24A: Concept
Opportunity
What are the forces or changes in the environment creating this opportunity?
Alongside college tuition, the price of college textbooks has risen four times faster than the rate of inflation over the last ten years. This is most likely due to the oligopoly of textbook publishers in the United States, most notably, Pearson, McGraw Hill, and Houghton Mifflin.
How is this market defined geographically and demographically?
Most of the market in need of a service like this is located in the United States. For now, we will focus on students at the University of Florida in Gainesville. In terms of demographics, most who would need this would be lower-income students, including minorities.
How are customers currently satisfying this need? And how loyal are they to whatever they use now?
For now, students are using the school bookstore, where books are offered at full retail price. For some older books, they are available to rent at a relatively lower cost. Other students, particularly those without enough financial aid or are low income, use services like Amazon to rent or buy their books. Students can usually find their books at a 30% discount on Amazon. I don’t believe there is any loyalty to the way students purchase their books. They receive no reward for buying their books at a certain place over another.
How big is this opportunity?
This opportunity is enormous. Every student, at some point, has to buy textbooks for their courses, and by offering a subsidized, simple, and standard way of accessing books, students will rave over it.
How long will the “window of opportunity” be open?
As long as there is no option for students to view their books that appears on a national scale, and as long as textbook costs keep growing, this opportunity will be open.
Innovation
My venture concept is a proprietary software, bundled as a subscription service for university textbooks. The service would be started at the University of Florida.
At the beginning of every semester, once Add/Drop ends, students will be given an “Opt-in” option to access all of their textbooks, from day one, on our proprietary software. The price will always be $199, no matter how many books your classes require, and will grant students access for 180 days. Every year, the University will set aside a certain amount of money in order to subsidize the cost of book access for students. The service itself will receive 4% of all revenues, in order to support customer service, operations, and sales.
Venture Concept
What are the reasons to think customers would switch to this new product? How hard will it be
to get them to switch?
The main reason why students would switch would be the price. I have heard of some students spending over $500 a semester on books. Another reason would be convenience. Instead of having students spend hours balancing price versus price at the UF bookstore or Amazon or another service, students can simply opt-in and have their books from the first day.
Who are the competitors? What are their possible weaknesses or vulnerabilities?
The UF Bookstore and Amazon, as well as other third-party services are our main competitors.
What role does packaging, your price points, distribution, customer support, the customer experience or the business location play (if any) in defining your business concept?
The sole selling points for our product is the fact that we can offer convenience, immediacy, and savings, all in one. It is paramount.
How would you organize a “business” to support the ongoing production of your new product, service, or process? How many employees? What roles are in the venture?
I would have at least 25 employees; five working on sales to grow our customer base, five on customer service to support our current customer base, three as CEO, CMO, and CTIO, three for human resources to maintain culture within the company, and nine for research and development, including programming to keep the company moving forward.
I liked how you narrowed your target down to specifics. Narrowing your target market down to low income University of Florida students helps you know exactly who has the need. I also liked you were very specific about the when. Knowing that your book service will be mostly utilized before drop/add gives you a great timeframe to work with and market in. Also, having a very specific price helps the audience know exactly the cost for what they are getting. I can see this service being successful.
ReplyDeleteHey Fede,
ReplyDeleteI thought it was neat that your were able to extensively narrow your target market to low income UF students, this will provide you with an accurate and more effective comprehension of the resources needed to establish competitive advantage and maintain an important presence in your market, but most importantly it will allow you to efficiently satisfy the needs of your customers. Great post!
Great job Federico! I admire that you have the larger market in mind while starting small. It shows that you have the students’ best interests at heart, which is the key to success. You really do have an enormous opportunity here. You mentioning the service’s 4% charge shows how much planning and preparation you have for the product, and thus foreshadows your immense success.
ReplyDeleteI have been following your venture idea from the beginning and this post shows that you have put some real thought into moving your venture forward. There is definitely a market for this service but like you said the window is only open until someone else moves in with the same idea. I hope you are able to move on this because I know I would sigh up.
ReplyDelete