1. business and industrial
2. business operations
3. business plans

Business Plan
and Prospectus
June 2010
Contact:
Sam Khedr
779 14th St.
San Francisco, CA 94114
415.225.1470
[email protected]
Nitevibe.com Business Plan and Prospectus
NOTICE TO RECIPIENT
THIS DOCUMENT CONTAINS CERTAIN INFORMATION THAT IS NON-PUBLIC,
CONFIDENTIAL, AND/OR PROPRIETARY TO NITEVIBE.COM (“THE COMPANY”) AND IS
SUBMITTED ON A CONFIDENTIAL BASIS FOR USE BY A LIMITED NUMBER OF
INSTITUTIONAL INVESTORS SOLELY TO ASSIST THEM IN CONSIDERING PURCHASING
SECURITIES OF THE COMPANY (THE “TRANSACTION”). ITS USE FOR ANY OTHER
PURPOSE IS NOT AUTHORIZED. THIS DOCUMENT, INCLUDING ITS ATTACHMENTS, MAY
NOT BE REPRODUCED OR REDISTRIBUTED IN WHOLE OR IN PART, NOR MAY ITS
CONTENTS BE DISCLOSED TO ANY PERSON OTHER THAN THE ENTITIES TO WHICH IT
IS SUBMITTED.
AS USED HEREIN, “CONFIDENTIAL INFORMATION” MEANS INFORMATION ABOUT THE
COMPANY OR THE TRANSACTION FURNISHED BY THE COMPANY TO YOU AND THE
FACT THAT YOU ARE CONSIDERING THE TRANSACTION, BUT DOES NOT INCLUDE
INFORMATION (I) WHICH WAS PUBLICLY KNOWN, OR OTHERWISE KNOWN TO YOU AT
THE TIME OF DISCLOSURE, (II) WHICH SUBSEQUENTLY BECOMES PUBLICLY KNOWN
THROUGH NO ACT OR OMISSION BY YOU, OR (III) WHICH OTHERWISE BECOMES
KNOWN TO YOU, OTHER THAN THROUGH DISCLOSURE BY THE COMPANY, ITS
REPRESENTATIVES OR ITS ATTORNEYS.
YOU AGREE THAT YOU WILL USE YOUR BEST EFFORTS TO HOLD IN CONFIDENCE AND
NOT TO DISCLOSE THE CONFIDENTIAL INFORMATION, EXCEP (A) AS MAY BE REQUIRED
BY LAW, AND (B) TO YOU AND YOUR INVESTMENT-ORIENTED SUBSIDIARIES’ OFFIERS,
DIRECTORS, EMPLOYEES, AGENTS, AND PROFESSIONAL CONSULTANTS IN
CONNECTION WITH THE TRANSACTION.
WHILE THE INFORMATION PROVIDED HEREIN IS BELIEVED TO BE ACCURATE AND
RELIABLE, THE COMPANY MAKES NO REPRESENTATION OR WARRANTIES, EXPRESSED
OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. ONLY
THOSE RESPRESENTATIONS AND WARRANTIES CONTAINED IN A DEFINITIVE EQUITY
PURCHASE AGREEMENT SHALL HAVE ANY LEGAL EFFECT. THE COMPANY RESERVES
THE RIGHT TO AMEND OR REPLACE THIS DOCUMENT AT ANY TIME. NOTHING
CONTAINED WITHIN THIS DOCUMENT IS, OR SHOULD BE RELIED UPON AS, A PROMISE
OR REPRESENTATION AS TO THE FUTURE.
THE PRO FORMA AND ESTIMATED FINANCIAL INFORMATION CONTAINED HEREIN WERE
PREPARED EXPRESSELY FOR USE HEREIN AND ARE BASED ON CERTAIN
ASSUMPTIONS AND MANAGEMENT’S ANALYSIS OF INFORMATION AVAILABLE AT THE
TIME THAT THIS DOCUMENT WAS PREPARED. THERE IS NO REPRESENTATION,
WATTANTY OR OTHER ASSURANCE THAT ANY OF THE FINANCIAL PROJECTIONS WILL
BE REALIZED. PROSPECTIVE INVESTORS SHOULD CONDUCT THEIR OWN
INVESTIGATION AND ANALYSIS OF THE BUSINESS, DATA, AND PROPERTY DESCRIBED
HEREIN.
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Nitevibe.com Business Plan and Prospectus
Table of Contents
I.
Mission and Vision
II.
Executive Summary
a. About the Company
b. Business Model
c. Expansion Business Plan – 2 Phase Plan
d. Marketing Plan
e. Management & Personnel
f. Investment & Capitalization
III.
Operating Plan
a. Objective
b. Mission
c. Keys to Success
d. Current Business Model
i. Revenue Source
e. Future Business Model – Expend Social Network
i. Answer the Question 1 - What’s Happening?
ii. Answer the Question 2 - Who’s Going?
iii. Answer the Question 3 - How is it?
iv. Answer the Question 4 - How Was it?
v. Mobile Functionality
1. How it works
2. Usability
3. Mobile Revenue Model
vi. Nitevibe Revenue Streams
1. National Ad Sales
2. Local Ad Sales
3. Event Production
4. Google Adsense
IV.
Management and Structure
a. Sam Khedr – President
b. Current Organizational Structure
c. Future Organizational Structure
i. Geographic Cells
ii. Key City Personnel
V.
Industry & Market Analysis
a. Industry Analysis
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Nitevibe.com Business Plan and Prospectus
b. Social Networking
i. Trends
ii. Keys to Success
iii. Peer Reviews and Credibility
iv. Incentive Programs
c. Online Advertising Spending
i. Current Landscape
d. Mobile Applications
e. Advertising Spending Trends
f. Nitevibe’s Competitive Advantages
g. SWOT Analysis
h. Competitive Analysis
i. Flavorpill
ii. Going.com
iii. Yelp
iv. Summary of Players
i. Nitevibe’s Competitive Advantages
VI.
Marketing Plan
a. Current User Profile
b. Target Advertising Clients
c. Pricing
d. Advertising Plan
i. Post-Capitalization Ad Spending
ii. Ad Spending Mix
VII.
Current Status of Geographic Expansion
VIII.
Financial Plan
a. Assumptions
i. Projected Income Statement
IX.
Partial List of Research Sources
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Nitevibe.com Business Plan and Prospectus
I. Mission & Vision
Mission Statement:
To be the leader in connecting online users
with real-world events by offering products
and services that are both unique and
superior to our competitors.
Vision:
To expand Nitevibe’s local success to a
dominant national presence.
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Nitevibe.com Business Plan and Prospectus
II. Executive Summary
About The Company
Nitevibe was founded in 2002 by San Francisco native Sam Khedr. An active participant
in the vibrant local night life, Sam saw an opportunity to create a web portal that created
online access to a real-life community of young people looking for the “hot spot”.
Nitevibe has grown year over year, establishing a strong brand and earning profits since
startup. Sam’s experience and relationships continue to anchor the business in the local
community, and he now turns to the future for Nitevibe’s next step.
Nitevibe’s revenues have grown at an average of
82% per year since conception.
