29A: Venture Concept 2
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.
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.
2. Provide a summary of the feedback you received from your previous venture concept description. You certainly want to include the student feedback, but you may also include the feedback you received from others during the "What's Next" exercise. You want to summarize all of the feedback, but be sure to place an emphasis on what people recommended you change about your idea. (In other words, don't just describe the positive feedback.)
I received really good and positive feedback from my first Venture Concept. Everyone who commented mentioned that I did a good job being specific with my target audience, our profitability plan, and overall branding of the service.
3. Describe how you changed your venture concept, based on what you learned from the feedback.
I made sure to add more specifics in the concept, including specific services competing with mine, as well as a more detailed step by step rundown on how the service would work client-side.
Hi Fede,
ReplyDeletePrice is surely the driving force behind that customer subscription switch. As a quick and easy service that can give students books without much effort is bound to be a success. As you have thought of potential customers like Amazon, I believe you have a good idea on who to keep tabs on and how you can better target your customers so they choose your product. This is a great service and I would most definitely opt in to it.
Fede,
ReplyDeleteYou have a great idea here and have developed it well throughout the semester. I read your original venture concept and agree there was not much more to add to it. You have identified you target customers and your biggest competitors well. I know if this service was offered I would use it, it’s very convenient and saving money is always a plus!
Great job this semester!
Federico, I think that many industries are focusing on immediacy and convenience. So, in my opinion, focusing on fine-tuning those qualities for your product is a great idea. It will alleviate a lot of hassle and eliminate inconvenient steps that exist now with textbook access. I'm guessing that your biggest challenge will be convincing schools to give your textbook program a chance. Hopefully it works out because I really feel like the students would opt for this if given the choice.
ReplyDeleteThank you for your contributions to this class. I appreciate your (and everyone's) perspective and input; I think that is a very valuable part of growing as entrepreneurs.