Sample Business Plan Xportical

THE WIRELESS BUSINESSCOHHUNICATIONS COMPANY "Any Time, Any Place,Any Device" CORPORATE SUMMARY Prepared by Robert L. Robinson, Jr. & Jeffery D. Erb July 3, 2001 This Business Plan is the property of Xportical, Inc. Because it contains confidential information proprietary to Xportical, no copies may be made whatsoever of either the contents herein or any part thereof. The contents are not to be disclosed to any party not previously authorized to discuss said contents by Xportical's officers. This copy is to be returned to Xportical upon request. Leveraging Content Beyond the Web... "The convergence of the Wireless Web and World Wide Web is creating a new information fabric for an "anytime, anywhere" society. This creates an industry, which is fundamentally a wireless information business. It creates an opportunity for individuals to modify their lifestyles, corporations to change the way they do business, services providers to differentiate their offerings and content providers to broaden both the scope and distribution of their information through enhancements in infrastructure, handsets and mobile aware technologies." • Brian T. Modoff Deutsche banc Alex. Brown "Probably the hottest single spot in investment for the next six months will be the wireless data any company that has technology, devices or services in that space." • John Malone, Chairman ofAT&T Corp.'s Liberty Media Group, December 16, 1999 The Strategis Group predicts there will be 300,000 wireless portal users by the end of this year, 5.7 million by 2002 and 14.5 million by 2004. • Source: NUA Surveys/The Strategis Group. "Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicated opportunities for successful innovation. And they need to know and to apply principles of successful innovation." • Peter F. Drucker, Author of Innovation and the Entrepreneur 2 I EXECUTIVE SUMMMARY Xportical, Inc. ("Xportical" or the "Company"), with a website located at www.xportical.com ("Website"), seeks to become the premier wireless infrastructure company thatprovides proprietary technologies which allows companies in the tradeshow and publishingindustries to present their information to the wireless web anytime, anyplace,to any device. The Internet has changed how we communicate. It is also changing expectations anddemandson companies, their executives, employees and clients. Xportical extends the reach of its clients beyond the traditional business and Intemet model to an array of pervasive devices. This is accomplishedby providing proprietaryapplications offering instant delivery of information andcontent 24 hours a day, 7 days a week, regardless of user location or device. The content is distributed in efficient andcost effective -channels through wireless transmission. The Company has a streamlined niche focus andsolves specific existing problems in the tradeshow industry and additionallyprovides its services for companies in the content production and/or information distributionindustries, includingbothpublishing andreported information. Within these industries, Xportical additionally zeroes in on companies that also offer trade shows or live events to their audience. To effectively service the companies in this space, Xportical is currently implementing two proprietary technologies, a Wireless Events Suite called Xpo TM as well as a Wireless Content Server. Xportical's suite of applications reduces overhead, increases profit margins, streamlines the tradeshow attendee experience, and increases mindshare. Xportical is a combination of a strategic development company and a technology developer. Xportical owns the wireless technologies it builds and leverages those technologies through customers within our targeted vertical (or niche) market. The Company derives its revenues through technology development and deployment, strategic consulting, and by licensing its technologies on a monthly or per-usage basis for recurring revenue when applicable. The key difference between Xportical and individual ASPs and Service Companies is the laser sharp focus on the media/content ownership companies who have an involvement with trade shows. II. THE BUSINESS Xportical was established to produce and deliver wireless business information services while providing internaland external communication for corporate clients (the "Service") with focus on tradeshows and information publishing/distribution. Xportical's clients' falls into three categories (the "Clients"): • Companies that put on trade shows and/or conferences that can utilize our event suite on one level, and resell or license the deeper product offering to exhibiting companies; • Owners of content such as magazines, news sources, reported information, corporate information services that need to increase distribution channels to protect brand; • Companies that have a combination of the above two. Delivery of the content transcoded by Xportical is distributed from one database into various wireless platforms as specified by the client ("Distribution"). 