Business Model
Nitevibe.com and its Buzz Magazine E-mail newsletter provide highly filtered information
on the best local urban events & activities (dj & electronic music VIP and underground
events, festivals, boat parties, art, fashion and other urban-hip events and activities) to
its end-users that can be classified into two tiers:
Moving forward these events and activities will fall into two tiers:
1.
Editor’s Picks – Sam and his staff’s recommendations
a. Event & Activity Recommendations
b. Photo Coverage
c. Interviews
2.
User-Generated Events – Local user contributed content (post capitalization)
a. User submitted pictures
b. User submitted reviews via web
c. Guest list signup (visible to other users – to see who’s going)
d. Live on location user submitted rating and reviews
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Nitevibe.com Business Plan and Prospectus
In this approach, the end user becomes heavily invested through their use of reviews
and recommendations. Companies like Gawker Media have seen tremendous success
through the use of commenting features, which have nearly developed into a social
network of their own.
Once a user starts attending some of these events, they have the option to review them,
rank them, and list themselves as an attendee. This part of the business model
somewhat resembles CitySearch.com or Yelp.com, which offer review options but don’t
send newsletters or sponsor events.
The opportunity for Nitevibe exists in expansion. Having proven his “Nitevibe Formula”
and grass-roots word-of-mouth processes, Sam has created an invaluable website not
just for the end-users, but also for advertisers and promoters looking to tap into the most
coveted demographic: 20-somethings with money to spend and the desire to see and be
seen.
Expansion of Business Model – 2 Phase Plan
Phase 1: Who’s Going / How is it?
Nitevibe has built a solid user base (238k hits per month) by being
plugged into “What’s Happening?” The next step for Nitevibe is to
facilitate a social network that allows users to answer the question,
“Who’s Going?” and mobile functionality that allows on-the-fly ratings of
events, or, “How is It?” And the ability to voice “How was it?” Our
competition has yet to integrate all four of these functions, and being a
first mover to encompass all aspects of event-based social networking
and user-generated content is Nitevibe’s vision for the future.
Phase 2: Geographic Expansion
The second component to Nitevibe’s journey forward is to expand
regionally. Sam’s experience is that National brands are extremely willing
to invest in advertising with national sites like Flavorpill.com but often
pass on investing with local sites who serve only one major market.
Nitevibe’s initial geographic expansion to top markets: Los Angeles, New
York, Chicago, Miami, along with San Francisco will provide a national
platform for top X & Y brands.
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Nitevibe.com Business Plan and Prospectus
Marketing Plan
Nitevibe.com has chosen a strategy that can be identified by Porter’s model of strategic
competition as “Differentiation.” This means in summary that Nitevibe’s offerings are
unique and superior to that of its competition.
Nitevibe’s geographic expansion provides the opportunity for an economy of scale, as
advertisements can be used in multiple markets, lowering the CPM on the creative and
production side. Media buying will also have reduced CPM, as ads will be placed in
larger media channels.
Management & Personnel
Sam Khedr is the entrepreneur and acting president of Nitevibe. He is joined by a small
staff of part-time writers, photographers, and web developers. Most of his staff are
volunteers, trading part-time contribution for access to events and VIP lists. Sam’s
ability to motivate and garner productivity from a largely unpaid staff is a testament to
both his salesmanship and leadership abilities.
Linda Ho has been a valuable part of the Nitevibe team for nearly five years. She is paid
on commission for selling banner ads and other online media to local businesses.
Linda’s role with Nitevibe will continue in local sales, while a more experienced VP of
Sales will be brought on to handle national accounts.
The planned expansion of Nitevibe includes careful addition of sales and support staff,
centered on Key City Personnel. These are people who are local to the area and have
an “on-the-ground” perspective of the city’s nightlife. Nitevibe is already in the process
of building relationships with potential team members in Los Angeles and New York.
Investment & Capitalization
Nitevibe is a company at a crossroad. It can remain complacent in its local success, or
take full advantage of its scalability and expand aggressively. Sam and his team are
ready for the latter. After 5+ years of profitability and learning best practices for this
young industry, Nitevibe is poised for great success.
In order to expand the Nitevibe brand and build the infrastructure necessary to support
their model in multiple markets, Sam is seeking a $3M investment. This money will be
used in the following manners:
Use of Capital
Advertising
Infrastructure
Working Capital
Equipment
Hiring/Wages
TOTAL
$000's
1,200
600
600
300
300
3,000
%
40%
20%
20%
10%
10%
100%
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Nitevibe.com Business Plan and Prospectus
III. Operating Plan
Objective
Nitevibe's objective is to become the leading online Social Network City Guide by
T
T
helping its online users answer the four most vital questions when going out - What's
T
Happening? Who's Going? How is it? and How was it?
T
Our goals by the end of the third year of operation include:
•
To have the most street credibility as the top urban cultural website.
•
To be the central goto site within key top-tier urban markets such as NY, SF,
LA, Chicago, & Miami
•
Achieve annual ad sales revenue of approximately $3m+
•
Build a user subscribership of 1 million+ urban trend setter.
Mission
•
Nitevibe is a commercial enterprise and as such exists for the purpose of generating
profits for its investors, owners, managers and staff. Because Nitevibe is an online
social service, it also exists to server its online community. These two reasons for its
existence are inextricable. If one aspect does not exist, the other will cease to exist.
•
Nitevibe will build street credibility as the most trusted online city guide through highly
localized and highly filtered recommendations to top urban culture and social events.
•
The mission of each Nitevibe City Editor will be to expose, inform and entertain our users
through their editor's events of the week.
•
Nitevibe will deploy online and mobile tools to empower each user to promote their own
events or rate other people's events.
•
Our investors will see a lucrative return on their dollars, and will have opportunity for
future growth & prosperity with our company.
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Nitevibe.com Business Plan and Prospectus
Keys to Success:
1. Maintain core values by continuing to provide in-the-trenches peer-generated
content
2. Leverage this peer-generated content as superior to the editor-generated
content of our competitors
3. Develop Nitevibe's website as a social networking community including "
T
Who's Going? How is it? and How was it?" functionality.
4. Add "How is it?" mobile broadcasting functionality to enable users to receive
and broadcast live location-sensitive reviews of how a particular event is.
5. Grow geographically to attract national advertising clients
6. Accumulate and maintain organized databases of our target market and their
buying and lifestyle behavior to better target advertising
6. Publish highly filtered and localized email newsletter
7. Take market share from our competitors by providing better content and onthe-go mobile functionality.
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Nitevibe.com Business Plan and Prospectus
Current Business Model
Nitevibe has built a successful business by reliably providing users with up-to-date,
accurate information about ‘What’s Happening?’ One of the reasons for Nitevibe’s
reputation and popularity is that this information is collected mostly by a peer-to-peer
street team of volunteer contributors who are literally in the trenches of the local scene.
These contributions have consistently been of higher quality than our competition, who
simply hire writers and critics. The credibility of this formula has been well established in
San Francisco, where Nitevibe has over 65,000 email list subscribers, approximately
10,000 “core users” (users actually reading and using the newsletter), and 2,000 – 3,000
website hits per week.
Promoters, nightclubs, bars, venues, and other San Francisco establishments turn to
Nitevibe to make a valuable connection with their target markets.
