Professional Documents
Culture Documents
Session 8 - Zipcar
Session 8 - Zipcar
Elevator Pitch
Objective
. . . . . . . tell me more.
Market domain
Is the market large enough? What is the growth rate and the upside potential?
Industry domain
Macro-level
Market attractiveness
Industry attractiveness
Does the opportunity fit the teams business mission, personal aspirations, and risk propensity?
Mission, aspirations, Ability to execute propensity for risk Team domain Connectedness up, down, and across value chain Micro-level
Venture strategy
Sustainable advantage
What industry forces have the strongest impact on profitability? How are industry forces likely to change in the future? Does the team have what it takes, in a human sense in experience and industry know-how to deliver superior performance for this particular opportunity?
To which target market Is the ventures value proposition particularly compelling? Is the target market large enough to support the business model? Does the target market provide an Option to grow into other markets?
Is the team well connected up, down and across the value chain so it will be quick to notice any opportunity or need to change its approach if conditions warrant?
What entrepreneurial or firmlevel capabilities create a sustainable competitive advantage relative to rivals or potential rivals?
Market Attractiveness
Size Growth rate
Past Future
Trends
Economic, demographic, socio-cultural, technological, regulatory, natural
Industry Attractiveness
What industry? Ease of entry? Supplier power? Buyer power? Substitute products? Rivalry among existing firms?
Sustainable Advantage
Proprietary elements? Superior processes, capabilities, resources? Economically viable business model? Customer acquisition? Costs? Speed? Customer retention?
Total Revenue Revenue/Car Number of Cars Contribution/Car Lease Access Equip. Insurance Parking Maintenance Fuel
Cost/Car
Total Revenue - $27,104 / $14,645 Revenue/Car $2,259 / $1,003 Number of Cars 12 / 14.6 Contribution/Car $1,536 / $225 Cost/Car $723 / $778
$367 / $400 $42 / $42 $142 / $142 $50 / $63 $33 / $33 $90 / $99 $723 / $778
Monthly Usage
Contribution/ Member
Monthly Interest
Security Interest
Per Hour Fees $88 / $73 Per Mile Fees $35.2 / 13 Security $300 / $300 Interest .33 / .37
= =
$6.90/hour $2.80/hour
Epilogue
Robin was concerned when her analysis showed low revenue figures, driven primarily by the daily use of vehicles. Beginning in December, Zipcar increased the max daily rate from $45 to $55, increased the lowest hourly rate and changed from two-tier to four tier pricing. Still in business (http://www.zipcar.com/index)
36 US cities and London
Appears that they did not get any venture capital funding until July 2005 ($10 million) ( http://www.zipcar.com/press/releases/press-28) Raised $25 million in 2006 ( http://www.redherring.com/Home/19957) http://gigaom.com/cleantech/zipcar-prices-ipo-at-14-to-16-per
Takeaways
Keep business model fluid in early stages Understand factors that provide sustainable competitive advantage
Network externalities* Reputation and buyer uncertainty* Buyer switching costs* Legal restrictions (e.g., patents)
Reminders
Read Writing a Business Plan: The Basics