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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES PROFESSOR : DR. HILARY COLLINS | SPRING 2018


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

CONTENT INTRO The Team The Class Project Summary The Deliverable Reflection

MARKET RESEARCH Social Network Analysis Peer to Peer Market Analysis Real Estate Market Analysis

ENVIRONMENTAL ANALYSIS Social Network PESTLE Peer to Peer Real Estate PESTLE Peer to Peer Real Estate 5 Forces Social Network 5 Forces Iterative Process Social Network Drivers for Change Peer to Peer Drivers for Change Key Success Factors

MARKET SELECTION Market Justification Target Consumer

PRIMARY RESEARCH Research Plan Interviews Lister Survey Business Renter Survey Individual Renter Survey Lister Archetype Lister Persona Renter Archetype Renter Persona Event Planner Archetype Empathy Map

BRINGING IT TOGETHER Problem Statement Opportunity Statement Resources and Capabilities Resources and Capabilities with Key Success Factors Competitor Analysis Perceptual Map

CONCEPT IDEATION Initial Value Proposition Stakeholder Map Stakeholder Matrix Scenario Planning Strategic Options Johnsons SFA

CONCEPT DEVELOPMENT Our Mission Our Vision Our Concept The Brand Brand Comparison Branding

THE BUSINESS Business Plan Business Details Business idea Key Personnel Key Partners Business Goals What We Do Competitive Profiling Legal Requirements Competitive Advantage Positioning Map Our Strategy Financial Revenue Structure Expected Income App Cost Structure Website Cost Structure Marketing Strategies Suppliers Business Model Canvas The Application ZAG

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE TEAM

MICHAEL BOUMAROUN

NEHA SHAH M.F.A. DESIGN MANAGEMENT

M.A. DESIGN MANAGEMENT

TIMMY KUSNIEREK M.F.A. DESIGN MANAGEMENT

NANTHITHA SHANMUHASUNDARAM M.A. DESIGN MANAGEMENT M.A. LUXURY FASHION MANAGEMENT 5


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE CLASS

THE DELIVERABLE

DMGT 720: Design Innovation Development and Marketing Strategies This course presented the principles of project planning and implementation critical to forming a profitable and successful new business entity. Through the 10-week process, we integrated business plan development, technology transfer, offshore sourcing, and alliances with partners and suppliers as part of our skill set. This project saw us develop original design concepts for commercially marketed products, communications, environments, and services.

We were tasked with constructing a viable business plan and, and documenting the integration of our creative process into business culture. Our comprehensive product development strategy is explored in this process book, and employs conceptual models to transform ideas into tangible prototypes that demonstrate and foster shared understanding and ownership of those ideas. As part of our final pitch, we compiled financial forecasts and business planning documents to communicate the “innovation imperative” and our original concept to potential investors and capital partners.

PROJECT SUMMARY

REFLECTION

Our prompt was to develop a business in the context of social networks with designdriven innovation. Throughout the 10-week project, we employed macro-environmental analyses, industry position maps, scenario plans, branding campaigns, and thorough justification practices to arrive at our final deliverable: Espacio, a social network that functions as a venue booking and listing platform that sets itself apart with an innovative VR prototyping feature.

1. We learned to apply the creative process as an equal partner with analytical planning and justification practices. 2. Understand design strategy and the concept of feasibility as part of an overall business plan, as well as the nature of intellectual property pertaining to both stimulating and constraining innovation. 3. We have a new understanding of capital resources as they relate to the diffusion of innovation, and the “innovation imperative” of venturing into new domains as opposed to relying on incremental progress.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

MARKET RESEARCH

SOCIAL NETWORK A social networks is an online service or site through which people create and maintain interpersonal relationships. Social networks enable individuals and businesses to : • Spread awareness • Market their product • Inform friends & family • Gather knowledge

27% MARKET RESEACH

T I M E D A I LY

ON SOCIAL NETWORKS (WMADV, 2015)

3.2 BILLION

ACTIVE GLOBAL SOCIAL NETWORK USERS CURRENTLY (Chaffey, D. Smart Insights, 2018)

Micro-influencers play a big part on social networks as 82% of consumers are “highly likely” to follow a recommendation made by a micro–influencer. (Contevo, 2017)

NORTH AMERICA HAS THE HIGHEST PENETRATION OF SOCIAL NETWORKING SITES with at least 70% of the population have one app on their phone they regularly use and 81% of USA has at least an account. (Gordon, K. Statista, 2018)

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY ILARY COLLINS | SPRING 2018

MARKET RESEARCH

MARKET RESEARCH

PEER 2 PEER MARKET SPACE INDUSTRY

REAL ESTATE INDUSTRY

Peer-to-peer renting refers to the process of an individual renting an owned good, service, or property to another individual. The term is mainly used to describe online enabled rental transactions between individuals.

$15

$335

IN 2013

IN 2025

(Open Source, 2016)

(Open Source, 2016)

(Walsh,B. December 2010)

For businesses who cannot afford to own product/service

Currently the appeal of sharing is based on culture or ideology of Millennials who do not want to own expensive things.

DECENTRALIZED PLATFORMS Asset owner sets the price and offers it directly to user.

BILLION

• Expand markets • Target new customers • Make money (BCG Henderson Institute, 2017)

BILLION

(BCG Henderson Institute, 2017)

CENTRALIZED PLATFORMS Platform itself owns the asset and sets the price, can be standardized better, quality can be controlled

HYBRID PLATFORMS Asset owners offer a service with price and standards set by the platform, ownership and risk are decentralized, while standardization and service level are centralized (BCG Henderson Institute, 2017)

MORE THAN 80% PEOPLE WHO PROVIDE SHARING SERVICES IN USA, ARE WILLING TO SPEND MORE FOR DURABLE AND SHAREABLE PRODUCTS. More than 80% people who provide sharing services in USA, are willing to spend more for durable and shareable products. (BCG Henderson Institute, 2017)

The global Real Estate industry is worth $217 trillion and the global Commercial Real Estate (CRE) industry is valued at $32.3 trillion in 2016 and will grow annually at 7%. (Barnes. Y, 2017). Commercial leasing market in USA is $238 billion and had a 5.1% growth rate till 2018. But growth rate for the next 5 years will be low. No company has a dominant market share as there are lot of small firms. Commercial property in the U.S. is also very expensive, particularly in regard to large buildings or property near major metropolitan areas. (IBISWorld, 2018). As of 2018, 35,000 companies in U.S.A. are operating in the commercial brokerage and management field, generating $35 billion in yearly revenue. (Franchise Help, 2018) The 8600 USA retail stores closed down in 2017 alone, has rendered vast swaths of retail space vacant. There is about 23.6 retail sq.ft. per person in United states compared to 4.6 sq.ft. in United Kingdom and 11.1 sq.ft. in Australia. Byron Carlock Jr., who heads up PwC’s US real estate practice says “I do believe the existing square footage per capita will shrink and eventually space will be repurposed.” (Bain, M. Quartz Media LLC 2017).

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

MACROENVIRONMENTAL ANALYSIS

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

We began our macro-environment analysis through PESTLE for both social networks and peer-to-peer commercial rental space industry, which helped pinpoint the key drivers. The analysis was followed by Porter’s Five Forces for social networks and peer-to-peer commercial rental market, after which we were able to narrow down to the key success factors. The PESTLE Analysis is a useful method to use in order to identify the external factors that influence an organization (Team FME). Porter’s Five Forces lends a hand in understanding an industry and providing a framework to calculate and anticipate its competitive forces reveals profitability and risk (Porter, M.E. (2008/1979). (Porter, M.E. (2008/1979) ‘The five competitive forces that shape strategy’, Harvard Business Review,January: 23-41, (R0801E).

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

SOCIAL NETWORK PESTLE ANALYSIS

POLITICAL

ECONOMICAL

SOCIAL

TECHNOLOGICAL

ENVIRONMENTAL

LEGAL

With the influx of fake news and growing restrictions of free internet, consumers are looking for a clear way of attaining information, regardless of the means of acquiring.

Social networks have become an integral part of establishing a successful business in today’s growing and changing market landscape, proving owners and consumers with a plethora of new and creative options.

Consumers are gaining more trust in popular individuals and influencers through social media.

Investments in advanced technology and digital media is leading to a booming growth in the industry.

Consumers are using social media platforms to engage and connect over environmental issues.

Governments are increasing rules, regulations, and security to ensure cyber security.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE JUSTIFICATION.. • Impending Doom via Net Neutrality. 50 million Americans are resigned to using a company that has broken the rules of net neutrality. (Bliss, L. 2018). • False news stories are 70% more likely to be retweeted than true stories - true stories take 6x longer to go viral. (FrancePressi, 2018, Gadgets 360).

• Social networks provide a whole new ecosystem for entrepreneurs to build off of. (e.g. travel and hospitality, lifestyle, social commerce) (Forbes and contributor: Quora, 2017)

• Mobile Revolution: Mobile now represents 65% of time spent on digital media, while the desktop is becoming a "secondary touch point" for an increasing number of users. (Mobile Face Sheet. 2018). • Location Based Services (LBS): a report by technavio highlights that the LBS market will witness tremendous growth and will post a staggering Compounded Annual Growth Rate (CAGR) of more than 43% in 2020. (Rajendran, V. 2017). • Augmented Reality: as per IDC forecast, worldwide spending on AR and VR is expected to reach $17.8 billion in 2018, a whopping 95% more than the $9.1 billion spent in 2017. (Lampix Medium, 2018).

• The inexpensive setup cost of platforms have increased the growth of social networks along with a variety of convenient promotional options. (Guzman, A, World Economic Forum, 2016). • Social Networks are an essential part of business strategy in all industries. (Guzman, A, World Economic Forum, 2016). • The sharing economy is another aspect that is driving social networks in a new realm. (Guzman, A, World Economic Forum, 2016).

• Micro influencers are becoming better sales tools: accounts with over 1 million followers can earn $50,000 per post. (Pierucci, 2018). • Engagement through Likes and followers peak at 10,000 followers; over 10,000 followers, engagement plateaus (Pierucci, 2018). • 84% of consumers trust online reviews just as much as a personal friend. (Bloem, 2018)

• A way for people to connect local environmental challenges and solutions to large scale narratives (Dosemagen, S. Huffington Post, 2017). • Geotagging photographs details exactly where protests are happening and provides researches valuable information. (Richards, 2015).

• Digital Millennium Copyright act: requires platforms to have mechanisms where copyright owner can ask to remove the infringing content. This saves the platform owner from getting sued. (Find Law, 2016). • Reviews: the bill bans businesses from forcing consumers into contracts in which they waive their right to comment on the service they receive. It imposes fines of up to $10,000. (Washington Post, 2014). • Endorsements: The Federal Trade Commission revised its Endorsement Guides to include social media and blogging sites in the act to make sure that endorsements are honest and not misleading to the public. (Federal Trade Commission, 2017). • Information archiving and retention: There are multiple parameters that specify how and in what circumstances organizations should capture and retain social network conversations. (Financial Industry Regulatory Authority, 2011). General Data Protection Regulations (GDPR) in the EU. While These cybersecurity regulations are being made overseas, the U.S. may soon follow up with similar regulation in a bid to tighten up American networks and boost data security for individuals and businesses. (Business Daily, 2018). • There is debate regarding if and when should Tech companies reveal private information about clients when served with a federal warrant. Example case MS vs USA. (WSGR, 2018).

