Week 11
Our group has been making significant progress, and we have been working efficiently and successfully with each other as well. When we have different viewpoints, we are able to discuss the topic with ease and come to an agreement. Our team dynamics are great - we had a meeting and went out for ice cream afterwards! Personally, I have grown a lot from this class - I have never touched upon topics in business prior to this class, and it is definitely eye-opening to be learning how to build a startup in class while actually building a startup.
We have changed our initial target customers from small and mid-sized businesses in the healthcare and financial sectors to startups with around 100 to 5000 employees. We pivoted from our initial approach, because we aim to establish are reputation first within the industry with younger companies who have a high demand for cloud security before pursuing larger businesses. Moreover, this will lead to a shorter sale cycle and thus generate immediate revenue for us. It is also more approachable for us to perform case studies with those companies, than with highly sensitive businesses in the healthcare and financial sectors.
We also finalized our TAM, SAM, and SOM. Our TAM is based off of companies that are currently spending on information technology and cloud security. We researched the market of those companies, and concluded that it will grow to about $300 billion by 2020. Our SAM is based on mature startups with 100 to 5000 employees. Through careful analysis, we decided that there was about 279,000 startups to target and given that the companies are willing to invest $10 per person on cloud security, we assumed an average of 2000 employees per company and concluded on a SAM of about $6 billion. Our SOM is based on the percent of startups that are willing to use our product. We used SOPHOS, a security software and hardware company, as our proxy and estimated that we will reach $300 million by Year 5.
Our business model is fairly simple - we will first acquire our customers by offering a 1 month free trial for their company and charge $5 per person per month thereafter. The price is competitive and reasonable for the type of service we will be providing. Since our product is best paired with a cloud solution, we will partner will firms that provide cloud solutions to not only pave the road for strong sales, but to also establish our name and credibility within the industry.
For our financial timeline, we took into account the costs of Research and Development, Service and Maintenance, and General and Administrative. We know that we must hire more software engineers to develop our product, and an office would be necessary for us to collaborate between the multiple employees. We will not begin R&D until Year 3. These additional costs help us determine the amount of funding we would need for Year 1.
Rick and Tal, we would love to pick your brains over a long awaited dinner from the activity with the plastic box!
We have changed our initial target customers from small and mid-sized businesses in the healthcare and financial sectors to startups with around 100 to 5000 employees. We pivoted from our initial approach, because we aim to establish are reputation first within the industry with younger companies who have a high demand for cloud security before pursuing larger businesses. Moreover, this will lead to a shorter sale cycle and thus generate immediate revenue for us. It is also more approachable for us to perform case studies with those companies, than with highly sensitive businesses in the healthcare and financial sectors.
We also finalized our TAM, SAM, and SOM. Our TAM is based off of companies that are currently spending on information technology and cloud security. We researched the market of those companies, and concluded that it will grow to about $300 billion by 2020. Our SAM is based on mature startups with 100 to 5000 employees. Through careful analysis, we decided that there was about 279,000 startups to target and given that the companies are willing to invest $10 per person on cloud security, we assumed an average of 2000 employees per company and concluded on a SAM of about $6 billion. Our SOM is based on the percent of startups that are willing to use our product. We used SOPHOS, a security software and hardware company, as our proxy and estimated that we will reach $300 million by Year 5.
Our business model is fairly simple - we will first acquire our customers by offering a 1 month free trial for their company and charge $5 per person per month thereafter. The price is competitive and reasonable for the type of service we will be providing. Since our product is best paired with a cloud solution, we will partner will firms that provide cloud solutions to not only pave the road for strong sales, but to also establish our name and credibility within the industry.
For our financial timeline, we took into account the costs of Research and Development, Service and Maintenance, and General and Administrative. We know that we must hire more software engineers to develop our product, and an office would be necessary for us to collaborate between the multiple employees. We will not begin R&D until Year 3. These additional costs help us determine the amount of funding we would need for Year 1.
Rick and Tal, we would love to pick your brains over a long awaited dinner from the activity with the plastic box!
Nice post. Glad that you're enjoying the journey. The group has a couple of strong members and we'll be looking to have you include the not-so-strong in the final presentation.
ReplyDeleteThis could be a real business. Interested to see if you want to continue after this class.
RR