Opportunities and product YPlan - Essay Example

? Opportunity assessment for 'YPlan' Introduction The app industry has experienced exponential growth inrecent years with most of the growth involving Apple’s iPhone. Over 140,000 iPhone applications have been developed since Apple opened it apps store on iTunes to outside developers in 2008. The app market is worth over $2.5 billion a year. The British entertainment industry generates around ?3billion annually with the theater industry generating ?600 million. The cinema industry generates ?1billion while the live music industry generates ?1.5 billion. There is a business opportunity in the last minute seat business as the theatre industry has an annual balance of 30% unsold seats, the cinema industry has 80% unsold seats while the live music industry has a balance of 40% unsold seats. The company YPlan is a young app company founded in 2012 by Rytis Vitkauskas and Viktoras Jucikas. YPlan specializes in last minute event discovery which involves alerting users of available tickets for live events happening within the next 24 hours. The events it sells include wine tasting sessions, music gigs, theatre or silent discos with all featured events handpicked by the company’s editors. The YPlan is based in London, UK, and serves the iPhone market in the city. The company was initially based in East London’s TechHub starting with two employees but grew quickly recruiting 17 employees in the process and shifted its base to King’s Cross. The company plans to expand internationally to other markets where the iPhone penetration is huge like the US and Japan. YPlan seeks to exploit a gap in the entertainment market by being the first app company to provide an efficient means of purchasing last minute nights out tickets. The founders have experience in the software industry and have a long history of entrepreneurship. Rytis, for example, has previously worked at Summit Partners where he was responsible for software and technology investments. He contributed to the sourcing, execution and management of summit investments in Acturis and Avast software (Baron 2012). Challenges in the app business The company’s services were only available in London as of Jan 2013, but it looks to expand its business to American cities. The app market is crowded and competitive; it is hard for most entrepreneurs to break through. The popularity of apps changes quite often; therefore, entrepreneurs have to be conversant with the latest trends in the industry (Chell 2004). To launch a successful app entrepreneurs have to acquire the relevant technology appropriate to a particular platform. If the entrepreneur intends to launch the app on different platforms, then he/she needs to purchase a platform specific developer license for each platform. Platforms are in general mutually incompatible, with each having unique technical detailing and coding. The coding and testing stage requires the services of experienced app developers and software engineers. The app developer also needs sound designers, graphic designers and content developers, in addition to, an effective marketing and PR team. The company does not offer a filtering system to sort between different types of events like music gigs and theatre.  Some competitors like Hotel tonight appeal to customers with discounted rates for their services while Yplan offers discounts for only some of the events (Chell 2004). Other competitors like Groupon use coupons to advertise various products including sales of tickets to a wide range of events at highly discounted rates. This could impact on Yplan’s bottom-line as its services are restricted to subscriber-only app based marketing. Groupon’s customers need not own a smart phone in order to buy its products. Groupon has also negotiated lucrative deals with various American companies and this could be a hurdle to Yplan’s strategy of entering the American market. For instance, Groupon have partnered with the MLB to sell tickets to its games. Opportunities and product differentiation YPlan is a going out app which allows Londoners to discover, book and attend the best events of a night by just tapping on the app and buying tickets for the event. The app offers revelers the opportunity to discover and purchase tickets for a night out easily and conveniently while offering a payment system that is exceptionally safe, secure and instantaneous. The company has a very talented and hard-working team that has been critical to its growth over the last one year (Baron 2012). Jucikas is a former Goldman Sachs analyst while Rytis’s experience in the venture capital industry helped him negotiate successfully for funds to finance the project. Previous experience by the company’s founders helped them research the relevant data points and convince the venture capitalists that the concept would succeed (Baron 2012). Yplan’s core business is marketing the balance of empty seats event organisers have left a few hours before the event commences. Rytis and his partner established that 23% of Londoners have smart phones, and that only 2% of ticketed events in London sell out. This promoted them to launch Yplan in order to attract more customers to such events. Through Yplan, they were able to provide event promoters with access to people who had no plans for the night by providing them with tickets for events happening within a 24hour period. On the other hand, customers were provided with cheap tickets and bonuses for attending events. YPlan makes money when it facilitates the sale of tickets to an event by getting a fraction of the ticket price (Chell 2004). The automated online ticket buying system saves time and money for event managers as they only need to verify the authenticity of tickets at the event venue. This is convenient for both the event manager and the customer. Some analysts have suggested that automation can yield cost savings of over 90% and the YPlan app accelerates the automation process. Unsold