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

PEER 2 PEER FOR COMMERCIAL RENTALS PESTLE ANALYSIS

POLITICAL

ECONOMICAL

SOCIAL

TECHNOLOGICAL

ENVIRONMENTAL

LEGAL

The government influences and shapes complex legislation, making it difficult to acquire clear legislative information.

With the rise in GDP and this a rise in real estate prices and taxes, businesses and consumers are turning toward alternative ways to be able to make money and simply live.

Trends are heading towards sustainable, ephemeral, and smaller development of physical spaces.

Alternative approaches to physical developments, such as VR and AR, are assisting businesses and organizations to reach new consumers and innovate their business.

Governments are increasing rules, regulations, and security to ensure cyber security.

Varying laws, rules. and regulations in relation to zoning and permits do not provide a clear, concise, aggregated process for understanding or acquiring said permits.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE JUSTIFICATION.. • Political stability index is 0.35 (ranked 77th) strong but not the best. (Global Economy, 2016).

• Rising interest rates limit qualified buyers (Segal, T. 2018) (Feldstein, M. 2018)

• Government influences and shapes development priorities. (Select USA, 2018)

• Property values are rising (Shen, L. 2018)

• Complex legislation due to differing laws between federal, state and local. (Select USA, 2018) • International businesses can report taxes in low tax foreign countries. (Select USA, 2018) • U.S. ranked 18th on corruption index. One of the world’s least corrupt countries. (Select USA, 2018)

• Real estate closely tied to GDP, and GDP is increasing 2.9% according to 2017 trends. (Amadeo, K. 2018) • Recent Credit Suisse report projects that more than 8,600 U.S. retail stores closed in 2017. (Dejonge, A. 2017) • 300 brick-and-mortar retailers have filed for bankruptcy in 2017. (Isidore, C. 2017) • The sharing economy has led to the creation of collaborative models that combat inequality and rising levels of urban poverty. (Palacios, A. Helms, B. 2015) (Ali, R. 2014)

• Limited-time exclusivity (Lepeska, D. 2012) • Architecture moving in a smaller direction (Lepeska, D. 2012) • Alternative approach to “master planning” is emerging (Lepeska, D. 2012) • Video conferencing is the new norm (Will, M. 2013) • Retailers are signing shorter leases with landlords (Will, M. 2013) • Pop-ups make shopping easier for the consumer (Will, M. 2013) • Pop-ups largely powered by social media (Green, C. 2016) • Pop-ups (events) fit any industry (Green, C. 2016) • Exciting events (Green, C. 2016) • Sustainability movement (THINK, 2016) • Temporary public spaces: a technical paradigm (THINK, 2016) • Growing population (THINK, 2016) • Temporary spaces can provide new opportunities for sustainable buildings (THINK, 2016)

• “Black Income Problem” - people are using sharing communities to dodge taxes and keep their income under the table. (Jackson, D. 2018)

• Hologram powered meetings facilitate convenient in person meetings and break geographic barriers. 3D presentation capabilities are an added benefit for the future. (Solaris, J. 2017) • Use of a VR for venue tours is an emerging trend (e.g. Amsterdam’s Exhibition Centre) (Solaris, J. 2017) • The Swiss Convention Centre’s Drag and Drop venues have changed the way space is perceived. Places can be augmented to suit different purposes in 15 minutes. The use of Grätzel photovoltaic panels can simultaneously produce energy and prevent the space from overheating via transparent, coloured glazing. (Solaris, J. 2017) • Augmented Reality has been adopted by retailers in fashion and decor spaces. (Quarry design group, 2017) • Temporary Architecture is an upcoming trend. (Verzier, M. 2013) Chatbots and conversational selling methods are being adopted by Facebook and Wechat. This has improved the transaction process of online businesses along with the help of digital assistant like Siri, Google. • Alternative payment options are being developed, potentially changing or eliminating industry payment limitations.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

• Zoning and land use regulations don’t vary greatly between temporary and permanent uses. (Cary R. Kadlecek and Timothy H. Watkins, 2015) • Certain cities have relaxed their permit laws for pop-up businesses. (Cary R. Kadlecek and Timothy H. Watkins, 2015) • Some cities have expedited the permit process for pop-up businesses. (Dunbar, W. 2011).

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

• Big data is identifying gentrification before it happens (Frank, A. 2017) • Resilience thinking” is being used to determine zoning and regulations (Armstrong, A. 2017) • Attractive cities have a sense of community, educational opportunities, and occupational opportunities (Sofa, 2016) • Charity pop-ups (Trend hunter, 2017)

• Insurance is vital, even if only for a short period of time. (Legal Vision, 2018). • A combination of licenses and permits are required from both federal and state agencies. (Department of Consumer and Regulatory Affairs, 2018). • Obtaining a certificate of occupancy or use permit can be a long process. (Department of Consumer and Regulatory Affairs, 2018). • New tax regulations have: -Eliminated tax deduction on travel and entertainment expenses of businesses. -Reduced Maximum Corporate tax rate from 35% to 21% -Investments on new equipment up to $2.5 million does not incur tax • Small businesses (which make up 95% of U.S. businesses) now have the option to apply for additional 20% tax deduction. (Department of Consumer and Regulatory Affairs, 2018). • Many cities, counties and municipalities have restrictions on short-term home rentals. In New York apartments and houses can’t be rented for less than 30 days; potential fines of up to $7500. (Zoe Rosenberg, 2016). • Some cities allow short term apartment and house lease if owners live simultaneously in the house. (AirBnB, 2018). • Some cities and municipalities like Palm Desert, California, allow short term rentals so long as property owner registers with the city. (AirBnB, 2018). • Each city or county has varying definitions of what constitutes a “short-term rental property”. Hence, the rules vary thus making it complicated. (Zoe Rosenberg, 2016).

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

5 FORCES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE JUSTIFICATION..

Bargaining power of buyers: High

Inconceivable number of substitutes and high quality information is available both online and on-ground, making it difficult to gain customer loyalty. (Greenspan, R. Panmore Institute, 2017). Currently, there are multiple spaces available but are priced high due to the 76% real term increase in Commercial Real Estate prices according to Business Insider (2017). This gives buyers high bargaining power as suppliers are relying on limited buyers who can afford the space. Spaces are not standardized, hence, if buyers are particular on specifics they lose bargaining power. In temporary rentals, buyers can easily transition from one supplier to another, which gives them more bargaining power as they typically have freedom when selecting the time frame. Peer reviews have a direct influence on customer purchases; according to BrightLocal, 92% of customers read reviews, 88% trust the reviews, and 40% make decisions based on those reviews. Customers also spend 31% more with businesses that have excellent reviews. (Frary, M. Forbes, 2017). Numerous competition = Lack of loyalty Prices are high = limited buyers can afford Non standardized spaces = so if place is important for buyer their bargaining power is low. Temporary spaces = easy transition from one property to another. Peer reviews can make or break business.

Rivalry Among Existing Competitors: Medium to High

Low switching costs (low exit barriers) from one business to another have invited increased competition, as the investment is low in comparison to brick and mortar business. Businesses are aggressive and ambitious with Red Ocean strategies, and exert a strong competitive force against each other. For example, a new online market space would directly compete against giants like Walmart, Amazon.com Inc., which have a significant and expanding e-commerce website. (Greenspan, R. Panmore Institute, 2017). Customers can rent spaces from a wide range of distributors, auctioneers, directories, brick and mortar, realty agencies, search engines, etc., creating intense competition. However, in the commercial online rental market space, the competition is moderate as the market is fairly new (two decades). It is also difficult to gain accurate information about particular spaces, limiting the number of parties venturing into this business. (Trefis, T. Forbes, 2014). Low exit and entry barriers = attractive market. Aggressive and ambitious competition in a red ocean. E-commerce competes with large brick and mortar or online brands that are expanding E-commerce ( Amazon, Walmart). Multiple modes of space rental. Commercial Real Estate rental market is fairly new (2 decades). Difficulty to gain accurate information.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

Threat of New Entrants: Moderate

The barriers to entry and exit are low, hence, it is a highly attractive market. If new entrants have a competitive advantage in any terms of economic, functional, physiological (AirBnB), or creative value, customers will switch, thereby empowering the new entrants. Consumers can also easily transfer to new firms as loyalty is difficult to retain in this Red Ocean climate. This condition is due to low switching costs, or the low negative effects of transferring from one provider to another. However, the high cost of brand development in online retail weakens the influence of new entrants on performance. It would take years and billions of dollars to create a strong brand that directly competes with a rival brand. (Greenspan, R. Panmore Institute, 2017). Low or no inventory in the case of commercial rental spaces makes it convenient for business to enter, as their strategy or business model is focused on facilitating transactions. (Kestenbaum, R. Forbes, 2017). Low exit and entry barriers = attractive market. Low switching cost for customers = lack of loyalty. Competitive advantage by entrants (eg: psychological vale of AirBnB) = create brand switch. High cost of brand development = afraid to enter. Low of no inventory in real estate, only transaction facilitation.

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

are a large number of small businesses that rely on borrowed software from websites like Sharetribe. (Arredondo, J. 2016). As a result, power players of the industry, like Facebook and Amazon, survive by buying software companies or technologies from developers who have a strong bargaining power, as the softwares rely on patents and cannot be copied. (Page, V. 2017 & Tarver, E. 2018). Thus, it is easy to use a simple software, but to set the business apart, the industry relies heavily on software suppliers. If the software is good, the supplier has high bargaining power. Despite the strong demand for housing, occupancy gains aren’t matching the rapid pace of development. JLL (2017) expects the vacancy rate to continue its steady rise in 2018 and subsequently decline in 2019. The decline in vacancy over the coming years will provide suppliers (our also buyers) with bargaining power as a large number of customers will stir demand for limited property. Additionally, these suppliers don’t depend on one industry as they can rent space to tech firms or event management. With the increase in CRE prices of 76% in real terms over the last 7 years according to Business Insider (2017). Suppliers have lost their bargaining power as they have to keep their options open to rent a high cost property. Product offering is limited to the number of spaces that match a customer’s exacting requirements. On the other hand, there are multiple substitutions if a customer has flexible requirements, depending on location (NYC vs. Savannah). There is no single strong supplier as they cannot affect the market credibly.

Threat of Substitute Products or Services: High

There are multiple substitutes where activities can be performed online, from renting space to buying clothing. Substitutes for the industry can be seen as products and activities that can be done offline. From Kiosks that can be installed in high-traffic locations, E-commerce which is easy and inexpensive to open and close, and wholesalers that provide inventory for small retailers. (Fallon, N. 2015). Social commerce is another large threat that is elevating quick purchase experiences from inspiration. (Chahal, M. 2016). Brick and mortar businesses provide experiences which online marketplaces cannot provide. VR and AR spaces are being used to create and test experiences online. Facebook’s and Altspace’s VR and AR spaces allow friends to explore new locations before planning a trip, and can be also used by businesses as a creative space to collaborate with full control over the environment. (Franklin, R. 2017. Eadicicco, L. 2017) This virtual approach is cost effective and provides extended use versus renting temporary spaces. Personal connections (a friend who lives in that area and has empty space) can be leveraged to rent space cheaply or at no cost at all. These are all cheaper options compared to the time and investment required to rent a temporary space. Buyers can easily switch from one option to another and existing market players are aware of new inventions, continuously improving to maintain relevance in the market. (Quarry Design Group, 2017).