The focused
demographic and the desirability of Nitevibe’s faithful has driven advertising sales, even
with a premium CPM prices.
Nitevibe’s evolution into a community of two-way
information exchange and geographic expansion will elevate the value of Nitevibe’s ad
space ten-fold.
Revenue Source
Adsense Revenues
Local Ad Sales
Outside Media/National Placements
Event Sponsorships
Event Revenues
Total Revenues
$
$
$
$
$
$
$US
2,500
65,000
3,000
12,000
82,500
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Nitevibe.com Business Plan and Prospectus
Future Business Model – Expand Social Network
The four most common questions when going out:
Nitevibe’s community growth will heavily rely on social networking and community tools.
The goal of these tools is to give users the ability to answer the four most relevant
questions when deciding where to go out:
1. What’s Happening?
2. Who’s Going?
3. How is it?
4. How was it?
To expand further on these four questions what follows is a step-by-step demonstration:
Question 1
What’s Happening?
When planning to go out, we’re constantly bombarded with hundreds of options; one can
go dizzy trying to sift through all the events and activities in their city. Other online & print
publications add to the chaos by just dumping on you the full list of everything that’s
happening.
The Nitevibe Solution:
Nitevibe answers the question - “What’s Happening?” in two ways: 1) User generated
events organized by users’ social group(s) and their unique interests. 2) Nitevibe’s peerto-peer Nightlife Correspondents post and recommend highly filtered events and &
activities. This gives the user the option to look up events based on recommendations by
user’s social group, or Nitevibe’s Editors. Each event, venue or activity will also have its
own community forum offering user generated reviews and pictures.
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Nitevibe.com Business Plan and Prospectus
Question 2
Who’s Going?
The second question most people ask is “Who’s Going?” and how can I easily connect
with my friends? Instead of multiple calls, email or text messages, it’d be nice for all my
friends to know where I am and when I want them to.
The Nitevibe Solution:
Nitevibe’s friend lookup/broadcast functionality will give users the ability to generate or
lookup/receive alerts, via web and mobile platforms, when an event or activity has been
flagged to the Favorite List. Users will also have control to allow their profile and
Favorite Lists to be viewed based on a concentric social network circle, with the inner
circle being your closest friends and the outer circle for the general public. Nitevibe will
also implement best-of-breed tools & functionality used on sites like Evite, Facebook,
Myspace, Yelp and Going.
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Nitevibe.com Business Plan and Prospectus
Question 3
How is it?
And what’s going on right now? Current lifestyle guides such as Timeout, Citysearch
even Yelp talk about the venue in general, and only offer post-event feedback but I want
to know what’s going on right now in the club or what people are doing in Central Park.
The Nitevibe Solution:
Nitevibe will give its users the ability to broadcast/receive real-time, location sensitive
content to their friends via mobile and web platforms. Call it a real-time on-location Yelp.
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Nitevibe.com Business Plan and Prospectus
Question 4
How was it?
Quite often people attend events/activities based on word-of-mouth recommendations.
The Nitevibe Solution:
Nitevibe will offer a public forum associated with each event or activity where users can
rank/review and upload their pictures and video files.
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Nitevibe.com Business Plan and Prospectus
Mobile Functionality
The third question that Nitevibe will answer is “How Is It?” In keeping with our usergenerated review process, the answer to that question will be provided by Nitevibe
users, not editors or even contributors. Nitevibe users will be able to access Nitevibe’s
online community from their cell phone, and rate an event while they are there. This
allows their friends to see “How Is It?” before they go.
How it works
Nitevibe’s mobile application was developed to answer two questions posed by our
target audience on a frequent basis:
1. Where is the best place to be right now? (The “How is it?” portion of Nitevibe)
2. How can I more easily connect with my friends when I’m out?
Our users rely heavily on text messages, emails, mobile IM, and other on-the-go
communication to figure out where their next move is going to be. Nitevibe will provide
an interface that makes this process centralized. Users can post where they are going,
and how they like it there, allowing their friends to make an instant one-stop decision on
where to go next.
The technology and function of Nitevibe’s mobile application is three-fold:
1. An ubiquitous, cross-carrier, cross-handset, global mobile platform
Using the mobile internet as the platform, users can easily connect with
others by sending messages through their profiles. Profiles are
automatically matched to generate alerts if consumers with similar
interests are within proximity.
2. User-generated real-time, location-sensitive content
Call it a real-time YELP. When users tag that they are at a specific venue, they
add a quick contextual post that adds real-time content to the web and mobile
platform that is searchable for everyone to consume.
3. Friend lookup/broadcast functionality
Picking up where Google’s ‘Dodgeball’ left off, users have the ability to create
and maintain friends, to whom they can generate alerts when they arrive at a
specific venue or be located by other friends if they want them to.
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Nitevibe.com Business Plan and Prospectus
Usability
Nitevibe users will get around the mobile application much like MySpace or a similar site.
First, they will create a profile consisting of pictures, personal info, contact info, and
other optional information. Second, they will connect with Nitevibe’s WAP system to
contribute their whereabouts along with a simplified ratings system. Posting will be
extremely easy and fast. Lastly, the new posting is broadcast to the user’s friends
based on location and preferences. Friends who want to know what’s going on, who’s
there, and how it is will get a mobile message telling them all of the above. Any user can
also access all postings from their group of friends through Nitevibe’s website.
Sample questions in the “How is it” category:
Static Images
Videos
open bars
drink specials
pool tables, lounge, basement, etc
age group present
after hours?
quality of sound system
lighting
Guy/girl ratio?
DJ name/genre of music?
Cover charge?
Crowded, sweaty?
Line outside?
Bouncer’s name?
Guestlist possibility?
Table availability?
Long line for the restroom?
Age 2nite?
Mobile Revenue Model
Mobile advertising (WAP ads) served and sold through
advertising networks and direct adsales to brands (e.g.
Anheuser-Busch, Motorola, NIKE, etc).brand sponsorship
takeovers of entire application (spirits such as Anheuser-Busch
or Heineken, lifestyle such as NIKE or virgin)
Enhanced venue/event
$500/month/listing)
Transactional/gifting commissions – purchasing tickets, buying
friends a drink, etc.
listings
to
venue/promoter
(e.g.
Mobile advertising
based revenue
$20-70CPM
proportional on
total number of
impressions &
specific targeting
capabilities
(handset
detection, location
relevance from
where user posts,
etc.
U
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Nitevibe.com Business Plan and Prospectus
Nitevibe Revenue Streams
National Ad Sales
Moving forward National Ad Sales will be the primary source of Nitevibe’s revenue.
This will be managed through high-profile Media Buyers. With the addition of 2 or
more major markets, Nitevibe will open the door for national advertising dollars. Our
primary competition, Flavorpill, has attracted international advertisers like Budweiser,
Absolute, and Nokia among others due to the following factors:
1. The focused makeup and desirability of their audience
2. Their presence in multiple (6) markets at once.
Nitevibe can compete on the first item, but currently not on the second. We believe
that Nitevibe has an opportunity to scale its success to multiple markets, and in doing
so open the door to high-dollar advertisers like those that are currently with Flavorpill.
Local Ad Sales
Nitevibe’s local advertising sales have been the backbone of its profitability so far.
