

aim to provide the Internet community with high quality user-submitted video content.

Competi t ion

Video Sharing Site

% of Online Video
Sharing Market

81.9%

8.8%

.1%

Market Research
156

176

169

183

135
114
90.2

Percent by Age Group of YouTube Users

20-35
13-19
2.4%
35-60
20.7%
60+

69.6
52.3

2003

2004

2005

2006

2007

2008

2009

2010

2011

19.1%

57.8%

US Online Video Viewers (Millions)

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Management

Founders

CEO

CMO

Lead Product Manager

Chynna Fry

Chari Redwine

Kirby Kohlmorgen

Company Cheerleader
Ensures Communication
Final Decision Maker

Head of Marketing
Builds Relationships with Advertisers
Innovates Ad Campains

Head of Web Developers and Designers

Site Feature Creator
Technology Coordinator

Employees

Web Developers

Web Designer

Develops Back-End Interfaces

Develops in Redis and Mongo
3+ Years Working Experience
BS in Computer Science

Develops Front-End Interfaces

Has a Spectacular Portfolio
Vast Technical Knowledge
BS in Graphic Design

Marketing

For first 6-12 months Flair will be an invitation

only beta. All invitations will be distributed
through Pay With a Tweet.

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After the beta period, the Pay With a Tweet invitation

will be shutdown and advertising will shift exclusively to
advertising space on Google and Facebook.

Finance

Revenue
Web Costs
Gross Profit
Gross $ per video

Year One

Year Two Ex.1

Year Two Ex.2

$0
$263,140
$263,140

$122,500
$253,140
$130,640

$408,300
$253,140
$155,160

$0
$0
$0
$0

Gross Profit
Operating Expenses
Net Profit

$182,500
$60,000
$122,500
$.0034

$547,500
$139,200
$408,300
$.0037

$.0044

$.0026

30

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250

500 1000 2500 5000 10000

Chapter

BUSINESS DESCRIPTION

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Business Overview
Flair.com, Inc. will create the first Rewards Based Online Video Sharing Platform. Flair will be a web-based organization that

will aim to provide the Internet community with high quality user-submitted video content. Flair recognizes the infancy of video
sharing and how it is one of the most rapidly growing industries on the Internet, and Flair intends to capitalize on this industry. Typical video sharing sites like YouTube only provide their users with the video sharing service, but Flair intends to draw its users with the
incentive of rewards, while at the same time generating higher content-quality videos through the same incentive.

Flairs actual site will be very similar in interface to that of its competitors. Flair will have two different types of users: producers

and consumers. Producers produce the video content that drive the sites interactions, where as consumers view, rate, and share videos
across Flairs site as well as social networks. What makes Flair unique is its ranking and reward systems. The site will allow users to rank
each video watched by giving the video a Flair Rating, an equivalent to a one to five star rating, see Appendix A. Video producers will
be able to win prizes for receiving flair.

Flair also intends to be one of the most effective video sharing sites. Users will access the site by signing in with either their

Facebook or Twitter login, see Appendix B. This would have several advantages over a typical login. Firstly, both Facebook and Twitter,
particularly Facebook, can provide information about the user to Flair. Information such as email, age, sex, location, etc. will allow Flair
to know more about the people visiting the site, and what videos they are watching. Secondly, Facebook can also provide what each
user has liked on Facebook. This will allow Flair to more effectively recommend videos to each user. Thirdly, we will be able to tell
our advertising clients more about the people that are interacting with their advertisements. Finally, the ease of using an existing login
versus creating another username and password for the user to remember benefits the user.

Money will be generated by selling video advertising packages to companies. Companies will be charged CPM (cost per thou-

sand) in terms of video views. This cost will also be prepackaged a number of rewards that the advertiser will give away. Advertisers
will determine the prizes, and more often than not the rewards will be discounts on products by the advertiser. An example would be 6
months free of a Netflix subscription. This way the advertiser spends less money and promotes their product at the same time.

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Mission Statement

Our mission is to provide users with an infrastructure where users can create a
community of video content producers and consumers, and where these users can
be rewarded with real prizes for their efforts and their high quality video content.

Vision Statement

Within three to five years Flair aims change the video sharing market place, and be
the leader in this new market of Rewards Based Online Video Sharing.