Bargaining Power of Suppliers: Moderate to High

The Peer-to-Peer commercial rental market relies heavily on technology and many large businesses have invested in proprietary software to service their network, like Peerspace and AirBnB (Price, R. 2016). On the other hand, there

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

5 FORCES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE JUSTIFICATION.. Bargaining Power of Suppliers: High

With multiple social networks present, suppliers who are also users of the platform have high bargaining power. Social Networks rely heavily on their users (who also act as suppliers) to generate content and the revenue of these networks rely on the number of users and their per minute usage. (Ang, L. 2014) Another set of suppliers are companies or individuals that supply software and other technology. They generally have bargaining power in the initial stage of the network, but as the businesses grow, companies start creating softwares in-house. However, if the platform is powerful and large, the suppliers lose their bargaining power, as they will eventually be purchased by industry giants such as Facebook and Google. (Sawers, P. Venture Beat, 2017)

Bargaining Power of Buyers: Low to Moderate

Social networks (who act as buyers), rely on users (acting as suppliers) heavily, which drastically reduces their bargaining power. With the presence of numerous platforms, it is difficult to bring in users, requiring intense and accurate marketing. Until buyers start manufacturing technology inhouse, they rely heavily on other tech companies for their platform. This in-house manufacturing only happens when the platform has gained popularity. Some networks that were created by tech giants, like Facebook and Alphabet, have more bargaining power against software suppliers due to their being first-movers and founders of modern technology. They also tend to have more power to buy out companies if they require certain software. (Manjoo, F. The New York Times, 2016).

Threat of Substitute Products or Services: High

Numerous online and offline networks/platforms exist for different purposes, each of varying importance in an individual’s life. The global online network of active users is currently 3.196 billion. (Chaffey, D. Smart Insights, 2018). With the increase in average time spent per person on social networks every day from 90 minutes in 2012, to 135 minutes in 2017, shows that the business of online networking sites is growing and users are testing out numerous options. With over 175 billion apps being downloaded every year, user attention is diverted from one platform to another, decreasing the per minute usage of individual platforms. (Statista, 2018).

Rivalry Among Existing Competitors: High

The business of social networks is subject to heavy competition as the industry is dominated by few large companies like Facebook, WeChat, Instagram, and Snapchat. (Statista, 2018). There are numerous small businesses but they have a correspondingly small influence over users in comparison to established corporate giants. North America has the highest penetration of social networking sites with at least 70% of the population having one app on their phone that they regularly use and 81% of the USA has at least an social media account. (Gordon, K. Statista, 2018). Currently, over 197 billion mobile apps are downloaded every year. (Statista, 2018)

Threat of Entrants: High

The industry barriers to enter and exit is low. Typically, investment is low with potential for high returns. The rush to market is evident when taking into account the over 17,000 apps being launched on the Apple App Store every month. (Stein, S. 2013). The number of annual mobile app downloads is expected to increase to 352.9 billion by 2021, which supports predictions of new networks continuously entering the market. (Statista, 2018). Hence, it is important for existing firms to keep innovating and upgrading their services to stay relevant. 29


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

ITERATIVE PROCESS

When we began to analyze and ideate about what direction we wanted to go, we realized that certain ideas required different macro-environmental analysis. This provided us with a real world problem of always having to re-examine industries and the external forces that could potentially affect our business. As all creative minds do, we jumped from different concepts in different industries, having this iterative process. We learned that not all ideas turn out where you want them. However, within this 10 week time limit, we knew we needed to move forward with an idea and ultimately ended on our final concept.

PIVOT I redefining spaces

INITIAL DIRECTION ephemeral spaces

PESTLE

5 FORCES

OUTPUT final concept

PIVOT II peer to peer

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

DRIVERS FOR CHANGE

After conducting our macro-environmental analysis we outlined six key drivers of change, 3 for each industry. Social networks rely heavily on content generated by users, and currently, the major issues emerging, such as fake news, unprotected user data, and networks charging for content has increased the need for trustworthy, transparent, and free content (Ong, T. 2018). Along with the need for personal recognition, the need for consumers to claim and get credit for their work and property is increasing (Lumba, J. 2011), which helps social networks’ business to thrive as users love to post about themselves and be appreciated by peers for their accomplishments, however, they hope for their work to be credited and protected from being misused or stolen. With the new data protection act (GDPR) coming into place in Europe where it applies to 28 countries. The act states that all the client information has to be protected and clients have the right to ask for the data to be forgotten, the right to object, the right to access, etc. It applies to all companies selling to and storing personal information about citizens in Europe, including companies on other continents. It provides citizens of the EU and EEA with greater control over their personal data and assurances that their information is being securely protected across Europe (Lund, J. 2018). Therefore, the need for Legal ownership of data is another key driver of change. Through our PESTLE analysis, we discovered that many startups, both online and offline, rely heavily on other technological platforms to provide assistance with software or website development. This is an important driver behind the increasing number of businesses that are offering software and services for other businesses to survive. Thus, the third driver for change in social networks is the use of symbiotic platforms.

With more than 8600 retail stores closing and increasing market location testing due to ephemerality of commerce and market volatility, the demand for temporary space and the supply of unused space has increased (Bain, M. Quartz Media LLC 2017). Along with the saturation of digital niche platforms (legal, renting, VR), consumers are faced with the unintended consequence of overconsumption on their devices/ services (Jensen, T.K. 2018). Users are forced to visit multiple platforms for different purposes hence, driving new startups to aggregate knowledge and diffuse it in one platform for quick and easy access. Another major driver pinpointed was the difficulty in gathering accurate legal information. The USA has numerous legal barriers varying from federal, to state, to local, making it complicated for users to understand all the requirements (Vietz, N. 2017). This drives the need for quick and easy acquisition of zoning, land use, and other permits for renting/renting out spaces.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

KEY SUCCESS FACTORS

HOW DOES THE FIRM SURVIVE COMPETITION?

PRER EQUISITES FOR SU CCESS

WHAT DO CUSTOMERS WANT?

WHAT DRIVES COMPETITION?

WHAT ARE THE MAIN DIMENSIONS OF COMPETITION?

• Trustworthy, transparent, and free content

• Information

• Legal ownership of data

WHO ARE THEY?

WHAT DO THEY WANT?

• Symbiotic platforms

• Property owners

• Peer-to-peer connectivity

• Ephemerality of commerce and market volatility

• Business (Large, Medium & Small)

• A platform with condensed leasing information

• Aggregate of knowledge and diffuse through one platform

• Event Planners

• Generate money from unused space | The need for empty space promotion

• Acquisition of zoning, land use, and other permits

• Individuals (millenials, gen X & Baby boomer).

• Hassle free leasing of temporary space • Test space before renting • Collaboration opportunities

• Finance • Technology • Connections • Platform design • External property

HOW INTENSE IS COMPETITION?

HOW CAN WE OBTAIN A SUPERIOR COMPETITIVE POSITION?

Very intense in terms of social networks and medium to high in terms of peer-to-peer commercial rental market.

• Augmented reality space testing • Partnership with established realtors • Partnership with event planners • Partnership with government for their spaces • Condensed information for quick renting

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY ILARY COLLINS | SPRING 2018

KEY SUCCESS FACTORS

Softwares for basic platform The softwares required to survive in this industry is webpage and app creation softwares. Software to connect apps and automate tasks; property management; channel management, unified inbox (messaging); automation tools for sending reminders, setting pricing rules, automate guest reviews; staff management; information protection; payment processing; integrations marketplace; 24/7 guest communication (Guesty, 2018, & Damir, N. 2016).

Accurate and reliable information Clients rely on the platforms to gain information and if the information isn’t right it would damage the platforms name along with disappointing the clients. Also the visuals provided should be accurate and not misleading to renters.

Convenient User experience the platform should be integrated, fun and easy for users to understand and use (Damir, N. 2016).

Maintaining Privacy and Security

Identity/Visuals (professional photos) This is not a minimum requirement, but it is important for a peer-to-peer rental space as it provides a clear and appealing view of the space to help clients rent out their space and generate revenue. Hence, all the peerto-peer rental businesses such as Airbnb and Peerspace are offering this service.

Clients are providing private information about themselves such as their property and bank details which need to be protected. Also with the new data protection law coming into place in europe and it is important to stay updated as this law protects individuals in 28 countries (Tiku, N. 2018).

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

MARKET JUSTIFICATION

As proven through our market research, USA has the highest penetration of social networking sites with at least 70% of the population using one app on their phone regularly. (Gordon, K. Statista, 2018). The Commercial Real Estate industry of USA is very strong with an revenue of $238 billion in 2017. The commercial brokerage and management field in USA generates $35 billion in yearly, which we could capitalize on. (Franchise Help, 2018). Another major aspect that makes US the best place to launch our network is, with 8600 USA retail stores that closed down in 2017 alone, has rendered vast swaths of retail space vacant. (Bain, M. Quartz Media LLC 2017).These spaces are looking to be repurposed, which is were we play a role in providing owners of these spaces an opportunity to generate revenue by renting it temporarily to individuals who require spaces for pop-up and other events.

MARKET SELECTION 39


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE JUSTIFICATION..

Property owners (private and public)/Listers

Our market research shows that 8600 retail stores closed in 2017 alone, and that the amount of unused property and space is increasing (Bain, M. Quartz Media LLC 2017). These closures have left business owners with vacant properties that no longer offer a revenue stream, apart from government tax breaks on the unused property, revealing a target user that ranges from individuals to large conglomerates. In addition, other platforms such as Airbnb, Evenues, and Parqex have capitalized on an interest in listing vacant spaces and established this as a viable market; even small spaces like driveways, to make money. This need for individuals to list their property on a public network stems from financial pressures. Our primary user research of 12 individual space renters suggests that they will list their space if it generates revenue and if the legal work can be handled quickly. Thus, property listers would be enticed to list themselves on our platform if we provide the ability to generate extra revenue from spare spaces while simplifying the process of legal paperwork. The spaces listed on our platform would not include boarding and lodging, only spaces for commercial use such as backyards, rooftops, malls, public parks etc.

Business interested in renting ephemeral space

Our Macro-environmental analysis identified a booming peer-to-peer market; PWC predicted the industry to grow from $15 billion in 2013 to $355 billion in 2025 (Arredondo, J. 2016). This prediction, coupled with the fact that users trust their peers more when taking receiving purchase suggestions or renting spaces, suggests a key survival factor in the peer-to-peer social network business (Meola, A. 2016). In addition, leveraging this trust between peers may add value to the business through the process of renting and reviewing spaces listed on our platform, helping our listers generate revenue and in return we generate revenue. These businesses can vary from large conglomerates like LVMH to a sole-proprietorship such as Foxy Loxy in Savannah, GA. Regarding space rentals, our primary research of 15 individual business owners brought three issues to light: the need for multiple choices, the need to test spaces without visiting them, and the need to reduce the tedious paperwork involved in temporary renting. The incentive for these businesses to register on our space will be their ability to test markets, to temporarily showcase events, and to launch products. Thus, our VR space testing and mapping software, along with the detailed legal information pertaining to the location and the ability to check out multiple spaces without having to visit them, will solve major issues currently faced by the clients.

Event planners

Event planners are continuously interacting with both location owners and businesses, making them a key client. Through our interview with a well-known Savannah event planner, Erin Wessling, we gathered that the most difficult part of the business was to explain the design and logistics of a project to clients, property owners, and government. Another issue we gathered was that her clients need someone to take care of the legal work. So, our platform will allow event planners to easily conduct business using the VR space testing and mapping software and give them the ability to get and crosscheck legal information quickly.