Nitevibe has developing valuable relationships with local promoters and venues
owners to establish long-term buying relationships. These efforts will continue as
Nitevibe will look to hire the best local sales teams in each new city that can use the
same relationship-building model.
Event Production
Nitevibe’s flagship event is also San Francisco’s annual banner event: Nitevibe’s
Top10 DJ Dreamteam is based on Nitevibe asking it’s community to nominate and
vote for their favorite top 10 local DJs. In March 08 Nitevibe will be producing its 6th
annual DJ Dreamteam which has generated $15K tickets sales and $5K in
sponsorship revenue not to mention all the valuable brand promotions. This ‘By the
People & for the People’ style of event will also expand to each major market which
will culminate in a national USA Top10 DJ Dreamteam becoming the gold standard
for picking the nation’s top DJs.
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Nitevibe.com Business Plan and Prospectus
Google Adsense
Google and other search engines offer programs that provide revenue on a pay-perclick basis. For example, when visiting Nitevibe’s photo galleries (one of the most
popular areas of our site), users may see ads for electronic music sites and other
closely related businesses. This service runs itself via HTML code built into
Nitevibe’s page, and Google’s Adsense program cuts checks on a monthly basis.
Increased traffic with geographic and functional expansion will perpetuate growth in
this revenue category, while the effort required to collect it remains minimal
generating passive income.
Click HERE to go to this Photo Gallery
Click HERE to go to this Photo Gallery
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Nitevibe.com Business Plan and Prospectus
IV. Management & Structure
Sam Khedr - President
Sam Khedr is an entrepreneur who has repeatedly demonstrated the courage to take
risks and the tenacity for perfection. Born in Cairo, Sam immigrated to Detroit with his
family at seven years and quickly acclimated to his new home. After high school, the
Khedr family moved to Germany, where Sam put the money he had raised through his
early entrepreneurial ventures to finance his education at the University of Maryland
(European Div. Munich, Germany Campus). There he earned his B.A. in Business and
simultaneously fell in love with the country and its tourism industry.
After graduating, Sam partnered up with Munich’s top bike rental shop to be the first to
conduct city bike tours for English-speaking backpackers.
By the time he sold his
interest, Sam had created a new mini-industry service for backpackers. (There are now
three different companies selling city bike tours.) Soon after, became involved in the
creation of a youth hostel, and managed an integrated hostel and bus tour company at
high occupancy for two years. During one of those tours he met Mark Maxam, president
of Vagabond Publishing, a San Francisco company that specialized in travel guides.
Mark recognized Sam’s intimate backpacker’s perspective of Europe and offered him a
publishing deal.
Sam’s journey with Vagabond Publishing began in 1994, when he hit the road
researching and writing on 38 top destinations in Europe all within 5 months. His book
Let's Party! Europe was released early 1995 and had garnered much attention due to
its humorous and irreverent perspective on budget travel through Europe. Sam’s
premise: to truly experience Europe one has to dive in nose first and get to know the
people on a real human level, and where better then social settings like beer halls, pubs,
clubs, cafés and plazas. Sam tells his readers “If you want to be a spectator of history go
visit a museum, but if you want to make some history of your own get out there and
party!” Let's Party! Europe had become the second best selling general travel guide for
Europe selling over 30,000 copies. Sam was invited on nationally syndicated radio
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Nitevibe.com Business Plan and Prospectus
shows and travel forums to share his experience. Soon after, Sam rediscovered his love
for America and moved from Munich to San Francisco where Vagabond Publishing was
based. Shortly after Sam wrote and published his second and third book Let’s Party!
San Francisco and Chicago Party Guide
In 1998, Sam recognized the opportunities of the Dot com boom and started 10,000
Volts a web development & design shop providing outsource solutions for the expanding
landscape of new startups. 10,000 Volts quickly grew to 3 full time employees and 3 part
time. The company secured accounts with Pinnacle Systems Inc., OnSale / Egghead,
Esprit, Bebe, Home Stead, Nomidca to name a few.
While designing sites for clients, Sam was frustrated that on his time off there was no
credible website that offered real-life feedback on the nightlife scene in San Francisco.
After a few months of circulating his own newsletter to his friends, word started to get out
and circulation skyrocketed. Sam’s hobby would soon evolve into Nitevibe.com. As his
mailing list grew, advertising requests started to come in.
In 2002, Sam hired a
Managing Editor and Advertising Sales Rep. Nitevibe also began to produce its own
events and grow its brand. 6 years later Nitevibe now has the most loyal following
because of Sam’s commitment to quality highly filtered recommendations pushing to
always inform and entertain it’s readers with a weekly list of the most happening events
and activities.
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Nitevibe.com Business Plan and Prospectus
Current Organzational Structure
Sam Khedr
Founder/CEO
Creative Director
David Javate
Phil Martin
Farah Rodriquez
Linda Ho
Bennett Sell-Kline
Managing Editor
Web Developer
Marketing
Sales/Promotion
Photo Director
Part-time volunteer
Field Correspondents
Photographers
promotional street team
Kim Williams
Carolina Quijano
DJ Javaight
Farah Rodriquez
Ersson Bartle
Kera Soko
Steve Tough
Will Freeman
Steve Murdock
Bennett Sell-Kline
Ashton Boni
Daniel Kokin
Edgar Maguyon
Future Organizational Structure
Given Nitevibes plans for both horizontal and vertical expansion, headcount would need
to be increased in the following ways:
Current
1
5
14
20
Q1
2
8
22
32
Q2
2
11
37
50
Q3
2
14
51
67
Q4
2
16
66
84
Year 2
3
22
77
102
Year 3
3
24
89
116
Current
Q1
Q2
Q3
Q4
Year 2
Year 3
Salaried
12.5
42.5
42.5
42.5
42.5
68.8
75.6
Part Time
76.3
100.0
136.3
168.8
192.5
291.5
353.9
Part Time/Interns
8.8
16.3
32.5
48.8
65.0
89.4
140.7
Total Labor Cost (000's)
97.5
158.8
211.3
260.0
300.0
`
Salaried
Part Time
Part Time/Interns
Total Headcount
449.6
570.2
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Nitevibe.com Business Plan and Prospectus
Geographic Cell Organization
Given the geographic challenges of upholding Nitevibe’s “in-the-trenches” approach,
each major market will have its own business unit, managed by the San Francisco
executive team. The structure of each city will look something like this:
Sam Khedr
Founder/CEO
Creative Director
David Javate
Phil Martin
Farah Rodriquez
Linda Ho
Bennett Sell-Kline
Managing Editor
Web Developer
Marketing
Sales/Promotions
Photo Director|
(SF Office)
(SF Office)
(SF Office)
(SF Office)
(SF Office)
City Editors
San Francisco
New York
Los Angels
Chicago
Miami
City Marketing
San Francisco
New York
Los Angels
Chicago
Miami
City Sales/Promotions
San Francisco
New York
Los Angels
Chicago
Miami
City Head
Photographers
San Francisco
New York
Los Angels
Chicago
Miami
Key City Personnel
The key to success for the geographic rollout is to hire local contributors who are familiar
with their local markets. Nitevibe’s staff in Los Angeles will consist of people who live in
and are vastly familiar with the Los Angeles scene. This is consistent with Nitevibe’s
proven business model of using local contributors who can answer Nitevibe users’ three
questions with firsthand information.