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Core Values
Placing the users experience before all other endeavors.
Encouraging the growth of a positive user based community.
Promoting the pursuit of individual talent.
Using only user submitted videos.
Supplying users with quality video content.
Keeping our service free of charge for users.
Creating a positive user environment for all ages.

Using analytics and metrics to ensure effectiveness in user interface and product development.
Working innovatively with advertisers.

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Chapter

COMPETITIVE ANALYSIS

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Competi t or Profiling

Flairs competition for the online video sharing market can be distilled down to three companies: YouTube.com, Vimeo.com, and

Viddler.com. Each of the online sites have been profiled according to three categories: description, strengths, and weaknesses. Flair be-

Weaknesses

Strengths

Description

lieves that its strengths are able to provide were these other companies have failed.

YouTube is an online video sharing site

that allows anyone around the world to
upload, view, and share videos.

Vimeo is an online video sharing site

geared towards indie filmmakers and
more creative video content generators.

Viddler is an online video sharing site for

brands and other businesses.

YouTubes service is 100% free to use.

Vimeo offers its video viewing

free of charge.

Viddler has found a niche in brand advertising purely on their site.

Offers HD streaming

No actual website advertisements.

Poor video content far exceeds quality

video content.

Limits users to 500MBs of video

data per week.

Viddler focuses only on brands and

businesses.

Video consumers far out weigh

video producers.

Charges users for premium

upload service.

Charges users for upload service.

YouTube currently maintains 82% of all

online video sharing.

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Threats

Opportunities

Weaknesses

Strengths

SWOT Analysis

Flair is a new idea in the young market of

video sharing websites.

Flairs Internet based infrastructure

allows for it to be easily scalable.

Flair gains its edge by providing users with

physical rewards for their video content.

The actual service is free to the user.

If Flair is not popular, advertisers will not

pay for advertising space on the website.

Flair has a limited budget.

Flair enters as a small competitor in themarket going against YouTube.

Barriers to entry and exit are few.

Flair will grow with the demands of its
user community.

Competitors who already maintain a large

portion of the market could quickly innovate towards a reward-based model as well.

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There are many substitutes such as

YouTube, Vimeo, etc.

The Internet is a large, young, and

world-wide market.
A downward economy should not
negatively impact demand.

Users could find ways to game the

system, and make the video sharing
competition unfair.

Flair is 100% user driven, therefore the

user is in control of their experience.

Will take six to twelve months

to build the site.

New businesses are entering the online

market successfully.

Limiting staff while iterating innovation and site development.

13

Competi t or Summary

In terms of popularity and overall site usage YouTube with over 80%
of the market share is the obvious leader, see appendix C. Entry into this
current market will be difficult, but Flair feels that it will be able to leverage its reward system to draw users. The intention of having higher quality content as well as content that is dynamically adjusted to each user
will be main leverage points.

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Chapter

PRODUCT MARKET RESEARCH

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Customer Demand

The demand for online video sharing has streadily inceased over the years. In October of 2009 there were 11 bil-

lion videos streams watched by 139 million unique users last month in the U.S., which represents growth of 24.8% and
11.3% respectively compared with September 2008 (Sysomos). YouTube alone has 1.2 billion video views each day as of
2009 (TechCrunch). Currently, in 2011, there are 183 million online internet video viewers, more that a 300% increase
from 2003 (Hybridsem). Not only is there a market for uploading, watching, and sharing videos online, but there is also
a market for achievement based reward systems. Kiip.com, founded only a little more that a year ago has already formed
a network of 15 millions users for its iPhone based game reward system (Kiip). With Kiip users are rewarded with real
rewards for their achievements on iPhone based games. Kiip also just recently, as of April of 2011, recieved 4 million dollars of seed money for the companies startup (CrunchBase).
156

169

176

183

15
12

135
114

90.2

69.6
52.3

3
0

2003

2004

2005

2006

2007

2008

2009

2010

2011

7/10

10/10
1/11
4/10
Kiip Users (Millions)

7/10

11/11

US Online Video Viewers (Millions)

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Customer Profiling

The Internet is a worldwide market; this causes there to be a large and varying
demographic for online video sharing. However, within this varying demographic
there remains to be a dominating age in which video sharing and consuming is
most popular. 78.5 percent of the users on YouTube are between the ages 13-35.
Marketing will be directed toward this demographic to maximise Flairs site usage
and minimize wasteful spending on advertising to a group that is not interested in
Flairs services.
Percent by Age Group of YouTube Users
20-35
13-19
2.4%
35-60
20.7%
60+

19.1%

f la i r. c om , I N C. ST RAT EGIC BU S IN ES S P LAN

57.8%

Percent by Gender of YouTube Users

Male
Female

41.7%

58.3%

17

Chapter

MANAGEMENT TEAM PLAN

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Leadership Roles

Flairs management team will consist of three lead positions of management; Chief Executive Officer, Chief Marketing Officer, and Lead Product Manager.