Individual renters

The peer-to-peer industry places individuals as major clients (Arredondo, J. 2016), which identifies our target consumer group, and can include any individual who wished to rent a space for the commercial/ private purpose. Our primary research focusing on 10 freelancing individuals (artists, musicians, jewelry designers) shows that they require temporary spaces to showcase their work and sell them. Hence, our social network allows them an easy access to small and large temporary spaces, without having to spend much on legal paperwork.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

We conducted three target user surveys and two interviews to gain information. The three target user surveys were aimed at property owners, businesses interested in leasing ephemeral spaces, and Individuals interested in renting ephemeral spaces. The first interview was conducted to understand the fourth target segment; the event planners. The second interview was with a business owner who conducts regular pop-up events. This interview helped us formulate our questions for the target survey.

12 Participants Male : 7 | Female : 5 Age Group 26-35 - 3 | 36-45 - 5 46-55 - 3 | 56-65 - 1

LISTER SURVEYS

15 Participants Male : 7 | Female : 8 Age Group 26-35 - 3 | 36-45 - 5 46-55 - 4 | 56-65 - 3

PRIMARY RESEARCH

BUSINESS RENTERS SURVEYS

12 Participants Male : 6 | Female : 6 Age Group 16-25 - 5 | 26-35 - 4 36-45 - 2 | 56-75 - 1

INDIVIDUAL RENTERS SURVEYS

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

1

EVENT PLANNER INTERVIEW

As an event organizer, getting permits are her specialty. She would be out of a job if someone came along to do all of that. And regarding ephemerality, she has to make it clear that any modifications are temporal, and she has to stress that point to the government, that the integrity of the space is not violated. Event organizers such as Erin are building the rules and regulations with the city as they go. The historic board and the MPC are the ones who actually monitor and implement what she gives them in terms of legislation. An example of an approved legal venue is Savannah Station. Organizers can use the owners liquor license, no farm or wild animals within a 3 mile radius doesn’t affect private party owners, and insurance and liability coverage is up to $2 million. Laws in Savannah have not evolved from the time they were made. We need to be able to adapt to new designs yet not threaten the integrity of the historic building; there’s a lot we could learn from Poland, and Germany, specifically Berlin. Thus, the process of education is important, for both the city and the client. Two important decisions must be made when considering regulations pertaining to a space: is it indoor or outdoor, and is it public or private. Erin’s biggest problems are money, manpower, rendering, and marketing, though she hasn’t publicize yet, word of mouth and customer retention are how her business continues to operate. Discovering the best spaces stems mostly from word-of-mouth. If she thinks the place is cool, she tries to get the space and help transition it to something interesting to be of use for events. Erin sees the benefit of our VR concept as a when communicating with public officials to facilitate permit acquisition. Additionally, since public spaces are difficult to measure, placing them into a VR map helps ease the process. However, sometimes reality can change and an event won’t be able to approach the fidelity of the rendering, and can do something better, but the client might get enamored with the rendered concept and be reluctant to adapt it in real life. A walk through is needed to check out the flow of the space and Erin never gives clients the an option of more than 2 venues, and until now she’s had to make clients visit spaces in-person. Events can take 6 months to a year to produce so there’s a need for multiple visits. The reason for all the visits is that the client needs to be stimulated and experience the space, so an immersive VR experience would be the only substitute for a real, in-person walkthrough. Price depends on the budget for a particular event. There could be bits and pieces that give a feel for the space, and if they are willing to pay more, then possibly add the testing feature. The ROI has to be worth it. Erin would be willing to pay close to a $1000 for a year subscription as an overall tool, but certain elements could be paid on a per event basis.

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

2

INTERVIEW WITH BIG BON CONTACT When clients book Big Bon it can be broken into three steps: First, a client reaches out to Big Bon via email, and they typically find a venue that fits Big Bon, not the other way around. Traditionally, the venue would be selected first, and then a caterer would be selected to fit. Second, a conversation with the client ensues, and together they visit the site, meet the client, and problem shoot what’s possible with the space and if their equipment will fit. The final step includes more email and communication leading up to the actual event. Big Bon’s target client is a young professional age 24-34, and their social media audience is 68% women. They’ve created a persona to embody this client: Carey, a 28 year old environmental lawyer. Regarding permits, Big Bon knows who to contact for permits and the client pays for it, however, when it’s a private event and private venue Big Bon doesn’t deal with it. They will help to guide the process of getting a permit, but that’s typically on the client, and Big Bon has a good relationship with the city to step in when required to facilitate the process. They do collaborate with local artists, and had a t-shirt design contest where the winner would be rewarded with free Big Bon. They also have another local artist that’s designing a pizza themed coloring book for us so people can color while they’re waiting in line. Most of their business connections are made through word of mouth. In 2018 everyone is reaching out to Big Bon, but in the first year we were the ones reaching out and building those relationships. Word of mouth is the only way to really find a really really cool venue, places that aren’t really on the radar. However, venues have a lot of restrictions, especially in Savannah, so if there were a hub for clients or event planners with a list of which venues allow what, that would be great. Big Bon supports their clients’ goals to bring more attention to a venue. And event coordinators do sometimes reach out and book Big Bon for catering, they’re really the key when trying to grow. This year a Company reached out for catering at the Mansion by Forsyth park, and they paid $3k for an hour of catering for a corporate lunch At times, Big Bon themselves are event producers for their own popups, and will create a timeline if it’s really complicated. Anna needs to be there on-site to plan, and uses a work schedule app to manage the team, in addition to Google Docs to manage the timeline, and different forms as needed. It would be great if all of these elements could be consolidated in one platform.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

3

LISTER SURVEYS

Fun

Expensive

The property lister survey was conducted to understand one of our user groups. The survey helped us gather Intel on the users’ interest in listing their personal space for temporary renting, their difficulties with listing spaces, their reasons for listings and their thoughts on VR/AR capabilities.

Exciting Fascinating

Interesting (3)

Through the user research, we gathered that the main reason for listing a space is for extra revenue. Users also have a lot of frustration with legal and space publicity. 9 of the participants were also excited elated about the VR/AR space testing and were interested in trying the App. 7 of the participants said they would use it to show clients what they can do with the space and what they cannot. These important data allowed us to create a business model that caters to customers needs and wants. A valuable insight we gained from one of the participants was that he wouldn’t rent temporary spaces as it is a hassle to continuously wait for new renters along with trusting all of them. He also bought up the issue of not having enough time to answer all the questions asked by different interested customers.

Yes (11)

Risky

Would you rent out a space for a short period of time (not lodging)?

Looking forward to it

How do you feel about renters experiencing your space in virtual reality before booking?

Cool Idea Indifferent

12

Number of responses - 12

No (1)

Elated

What are the biggest frustrations with listing a space?

10

8

6

4

Licenses

Permits

Publicity of space

Coordinating with leasers

App interface

Time to set the place

Trusting leasers

Frustrations faced while renting space out

How would you use virtual reality when listing a space? Community building (2)

For what purposes would you list a temporary space?

Regular Income (2)

Extra Income (8)

• • • • • • • • • • • •

Show the space in its full glory. To show interested party all the cool things that they can do with the place. Relay the different options that the place can be used for. Show all the features of the space. Let customers know what they can do with the space and what is not acceptable. Give a 360-degree tour. To give them a clear picture of the space and its size. Let them know what they cannot do in the space. Allow renters to walk through and play around with the space. I might not use them at all as it could be misleading. Use them in a way it is clear what the space is like and what it can accommodate. To show the space along with its dos and don't. 47


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

4

Curious to see what you come up with

BUSINESS RENTERS SURVEY How do you feel about experiencing a space in virtual reality before booking?

The renter survey was conducted to understand one of our user groups. The survey helped us gather Intel on the users’ interest in renting temporary spaces for commercial purpose, their difficulties with renting temporary spaces, their reasons for renting and their thoughts on VR/AR capabilities. Through the user research, we gathered that the main purpose for renting temporary space was, sell products, storage and meetings along with product launch. Users also have a lot of frustration with legal and publicity of the event. 12 of the participants had a positive feeling towards VR and they were opened to the idea. While 3 of them were skeptical about its importance in space renting. Most of the participants said they would use it to see the space and compare it with other spaces without going to the space physically, which will save lot of money and time. In an average the target users were willing to pay up to $20-35 to test a space.

Great Idea (3)

Fun

Helpful

Excited Intrigued (2)

Has to resemble to real space

Awesome

Don’t really trust it

Good Idea

Okay Interesting

15

12

Number of responses - 15

These important data allowed us to create a business model that caters to customers needs and wants. This along with our secondary research allowed us to price the product and market it to the way customers intend to use the product.

What are the biggest frustrations with booking a space?

9

6

3

0

No (3)

Would you book spaces for a short period of time (not lodging)?

Yes (12)

Number of responses - 15

6

Meetings

Selling product

Hosting parties

Coordinating with owners

Co-ordinating with event planner

It will be very helpful to get an idea about the space in advance (2).

To get the feel of the space.

As a reference.

To look at the place without being there (2).

To save me time and money from travel.

Compare spaces (3).

Would look and walk around, more convenient than making time to go to the actual place.

Through my computer or smart-phone I prefer computer over phone.

Just take a look around the space.

To check seats and their locations.

To see the space and what I can and cannot do with the space restrictions.

9

Photoshoot Temporary Galleries

nowledge of availability of space

How would you use virtual reality when booking a space?

12

3

PermitsK

Publicity of event

Trusting Renters

Other

Frustrations faced while renting space

15

For what purposes would you book a space?

Licenses

Storage

Product launch

FilmingO

How much would you be willing to pay to test a space in virtual reality before booking? •

I would think that the cost would be a part of the service provided be the event planner. As an individual I wouldn't know how much I would pay.

Like 3% of the amount it costs to rent it.

0.

$20 (4)

$15-25 (2)

Cannot say (3)

4-5% of the space’s fee (2)

It should be included in the booking fee and I would pay upto $35.

ther

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

5

INDIVIDUAL RENTERS SURVEYS

Thankful

Great Idea (2)

Fun

The Individual renter survey was conducted to understand one of our user groups that wish to generate revenue but don’t have a business per say. The research was focused on artists, musicians, jewelry makers, furniture designers, fashion designers and industrial designers.

Awesome Intrigued

Excited

Through the user research, we gathered that all the participants would book spaces temporarily. The main purpose for renting these places are sell products, storage and temporary galleries. All the users have a lot of frustration with legal and publicity of the event. 11 of the participants had a positive feeling towards VR and they were opened to the idea. Most of the participants said they would use it to “check our the space” In an average the target users were willing to pay up to

Helpful

Will it look similar to my imagination

Not super keen on using it

Awesome

How do you feel about experiencing a space in virtual reality before booking?

Interesting

12

$20 to test a space.

What are the biggest frustrations with booking a space?

Number of responses - 12

10

Yes (12)

8

6

4

2

Would you book spaces for a short period of time (not lodging)?

0

Licenses

PermitsK

nowledge of availability of space

Coordinating with owners

Number of responses - 12

12

10

8

6

4

2

Photoshoot Temporary Galleries

Meetings

Selling product

Publicity of event

Trusting Renters

Dos and don't list not displayed clearly

Frustrations faced while renting space

How would you use virtual reality when booking a space?

For what purposes would you book a space?

Co-ordinating with event planner

Hosting parties

Storage

Product launch

FilmingO

ther

I would place my designs in the room.

Check out the space (4).

How much would you be willing to pay to test a space in virtual reality before booking? •

I don’t know what is the market rate so I would say $10-20.

Compare and contrast places I am interested in (2)

$15 or less (2)

$20-25

See how I can place all my collections in the space to make it beautiful.