3 It is estimated by IDC that 18.5million units of information appliances will ship in the US in 2001 versus 15.7 million PCs. Analyst predict that by 2002 all new telephones will feature a built in web browsing device, thus giving consumers the choice between voice and data access. Tradeshows are still the second most popular form of marketing, according to Tradeshow Week's Databook. The percentage of corporate marketing dollars spent on exhibitions is 14 percent, second only to direct field sales (47 percent). Tradeshow marketing was ahead of advertising (11.5 percent), direct mail (9 percent), public relations (6.5 percent) and telemarketing (5 percent). According to Tradeshow Week's Databook, business-to-business tradeshows now account for 49 percent of the exhibition industry's $100 billion annual spending. III. THE TECHNOLOGIES The company has two primary technologies designed for the distribution and acceptance of information to andfrom pervasive devices. • Wireless Events Suite (entitled: "XPO") • Wireless Content Server Wireless Events Suite Trade show and conference owners have invested a great deal in creating, updatingand publishing information for the people who work, shop andplay in their facilities or event--including signs and maps, catalogues, brochures, web sites, corporate intranets and more. Xportical takes that information and publishes it on a mobile extranet so that it can be delivered to the wide variety ofhandheld devices that a growing number of people are carrying at and about the shows. We provide our clients with the tools for automatically updating and re-publishing their data so that their employees and visitors have the up-to-date information they need, when they need it, and can make the most efficient use of the tradeshow environment. The company gives them the flexibility of offering different types of data to different constituencies. • Deliver scheduling, news information, maps, etc. to wireless devices for trade shows and conferences. This done by Xporticat working with trade shows to create a comprehensive Database ofthe showusingourtechnology. Thedatabase includedvendorinformationbooth ( location, contact info, background, etc.), vendor listings by category, up-to-the-minute event schedules and locations, as well as the location of bathrooms, ATMs, refreshment centers, elevators, stairs and exits, shuttle pick-ups, etc. It features a high-level graphical representation of the entire show floor plan and close ups of each section. Additionally, speaker biographies, locations, etc., are made available. Xportical then made.this data available for downloaded to individuals' PDAs, WAP phones and pager devices. When updates are made, they are automatically distributed to individuals when they synch their devices. Allow for registration and check-in wirelessly Distribute corporate literature between devices without the need for a third-party reader Receive user data at the exhibitor level through infrared interface and track level of interest • • • 4 XPO is a suite of products designed for tradeshow and live events that address: • Itineraries • Registration • Lead Management • Marketing Itineraries • • • Foundation product that provides event information at the user's fingertips. This was done for Internet World, Ground Hog Day, Silicon Alley Reporter 2001, Business 2.0 Rules & Tools Conference. Lead product into other facets of relationship Registration • Xportical will eliminate unnecessary lines by streamlining the registration process for individuals who have pre-registered online. • By placing the registration application on their portable device, upon arriving at the event, they "beam" through infra-red transmission of information to a reader that processes the onsite registration, increasing efficiency, and reducing labor cost. Lead Management • Xpo IR Reader - This tabletop or portable unit electronically reads the attendee's IR port on their mobile device, stores the information in its internal memory and integrates it directly into Direct Connect Software, eliminating the need for scanning and manual inputting of business cards. • This works in conjunction with... Lead Management • Xpo Direct Connect Software - Exhibitors install the software on their own computer to create a custom qualification and lead capture system. Using Xpo IR Reader, exhibitors quickly collect contact and demographic information in addition to their qualifying criteria. When a user returns to a booth at another event, the information is stored and flagged so that the individuals manning the booth are aware that this is a hot lead. • This works in conjunction with... Lead Management • Xpo Literature is a product that allows exhibitors to beam their corporate information directly to the attendee, and provide a record of the transaction so that the exhibitor can track and utilize a record of the information the attendee is most interested in. This is crucial as it now gives exhibitors the means to track relationships and actions of attendees once they leave the conference and measure interest levels. Wireless Content Server Xportical's Wireless Content Server is a User Interface Server Architecture solution