Each management position will be in charge of a small team of 2-3 employees.

The Chief Executive Officer, Chynna Fry, will oversee all aspects of the company. It is her responsibility to make sure that everyone is happy
and doing their job as effectively as possible. Chynna will have weekly meetings with the other lead officers to ensure that everyone is on the
same page and working towards the same goals. She will also be the director of employment at Flair, and will be doing all of the hiring. She
will follow the overall growth of the company. In a way, Chynna will be Flairs cheerleader, going out and making connections with clients,
investors, and users. Chynna will have final decision over product design, employment, and all other company decisions.

The Chief Marketing Officer, Chari Redwine, will be in charge of all of Flairs advertising. It is Charis responsibility to lead Flairs mar-

keting team. Advertising is the sole revenue producer for Flair; therefore Chair holds one of the most vital management positions. It is her job
to pursue new advertising clients as well as maintain relationships with current clients. Chari will work one-on-one with each client to ensure
that they are happy, and that all of their needs are being met. Chair will build real relationships with each client and will be frequently asking
for their input on Flairs product development to ensure that the product best suits their needs.
The Lead Product Manager, Kirby Kohlmorgen, will be in charge of all Flairs product development. Its is Kirbys job to work with both site
developers and designers, and make sure that communication between the two groups is constantly achieved. Kirby will measure the usage of
the site and the features, and will ensure that Flairs features are being utilized by all of the users, and that they fulfill the users needs. He will
have serious input on all of Flairs features, and will make sure that each feature is user-friendly, advertiser-friendly, and cost effective.

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Personnel

Once Flair gets its funding the hiring process will begin. Three people will be hired when

the company starts.

Two web developers will be hired to create the back-end for Flair. Their job will requrire

them to have a swiss army knife of coding and development skills. These skills will range from
programing in systems such as Redis, Hadoop, and Mongo to solving geospatial problems to
developing an effective video recommendation engine. We will require that each developer have
3+ years working experience will a 1 million plus user system, and that they have at least a BS in
Computer Science or the equivalent.

The third person hired will be a web designer. The designers job will be to make the front-

end of the site visually appealing while at the same time forming a layout that is user friendly.
The designer will have to be able to proficently communicate with the two web developers. This
requires that the designer have a good knowledge of how Flairs back-end system works. We will
require that the designer provide a portfolio of work. This protfolio will weigh very heavily in the
hiring process. We will also require that they have a BS in Graphic Design or the equivalent.

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Chapter

MARKETING PLAN

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Beta Marketing

For first 6-12 months Flair will be an invitation only beta. All invitations will
be distributed through Pay With a Tweet. Pay With a Tweet is simple social payment system where one gains access to a service by tweeting an advertisement for
that service. The exclusivity of an invitation only service will drive more people to
sign up for the service. This will cause a snowball effect of signups because each
added user would have advertised Flair to all of their followers on Twitter. This is a
simple, yet effective way for Flair to freely advertise. The beta will allow us to build
up a user-base and content database, and at the same time allow us to receive valuable feedback. This feedback will allow us to tweak the site until all of the features
are ready for a full site launch making the site available to everyone.

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Final Marketing

After the beta period, the Pay With a Tweet invitation will be shutdown and
advertising will shift exclusively to advertising space on Google and Facebook.
Google and Facebook will be the only mediums for advertising because of their
more effective advertising model. Both Google and Facebook support the most effective adverting platforms. With Google we can specify keyword sponsored search
results. Keywords like video sharing, YouTube, and Flair will be bought through
Google and every time someone googles any of those keywords Flair will be the top
search result. With Facebook we will be able to specifically target our target demographic of tech savvy males and females between the ages of 13 and 30. We will be
able to not only advertise within our demographic, but also will be able to filter our
advertisements to only hit people who like other video sharing services like YouTube, Vimeo, and Viddler.