1% of the space rate

$20 (2)

Look at the space without visiting the space.

less than $10

To look around the space.

5% of the space rate

Not sure 51


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

LISTER ARCHETYPE

LISTER PERSONA

The Magicians

Name: Kayane Scott Age: 35 Profession: Professor Income: $135,000 Status: Divorced | Mother of two Location: Savanna, GA

Age: 28-60 Career: Business, office job or self-employed Income: $45,000 to $150,000 per annum (p.a.) Status: Single-complicated-married Location: Savannah, GA About: The magicians look for anyway to make money smartly. They own or have leased a space through a long-term contract. With the increasing cost of living they are open to any option that would allow them to generate extra revenue. They are semi techhey are thinking about joining or already on platforms like Airbnb and are used to the peer-to-peer market system. Lifestyle: Busy with work, planner, enjoys travelling & open to new ideas. Needs: · To generate extra cash · To make money without having to work extra hours · Rent out other unused or rarely used spaces they own/lease · Strengths: · Has lot of unused space · Has little connections with realtors. Difficulties: · Cleaning guests mess. · Strenuous legal process to rent out a living space. · Lack of time to prepare the space for guests. · Marketing their space.

About: Scott is originally from Oklahoma City, OK. She moved to savannah 5 years ago to teach at Savannah Law College. She loved the city very much and decided to move permanently. Hence, recently she bought a house in the Historic District of Savannah. For some time now, she has been eager to go on a long trip during summer with her children and some extra money would make the trip happen. She joined Airbnb, however, the income in savannah from Airbnb isn’t enough. Hence, she is looking for other options to generate cash. Lifestyle: Busy with work, loves to travel, spend thrift & open to new ideas. Needs: · She requires extra money for travel. · She wants to make money without having to work extra hours. · Rent other unused spaces in her house. Strengths: · Has government connections. · Knows the law quite well. · Has good realtor connections. · Has lot of unused space. Difficulties: · Difficulty in cleaning guests mess. · Strenuous legal process to rent out a living space in historic district of Savannah. · Lack of time to prepare the space for guests.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

RENTER ARCHETYPE

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

RENTER PERSONA

THE CREATORS Age: 18 to 60 Career: Owner/employees of small, medium and large businesses/charities Location: Planet earth

Name: Maxwell Smith Profession: Jewelry Designer / self-employed Status: Single Location: Savanna, GA

About: creators are individuals who have a moto, “If you can imagine it, it can be done”. They are very much interested in testing new markets and have a solid integrated market communication plan. They require spaces only for a short period of time as they do pop-up events all around the globe. They are always in the pursuit for new ways to sell a product or generate revenue.

About: Smith is a pursuing his Masters in Jewelry Design at SCAD, Savannah. He has created numerous collections and would like to sell them. He sees lot of tourists visiting Savannah and would love to sell his collections during one of the parades or festivals in savannah. He also knows other cities provide such opportunities too, with numerous fairs and exhibitions always taking place.

Needs: · Easy access to temporary spaces to sell products in desired locations. · Easy access to temporarily rent spaces for event in amazing locations. · Plan the event/space without having to visit continuously. · All the departments should have easy access to the space without going to the space.

Lifestyle: Busy with school work, moves from one place to another, risk taker, and always eager to prove himself.

Strengths: · Has some government connections. · Has the ability to quickly put together events/marketing campaigns. · Has enough money to rent some kind of space in desired location. · Ability to adapt to new technology. Difficulties: · Liking a space but not knowing if it is available for rent. · Legal difficulties in renting space temporarily. · Lack of information about available spaces. · Very busy to travel. · Unable to show the plan to multiple departments clearly. · Time consuming to get city officials to provide permits.

Needs: · He needs to be able to sell/showcase his work temporarily in as many places as possible. · Accomplish the above task without having to spend much on travelling. · Quick and easy way to plan the space. · Connections in different cities. Strengths: · Good at his work. · Tech savvy. Difficulties: · Single handedly finding and designing the space. · Marketing his pop-up at that store. · Lack of connections in the locations in terms of government or planners. · Knowing if a place has foot traffic or not.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

EVENT PLANNER ARCHETYPE

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

EMPATHY MAP

The Connector Age: 25 to 60 Career: Event planners (Individuals/businesses) Location: Planet earth About: Connectors are individuals or businesses who are the bridge between two groups or processes. They are the ones who make everything about the event is taken care of perfectly. They handle booking space, getting permits, arranging space and ensuring the event goes without hindrance. Needs: · Have multiple options of spaces · Ability to easily explain idea · Get permits from government departments without complication · Easily test and plan the space with clients Strengths: · Government connections · Client connections · Quick access to props and decors · Knows their city locations well (hence the dos and the don’ts and clear Difficulties: · Showing ideas and getting approvals to clients without making them travel. · Getting permits from government quickly. · Designing a space where changes can be made in real time from anywhere.

EMPATHIZE WITH

NEED

Individuals and businesses looking for unique ephemeral rental spaces for commercial purpose.

Businesses and individuals looking for affordable and unique temporary rental spaces to test markets and reach more customers.

Property owners with unused or vacant spaces, who are looking to generate extra revenue.

Property owners who need extra/regular revenue and wish to earn it without having to work extra hours.

Event planners who help plan and design these spaces for businesses and individuals.

Event planners who wish to get permits quickly along with allowing their clients to view the plan easily.

SEE THINK & FEEL

HEAR Quick process of registering. You can design your venue through VR. They have unique places listed. They have all the legal information. You can subscribe to their AR testing. Easy to make extra money. They have government spaces.

FROM

Many people have this App and an affordable VR. There are other options but this has better rating.

WHAT Easy and convenient to use.

Friend making almost $5000 monthly.

PAINS

GAINS

Loosing a job - no revenue.

I can accomplish tasks without traveling.

Inconvenient access to legal information.

I don’t have to work extra hours and still make more money.

Complex user information.

It says they have all legal information for the space. They have government spots “awesome” They are utilizing unused and vacant spaces.

I can get across to by clients quickly.

Lack of local venue spaces.

I can reach more customers.

Lack of information on availability of desired spaces. Reaching more customers to increase their revenue.

I can test my space and location before spending a lot of money. I will be better than my competition.

Not getting the idea across to all the stakeholders.

SAY That was quick and easy!!

Friends and Family

I love making extra money.

Co-workers

I get more clients by using AR & VR.

TV Ad’s

The subscription is cheaper.

Digital and Traditional Media

The images are authentic and of good quality. The photographs taken of my place are pretty.

DO Business and individuals are using agencies to get temporary spaces for marketing and selling purposes. Property owners are open to allowing peers/strangers to enter and use their personal or commercial space. Event planners are hiring designers to continuously design and alter spaces to get clients approvals and permits from governments. The empathizers are always looking for cheaper options with more offerings. They feel more comfortable in using Apps that are easy to use and provide quicker results.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

Driven by a rise in property value and pricing and drop in financial stability, many businesses have closed their doors, leaving an abundance of unused real estate available. (Bain, M. Quartz Media LLC 2017). However, due to strict regulations and legislation (Zoe Rosenberg, 2016), many property owners lack the understanding to utilize these spaces as desired, and need a way to communicate to parties interested in temporary usage.

BRINGING IT TOGETHER 59


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

RESOURCES & CAPABILITIES

To create a network which provides business owners convenient access to regulatory knowledge and best practices, offers insights to consumer desires and behaviors, and equips consumers with a platform to interact with ephemeral regional businesses.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

RESOURCES AND CAPABILITIES APPLIED TO KEY SUCCESS FACTORS

63


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

COMPETITOR ANALYSIS

The competitor analysis chart illustrates the strengths and weaknesses of our competitors. The ranking is in the form of stars. For instance, in the category of price, Airbnb is stared the highest (5) as it provides the most competitive price for customers. This chart condenses our analysis of our competitors for clearer understanding. Overall Airbnb offers the best services to a wider range of customers at the most reasonable price, in comparison to its competitors.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE JUSTIFICATION..

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

69


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY ILARY COLLINS | SPRING 2018

Popular YouTube

Facebook Pinterest

Instagram

Tumblr Airbnb

Splacer PeerSpace

Appear Here

Low Content

High Content AltSpace Knotel Breather

Not Popular

71


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

INITIAL VALUE PROPOSITION

CONCEPT IDEATION 73


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

STAKEHOLDERS MAP

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

STAKEHOLDER POWER MATRIX

In mapping out our stakeholders on a 2x2 matrix, we were able to understand the power each had upon our business and shape our business plan to create the most successful strategy we could. It also provided us with an opportunity to see potential partnerships and collaborations for future endeavors.

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SCENARIO PLANNING

It was at this point where we hit a major hurdle. While wanting to do something innovative and new, we didn't feel like any of our ideas were matching up with our research. It was a truly difficult time for us. We wanted to keep switching to something new, but given the time constraints, we couldn't start again. With the data and research we had thus far. We spent a day ideating what we could add to our concept to increase its design aspects, be innovative for us and our consumers by adding value to a service, stand out in an already saturated market, and socially connect our users and consumers. With came upon one idea and trucked on from there...

Virtual Frontier Within 5 years, the VR/AR industry has grown to permeate every industry. Just as every company has a web site and complementary mobile apps, so too do companies have VR experience built into their offerings. This has led to increased competition and lack of differentiation as the technology has become commonplace. Additionally, the need for physical spaces is declining due to the switch to this accessible virtual world, contributing to decreased investment in physical infrastructure and an increase in the virtual frontier.

Urbanization Crisis In 15 years the global water and food shortage has led to immigration bans, as countries only have the capacity to care for their respective citizens. These bans have led to an increase in zoning regulations in tandem with an immense drop in property value in those areas without water access. The gradual displacement of people in arid regions have spiked demand for housing in areas with water access, leading to a rise in communal living for essential access to water. This lifestyle has spurred a renewed nomadic movement, with entire pop-up cities sprouting and migrating with the seasons. As well, the world has entered a golden age of transportation with advancements such as hyperloops, autonomous vehicles, and EVTOL craft enabling the growth of region-spanning hypercities to cope with urbanization. 77


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HOW DO OUR STRATEGIC OPTIONS REACT TO SCENARIOS

Virtual Frontier

By linking our strategic options to our Key Success factors, we are able to make a direct correlation as to how we will accomplish our goals and be able to survive and succeed within our industry. Connecting the dots visually showed us what we are capable of when faced with a hurdle.

Our response to this scenario is to completely pivot to an ephemeral booking and listing site. We will do this by connecting UX/UI designers, videographers, and photographers, to construct virtual real estate. Our business model would then adapt to house two business units, both virtual contracting, and virtual reality, utilizing partnerships with lawyers, realtors, and real estate agencies.

Urbanization Crisis By creating alliances with government agencies and businesses both small and large, we will connect with various collaborators for events and pop-ups to change our strategy to lean towards nomadic individuals to combine their businesses and residences. This strategy leads us to become a government contractor, leaving the VR/AR industry and becoming an urban development organization which leverages urban designers and architects to create ephemeral and sustainable cities.

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PROFESSOR : DR. HILARY COLLINS | SPRING 2018

JOHNSONS SFA TO TEST STRATEGIC OPTIONS

The following chart taken from Johnson, Scholes, and Whittington (2006) helps us to visually lay out the potential success our strategies have. This provides an optimal way for us as managers to understand how to handle and analyze the external and internal forces that could affect out company.

Strategic Option

Suitability

Feasibility

Acceptability

Connecting UX / Designers / Photographers

Yes, this strategy fulfills industry KSFs, addresses identified threats and weaknesses, and capitalizes on our resources and capabilities.