for delivering content to the wireless environment in a fashion that goes beyond emerging Transcoding solutions. Its engine runs the presentation portion of the logic of applications, which separates the presentation from the business and adapts the user interface to a wide variety of devices. • Allows "overnight" implementation of content distribution to any mobile device • Ability to "scrape" a client's web site, or receive specific data through an XML feed to be converted into numerous wireless formats to be served to wireless devices • • Ability to deliver newsletter style wireless content through syndicated information feeds Infomediary capabilities, allowing for tracking, analyzing, and profiling usage and user trends IV. STRATEGIC ADVANTAGE While there are a number of competitors delivering on-line information to pervasive devices, Xportical brings together a complete solution for leveraging content beyond the web, unlike other companies who deliver one piece of what is a larger puzzle. In addition, Xportical has a number of unique approaches giving it a distinct market advantage: • Strategic relationships with well-known companies, media sources, conference and seminar organizations and industry/professional associations provide ready made branding, marketing opportunities and access to potential customers• • Secondary distribution and future thinking into growing information channels such as wireless to compliment and promote broadband. • Focus on tight niche not shotgun marketing. V. • • • • THE MARKET The US Wireless Internet Subscriber market is expected to go from 469 Million in the year 2000 to 1.2 Billion by the year 2004• 1 The Wireless Internet will be the second coming of the Internet in the US and the first coming in Europe• 2 B'_'_m_m!_!'_'_'_ " The Wireless Web information market will expand to $38 ___,_,_:,_ Billion by the year 2003.3 ......... Non PC devices will become the majority within the next 3- _.... 5 years. 4 ........... ,_ _ __ ,,_ There are over 18,000 tradeshows per year in the US and Canada alone - Yradeshow Week Magazine • 65% of all tradeshows experienced growth in both number of attendees and number of exhibiting companies in the year 2000- Tradeshow Week Magazine Tradeshows are still the second most popular form of _ -....... /_ _, _ • "_i'_' _" _ ................. _,_ "_ .... _ ......... "_"_""£_,'L_5. ...... • _7 _ _=y:,_ _- percentage of corporate marketing dollars spent on marketing, according to Tradeshow Week's Databook. The exhibitions is 14 percent, second only to direct field sales (47 percent). Tradeshow marketing was ahead of advertising (11.5 percent), direct mail (9 percent), public relations (6.5 percent) and telemarketing (5 percent). According to Tradeshow Week's Databook, business-to-business tradeshows now account for 49 percent of the exhibition industry's $100 billion annual spending. Market demand for Xportical's range of services is growing. Three years from now, there will be twice as many wireless Internet users as there were Intemet users at the beginning of 1999, according to analyst Mark McKechnie of Banc of America Securities. It is vital that the company attacks the publishing/tradeshow services market, looking towards where the industry will be and aggressively begin information distribution through the wireless channel. Xportical will concentrate its efforts in three major target markets. I. Conference and seminar organizers, professional associations and media organizations that currently organize industry informational and educational events. Their recognized brands and I The Gartner Group, 2000 2 Iain Gillott, International Data Corp, as printed in Silicon Alley Reporter, August, 2000 3 4 Meta Group industry report Meta Group industry report 6 II. III. loyal customers will help ensure Xportical is a success. In return, Xportical will offer these organizations the ability to: • Open their events to a worldwide market, • Allow 24 hour, 7 days per accessibility to their Event • Increase the visibility of their Events and the market potential • Tap a previously unavailable on-line revenue stream • Add a currently non-existent post Event revenue stream Owners of content that can be converted for distribution into wireless versions. Retail trade in business information and learning services targeted for executives, professionals and career focused people worldwide. This affluent group can afford the services offered by Xportical; one of the most desired markets for advertisers; and represents the majority of worldwide Internet users. VI. THE COMPETITION Xportical competes for revenue with other Internet-based marketplace providers in the tradeshow industry. While there are companies who offer some form of integrated suite of solutions that enable industry marketplaces, Xportical goes far beyond the competition's offerings within the Company's full range of products and services. The Company's services eliminates the need for hard-copy distribution of information and speeds up all processes involved in the tradeshow industry, while the technology platform tracks customer usage