23
Nitevibe.com Business Plan and Prospectus
V. Industry & Market Analysis
Industry Analysis
The industry in which Nitevibe will succeed is still an embryonic one. Its business model
represents a merging of directory services like CitySearch, Social Networking
communities like MySpace, media sharing communities like Flickr, event-oriented sites
like eVite and Going, peer review sites like Yelp, and mobile networking like Dodgeball.
Given the complexity and embryonic nature of Nitevibe’s Business Model 2.0, we have
identified and studied key developments in all of these industries to prove Sam’s
assertion that Nitevibe’s model is in fact the future of social networking through
electronic mediums.
Social Networking Trends
Trends
More than 36 percent of Web users “highly trust” the information they receive from
friends and acquaintances in their online social networks, according to a new social
Internet survey by Faves.com, a social discovery and bookmarking site. The same
survey found that 34 percent of respondents visit a social networking site at least
weekly. This is a drastic increase from the 13% in 2004.
An emerging trend in the online social
networking industry is a growing
preference for specialized networking
communities (Facebook for students,
Flickr for photographers and artists, etc.)
over previously dominant general sites
like MySpace and Xanga. The graph to
the left shows subscribership of major
networking sites as of summer 2006.
This graph shows that these specialized
sites are beginning to cut into the market
share of MySpace and others.
We
believe that Nitevibe is such a
specialized and desirable market that we
can quickly take away market share from
these giants in both usership and
24
Nitevibe.com Business Plan and Prospectus
Keys to Success
Faber Consulting offers the following advice on how to stand out in the fast growing
social networking industry.
Social networks have numerous specificities. A company’s ability to identify and
understand these specificities, and offer suitable answers, results in major
success within this field. Today, this sector appears mature enough to enable a
study of the market’s leading firms’ development in order to identify their “best
practices” and to propose a specific framework analysis for each type of website.
As the Faber report shows, developing a focused user base and marketing the
uniqueness of it to advertisers is going to be the key to success for Nitevibe and other
sites. We believe that the MySpace sites of the world will likely be replaced by special
interest social networking sites like Nitevibe and others.
Source: Faber Consulting via Mashable.com
Peer Reviews as a component of Social Networking
People are interacting differently with the Web today, and as the Faves.com survey
results show, people trust their online social networks more than any other online
resource. How this translates to Nitevibe’s potential success is easy to extrapolate. The
very cornerstone of Nitevibe’s content is its peer-to-peer reviews & recommendations.
Nitevibe users will be finding out the answer to “How is it?” and “How was it?” from the
people that they trust the most, members of their circle of virtual (and real) friends.
So people are visiting and joining these sites more frequently,
as well as trusting their content and reviews more and more.
But are they contributing?
Will they be contributing to
Nitevibe as well as garnering information from it? According
to the Faves.com survey, the answer is a resounding YES.
More than 70 percent
said they sometimes or
frequently
rely
on
online product or book
reviews, and another
62 percent rely on the
popularity
of
information based on
users’ votes or ratings.
Faves.com Survey, 2007
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Nitevibe.com Business Plan and Prospectus
•
78 percent of respondents have recently voted or rated something online, compared with 47
percent two years ago;
•
63 percent have recently uploaded photographs or videos; 40 percent had two years ago;
•
44 percent have recently commented on a forum or blog; 23 percent had two years ago;
•
28 percent have recently written a product or book review: 15 percent had two years ago;
•
16 percent now maintain a blog; 9 percent were maintaining a blog two years ago.
“People are becoming more comfortable with the social aspects of the Web,
particularly voting or Rating content online and using other people’s opinions and
ratings to help them in their own research.”
Rob Dickerson, CEO of Faves.com.
Incentive Programs
Nitevibe will also implement some “Affinity Programs” that reward users for contributing.
So far, our users have been eager to participate in the Nitevibe community, however, we
feel that providing incentives (points redeemable for free cover charges, VIP, etc) will
help jumpstart the local community’s participation as we expand to new markets.
Online Advertising Spending
Advertisers have not let these trends go unnoticed. The trend among advertisers is not
only toward social networking sites in general, but toward SPECIALIZED networking
sites. The projections for Facebook (a networking site centered around students and
college life) is projected to grow by 72 percent in 2009, compared to MySpace (an
unspecialized networking site with a terribly broad usership) is only projected to grow by
59 percent. The staggering amounts of advertising revenues aside, MySpace should be
concerned about the trend in advertising spending to specialized versus general social
communities.
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Nitevibe.com Business Plan and Prospectus
Nitevibe is an advertiser’s dream, as their usership is fairly homogeneous and highly
desirable for many companies due to their activity, incomes, and spending habits.
Current Landscape
Sources: Pronet Advertising May 2007, eMarketer.com May 2007
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Nitevibe.com Business Plan and Prospectus
Mobile Applications
The mobile communications market is growing fast, and not just for cellular phone users.
Current data shows that more users are expanding the amount of things they do with
their mobile phone.
Over 230M cell phones in the US (CTIA, February 2007), and over 2B globally
80% of US based 18-34 yr olds have sent/received a txt msg in the past week (mMetrics),
15% of all internet connections globally are conducted through the mobile phone
Over 2B WAP pages served in the US Oct 2007 with 30% growth month over month (admob
Oct 2007)
16% of US subscribers use WAP monthly (mMetrics, Feb 07), of which 80% is the 18-35 yr
old demographic
US mobile web usage up 300% from 2006 (bango, June 2007)
iPhone and iPhone competitors to catalyze mobile web and data usage summer of
2007
Mobile Advertising Trends
What has everyone so excited about mobile advertising is what has happened on the
Internet. Ad spending on the Web is growing at a compound annual rate of 18.3% and
will reach $73 billion in 2011, according to PriceWaterhouseCoopers. The consultancy
says Internet advertising will comprise 14% of the entire global advertising market by
that year (Wireless Week August 2007).
“The outlook for mobile
advertising spend has
significantly advanced
in the past 12 months,”
says Phil Taylor,
director of Strategy
Analytic’s global
wireless practice. “The
supply of advertising
inventory is rapidly
increasing as mobile
publishers look to
develop advertising as
a revenue stream.”
Taylor notes that Sprint
Nextel, Verizon
Wireless and Vodafone
have all accelerated
their plans to sell
advertising through
their networks.
Source: Strategy Analytics
Faves.com Survey, 2007
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Nitevibe.com Business Plan and Prospectus
The spending on internet advertising has grown yet again this year, and researchers
believe that mobile advertising will follow.
Research publication eMarketer expects
Internet ad spending in the United States to total $19.5 billion this year. Nielsen
NetRatings says the top 10 Internet advertisers in the United States spent $278.4 million
in June alone, led by InterActive Corporation’s $47.2 million. Those numbers exclude
search advertising, which is the fastest-growing segment of Internet advertising.
If mobile advertising follows the same spending curve, it’s no wonder the mobile industry
sees big things ahead. Strategy Analytics is forecasting advertisers will spend $1.4
billion on mobile media this year, with that rising to $14.4 billion in 2011.
eMarketer says mobile ad spending reached $1.5 billion last year and will grow to $14 by
2011. Both projections are extremely good news for a company who can provide a
focused, desirable user base and easy access. A company like Nitevibe.