Mostly yes, the strategy can be resourced, achieves our required level of operational quality, and reflects our ambition to offer a superior service.

Yes, the cost-benefit is acceptable, stakeholder relationships will not be negatively impacted, and the proposed strategy will not place undue stress on staff.

Partnerships with Lawyers, Realtors, Real Estate Agencies

Yes, this strategy fulfills industry KSFs, addresses identified threats and weaknesses, capitalizes on our resources and capabilities, and fits our KPIs.

Low to medium; the strategy can be resourced, though these partnerships have yet to be formed, and they will help achieve our required level of operational quality, potentially prompting competition to begin their own foray into providing legal support to clients.

Yes, the cost-benefit is acceptable, stakeholder relationships will not be negatively impacted, and the proposed strategy will not place undue stress on staff.

Alliances with government and businesses (small & large)

Yes, this strategy fulfills industry KSFs, addresses identified threats and weaknesses, capitalizes on our resources and capabilities, and fits our mission of distributing accurate knowledge.

Low to medium; the strategy can be resourced, though these partnerships have yet to be formed, and they will help achieve our required level of operational quality. Competitors will likely not be inclined to start their own high-functioning relationship with local governments.

Yes, the cost-benefit is acceptable, stakeholder relationships will not be negatively impacted, and the proposed strategy will not place undue stress on staff.

Connecting various collaborators for events

Yes, this strategy fulfills industry KSFs, addresses identified threats and weaknesses, capitalizes on our resources and capabilities, and fits our KPIs.

Mostly yes, the strategy can be resourced, achieves our required level of operational quality, and reflects our ambition to offer a superior service.

Yes, the cost-benefit is more than acceptable, stakeholder relationships will be positively impacted, and the proposed strategy will delight our staff.

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OUR MISSION

To leverage technology to evolve the ephemeral real estate industry.

OUR VISION

CONCEPT DEVELOPMENT

To build a world that empowers collaborative celebration.

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

THE CONCEPT

Espacio is a platform that specializes in virtual prototyping when booking and listing spaces for temporary event. We provide the ability to rapidly prototype an event in order to serve the exact needs of our users and eliminate the unknown, easily and conveniently. We’ve started with the proven model of online booking and listing platforms, and integrated a simple tool to modify spaces in virtual reality to give our users an edge when communicating their own vision for a space. Unlike other booking networks such as Airbnb or Peerspace, Espacio is the only service that provides the opportunity to preview spaces and prototype events through an immersive VR experience. Virtually previewing an event space saves time, money, and headaches while easily and clearly communicating your concept to an audience. This means less trips to meet with city officials for acquiring permits, less traveling for clients, less money spent on the wrong curtains, and more time to actually produce your event.

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

THE BRAND

WHY ESPACIO

ESPACIO means space. We are a platform that changes the booking and listing expereince of spaces.

Brand identity is how a business presents itself to, and wants to be perceived by, its consumers (Investopedia, 2018). The illustrations shows our identity in a clear and simple way, exactly like we want to position ESPACIO. For our reader's understanding we have also created an illustration of brand comparison with popular brands. to show we are a combination of these brands’ identity.

VR handset

Minimal logo type

Additionally, we provide a seamless connection to local vendors for catering, photography, lighting, etc; access to space specific legal information such as zoning regulations; and verified reviews to hear what real people have to say about a space.

Clean Harmonious Minimal Simple Finesse Elegant

Technology Futuristic Adventurous

Helpful Friendly Understanding Our Nature

Visual Language

Functions

BRAND IDENTITY Desired Perception

UX DESIGN (Experience)

Reliable Flexible Discovery Connectivity Dynamic

Hassle-free Expertise Organized Intuitive Visual Descriptive

(Perception)

Aspirations Powerful Fortitude

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

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BRAND COMPARISON

IBM Xbox

THE FONT

Apple Wii Uber

Burberry

Alexander McQueen

Pandora

Spotify

Starbucks

Peetes

Ford

Tesla

H&M

Zara

Playdough

Lego

Benz

BMW

Pepsi

Coke

Jif Ethihad Southwest Rayban Spiderman

Adam - Regular

Skippy Emirates

ABCDEFGHIJKLM NOPQRSTUVWXYZ

ADAM Font is modern minimal. It is a open font with minimal lines. It represents openess and is spacious.

abcdefghijklmn opqrstuvwxyz

Styles

Adam normal

Jetblue Warby Parker Deadpool

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

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BUSINESS DETAILS Company name: Espacio Location: Savannah, GA Legal Structure: Limited Liability Company, LLC Brief business description: Espacio is an event prototyping service that allows users to book and list spaces for temporary use (e.g. photoshoots, events, exhibitions, galleries).

THE BUSINESS IDEA Espacio is a platform that specializes in virtual prototyping when booking and listing spaces for temporary event. We provide the ability to rapidly prototype an event in order to serve the exact needs of our users and eliminate the unknown, easily and conveniently. Additionally, we provide a seamless connection to local vendors for catering, photography, lighting, etc; access to space specific legal information such as zoning regulations; and verified reviews to hear what real people have to say about a space.

THE BUSINESS 89


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

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KEY PERSONNEL

KEY PARTNERS

Key Outsourced: Software: Sathyaraj Rammoorthy (M.Sc. in Software Engineering). Owns a small software developing company in Coimbatore, India. It employees 15 developers currently. They develop specific softwares per request by clients. Being in India, the development cost would be cheaper than in USA. We also have a family connection to the owner, which makes negotiations easy along with the ability to get a reasonable deal on continuous monitoring and updation. They charge based on the software development type and time. UX/UI: Company Name: Lollypop Design studios. This company is located in the IT hub of India, Bangalore. It is ranked as one of the top companies by Clutch, 2018. They only charge $25-50 an hour and have around 100 employees. Hence, outsourcing UX/UI to India is cheaper compared to accomplishing it in USA. Marketing: Company Name: Nobel People. They are a good choice as they are ranked on top 50 by AdAge in 2017. They are small and would pay more attention to small a small business like ours as they don’t have big clients that will overpower us. They are Located in New York City, NY and employee 36 individuals.Their services include media strategy, negotiation, buying and optimization, brand strategy and positioning, and creative ideation. They charge a monthly fee depending on the campaign and company size. Starts from $500 to $5,000. Accountant: Harshad Shah (MA. in Accounting, CPA). Currently works at a Gavis Pharmaceuticals in New Jersey, USA. He would be paid $75,000 Lawyer: Anuradha Subramanian (Masters of Law in Intellectual property and Global business law). She resides in New Jersey and has licence to practice in Washington State, New York, and New Jersey. Her skill set allows us to gather the required legal information to start a business and continuously provide our clients with the required legal information for locations. She taked a consulting fee of $200 per hour.

Location scouts: Location scouts, also referred to as location managers, work mainly for Film/Television Industry. They work in the firm’s pre-production phase and their main responsibilities include, ensuring that the locations chosen to shoot a production authentically match the vision of the show's producer or director. They are also great communicators, networkers and negotiators. They also negotiate price and terms, and deal with permits and agreements (Imani, A. 2016). They could be a very important partner as their connections would help in getting unique places to register on our platform. They would also be a great asset in providing the platform with key insights on permits and agreements. Apart from the job they already perform, this partnership would also allow the scouts to generate extra income on a commission/contract basis. They generally charge an avg. of $2,000/per week plus $70/ day for other expenses (Locationtalk, 2012). Realtors: Realtors have good contacts around the city and work with individuals, firms, and the government. Apart from traveling with clients to show properties, they also help clients in staging and preparing homes for sale and negotiate contracts (Indeed.com, 2018). Having realtors as partners would allow our business to get clients through word of mouth. It also helps us create a basic contract document, and gather information on location specific permits and licenses. We would be forming a formal contract where we request 5 hand picked realtors to invest a certain amount in the company for a share and provide continuous consultation. We would be giving them a stake in the company which will allow them to look at us as partners instead of competitors. Event planner/coordinators: Event planners, also known as event coordinators, work with any industry that needs event organization. They specialise in event planning, design and production within time limits. They organize facilities and details such as decor, catering, entertainment, transportation, location, invitee list, special guests, equipment, promotional material etc. Some event planners also work with governments for permits and licenses (that is their competitive advantage) (Workable.com, 2018). Event planners would be great partners as they would

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THE BUSINESS GOALS help us through word of mouth and also provide us with collaboration opportunity services in the future. They could also be an asset in getting permits and legal information based on locations along with designing the props for apps. We propose to to approach 4 event planners and offer them a % of share in the company for $5,000 each. This will allow them to earn continuous revenue for regular consultation. They would also be part of the company, hence wouldn’t hold back any information.

In the next 5 years we will position ourselves as a partner to companies like Airbnb and PeerSpace, licensing the use of our VR database to enhance their own platforms, and offering the advantage of not having to invest in setup costs, and access to our established repertoire of mapped spaces.

Freelance Photographers/videographers: These are individuals who love photography and would like to work on commission basis for our platform. They could be from any part of the world and could register on our platform to be a freelance photographer and we would give them locations to click pictures for which they would be paid based on the number of photos chosen or certain amount per location. We would pay similar to Airbnb, which is $50 flat per location and $15 for travel expense. Videographers get $85 flat per location and $15 for travel expenses (Anna, T. 2017).

WHAT THE BUSINESS DOES

Government: We would be forming a formal contract by providing the government an opportunity to invest in our firm by listing their space on our platform. This will allow them to generate revenue from unused spaces. Our incentive to bring them to our platform is that they own most number of buildings in a city and they also tend to have spaces that are only used at times ( 52.245-1 Government Property.) which we would help monitize on. With many individuals wanting to showcase artwork on sidewalks, parks and squares, the government can legally allow citizens to use their property as per governments timetable, and monetize on it. We will also pay them a regular fee for their location based information on legal permits and licenses.

