Download - Menkle Executive Summary
Menkle, LLC
Pitch Book
As of October 29, 2008
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1. Harris Interactive study done for eBay. http://news.ebay.com/releasedetail.cfm?ReleaseID=328432
2. Wall Street Journal: EBay Plans Classifieds Buyouts. September 17, 2008
Demand exists for efficient, local, online marketplaces
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Notes:a) Craigslist and Kijiji are the largest online classifieds websites. Craigslist has 50
million visitors a month and Kijiji has 5 million.b) eBay’s primary purpose is to facilitate exchange regardless of location. Therefore,
eBay does not make location a primary search or sorting functionc) Menkle creates a local classified ads community around each user. Communities
are based upon both location and population data (50,000 people per community)
Several factors are driving demand for local, online marketplaces:
1. Households facing increasing economic uncertainty
2. Rising transportation costs limiting willingness to travel
3. Environmental awareness leading consumers to purchase pre-owned goods
Existing online classifieds services have two primary shortcomings:
1. No major service for small towns and rural communities
2. Inefficient service for urban and suburban neighborhoods
The market for online classifieds is growing:1. 75% of adults are purchasing used (pre-owned)
goods. More than half of pre-owned shoppers (54 percent) are turning to online sites to purchase used items1
2. Global online and offline classifieds market estimated at $100 billion in 20032
Menkle is an online platform that creates a marketplace in every town and neighborhood
Consumer Platform
Consumer Platform Business Platform
Implementation Time Launch 12 to 24 months
Functionality • Consumer to Consumer Marketplace
– Local marketplaces based on users’ location and population data
– Global Marketplace comprised of posts from all communities
• Individual Pages for Local and National Businesses
• Site would include:– Business Logo– Business Information– Inventory (Posts)– E-commerce capability– Connection to buyers
Targeted Users • College Students• Young Professionals• Heads of Households
• Local Businesses• National Businesses
Potential Revenue Streams
• Advertising• Listing Fees
• Advertising • Initial fee• Subscription fee• Listing fee• Transaction fee
Competition • Craigslist• eBay• Other Online Classified Sites
• Individual business websites• Search engines• Websites that connect
consumers with businesses (Yellow Pages)
• Sites with a local focus (Yelp)
Menkle Advantage • Emphasizes local communities through zip code groupings
• Global Marketplace• Superior functionality and
interface
• Businesses gain access to Menkle Consumer base
• Menkle provides the infrastructure e-commerce site
Business Platform
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A beta version of the Consumer Platform is live and fully functional
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www.menkle.com
Menkle is undergoing launch in three college towns and in Sewickley, PA
• The three college towns are:
– University of Pittsburgh
– University of Maryland
– Georgetown University
• College towns are good communities to launch Menkle because:– Students are tech savvy
– Students are transient and have large networks
– Move at least once a year
• Sewickley is a good launching point because:
– It is a model suburban community
– Most suburban communities do not have efficient marketplaces for goods and services
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Launch of each new community will follow a specific 90-day adoption plan
A three phase marketing approach will be used to bring Menkle to market in a new community:
• Posts should exist in each category before visitors from outside of founders’ immediate network visit the site• Posts shown should be relevant to each user in terms of location and availability• Ideally, worth-of-mouth, rather than traditional advertising mechanisms, will help spur growth• If growth does not occur organically, traditional tools will be utilized to help increase growth
Several best practices developed after analysis of successful & unsuccessful websites:
Phase I: Stocking the Shelves Phase II: Attracting Buyers Phase III: Building User Base
Objective Add posts to the community Start the facilitation of commerce Build sustainable community
Time 0-30 days 30-60 days 60-90 days
Campaign Tools • Management inspired• Paid incentives to populate
communities (if necessary)
• Management inspired• Extended networks• Word-of-Mouth• Paid incentives (if necessary)
• Word-of-Mouth• Traditional media outlets (as
necessary)– Print– Web– Events– Sponsorships
• Public relations (as necessary)– Interviews in newspaper– Viral marketing
Cost Minimal Minimal Varies depending on campaign tools
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Growth is anticipated to spread to major cities over a five year period
Region Year One Year Two Year Three Year Four Year Five
EastWashington, D.C New York City, NY
Baltimore, MDBoston, MA
Philadelphia, PAHartford, CT
Manchester, NHSmaller Cities
Midwest Pittsburgh, PA Cleveland, OHColumbus, OHCincinnati, OH
Indianapolis, INChicago, IL
St. Louis, MOSmaller Cities
South -- -- Charlotte, NC
Atlanta, GACharleston, SC
Raleigh/Durham, NC
Smaller Cities
West -- -- -- San Francisco, CALos Angeles, CA
San Diego, CASeattle, WA
Central -- -- -- -- Austin, TX
Growth will focus on one city within a region before expanding to additional cities in a particular region:
Craigslist: San Francisco > Boston > Chicago, LA, NYC, and 5 more
Facebook: Harvard > Ivy League > Colleges > High Schools > Anyone
Yelp: San Francisco > Los Angeles > Chicago, NYC
Several of the web’s more trafficked sites started in one geographic location and expanded to meet demand
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A “Network Effect” makes exponential growth possible
Vis
itor
s
Months
Craigslist – online classifieds
Facebook – social networking
Yelp – online reviews
A network effect occurs when a good/service becomes more useful as new users are added
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*Assumes a doubling in the number of visitors every 6 months
Menkle will monetize visitor traffic through advertising and listing fees
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Menkle will utilize a Core Team to continue development and build a user base
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Management & Marketing Development
Menkle Team • Andrew• Lee
• Jinsoft Solutions (India)
Additional Team • Marketing #1• Georgetown student• Univ. of Maryland student• Pitt student
• Engineer #1
Responsibilities • Strategic website enhancements• Marketing initiatives• Administrative responsibilities
• Support and maintenance• New development (both Consumer and
Business Platforms)• Revenue generation capability
A continuous launch & feedback cycle will allow Menkle to improve the service offered while building a base of loyal users
Exit Strategy will be evaluated in 4 to 6 years
Menkle has several exit options for investors:
Sustainable Business Horizontal Integration Vertical Integration
Exit IPO Sale Sale
Potential Partner N/A Google, Yahoo, Microsoft eBay, Yellow Pages, etc.
Advantage • Menkle grows into sustainable business
• Growth occurs organically and through acquisitions
• Portal breaks into classifieds market through Menkle
• Menkle becomes an additional offering beyond company’s core product(s)
• Sale to company in classifieds business
• Menkle aids in gaining market share for acquirer
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Appendix
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Competition
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First and foremost, Menkle creates marketplaces where they currently do not exist -- primarily in small towns, urban neighborhoods, and suburban communities
In some places, Menkle will compete with the following services:
•Traditional Classifieds– Print and online classifieds sections part of local and regional newspapers– High posting fees, limited descriptions, no pictures or video
•Craigslist– Strong following in large cities and urban areas– No support for local towns and “hyper-local” urban/suburban neighborhoods– Poor design and functionality increases amount of time spent searching
•eBay– Focuses on connecting buyers and sellers regardless of location– Transactions take place online, items are usually shipped– Not practical for selling large items in local communities
•Other Online Classifieds– Focus on urban populations, no attempt to capture “long-tail” in local towns and neighborhoods
Competition
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Home Category Table
Product: Central network of online communities, featuring classifieds and forums. Fee to post in most categories
Shortfall: Focus primarily on metropolitan areas. Site is cluttered with information and functionality is not user friendly
Menkle Advantage: Menkle emphasizes local communities through zip code groupings; Global Marketplace; and superior
functionality and user-interface
Craigslist (www.craigslist.com)
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Auction Express
Product: Online auction and shopping website in which people and businesses buy and sell goods and services worldwide
Shortfall: No emphasis on local communities; lengthy registration & selling process can be prohibitive; shipping adds additional
costs to items; small fee to post
Menkle Advantage: Emphasis on Local Communities eliminates online transactions and minimizes shipping costs
eBay (www.ebay.com)
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Home Location Home
Product: eBay owned; centralized network of online urban communities for posting local classifieds
Shortfall: Focus on major metropolitan areas; offers very similar functionality as Craigslist
Menkle Advantage: Menkle emphasizes local communities through zip code groupings and has a Global Marketplace
Kijiji (www.kijiji.com)
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Marketplace Home Category Table
Product: Social networking site to connect and interact with other people. One Application is classifieds Marketplace
Shortfall: Users attention is focused on socializing and networking. Marketplaces have not garnered strong following
Menkle Advantage: Menkle is focused on facilitating exchange within Local Communities and also has Global Marketplace
Facebook Marketplace (www.facebook.com)
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Home Campuses & Reps
Product: Network of online marketplaces for college students, featuring books, jobs, carpools, housing, for sale, notes, & events
Shortfall: Only students with a valid school email address have full access to the site, thus eliminating some of the market
Menkle Advantage: Menkle will connect both students and local residents by providing a platform for exchange with unrestricted
access
Uloop (www.uloop.com)
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