After all, the true appeal of mobile advertising is its FOCUS. Not only is Nitevibe
providing a focused user base, its mobile function will reveal volumes about our user’s
habits and decision-making. The following quip from a recent issue of The Economist
summarizes why Nitevibe and its audience are primed and ready for the advent of
mobile advertising.
Yet the biggest selling point of mobile ads is what marketing types call
“relevance”. Advertisers believe that about half of all traditional advertising does
not reach the right audience. Less effort (and money) is wasted with online
advertising: half of it is sold on a “pay-per-click” basis, which means advertisers
pay only when consumers click on an ad. But mobile advertising through text
messages is the most focused: if marketers use mobile firms' profiles of their
customers cleverly enough, they can tailor their advertisements to match each
subscriber's habits.
- Economist, Oct. 2007
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Nitevibe.com Business Plan and Prospectus
Nitevibe’s Competitive Advantage
Nitevibe boasts a clear advantage over our competition, both direct and indirect. Not
only do we provide quality content, but we will be a first mover in the mobile networking
and event-based promotion market.
Nitevibe’s technology leverages mobile platforms that are global and commutable across
any carrier and handset. We face not obstacles from porting or SMPP gateways. Also,
the off-deck D2C system is not reliant on carrier partnerships; we can implement our
programs without licensing from wireless carriers.
Finally, the content we will provide is of the highest quality because it is user-generated.
Our content comes from people who are pounding pavement and providing real-time
reviews, whereas the competition relies on paid editors and contributors as a primary
source of content.
SWOT Analysis
With its new and improved business model, Nitevibe faces competition on two fronts.
First, it faces competition with local sites who offer insight into “What’s going on” in each
market. Second, it faces national competition with companies like Going.com, who offer
similar social-networking communities centered around real world events.
Rather than shy away from the challenge of taking market share from established
competition, Sam has chosen to study both Going and Flavorpill, emulate their
successes, and stand on their shoulders to become the leader in social network city
guides.
Given the analysis on each of our competitors as a whole, Nitevibe has identified the
following Strengths, Opportunities, Weaknesses, and Threats:
30
Nitevibe.com Business Plan and Prospectus
Nitevibe.com SWOT Analysis
STRENGTHS
6 years experience
6 years profitability
QUALITY/CALIBER & Original content
Involvement of contributors in the local
scene (in the trenches)
Respected Street-Credibility for answering
“What’s Happening” in SF’s DJ and Urban
Culture Community
Established double opt-in subscribership to
newsletter (65k+)
Relationships with advertising clients
WEAKNESSES
Single-market presence (Detracts from ad
sales potential)
Management team gaps (CTO and other
tech positions needed)
OPPORTUNITIES
REPLICATE successful model in new
markets
Add social networking with “Who’s Going”
functionality to website
Add new technology (mobile “How Is It?”)
to extend value added
THREATS
Ability of Flavorpill/Going to replicate our new
functionality
Cost of expanding into new markets must be
controlled
Building Critical Mass of users
Maintaining cool factor image while growing
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Nitevibe.com Business Plan and Prospectus
Competitive Analysis
Flavorpill.com
Basic Offerings
As for the newsletter/what’s going on function, the closest direct competitors are
Flavorpill and Going.com. Flavorpill is present in all 5 U.S. Markets that Nitevibe is
targeting. Their subscribership is over 150,000, and their revenues approaching $4.2M.
Their target demographic and typical user profile is practically identical to Nitevibe’s.
We consider Flavorpill to be only a semi-direct competitor as they focus on urban cultural
events and target a slightly older (30’s) crowd. Our demographic is a little bit younger
and more interested in music/DJ events, hip-hop, and club culture. The key to their
success is their hip factor; the layout, verbiage, and in-tune reviewers who submit their
content. Flavorpill is a brand among brands, and its popularity has increased because of
their devotion to consistency and brand value.
Business Model
Flavorpill’s model is very similar to Nitevibe’s.
They compile a directory of “What’s
Happening”. Second, they send out a weekly newsletter partially similar in content to
Nitevibe’s (although it contains more editor-content than in-the-trenches volunteer
contributor content like Nitevibe.)
Their advertising scheme is where Nitevibe will use some creative benchmarking.
Flavorpill sells sponsorships for its newsletter, where a single company will be branded
across the entire mailing, rather than placing several ads from different sponsors
throughout.
(Gawker media is also beginning to copy this model in its blog sites).
Nitevibe will continue its quest to be hipper and more plugged in than Flavorpill and place
the quality of our content as first priority.
How Nitevibe will compete with Flavorpill
Once we begin to roll out social network functionality like “Who’s Going?” and the mobile
& web features like “How is it?” and “How was it?” tools, we feel that we can dominate
this market and steal a large portion of both Flavorpill’s 500k + users and $4M+ annual
advertising revenues.
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Nitevibe.com Business Plan and Prospectus
Going.com
One of Nitevibe’s influences and strongest competitors is Boston-based
Going.com. Going recently expanded to San Francisco and is fast becoming a
player in obtaining national advertising dollars and partnerships.
A recent article from Venture Beat tells us a great deal about the strategies and
practices behind their success.
From VentureBeat.com, April 2007
Going.com, a Boston-based networking site centered around urban
events, has grown rapidly since it launched in June of 2006.
Going has 220,000 unique monthly visitors to the site. The numbers,
while not mind-blowing by any stretch, are enough to look around and
ask why other sites haven’t sewn up this events area. Going lists events
in three cities; it launched in Boston six months ago, and more recently
New York and San Francisco. It tries to mobilize a community around
each event.
Going’s chief executive Evan Schumacher says no other web site has
done the hard work of engaging with event promoters in local
communities. Going, which focuses on answering the question “What
should I do tonight?,” has targeted top event organizers in each city
and encouraged them to invite their contacts to events using Going.
You’ll see some events, with more than a thousand people responding to
the invites and registering. If respondents express interest in going to an
event, their photos show at the bottom of the event page, with links to
their profile.
As for competition, you’ve got JudysBook, which has yet to have real
traction, and Yahoo’s Upcoming.org, which is still larger than Going, but
limited to the techie crowd. You’ve got Yelp for information about
restaurants and bars, and you’ve got MingleNow, a site that revolves
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Nitevibe.com Business Plan and Prospectus
around tequila-filled night clubs, and Down2Night, which is mainly texting
event information to your cell phone. You’ve got Zvents for an agenda of
events in your region, but much less oriented around people ( update :
T
T
forgot to mention Eventful.com, which is similar). And you’ve got various
invite services, but these tend to be more for personal parties or
occasions. Facebook’s community is still centered around colleges, even
if it has branched out.
Going has hired editors to pick and profile specific events for each
city, and then tries to encourage user participation. Any event can be
featured, from Playboy parties to art gallery openings and charity events.
The targeted community is the out-of-school crowd, broadly the 20- and
30-somethings.
The company is backed with $3.5 million in venture capital from General
Catalyst Ventures and Highland Capital. George Bell, of GCV, was cofounder of Excite, and Bob Davis, of Highland was co-founder of Lycos.