Our primary service is as a booking and listing platform for the temporary use of spaces. Our primary differentiator is the ability to prototype various configurations in a space through our proprietary virtual reality software. This feature empowers organizers to communicate their proposed event more efficiently and with greater clarity to city officials, investors, and clients to acquire permits, funding, and approval without the need to visit the site in-person. Unlike other booking networks such as Airbnb or Peerspace, Espacio is the only service that provides the opportunity to preview spaces and prototype events through an immersive VR experience. Virtually previewing an event space saves time, money, and headaches while easily and clearly communicating your concept to an audience. This means less trips to meet with city officials for acquiring permits, less traveling for clients, less money spent on the wrong curtains, and more time to actually produce your event. Additionally, we provide a seamless connection to local vendors for catering, photography, lighting, etc; access to space specific legal information such as zoning regulations; and verified reviews to hear what real people have to say about a space

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COMPETITOR PROFILING ALTSPACE VR It was founded in 2013, and acquired by Microsoft in 2017. Based in Redwood City, California. Initially, the company used a freemium business model where basic software was given away to consumers for free, and more advanced features were available through payment. It was one of the first VR Chat Rooms, and utilized Microsoft’s Kinect technology to track user’s movements without the need for wearable trackers. The company’s revenue options ranged from selling tickets to virtual events. PEERSPACE It is a peer-to-peer marketplace for booking space for events, meetings and productions. Launched in February 2014, PeerSpace is a privately-owned company operating in the San Francisco Bay Area, Los Angeles, New York, Chicago, Austin and Seattle. This latest example of a sharing-economy startup gives people access to a broad array of underutilized and under-the-radar spaces. PeerSpace wants to eliminate the need for intermediaries, like location scouts and event planners. Its founders, Rony Chammas and Matt Bendett, hope it can be the B2B equivalent of Airbnb - and believe it might even alleviate the real estate crunch that the tech boom has inflicted on San Francisco, where they are based. PeerSpace has enjoyed a 37% month-over-month growth in bookings and 30% of users are repeat customers. The company has raised $1.5 million in seed funding. After five months operating in the San Francisco Bay Area, it plans to use the funding to expand to a couple more markets by the end of the year. Total funding to date is $28.28 million. Revenue comes from a 15% license charge on the total booking amount taken from hosts. Listing a space is free and there are no membership fees. PeerSpace charges guests a processing fee to help cover operational costs, including completing a transaction and providing booking support. The fee is set at 5% and is added to all transactions. AIRBNB It is a community marketplace for people to list, discover and book unique spaces around the world. Founded in August 2008, Airbnb has since acquired several of its competitors, including Accoleo, CrashPadder, NabeWise, and Localmind, and is currently headquartered in San Francisco, California, USA. Airbnb connects

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

people to unique travel experiences at any price point, with over 2 million listings in 34k cities and 192 countries. With a growing community of users, Airbnb also provides an easy way for people to monetize their extra space and showcase it to an audience of millions.The total price of a reservation on Airbnb is based on a few factors. The price is only charged in full once a host accepts your reservation request, or if booked with Instant Book. The host determines several costs such as the nightly rate, an optional cleaning fee, or extra guest fees. Airbnb charges a guest service fee for all reservations to help Airbnb run smoothly and offer 24/7 customer support. Other costs that may be included are a currency exchange fee, Value Added Tax (VAT), or any local taxes. SPLACER It was founded by architects in 2014, and was inspired by local sharing and thoughtful use of resources extended to as many communities as possible. “We envisioned a world where beautiful spaces never go to waste, and can be a shared commodity.” The company functions as location management, with different offerings for its two customer segments, booking and listing: Event organizers can browse listings and filter spaces by size, location, eventtype, or general keyword. Once they find a space they like, organizers can connect with the host to receive additional information. Splacer charges a 15% booking fee on all transactions, and the Splacer Marketplace allows renters to view venues and book with the convenience of an integrated FB booking widget. Property owners can sign up their space by entering some basic information, and once approved, the Splacer Team will reach out for additional information about your space, pictures, and the types of events you would welcome. All spaces are reviewed by the Splacer team before being listed on site. Once listed on the site, you can communicate with event organizers about availability and prices. Splacer will handle payment processing and all other backend details to guarantee a safe and secure exchange all around. Owners determine how they want their spaces used, and have access to Splacer’s proprietary booking management tool: SpacePro. Splacer services are offered through subscription tiers, and each owner is assigned a personal account manager, and offers $1m liability coverage per event.

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LEGAL REQUIREMENT APPEAR HERE is an online marketplace for short-term retail spaces. Based in London, it was founded in February 2013 and is currently in the Series-B stage where it received $12 million investment in May 2017. Total investment is over $21.4 million, with 16 investors and a core team of 4 (CEO, Chief Strategy Officer, Chief Marketing Officer and Head of operations). Ten of the biggest real estate brokers in the U.S. have signed exclusive deals with Appear Here, including Blackstone and Simon, the biggest mall operator in the U.S., which has booking requests worth $110 million every month across its platform. The whole booking process takes place online, simplifying and speeding up the process of renting space, and Appear Here charges a 15% booking fee on every transaction. Every user gets matched to a personal concierge, available 24/7. Renters can curate how they want their space and suggestions will be provided based on that, using those ideas landlords can contact the renter with an offer. Truths about the space is an option where they tell you like they don’t know the exact measurements of the place and so forth. They also take pictures of the locations to capture the essence and sell it better.

As mentioned before USA is the primary location as one of the reasons is, it offers certain legal benefits for startup and established businesses. One such is the ability to pay taxes in another country if the business is registered there. This law applies to us as we are planning to expand our LLC in the near future and might be able to register the company in another location and benefit from low taxes legally. However, Foreign companies doing business in the US cannot shift profits to a foreign parent company to avoid taxes. It is also important to consider that a corporation formed in the US is subject to federal income taxes on all of its income earned anywhere in the world. Another benefit is the ability is the wide variety of deductions and credits available to taxpayers such as retraining tax credits (Georgia Government, 2018). As laws in the USA are made in three levels (federal, state and local) we have to consider Georgia’s, local and feral taxes and legalities. Laws to consider before setting up. Being a new company, we must obtain an Employer Identification Number (EIN) from the Internal Revenue Service through an SS-4 form. The EIN is required for filing taxes and to identify the company, so we can transact business or open a bank account (Vietz, N. 2017). Federal income and net worth tax is 21 to 35% depending on the tax bracket hence the total could be upto (Pomerleau, K. 2018) and Georgia’s tax is 6% (Steingold, D.M. 2013). Thus, the average corporate income tax of USA is 25.7%. Georgia is also one of the states with cheaper taxes compared to states such as Iowa 12%, NYC is 7.1%. (Pomerleau, K. 2018) Sales and use taxes are collected in 45 states and local sales taxes are collected in 38 states. Georgia has one of the lowest sales and use tax rate of 4% (Georgia Government, 2018) on sales compared to Washigton’s 8.92% (Walczak, J., Drenkard, S. 2017). Federal allows 20% tax deduction on qualified business income while Georgia doesn’t allow the 20% deduction. (Georgia Government, 2018).

We require trademark rights from Federal protection for a trademark is secured by registering the trademark with the USPTO. Trademarks have to also be filed in each country like patents. However, by filing one application with the USPTO, U.S. applicants can concurrently seek protection in up to 84 countries (Vietz, N. 2017). Trade Secrets need to be registered and protected thus, filing both with federal and state government is important. Trade secrets are broadly protected by state law in all 50 states. Trade secrets are also protected under federal law as of the May 2016 passage of the Defend Trade Secrets Act. Trade secret law can protect intellectual property that is not patentable but is crucial to a company’s operations or product. We also require employees to sign agreements to protect trade secrets (Vietz, N. 2017). Not all countries require consideration for contract formation, but in the US, an agreement without consideration is invalid. All 50 states have adopted some variation of the Uniform Commercial Code (UCC), which generally applies to any contract for the sale of goods over $500. This contract is governed by state law. Contract agreement should also include a “choice of law” clause that designates which state’s laws to use in interpreting the agreement and a “choice of venue” clause that designates the state in which a lawsuit may be brought to enforce the contract. (Vietz, N. 2017). Foreign Investment in Real Property Tax Act (FIRPTA) needs to be considered as foreign individuals and companies doing business in the US are also subject to the FIRPTA. This tax is issued any time an individual or corporation acquires or sells any interest in real property in the US. This allows us to decide whether to buy or lease properties as two of the owners are foreign (Vietz, N. 2017). Apart from these non-compete and non-disclosure agreements have to be signed with employees and co-owners. (Vietz, N. 2017).

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Popular

WHAT WE DO BETTER

YouTube

Facebook Pinterest

Instagram

Tumblr

While booking and listing property on a digital platform is nothing new, Espacio will utilize the full user experience of being able to visually communicate spatial layout through a comprehensive Virtual Reality event prototyping service. Unlike our competitors (see competitor analysis), the addition of VR to a booking and listing platform allows our users to communicate more clearly and more in depth. It will allow someone to not only boost their bookings, but allow the renters to test the potential space for their event. We know that by adding this, we will become the platform that consumers prefer to use. “Sometimes the best location is a non-traditional space� (Green, C. 2016), and with Espacio, it will be faster and easier to plan your event. Additionally, through providing accurate and reliable legal information, we will further assist our consumers to book and list without any of the hassle. Through a visually stimulating and convenient user experience, Espacio will be the preferred network. We will ensure that our platform is sleek and intuitive for consumers. Understanding that security is a huge concern for anyone on a network today, we strive to provide the utmost privacy and security for our members. By providing these competitive services, we are confident our business will have a great advantage and survive within the $217 trillion dollar global real estate industry (Barnes, Y. 2017)

Airbnb

Splacer PeerSpace

Appear Here

Low Content

High Content AltSpace Knotel Breather

Not Popular

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OUR STRATEGY

FINANCE & REVENUE STRUCTURE

Purple ocean : Red Ocean Strategy with a competitive advantage As mentioned before in the market research, the social network industry and peer-to-peer commercial rental industry are enormous but it has heavy competition too. (Arredondo, J. 2016, Franchise Help, 2018, Chaffey, D. Smart Insights, 2018). Our competitor analysis also brings to light the number of large existing players who have already captured market shares and capitalized on them. In order to be competitive in this cut-throat industry, we started perusing through different business strategies. Which is when we came across the Red ocean and Blue ocean strategies (Kim, W.C, & Mauborgne, R. 2004). The red ocean strategy is a business strategy that deals with the same market as numerous other competitors while the blue ocean strategy deals with an industry that doesn't exist till now. It is a new segment that is created by combining 2 or more existing industries in a unique way like Cirque Du Soleil did by combining circus and theatre. Blue ocean strategy allows a business to capitalize on the market before any competition enters the new market. (Kim, W.C, & Mauborgne, R. 2004). We aimed at accomplishing a blue ocean strategy, however, after conducting thorough macro-environmental research and competitor analysis, our key drivers for change pointed us to a direction that the industry needs more trustworthy and transparent legal information along with the knowledge to be aggregated in to one platform for easy access (Ong, T. 2018, Vietz, N. 2017, Lund, J. 2018). It was also evident that with the ephemerality of commerce (Bain, M. Quartz Media LLC 2017) we could tap into a $trillion dollar industry by combining social networks, commercial brokerage, and peer-to-peer market.

This is the finance and revenue structure for the first 3 years of our start up. We are heavily relying on personal and family investments before reaching out to venture capitalists. Taking into consideration the growth, investments, and revenues of our competitors Peerspace, Appear Here, and Splacer we have provided an estimation of our revenue and funding opportunities. (Datafox, 2017). We have 5 revenue streams. Promotion includes spaces signing up for an higher version for our platform to promote their space over others. We also would promote events happening on their space. The revenue generated through VR testing per space and subscription relies on renters. If renters wish to just check out one space they can pay $20-35 for that space depending on the size. The subscription starts at $120/year. This will offer basic VR/AR feature for unlimited spaces, where the users can use minimum props to test the space. The second tier is $250/year. This will allow the users to get multiple features such as many devices from phone to laptop. It will also have more props with detail options such as color, style, shape. The last tier is $450/year where users can further use their own props by clicking a picture and adding it to the space. There is a 2 tier subscription for VR/AR mapping for listers as well. The starting is $100/year for one space. The second tier is $250/year for unlimited spaces. The VR device will generate $3 profit per piece and will allow us to brand ourselves. The service booking revenue would be $15% of the space booking cost which is the average charged by the competitors.

Though our industry is heavy with the competition we have enough share to tap from, at this moment. Hence, we propose to venture into the red ocean (even with large sharks like Airbnb and Peerspace present), with a strong competitive advantage that would allow us to change the way people rent and list spaces. We plan to offer two unique services to set us apart. The first is providing the legal requirements and where to get the permits and licenses for each space listed on our platform. The second is the ability to VR/AR test a space, which would reduce the travel time and expense of users (solving an issue from the primary research finding) and allow them to compare and contrast multiple spaces at once. In the future, we plan to provide our competitors the VR/AR service at a royalty, as we would have already created a bank of data from VR/ AR mapping, that our competitors would rather buy from us than go through the trouble all over again. This is how we plan to stay ahead of the industry and change the way the industry rents and lists spaces.

