Overview - Entrepreneurship - Harvard Business School

?Rock Venture Partner ApplicationCohort 2021-2022Table of Contents TOC \o "1-3" \h \z \u Overview PAGEREF _Toc64287695 \h 1Venture Selection and Rationale Instructions PAGEREF _Toc64287696 \h 1Accelerator Application Review PAGEREF _Toc64287697 \h 3Venture Applicant I: Cold Brew Better PAGEREF _Toc64287698 \h 3Venture Applicant II: Ramp Me Up PAGEREF _Toc64287699 \h 6Venture Applicant III: Wealth Made Easy PAGEREF _Toc64287700 \h 8OverviewComplete each question below and deliver your analysis of the three included companies. List your Full Name, Section & Email on each page of your application.The Rock Venture Program is structured such that each RVP will be paired with a pod of HBS start-ups in the Rock Accelerator. These pods share strategies of best practices, provide insights and help start-ups think through their entrepreneurial journey. What experience and/or strengths do you possess that would contribute positively to supporting your pod? (250 words or less)What is a technology sector that you think is ripe for disruption by new venture-backed startups? Provide 1-2 examples of start-ups that are paving the way in this space. (Please be concise and use bullet points, 250 words or less) Tell us something about yourself that we should know as we consider your RVP application but might not be able to see from your resume or LinkedIn profile. (250 words or less)Include a current resume with your application (uploaded at time of submission)Venture Selection and Rationale InstructionsBelow are three applications from former RA teams (key details have been changed for anonymity). For the purpose of this application, we judge all Rock Accelerator applications based on the following criteria:50% “high impact” potential of the proposed opportunity (value proposition, market size, business model, and team)50% quality of their Customer Discovery (if indicated) and MVP experiment (singular, falsifiable, measurable, etc.)Please read through and prepare a 700-word memo with the following:Order rank of all three applications (first, second, and third choice)Select one application (does not have to be your top rank) and explain the rationale for investing (or not) in this team, based on our high-level criteria above.Note that for other than significant readability issues, the applications below are included as they were received.Accelerator Application ReviewVenture Applicant I: Cold Brew Better1. Company name:Cold Brew Better2. What industries does your start-up innovate/disrupt/revolutionize?Food & Beverage, Coffee3. Please describe your company in 140 characters or less.Cold drip maker for your home, which brews cold drip coffee precisely and consistently.4. What are your customers' pain points?Absence of a reliable (price or quality) cold brew devices in market, or ANY that use tech. This results in a sub-optimal customer experience where the customer can’t control the consistency and quantity of coffee brewed.5. How will your business address the customer pain points?Our device is the first automated cold drip machine, using an electronic valve to give users total control over how their coffee brews. We’re the first consumer-focused cold brew device using electronics! 6. What is your value proposition? Design for use is key - device should be simple to use, easy to clean, and hard to break. We are building in the kind of aesthetics that reflect the kitchens of our target consumer.7. Describe your target segment and the size of your addressable market.We are at the intersection of two trends in the US- 61% of US coffee consumption is in specialty coffee and more people are drinking coffee concentrate. We think of our target market as baristas and specialty coffee drinkers.8. Who are your major competitors?Chemex9. What is your business's competitive advantage?Today’s devices do not offer enough in terms of consistency and precision. We are bridging that gap with a first to market hardware solution. We have patent protected our technology which should slow competition down 10. What are the top 3 risks, that if they become true, you do not have a business? How do you plan to address these risks?Coffee as a trend disappears – we believe that specialty coffee drinkers are a sticky audience and very serious about their coffee- several user tests have been done to validate this assumptionBig competitors coming into the space -- mitigated by launching early/often and moving as quickly and nimbly as possible; also, by having patent protection for our technologyBasic hypothesis of the business proved wrong (people are not interested in the product) -- also mitigated by launching fast and iterating.11. Please describe your business model.Planning to sell the at $250 retail price- initially start by selling from our own website and slowly partner with premium retail stores12. Please describe status of business and any milestones achieved (e.g., prototype status, customers, revenue).Prototype built, production facility in Asia has been finalized, currently testing our prototype with baristas, coffee drinkers and coffee shop owners13. Please tell us about each founder, their role, and each founder’s relevant experience.Jackie Arthur- Former design consultant, experience in building new businesses based on deep user discovery before coming to HBSOscar Adams- engineer by education, marketing analytics experience before coming to HBS14. Please describe the minimum viable product you intend to build.Prototype ready; provisional patent has been filed15. What specific hypotheses about customer needs/demand are embedded in this view of the MVP and why do you hold these hypotheses?People care a lot about their cold brew and are willing to pay $250 to buy a machine that gives them full control over their cold brew