JetBlue has partnered with Going.com promote alternative rock tours
(The Teddy Bears in San Francisco and NY, for example), and JetBlue’s
new air service to San Francisco.
After talking with Schumacher, it’s clear he wants Going to be the
Facebook for city events — replicating Facebook’s success of matching
online interests with those that exist offline. If it executes, this site could
go somewhere, but we’re still not certain how viral such a site can be.
After all, the point is not to hang out at a site about events, but to actually
go to the events.
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Nitevibe.com Business Plan and Prospectus
ClubPlanet.com
Club Planet is one of the first sites directed at “Nightlife” and urban events. It was
founded in New York in 1995 and has since grown its usership to over 2 Million
subscribers (25% in New York). They are present in 30 U.S. markets, although
they only have offices in 5. Much of their content is superficial descriptions of
venues giving only the impression of rich current content. Herein lies the problem
for ClubPlanet; a disconnect from the local scene. Sam has spoken with people
in markets like LA and San Francisco who have used ClubPlanets’ “Guest List”
feature only to show up at the venue and find that the people at the door have no
idea what they are talking about. This disconnect with what’s ACTUALLY
happening outside their office doors is indicative of ClubPlanet’s editor-based
and sponsorship-based content model.
Their design and usability is dated
confusing. They’re limited functionality has not yet evolved beyond Web 1.0
generation. ,
Nitevibe has a major set of advantages over ClubPlanet as a content provider.
One of its goals is to roll out and immediately begin to go after ClubPlanets’
users and advertisers. With our superior product and multi-market presence,
Nitevibe hopes to send ClubPlanet into outer space.
35
Nitevibe.com Business Plan and Prospectus
Yelp.com
While Yelp.com’s offerings differ from Nitevibe, the target audience is identical.
We have collected some data on their target market even though Nitevibe serves
a slightly different purpose.
From Hitlist.com reviewer LeAnn Prescott.
March 07, 2007
For the four weeks ending March 3, 2006, 57% of visits to Yelp
were from females, and 34% were from users between the ages
of 25-34. Not surprisingly, regional demographics skewed toward
the states that contained its featured cities: 40% of visits came
from California (SF and LA), 11% from New York and New Jersey
(NYC), 10% from Illinois (Chicago), 6.4% from Massachusetts
(Boston) and 5.8% from Washington (Seattle).
If you've spent any amount of time on Yelp, you will get the sense
that there is a shared vibe among its users. They are young, hip,
urban, and have plenty of disposable income to eat out frequently
and go to bars, salons, and spas. Hitwise Lifestyle data, in
conjunction with Claritas PRIZM NE Segmentation, gives us and
even deeper view of who Yelp users are and what other sites they
tend to visit on the web.
PRIZM NE segments the US population by 66 segments, based upon where
people live, along with other factors like age, household income levels,
household size, etc. The profile of visits to Yelp has a very strong skew toward
the Urban Uptown social group, which is made up of the highest earning
segments of the urban population. For the four weeks ending March 3, 2007,
31% of visits to Yelp came from Urban Uptown, versus less than 10% of the
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Nitevibe.com Business Plan and Prospectus
online population. The segment which accounted for the largest share of Yelp's
traffic was Young Digerati, which we will explore further. Below is the complete
PRIZM NE profile of traffic to Yelp. You will notice that the segments are color
coded by where they are located, and that their descriptive names give you a
sense what type of people they are.
Yelp refers to their target segment as “Young Digerati,” a segment that many
web marketers would like to attract. Yelp uses the following description of this
market segment:
Young Digerati are the nation's
tech-savvy singles and couples
living
in
neighborhoods
fashionable
on
the
urban
fringe. Affluent, highly educated
and
ethnically
mixed,
Young
Digerati communities are typically
filled with trendy apartments and
condos, fitness clubs and clothing
boutiques, casual restaurants and
all types of bars-from juice to
coffee to microbrew. The lifestyle
and media behaviors they are
more
likely
than
the
general
population to engage in, according
to
Claritas,
are:
shopping
at
Banana Republic, Amazon.com
and
Bloomingdale's,
going
snowboarding and scuba diving,
visiting spas, spending more than
$3000 on foreign travel in the past
year, watching IFC, Showtime and
HBO, and driving an Audi A4.
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Nitevibe.com Business Plan and Prospectus
Prescott goes on to give us even more statistics about this “Young Digerati”
segment, here , as well as a list of websites that are targeting them specifically:
TU
UT
Shopping:
Banking:
Banana Republic
World Savings
U
Ann Taylor LOFT
Anthropologie
News:
Salon
Entertainment:
MyAmericanIdol,
Automotive:
411 Mania
VW Vortex
Currently the Yelp user base is centered on its major markets and a distinct
population within those markets. Similarly, in October 2004, the Craigslist home
page received 39% of its traffic from Urban Uptown. As it has grown to have sites
for 22 US metros and all 50 states, only 22% of Craigslist.org traffic came from
Urban Uptown for the most recent 4 weeks. The momentum created by Craigslist
in its first cities spread as city dwellers spread the word to friends and family and
relocated to smaller markets for new jobs or to start families. Yelp appears to be
growing in the same way, and if it continues to nurture and grow its core user
base while at the same time expanding into new markets, it could disrupt the
local search space, just as Craigslist disrupted local classifieds.
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Nitevibe.com Business Plan and Prospectus
Summary of Industry Players
Mission
Mediums
Cities
Subscribers
Nitevibe's Benchmark:
Flavorpill
"filtered cultural stimuli"
Email Newsletter
Chicago, NY, Miami,
LA, SF, London
500k +
Nitevibe looks to match Flavorpill in
CPMs for certain types of ad sales,
as well as total revenues by the end
of 2009.
Going
event-based social
networking
Website
NY, Chicago, Boston,
LA, SF
220k +
Going is a starting place for
Nitevibe's social community
functions. Nitevibe will build on this
model with mobile review capability.
ClubPlanet
Editor/User Generated
Nightlife Site - HIGHEST Website and Email
TRAFFIC IN THIS NICHE Newsletter
AT PRESENT
2.6M Registered
Users
Nitevibe will leverage the success of
Yelp and take it one step further by
providing users the ability to
broadcast live-location-based
mobile reviews to their friends or the
greater community.
Yelp
User-Generated review
site centered around
restaurants and bars.
Most large urban
centers in the U.S.
4M unique visitors in
Sept. 2007 (source:
Boston Business
Journal Nov. 2007)
Nitevibe will leverage the success of
Yelp and take it one step further by
providing users the ability to
broadcast live-location-based
mobile reviews to their friends or the
greater community.
CitySearch has developed into a
modernized yellow pages, where
most of its featured content is
purchased. Its usership does not
generally rely on their reviews,
and is generally older.
---
Website
30 Major U.S. Cities
(NY is biggest % of
users)
CitySearch
Editor-based local reviews
Website
with user commentaries.
Every major market
in the U.S.
10M unique visitors
in Sept. 2007
(source: Boston
Business Journal
Nov. 2007).
Nitevibe
Website, Email
combine most elements
above, and add on-the-fly Newsletter, Mobile
Guide
mobile reviews.