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EXPECTED INCOME

YEAR 2 550

YEAR 1 Personal Nanthitha: $25,000 Neha: $25,000 Michael: $10,000 Timmy: $10,000

220 125 100

Family Investors Veerappan Subramanian - $85,000

75

SCAD+: This is an investment section of Savannah College of Art and Design. SCAD+ provides alumni entrepreneurs the resources, guidance and creative space to propel a digitally focused prototype to market. They provide hands-on mentoring, real-world milestones and cutting-edge equipment to help alumni establish sustainable companies within weeks and launch their projects within one year (SCAD+, 2018). - $15,000

IN THOUSANDS

50 25 15 10 5 2

Personal Funds

VR Testing

Venture Capitalists Family/ Friends Funding

Service Revenue VR Device

Advertising SCAD+

VR Testing Sub.

Venture Capitalist: $15,000 Promotion: $4,000 VR Testing: $23,000 VR Device: $2,000 Service Revenue: $20,000

Personal Nanthitha: $15,000 Neha: $15,000 Michael: $7,000 Timmy: $7,000 Family Investors Veerappan Subramanian - $125,000 Venture Capitalist: $25,000 Promotion: $22,000 VR Testing per space: $37,000 VR Testing subscription: $54,000 VR Device: $5,000 Service Revenue: $220,000

YEAR 3 Personal Nanthitha: $25,000 Neha: $25,000 Michael: $10,000 Timmy: $10,000 Family Investors Veerappan Subramanian - $85,000 Venture Capitalist: $100,000 Promotion: $60,000 VR Testing subscription: $170,000 VR testing per space: 100,000 VR Device: $25,000 Service Revenue: $550,000

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APP COST STRUCTURE App Development $48,000 The development of the app will cost us the most. From being able to be compatible on both android and iPhone ($16,000), to individual profiles ($6,000), to using emails as logins ($6,000) to being able to connect with our website ($10,000), this is where we are spending a large chunk of money. We will be saving some money through our “in-app purchases” because it will give us a large return, but cost more upfront.

TOTAL ESTIMATED COST OF LAUNCHING AN APP = $50,400

Design APP DEVELOPMENT

+

DESIGN

+

STARTUP

FRONT END

UX/UI

MARKETING

BACK END

VISUAL

SUPPORT

TESTING

COPYWRITING

$2,400

$48,000

$0

$0 While designing an app to be pretty and attractive costs THE MOST, we will be utilizing our talens among the four of us to design the app. Neha will be the lead Visual and UX designer with the other three supporting her through user research and feedback, insuring our app is easy and convenient. The four of us will also all work on logo and branding, again, under Neha as lead designer. Because both Timmy and Michael are talented in writing, will not need the help of a copywriter to create exciting and compelling copy in order to engage our consumers. We will be able to communicate our competitive advantages and any other service we provide in order to best serve our consumer.

Start Up $2,4000 The four of us will be using all of our resources to have some influencers and large social network players to promote our app throughout the market.

TOTAL = $50,400 All quotes are estimated from http://howmuchtomakeanapp.com/

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

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COST STRUCTURE

TOTAL ESTIMATED COST OF LAUNCHING A WEBSITE = $6,400

Development

$1,000 ESPACIO is a professional and interactive website. They are active in the community, blogging, attending community events, networking, and generally being an information providing resource. We will spend a considerable amount of time and money on sales and marketing.

$4000 Because we want ESPACIO to be at the forefront of technology we will hire a team of developers that continuously challenge themselves to push the limits of what websites can do. They will try and optimize the code to load faster and write it clean so there are no errors in the code. They will collaborate on new technologies and teach each other what they do and don’t know.

Planning

YEAR 1

MARKETING COST

+

PLANNING

+

DESIGN

YEAR 2

MANAGEMENT OF WEBSITE

+

DEVELOPMENT COST

+

TESTING AND LAUNCH

YEAR 3

Marketing

$400 As we design the website and app, we will meet with a planning team to talk about our goals and our key activities that we would like to use our website for. We will spend a little more time figuring out what the final action of the website would be, and then work toward that final action in the architecture of the site. Because the four of us has some experience in this, we will plan on meeting two consultants for a billable 2 hours @ $100 per person, per hour.

MAINTENANCE AND SUPPORT

Website Testing and Launch $500 ESPACIOwill have its IT support people to help with website test and launch, domain name, and email

Maintenance $500 After launching, we will hire a team of IT specialists to give us a specific number of hours for a set number of months for any bugs, improvements, training or consultation.

Design $0 The four of us will design the website

TOTAL = $6,400 Management $0 We will have a project management system in place and Michael will manage the accounts and be the dedicated leader of all management aspects.

All quotes are estimated from https://www.blackbeardesign.com/blog/ how-much-does-a-website-cost/ 107


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

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MARKETING STRATEGY

SUPPLIERS SHORT

MEDIUM

LONG

Utilizing social media, other booking platforms, and word of mouth, we will spend a small amount of money on promoting our platform.

Software: The basic software such as the online platform for the marketspace would be purchased from Sharetribe, a software company that provides softwares to create an online marketplace. The software allows users to rent or sell goods, spaces or services online. The software comes with quick setup with no developers need for frequent updates, it can be customized and easy to charge a transaction fee, and the data and code are ours to keep. After which we would use Sathyaraj Rammoorthy to specifically develop features for our platform to create a competitive advantage. VR Device: We wish to provide our users with affordable long-lasting VR devices that can be easily packaged. They are cardboard devices that would be branded in our name and would be manufactured by Gvoo direct that is owned by Amazon. The cost of manufacturing the device would be $7 including shipping.

We will use our current relationships and connections to reach bloggers, influencers, retail experts, and tech gurus to create buzz surrounding our network.

Develop physical and digital advertisements in order to promote our platform through strong language and attractive graphics to draw a large consumer base within our target market. We will target specific platforms where event planners, real estate agents, fashion professionals, millennials, and artists congregate.

Be able to partner with larger companies and conglomerates to help promote the use of our network and utilize them to be a part of our platform.

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The Business Model Canvas

Designed for:

On:

Designed by:

Day

Iteration:

Month

No.

Key Partners

Key Activities

Value Propositions

Customer Relationships

Customer Segments

Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform?

What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? categories Production Problem Solving Platform/Network

What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they?

For whom are we creating value? Who are our most important customers?

motivations for partnerships: Optimization and economy Reduction of risk and uncertainty Acquisition of particular resources and activities

What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying?

• Venture capitalist

• VR mapping

• Outsorced software (Planyo)

• Listing spaces • Host / Guest support

• Property owners • Event planners

(research for offering)

• Hardware providers (Samsung)

examples Personal assistance Dedicated Personal Assistance Self-Service Automated Services Communities Co-creation

characteristics Newness Performance Customization “Getting the Job Done” Design Brand/Status Price Cost Reduction Risk Reduction Accessibility Convenience/Usability

• Guarantee

• Space testing

• Easy and transperent booking / listing

Key Resources

• Empty property utilization

What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams?

• Efficient use of resources

types of resources Physical Intellectual (brand patents, copyrights, data) Human Financial

Multi-sided Platform

-Under utilized -Established venues

• Personalized experience

• Renters

• Co-creation

- Established business

• Automated

- Commercial / Exhibitions

• Intuitive UI • Legal and insurance information

Mass Market Niche Market Segmented

• Property owners

• 24/7 assistance

• Virtual space testing before you commit

• Credible rating system

Year

- Emerging companies

Channels Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? channel phases: 1. Awareness

• Space bank

How do we raise awareness about our company’s products and services?

2. Evaluation How do we help customers evaluate our organization’s Value Proposition?

• VR team

3. Purchase

• UI / UX design

5. After sales

4. Delivery How do we deliver a Value Proposition to customers? How do we provide post-purchase customer support?

• Sponsored

• Payment processing (software)

• Publicity • Website • Mobile

Cost Structure What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? is your business more: Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing) Value Driven ( focused on value creation, premium value proposition) sample characteristics: Fixed Costs (salaries, rents, utilities) Variable costs Economies of scale Economies of scope

www.businessmodelgeneration.com

• Advertising

Revenue Streams

• Salaries • Rent and Utilities • VR mapping

• Booking / Listing

- Software

- Software

- Harware

- Desgin

- Onsite

- Maintenance

For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? types: Asset sale Usage fee Subscription Fees Lending/Renting/Leasing Licensing Brokerage fees Advertising

dynamic pricing List Price Negotiation( bargaining) Product feature dependent Yield Management Customer segment dependent Real-time-Market Volume dependent

• Service fees - Booking • Payment processing (VISA, credit, etc) • Testing fees • Sponsors / advertisments • Subscriptions / tiers

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

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THE APPLICATION

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DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

1

WHO ARE WE? a platform the connects individuals who need to rent a venue for a limited amount of time and those that own such venues.

5

2

WHAT DO YOU DO? provide an immersive experience when renting and booking a space for an event while.

3

WHAT IS YOUR VISION? We envision a world that celebrates the human experience. To build a world where virtual world seamlessly supports the human experience. We empower unforgettable human experience.

4

WHAT WAVE ARE WE RIDING? we are attacking the marketplace on the trends of ephemeral events and providing oneself with an additional income.

WHO SHARES YOUR BRANDSCAPE? we share the brandscape with other booking and listing platforms, real estate agencies, and event planners.

8

PROFESSOR : DR. HILARY COLLINS | SPRING 2018

7

6

WHAT MAKES YOU THE ONLY? we are the only booking and listing platform that allows you to rapidly prototype your event or space through a combination of virtual and augmented reality. in addition, providing easy and reliable access to all legal information needed for renting or listing a space.

WHAT SHOULD YOU ADD/ SUBTRACT? provide you with a way to test out venues without leaving your home. subtract time and money from traveling to various venues in a fast paced life.

WHO LOVES YOU? the on-the-go individual, the tech nerd, the property owners, the government

9

WHO IS THE ENEMY? other event booking platforms, event planners, other companies with existing government contracts.

10 11 12 13 14 15 16 17 EXPLAIN YOURSELF the booking and listing platform where you can truly inhabit your future.

HOW DO THEY SPREAD THE WORD? influencer marketing, word of mouth, partnerships with venues and real estate agencies, the government

WHAT DO THEY CALL YOU? Espacio

HOW DO PEOPLE ENGAGE WITH YOU? registering their email address through our website on a computer or through their mobile devices.

WHAT’S THE EXPERIENCE? our customers experience state of the art technology to assist them in listing or booking a space, in addition to the aggregation of legal knowledge as well as connections to any other service needed or wanted for their event.

HOW DO YOU EXTEND YOUR SUCCESS? partner with existing booking sites for traveling as well as beginning to own our own spaces.

HOW DO YOU EARN THEIR LOYALTY? through continued satisfaction and providing the newest technology with the most connections to vacant spaces as well as accessibility to any necessary legal documents.

HOW DO YOU PROTECT YOUR PORTFOLIO? maintain good relationships with local and state governments, provide first class service to all our members, acquisitions of the newest technology in order to make our consumers’ experience the best it could be. 119


DESIGN INNOVATION DEVELOPMENT AND MARKETING STRATEGIES

THANK YOU

Espacio  

The process book containing research, prototyping, business plan, and testing for the Espacio App developed within Product Innovation Develo...

Espacio  

The process book containing research, prototyping, business plan, and testing for the Espacio App developed within Product Innovation Develo...

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