experience.16. Please quantify how you will confirm/reject hypotheses around customer needs/demand? How will you collect this data? Please limit to 4 sentences.We’ve been testing with baristas that brew cold drip every day, with roasters that make millions of pounds of coffee a year, with coffee shop owners, and with all sorts of cold brew drinkers. And to put it bluntly, people love the cold brew that this device makes.17. Identify the resources you will need to build the MVP. (i.e. UX designers, domain name, engineers, etc.)NA- prototype has been built; we are testing our product with baristas now18. Please provide a high-level itemization of your budget.Working capital to cover production costs in Asia-- ~$5000 or so depending on how popular we get.Venture Applicant II: Ramp Me Up1. Company name:Ramp Me Up2. What industries does your start-up innovate/disrupt/revolutionize?SaaS, Customer success software 3. Please describe your company in 140 characters or less.Ramp Me Up is an onboarding management platform that helps Customer Success teams increase adoption, improve productivity, and reduce churn.4. What are your customers' pain points?Poor customer onboarding kills SaaS companies. Poor onboarding is the #1 cause of churn. ~$4B of revenue was lost to churn in 2020 due to poor onboarding. Premature churn prevents SaaS companies to breakeven fast. 5. How will your business address the customer pain points?Ramp Me Up provides customer support teams with a central command center that tracks all customer touchpoints. This ensures that teams can gather crucial insights into often unanswered questions regarding the customer lifecycle and where drop-off is more likely to occur. 6. What is your value proposition?Our product gives customer success teams with a one-stop solution for customer onboarding. This helps track insights real time and reduce time consuming weekly updates. Further, our tool tracks key customer metrics during onboarding, thereby reducing churn.7. Describe your target segment and the size of your addressable market.Our customers are customer success teams within SaaS businesses. Customer success software is a $0.9B market today and is estimated to triple in size to $2.7B by 2025. If we think of our addressable market being 25% of all SaaS companies (100K in all) and take an avg ticket size of $48K/annum, it leaves us with a TAM of $1.2B. Our beachhead market will target SaaS companies that sell to other SaaS companies.8. Who are your major competitors?No direct competitors. Our customers use several stop gap solutions like Google Sheets, Outlook, Asana, Trello to track and monitor customer onboarding.9. What is your business's competitive advantage?Our product is differentiated by being specifically tailored for the customer success teamsWe will be able to defend our market position by expanding into other aspects of customer lifecycle management and being a broader customer partnership platform10. What are the top 3 risks, that if they become true, you do not have a business? How do you plan to address these risks?SaaS companies do not need this product; mitigated through extensive product experimentation and encouraging customer reviews from our first 3 customersSaaS companies aren’t willing to pay for the product; to mitigate this risk, we have created a small subscription fee per month along with a pay per seat component that only increases with more usersBig CRM players like Salesforce get into this space; we have a healthy lead by being first movers and we intend to iterate fast and stay nimble. 11. Please describe your business model.Our customers, SaaS companies, will pay us subscription fees per month. Over and above, we will be charging a fee per seat. This pricing will be different across our different tier of customers- startups, growth or enterprise. Subscription fees is between $500-$3000 depending on the scale of our enterprise. 12. Please describe current status of business and any milestones achieved (e.g., prototype status, customers, revenue).MVP ready; we have signed paying contracts with our first 3 customers13. Please tell us about each founder, their role, and each founder’s relevant experience.David Mickey – Customer Success (CS) and Onboarding Expert. 6+ years of CS + Onboarding teams at B2B startups with 140% net retention. Deep relationships across the CS community Robert Baiz – Experienced startup ops and finance lead; 4+ years of startup experience, including managing 2 nine figure M&As, before coming to HBS14. Please describe the minimum viable product you intend to build.MVP is already built. Our MVP is a dashboard that tracks all end customer touchpoints with their new software tool. It provides CS teams insight into where end customers of their software are likely to get stuck and potentially see a drop-off leading to churn.15. What specific hypotheses about customer needs/demand are embedded in this view of the MVP and why do you hold these hypotheses?For our model to work, we would require our customers (the CS teams) to experience improved retention rates for their software products. 