of content on an infomediary level and is able to create a user profile and deliver content specific to that user's needs. Xportical's software platform also allows customers to match and deliver information based on detailed variables such as location, preferences and content channel. Xportical has a specific niche focus on content publishers such as publishing companies (Business 2.0) and reported information (Dun & Bradstreet). Xportical leverages its XPO suite of applications for the trade show industry into mobilizing the full content of the content publisher, as most publishers are also in the trade show business. • ExpoExchange (www.expoexchange.com) - ExpoExchange offers an integrated suite of solutions that enable industry marketplaces. They advertise that they provide a complete set of onsite and online products and services that increase value for exposition managers, show exhibitors, and all attendees, however ExpoExchange's solutions are based on card-reading technologies and non-wireless, tethered information. ExpoExchange is servicing the tradeshow industry and currently serves approximately 380 tradeshow partners. Tradeshow Multimedia, Inc., (www.tmiexpos.com/)is a provider of interactive products to the tradeshow and conference industry. In 1984, TMI introduced the first computerized, keywordsearchable exhibitor directory to the tradeshow world. TMI has continued to grow, introducing a touch screen based information system, and now a full line of web-enabled products. TMI's products have helped tens of thousands of attendees navigate tradeshows and is currently involved in over 50 events each year. • VII. REVENUE Xportical forecasts a number of revenue sources including: • Proprietary Technology Licensing • Project or business service based income. • Joint venture products. • Retainer based income. Financial Results and Projections FiscalYear 1999 2000 2001 2002 2003 2004 Revenue $54,0O0 $1,260,231 $6,736,855 $15,955,268 $26,209,436 EBIT $(50,623) $(160,344) $1,053,549 $2,237,792 $4,829,735 2005 $45,271,680 $10,353,230 VIII. DEVELOPMENT OF BUSINESS Xportical forecasts its development in through five key objectives: 1. Securing the core management team; establishing office; building technology to cross-pollinate Internet, broadband and wireless; identifying and entering into strategic alliances; leveraging its existing clients such as ABC, D&B, and LinkShare while securing and growing new relationships such as Dun & Bradstreet, Internet World, Internet.com, NBA, and others. 2. Securing rights to wirelessly distribute and exploit Events online; entering into strategic, long-term relationships with key business organizations and corporations (as content providers and clients). 3. Building and marketing in targeted territories the Channels as premier source of business content online. 4. Creating specific content and value added ancillary services internally. 5. Acquiring competitors and complementary businesses in order to grow geographically and vertically. IX. • VALUE PROPOSITION Expertise in mobilizing content and applications. The company has the relationships and technology needed to faithfully produce client communication needs in the way most appropriate for the intended delivery channels. Time-to-market advantage. In most instances, Xportical, via our strategic alliances can make our clients core content and applications available in weeks not months for a wide variety of distribution channels. • X. CAPITAL REQUIREMENTS AND USE OF FUNDS The purpose of this plan is to obtain initial funding to provide capital for start-up.It is envisioned that first round financingrequirementswill be fulfilled through an injectionof US $1 Million. The initial capital will be exchanged for either convertible debtor preferred shares equivalent to a 25%stake in the Company. Further rounds of funding will be necessary as the Business grows. The exact amounts and uses for future funding will be determined after the Company completes its first stage of development, which is envisioned to take three to six months. Proceeds of initial financing will be used to: • Build the Company's management team and first tier employees. 8 • • • Market and monetize its existing technologies Continued development of its proprietary technologies Identify and enter into strategic alliances Initial Funding Emerald Asset Management Executive Management Funds Sought Equity or Debt Financing: Pre-money Valuation: Use of Funds • • • • Marketing & sales Equipment and facilities expansion Additional staff General operations $1,000,000 $4,000,000 XI. COMPANY MANAGEMENT Robert L. Robinson, Jr. (Former Founder Emerald City Enterprises, Inc., & Silicon Philly) Jeffrey D. Erb (Former Founder / VP, Intersphere Comm.) Michael F. Oryl, Jr. (Former CTO, Investor Broadcast Network) Joseph Mustilli (Former CFO & COO, DMW & McClure Group) President & Chief Executive Officer: Chief Operating Officer: Chief Technical Officer: Chief Financial Officer: The Xportical Advisory Board: • Stephen Amsterdam, Former Managing Director PA Early Stage Fund • • • • • • • • • • • • Joseph E. Besecker, President