tickets are a loss of revenue for most venues; therefore, most venues view even heavily-discounted tickets as a boon that helps boost revenue (Chell 2004). Yplan’s business strategy The company raised $ 1.7 million from Wellington Partners, Octopus Investments and Baltcap to expand its business in late 2012. These funds were to be used in marketing, product development, hiring more sales agents and are critical to expansion outside the UK. The company plans to raise an A Round in early 2013 in order to finance expansion into the US (Greene 2008). There is competition in the event marketing segment from more established ticket booking companies which include Eventbrite and Ticketmaster. YPlan plans to steer ahead of the rest by specializing in a niche market. More precisely, YPlan provides events organisers with access to customers who would have missed the event or those who would not have had found out about the event if they were not using the app. Rytis emphasizes that the app provides event organisers with access to customers who would have given up on getting tickets to various events by assuring them on the availability of tickets. However, the necessity for a sales team on the ground has presented a barrier to entry for competitors into the last minute event business (Greene 2008). Attracting customers can be a challenge especially if they are not aware of the service. Even when customers are aware of the service, the limited choices on offer, which is often less than ten venues, makes it hard for customers to buy tickets as they may not like the events on offer. Some customers may even opt to buy a copy of Time Out as it features more events from a wide range of categories. Jucikas argues that the lack of many choices increases ticket sales as the customer has limited choices, and, therefore, finds it easier to make a choice. Groupon a competitor in the events marketing business, gives over 50% discounts to its customers but lacks a strong mobile based customer base (Greene 2008).The company needs to have a large user base so as to convince event partners that there is value in working with it. The company’s strategy for attracting customers is by giving customers fantastic experiences so that such customers give it rave reviews on Twitter and on the App Store reviews. The company has a fantastic and experienced sales team with the majority of its sales people having worked with Airbnb, Get Taxi, Time Out, See Tickets, Last Second Tickets and others in the past. Since the company did not have the ability to offer better remuneration to its staff that were recruited from more established and better paying companies, they offered every employee the chance to be a shareholder. This helped align all employees around the company’s vision and build a team of dedicated staff. To attract more customers the company advertises on Google by buying Ad-word traffic and keeping its app interface slick and simple. In the US market, there is no direct rival in the last-minute event discovery. The main competitor is WillCall which does mobile and general ticketing but focuses on theatre and music gigs. ScoreBig, on the other hand, focuses on only sports (Greene 2008). The company attracts users by providing several reward schemes to subscribers of its services. These incentives include free drinks upon arrival at the event venue, discounted tickets and wavered booking fees. YPlan has a customer referral scheme where users are offered ?7 of credit for referring friends to the app with a further ?7offered if the referred friend purchases a ticket. The company handles payments securely using Apples passbook ticket system on iOS (Bruin 2003). Another method of marketing used by YPlan is partnering with App Stores like Apples iTunes, this involves working with platform managers at Apple and in return Apple uses the app in its advertisements. The same tactic is applied to other app platforms as all app stores are in search for cool apps that they can market to their user base. Mentorship helps in strengthening the entrepreneur’s proposition and challenging his/her assumptions (Bruin 2003). The company’s co-founders often engage the services of several advisers who have experience in the events business such as Brent Hoberman the co-founder of Lastminute.com and Andy Phillipps the founder of Bookings.com. Ideas for Future development It is clear that Yplan has introduced a novel idea to the events business, but with only 23% of Londoners owning smart phones, there is a huge portion of the market alienated by the app only service and Yplan would do good to provide their services through a website. This would capture the segment of revelers lacking smart phones but in need of a going out plan. Since Yplan plans to venture into American cities, it would do well to develop relationships with event oriented companies like the NFL and MLB clubs as such companies can provide lucrative business opportunities. Conclusion The app market has experienced exponential growth since 2008 and, therefore, entrepreneurs who do extensive research on the market trends is likely to discover a viable business opportunity. YPlan has grown tremendously since launching in early 2012; this can be attributed to the experience of the co-founders and recruitment of talented staff. The experience and reputation of the founders came in hardy when the company needed capital for expansion. The company is able to maintain a sustainable customer base by serving a niche of the event market and providing quality service. Bibliography: Baron, R., 2012. Entrepreneurship: an evidence-based guide. Cheltenham; Northampton, MA: Edward Elgar Bruin, A., 2003. Entrepreneurship: new perspectives in a global age. Aldershot [u.a.]: Ashgate Chell, E., 2004. Entrepreneurship: globalization, innovation and development London [u.a.]: Thomson Learning Greene, C., 2008. Entrepreneurship: ideas in action. 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