SF. Adding NY, LA,
Chicago, Miami in
2008.
65k +
Other Sites of Note:
•
Flickr
o
•
Napkin Nights
o
•
Has some interesting mobile functions and avatars.
Involver
o
•
A similar site to Flickr that targets nightlife
Dodgeball
o
•
Good benchmark for photo sharing tools and functionality.
Recently started, looking to compete with Going on email and event promotion.
eVite.com
o
Good benchmark for guest lists and pay-to-promote in the future.
39
Nitevibe.com Business Plan and Prospectus
Nitevibe’s Competitive Advantages
Nitevibe’s advantage over our competitors’ content is summed up particularly well in a
comment left on Venturebeat.com. Venture Beat did an article on Going.com and similar
sites, at the end of which a user posted this comment:
This demand for peer-to-peer generated reviews and recommendations is posing
challenges to sites like CitySearch and others, who hire professional writers and
reviewers. Nitevibe’s contributors are in the trenches of the local scene, and provide
real feedback about “What’s Happening? “ As Nitevibe grows user generated content
will add a valuable layer to the user experience with “Who's Going?” “How is it?” and
,
“How was it?” functionality. This is an important advantage over the competition that
Nitevibe must stress as part of its differentiation strategy.
Another important lesson to be learned from Going.com is the viability of brand
partnerships, such as theirs with JetBlue. This potential is the main reason behind
Nitevibe’s geographic expansion. We believe that a presence in 5 major markets will
allow us to win the big dollar national ad placements and sponsorships and grow our
revenues into the tens of millions.
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Nitevibe.com Business Plan and Prospectus
VI. Marketing Plan
Current User Profile
Nitevibe’s users are by far its most valuable asset.
Its typical user is an educated single person between 21 and 35. They
typically are career oriented and have household incomes over $40k.
Much of this income is up for grabs, as they go out around 2 times a week
and spend more disposable income than any market segment other than
baby boomers. They are incredibly trend- aware and live active social
lives.
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Nitevibe.com Business Plan and Prospectus
This is the typical profile of Nitevibe’s 65,000+ users, and that is why advertisers are
paying attention to urban event networking sites more than ever before.
Target Advertisers
Nitevibe has had success in generating ad sales largely because of the desirability of its
readership. As the site’s new features and mobile applications roll out, even more traffic
will be generated.
The big push for Nitevibe to get to the next level though is equally hinged on its new
features and functionality (adding the ability to answer “Who's Going?” “How is it?” and
,
“How was it?”– while on the fly) and its geographic expansion. In the last year, Nitevibe
has missed significant opportunities with international brands like Smirnoff Vodka,
Diesel, Palm, Puma, Maxim, Absolut, who were reluctant to spend advertising dollars
with a single-market site.
Nitevibe’s goal is to grow advertising not only in total revenues, but in the average
amount spent by our clients. We believe we can meet Flavorpill’s performance on an
average per market basis within one year of each rollout. In other words, Flavorpill’s
average of 700k sales per market will be attainable within 12 months from the rollout of
each new city.
Pricing
The chart below shows what other companies in our industry are charging per 1000
impressions (CPM). We believe a 20 percent discount on these average rates will allow
us to capture market share and gradually increase to a 10 percent premium due to our
highly focused and desirable audience makeup.
CitySearch
MySpace
FlavorPill
Defamer (Gawker)
Facebook
ClubPlanet (Track Ent.)
Cost per 1000 Imperessions
per referral
$2 - $6
$18k + per issue (one sponsor)
$6.50 to $8.50
$10 + 2-5 for targeting
$4-8
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Nitevibe.com Business Plan and Prospectus
Advertising Plan
To be consistent with Nitevibe’s “in the trenches” model, most of its marketing will be
done guerilla style and through sponsorship local events. Growing the email list is the
first priority in entering a new city, and being on the street and in the venues is the most
valuable use of funds to help grow awareness and subscribership.
Post-Capitalization Ad Spending
Online Ads
Event Sponsorships
Guerrilla Campaigns
Other Categories
Q1
0%
0%
100%
0%
Year 1
Q2
Q3
0%
0%
0% 50%
100% 50%
0%
0%
Q4
20%
40%
30%
10%
Q1
20%
40%
30%
10%
Year 2
Q2
Q3
20% 20%
40% 40%
30% 30%
10% 10%
Q4
20%
40%
30%
10%
Q1
20%
40%
30%
10%
Year 3
Q2
Q3
20% 20%
40% 40%
30% 30%
10% 10%
Q4
20%
40%
30%
10%
U
43
Nitevibe.com Business Plan and Prospectus
VII. Current Status of Geographic Expansion
Nitevibe’s expansion to New York is already well under way. Sam recently spent 2
months there developing relationships with promoters in the area.
In addition, has
already begun developing a list of potential contributors through ads placed on
Craigslist. This model worked in SF and has generated several key personnel leads in
NY already.
Los Angeles is a little bit underway.
Sam has relationships with promoters and
entertainment industry. Nitevibe is looking to expand to Los Angeles in 2008, regardless
of whether or not the company receives a second round of investment.
Chicago and Miami are phase 2 and would be rolled out with similar formulas, and are at
this point contingent on investment.
44
Nitevibe.com Business Plan and Prospectus
VIII. Financial Plan
Financial Assumptions
1. Nitevibe will continue to provide the highest quality content in our industry.
2. Nitevibe will successfully implement its networking site and mobile applications
by Winter 2009.
3. In order to grow advertising sales immediately, Nitevibe will charge a 20 percent
discount to our competitors to grab market share. As we build our email list and
usership in each city, we will gradually increase to a 10 percent premium over
our competition.
4. Sam Khedr’s hiring plan will be implemented as shown. Wages will be market
rates.
5. Nitevibe will maintain an army of volunteers and street team members who add
the in-the-trenches feel to Nitevibe’s content.
6. The nightlife industry will continue to be fairly inelastic and solvent.
Projected Income Statement
2007
Year 1 Total
Year 2 Total
Year 3 Total
Adsense Revenues
Local Ad Sales
Outside Media/National Placements
Event Sponsorships
Event Revenues
Total Revenues
$
$
$
$
$
$
2,500
65,000
3,000
12,000
82,500
$
$
$
$
$
$
27,500
160,000
66,000
15,000
25,000
293,500
$
$
$
$
$
$
625,000
315,000
1,891,450
20,000
40,000
2,891,450
$
$
$
$
$
$
800,000
1,000,000
3,840,000
25,000
40,000
5,705,000
Cost of Sales
$
10,000
$
58,400
$
819,580
$
1,736,000
Gross Profit
$
72,500
$
235,100
$
2,071,870
$
3,969,000
TOTAL OPERATING EXPENSES
$
56,652
$
1,484,900
$
2,672,500
$
2,859,850
OPERATING PROFIT
$
15,848
$
(600,630) $
1,109,150
(1,249,800) $
45
Nitevibe.com Business Plan and Prospectus
IX. Partial List of Research Sources
Sources:
http://www.economist.com/business/displaystory.cfm?story_id=9912455
http://www.wirelessweek.com/Mobile-Advertising.aspx
www.mashable.com
www.emarketer.com
46