of Emerald Asset Management Walter Buckley, CEO of Internet Capital Group Jill Felix, CEO of University City Science Center Joanne Harmelin, CEO of Harmelin Media George Martin, Exec. VP, Dun & Bradstreet William J. Marrazzo, President & CEO WHYY TV- 12 Heidi Messer, President Linkshare Corporation Michael Mufson, Sr. VP Janney Montgomery Scott Stephen Mullin, Former Commerce Director, City of Philadelphia Robert L. Robinson, Sr., Former Chief counsel, CIGNA Corp Samuel Silvers, Partner Deloitte & Touche, LLP Robert Whalen, CEO of Founders Bank XII. VIABLE EXIT STRATEGIES The principals foresee three viable exit strategies. They are: • • • Sale of Company or Buy-out Initial Public Offering Equity Buy-Back by Principals XIII. CONCLUSION Xportical will offer significant, long-term earning streams by delivering content to wireless devices 24 hours a day, 7 days a week, in an efficient and convenient manner to the targeted niche market. Offering business communication, information and strategy to companies, executives, employees, and interested parties around the world accomplishes this. The audience already exists for this Service, and with the speed of the growth of the Internet and handheld wireless devices, and the increasing demand on companies and executives, Xportical predicts a growth in demand reflective of the increasing use of the Internet. The Company has a rapid mover advantage into the wireless space and the opportunity to capture market share in the internet space as no other company has been identified that is currently combining and providing the range of services to Xportical's target demographic combined with an international approach and dual distribution channels. Also by leveraging the relationship with Dun & Bradstreet and other companies such as Internet Capital Group, the company can quickly exploit channels and markets. 10 MANAGEMENT TEAM Chief Executive Officer - Robert L. Robinson, Jr. Bob Robinson, Jr. (40) is a li_e long entrepreneur. While a student in university, he managed and assisted in the growth of Comic Vault, a chain of comic book shops in the Greater Philadelphia Region, which grew 200 percent during Mr. Robinson's term there. In this endeavor, Mr. Robinson was able to help propel and profit from of the explosion in popularity that the comic book industry saw in the mid 1980s. From 1985 to 1988, Mr. Robinson sought to hone his developing sales skills, and became Director of Sales for Le Monde, an art gallery chain, that had operations on both coasts. Mr. Robinson increased revenue 100 percent in just 3 years and developed Le Monde's corporate and mail order businesses. In 1989, Mr. Robinson was recruited to join Egghead Software as a sales representative in Philadelphia. He quickly became the leading sales person locally, and then became one of the top performers nationally. Within six months he moved into management. As Manager of Sales, he led a sales team which was a national leader and generated over US$7 million in sales a year and helped propel Egghead to become the leading software retailer in the US at the time. In 1991, Mr. Robinson founded Emerald City Enterprises, Inc. (ECE), to license and merchandize the Barnes Foundation World Tour. He designed and implemented a merchandising program that produced $14 million in museum shop sales internationally. After being awarded the worldwide license to produce limited edition prints of the art collection, ECE expanded by distributing the art in museum shops, galleries, and auction companies nationwide. Mr. Robinson was able to execute a deal with QVC to sell Barnes Foundation merchandise to the 20 million households who receive QVC's nationally distributed home shopping channel. Business Philadelphia featured Mr. Robinson in its 1995 cover story, 100 People to Watch. In that same year, Mr. Robinson conceived Fourth Medium Productions as an Internet consulting company which has worked with organizations and people such as: Pat Croce, President of the Philadelphia 76ers Basketball Team; Sylvan Learning Centers; Crusader Bank; Founders' Bank; Insurance Federation of Pennsylvania; and South Eastern Pennsylvania Transport Authority (SEPTA). Mr. Robinson is on the boards of the Entrepreneurs Forum of Greater Philadelphia (and has been elected to serve as its president beginning July 1,2000); Silicon Philly.com; Pennsylvania Private Investors Group (PPIG) where he is on the Executive Committee. He has been involved as a community leader and currently sits on the board of Recordings for the Blind and DyslecticPhiladelphia Branch as well as being a Cub Scout Leader and Assistant Pack Master for Pack 500. Mr. Robinson has recently been nominated as a Team Pennsylvania Ambassador by the state of PA. He is the founder of Silicon Philly, an organization focused on outreach for Philadelphia technology companies. House of Business magazine featured Mr. Robinson in the October 2000 issue. He has additionally been featured on ABC, CBS, NBC, Philadelphia Inquirer, Philadelphia Daily News, Philadelphia Business Journal and art related periodicals. Chief Operating Officer - Jeffrey D. Erb Jeffrey D. Erb was the Founder and President of Precision Media prior to founding Xportical. Precision Media is a company which works closely with Xportical to provide an all-in-one solution for the realtime delivery of video and audio via the Internet to the business-to-business market, allowing companies to increase the effectiveness of their communications strategy while at the same time 11 • f ,. streamline their internal resources and reduce expenditures solutions. normally associated with corporate video Previous this venture, Mr. Erb was Executive Vice President and Co-Founder of Intersphere Communications Ltd., an Internet development company he sold to a publicly traded company within one year of its inception. While at Intersphere Communications, he managed the day-to-day operations of the company and oversaw customer relations and the design and development of projects relating to advertising and the World Wide Web. For over ten years he has been involved in the fields of design and management. Mr. Erb's contribution as a Senior Vice President to the public company (IGC) has resulted in numerous product developments that are currently being spun off as incubated companies. While at IGC, he had overseen the development of Intersphere's network based wagering application, the first ever used on the Internet, and has made a significant impact on the interactive community garnering clients such as: Lycos, MGM Interactive, GT Interactive Software, The President's Summit for America's Future, Girard College, Triumph Controls, Jeremy's Cookies and Creams, Comcast Cablevision, and many others. Mr. Erb has recently been nominated as a Team Pennsylvania Ambassador by the state of PA. He is a founding partner in Silicon Philly, an organization focused on outreach for Philadelphia technology companies, and serves as an advisor to both the Art Institute of Philadelphia, and the Painted Bride Art Center. Mr. Erb also serves or has served on the board of a number of other organizations including The Philadelphia Area New Media Association, as an advisor to the Eastern Technology Council, The Young Professionals Network, a division of the Greater Philadelphia Area Chamber of Commerce, as well as the board of The Philadelphia Entrepreneur's Forum. Mr. Erb is an active member of The Chief Executive Network, The International Who's Who of Entrepreneurs, Who's Who of Technology Professionals, Who's Who Online, The American Advertising Federation, The Philadelphia Ad Club, The Greater Philadelphia Area Chamber of Commerce, The International Television and Video Association, and the American Academy of Advertising and is a Director of the Divine Providence Auxiliary Association for handicap children. He has been featured and interviewed in a wide array of television and news media, including The Wall Street Journal, Philadelphia Enterpriser Magazine, TSM News, among others, and was recently named one of the top 100 people to watch by Philadelphia Style Magazine. He has spoken on numerous occasions as an expert in the fields of Intemet business development, wireless technology deployment, and streaming media. Mr. Erb currently lives in Plymouth Meeting, PA with his wife Dora and son, Ewan. Chief Financial Officer - Joseph Mustilli After serving as The McClure Group's accountant for an outside CPA firm since it's inception in 1984, Joe Mustilli joined The McClure Group as Chief Financial Officer in 1994. In this capacity, he was responsible for management of the financial and accounting departments, establishing and administering tax-related policies and procedures, and overseeing all internal MIS functions across multiple agency locations. In addition, as Director of Operations, Joe managed the overall day-to-day workings of the agency. After the merger of The McClure Group and DIMAC, Joe became the Chief Operating Officer of DMW Worldwide, managing over 350 employees at five office locations nationwide. 12 i/"/ / Chief Technical Officer - Michael F. Oryl, Jr. Michael F. Oryl, Jr. was the Chief Technology Officer and one of the early employees of the Investor Broadcast Network prior to joining Xportical. He led the design and development of IBN websites (Vcall.Com, RadioWallStreet.Com, and InvestorConference.Com) in addition to the company's wireless, streaming, and multimedia technologies. Prior to the Investor Broadcast Network, Mr. Oryl was the President and Co-Founder of Intersphere Communications Ltd., an Internet development company that specialized in Online Gaming and Sports Betting software. Early on Mr. Oryl designed the first system to ever accept a wager over the Intemet, the initial version of Intersphere's WiseGuy Sports Betting system. Mr. Oryl and his partner Jeffrey Erb sold Intersphere to a public company a year after its founding. Mr. Oryl has been developing Web-based applications since 1995 and has been developing computer applications in general for over 25 years. He currently specializes in the design of large scale web systems and new technologies, such as the emerging wireless and IP based network applications. 13