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Chapter

FINANCIAL PLAN

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Revenue & Web Costs

Gross Profit

Web Costs

Revenue

The only revenue producer for Flair is advertising revenue. Flair has decided on a CPM method for charing
advertising space. After research was done a $5 CPM rate was determined to be the industry average for online video
advertisments. Flairs website will be hosted through Amazon Cloud Services. With Amazon, Flair is only charged for
the data that is streamed to the user, a chart with their pricing can be seen in Appendix D. Financially, one thing going
against Flair is the fact that the first full year of operation no revenue will be produced, because that year will be spent
developing the site. Below is the first two years of revenue and web costs, the second year shows two differing senarios
the demonstrate Flairs scalability and viewership requirements.

Year One

Year Two Ex.1

Year Two Ex.2

Site Visitors
Videos per Visit
Total Videos
CPM
Advertising Revenue

0
10
0
$5.00
$0.00

3,650,000 (10,000 daily)

10
36,500,000
$5.00
$182,500

7,300,00 (30,000 daily)

10
10,950,000
$5.00
$547,500

Video Size
Terabytes Streamed
Streaming Costs

.02GB
0TB
$0

.02GB
730TB
$60,000

.02GB
2,190TB
$139,200

Revenue
Web Costs
Gross Profit
Gross $ per video

$0
$0
$0
$0

$182,500
$60,000
$122,500
$.0034

$547,500
$139,200
$408,300
$.0037

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Operating Expenses
Year Two Ex.1

Year Two Ex.2

Employees
Cost per Employee
Salary Expenses

6
$30,000
$180,000

6
$30,000
$180,000

6
$30,000
$180,000

Loan Amount
Term
Interest Rate
Total Loan Costs

$450,000
20 Years
5.5%
$34,308

$450,000
20 Years
5.5%
$34,308

$450,000
20 Years
5.5%
$34,308

Lease
Utilities
Office Supplies
Branding Legal Fees
Total Operating Expenses

$18,000
$8,400
$9,600
$10,000
$263,140

$18,000
$8,400
$9,600
$0
$253,140

$18,000
$8,400
$9,600
$0
$253,140

Gross Profit
Operating Expenses
Net Profit

$0
$263,140
$263,140

$122,500
$253,140
$130,640

$408,300
$253,140
$155,160

Operating Expenses

Year One

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Financial Summary

As demonstrated by the varying viewership in year 2, the amount of Flair users will
be directly proportional to revenue. Flair has decided to pay each employee $30,000 for
the first 3 years of existence. After those 3 years both pay and staff size will increase according to site traffic. Along with the $30,000 each employee will receive real equity in
the company in the form of stocks. Each new employee will receive approxiametly 5%
of the company. Below is a graph demonstrating Flairs scalibiliy.
$.0044

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NOTES

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Appendices

Appendix A

Flair.com

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Appendix B

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Appendix C

Appendix D
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References
Works Cited
Inc., Sysomos. In-depth Statistics on Online Video Sharing and Engagement - Part I. Social Media Monitoring Tools

for Business by Sysomos. Web. 28 Oct. 2011. <http://www.sysomos.com/reports/video/>.

Kiip | CrunchBase Profile. CrunchBase, The Free Tech Company Database. Web. 28 Oct. 2011. <http://www.crunch
base.com/company/kiip>.
Kiip About. Kiip, a New Model. Real Rewards for Virtual Achievements. Web. 28 Oct. 2011. <http://kiip.me/>.
List of Video Sharing Sites and Impact of Video Marketing Orange County SEO | Arizona SEO Experts. Orange

County SEO, PPC, Social Media & Video Marketing Consulting Services - Rank Better | HybridSEM.com. Web.

28 Oct. 2011. <http://www.hybridsem.com/blog/2007/07/01/list-of-video-sharing-sites-and-impact-of-video-

marketing/>.
YouTube Video Streams Top 1.2 Billion/Day. TechCrunch. TechCrunch, 9 June 2009. Web. 28 Oct. 2011. <http://tec
crunch.com/2009/06/09/youtube-video-streams-top-1-billionday/>.

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