16. Please quantify how you will confirm/reject hypotheses around customer needs/demand? How will you collect this data? Please limit to 4 sentences.Our first 3 paying customers are providing us valuable information to help us confirm/reject the hypothesis. We conduct weekly feedback meetings with the VPs (customer success) of these companies who provide us with valuable insights into new features and tweaks we can incorporate to better our productWe do not intend to scale until we get conclusive evidence from this first set of customers17. Identify the resources you will need to build the MVP. (i.e. UX designers, domain name, engineers, etc.)MVP is already built. We have already signed 3 paid customer contracts. We need $8000 for sales and marketing which will be used for new customer acquisition. Venture Applicant III: Wealth Made Easy1. Company name:Wealth Made Easy2. What industries does your start-up innovate/disrupt/revolutionize?Financial Services, Fintech3. Please describe your company in 140 characters or less.Wealth Made Easy is a digital platform that gives individuals access to institutional quality wealth management.4. What are your customers' pain points?Our key customer (between $200K-$10M investible wealth) is underserved by existing solutions- Private banks do not serve them or charge an exorbitant fee for wealth management; roboadvisors do not offer enough access to diverse investment solutions. 5. How will your business address the customer pain points?We want to bridge this gap for our key customers by providing them a trust-worthy, one stop solution, with reliable returns and transparency of performance/fees. 6. What is your value proposition?We attempt to differentiate ourselves through a three-pronged approach: 1/ provide access to an institutional quality portfolio 2/ deliver a one-stop shop for wealth management 3/ ensure transparent and fair fees7. Describe your target segment and the size of your addressable market.Our target segment is the ‘affluent’ customer- $250K-$1M in investible assets- and the ‘High Net Worth’ customer- $1M-$10M in investible assets. Our beachhead market targets to access customers in their 30s-40s, who work in tech and have earned majority of their cumulative wealth over the past 5 years. 8. Who are your major competitors?We believe this isn’t a winner take all market and there is scope for multiple players to exist. Through our customer interviews we have learnt that our target customer is underserved by existing solutions like: retail banks, Mom/Pop asset management, roboadvisors (Betterment) and private banks (like Goldman Sachs).9. What is your business's competitive advantage?We provide 1.2% higher returns than current roboadvisors (4.8%). We have two years of proprietary research and IP data to help us consistently locate these sources of outperformance. We are doing this at half the management fees (0.5%) that private banks or traditional wealth managers might charge. We also provide our customers access to a multi class portfolio (fixed income, credit, equities, real assets) that is massively differentiated from any other retail wealth management solution.10. What are the top 3 risks, that if they become true, you do not have a business? How do you plan to address these risks?Incumbents (like retail banks) offer this solution; this isn’t a winner take all market and we believe that there is enough space for multiple solutions to exist parallelly We are not able to provide higher returns than roboadvisors; our live investment portfolio has outperformed roboadvisors on a risk adjusted basis over the past two yearsOur customers aren’t willing to pay a premium over roboadvisory fees; we plan to link a part of our fees to returns11. Please describe your business model.Our customers need to make an initial deposit of $100K and a monthly deposit of $2K subsequently. Our customer acquisition cost is estimated at $1000/customer. Assuming a churn of 1 in 6 (or 16%) and a management fees of 0.5% p.a. we arrive at a CLV/CAC ratio of 3.5x (with breakeven in 1.5 years). 12. Please describe current status of business and any milestones achieved (e.g., prototype status, customers, revenue).MVP ready; we have partnered with 1 wealth manager and tested and debugged our MVP on 3 users. We are currently in the process of building a direct sales channel for our beachhead market and onboarding a software engineer to prepare for a beta product launch in 6 months.13. Please tell us about each founder, their role, and each founder’s relevant experience.Vaibhav Chaudhary –8+ years of experience in wealth management industry, Principal at Lamps capital, a $27B AuM asset management business before coming to HBS William Prince – Currently completing his MSc in Computing. 8+ years of experience in finance and law with experience across investment banks (UBS) and legal advisory firm (Deloitte)We met in undergrad 12 years back and have been close friends since14. Please describe the minimum viable product you intend to build.MVP is already built. Our MVP has a signup page along with a detailed risk assessment questionnaire to gauge our users risk appetite. Our MVP also provides a live tracking dashboard for our customers portfolio.15. What specific hypotheses about customer needs/demand are embedded in this view of the MVP and why do you hold these hypotheses?Hypothesis 1: Educational screenings are sufficient to convert from an app download to signupsHypothesis 2: Our beachhead target market will respond positively to FB and Google Ads and a certain % will download the app. The cost of acquiring a customer through this means remains steady at $100016. Please quantify how you will confirm/reject hypotheses around customer needs/demand? How will you collect this data? Please limit to 4 sentences.For Hypothesis 1: Onboard 10 cohorts of 10 ‘unknown users’ (beyond the 3 ‘friendly users’ already involved), gather feedback on usability. Provide free access to Wealth Made Easy as an incentive to help with the iterative process.For Hypothesis 2: After the User Interface Testing, use Facebook ads, Google AdWords, and paid advertising on NerdWallet to drive people to download the app. 17. Identify the resources you will need to build the MVP. (i.e. UX designers, domain name, engineers, etc.)MVP is already built. We will need $7500 to carry out our hypothesis testing. We will use this sum to carry out targeted sales and marketing campaigns on FB and google. ................
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