Genappeal

Business plan element

Your assessment

Your changes

Financial translation of your changes

1. Product and appropriability

Currently, there are 2 companies that offer the same service as GenAppeal namely, DNA Romance and Pheramor.

°DNA Romance is an online dating platform that uses genetic testing to identify potential relationship matches.

°Pheramor is an app that uses both your biology and your social technology. Pheramor collects your genetic data through a q-tip-like cheek swab and acquire your likes, dislikes, and interests from your social media profiles like Facebook, Twitter, etc,. All of this information will be used in their proprietary algorithm, which is designed to learn your preferences. The kit with the DNA-test will cost 14 euros and on top of that comes a monthly membership fee. Currently, the app is only available in Houston.

To summarize, the idea of matching singles based on their DNA   isn’t “new”, but the competition will be limited for GenAppeal because those companies only/mainly operate in America.

1) GenAppeal doesn’t really mention protecting their technology.

2) In the business plan GenAppeal doesn't really mention protecting their website.

3) In the financial plan of GenAppeal, we see that they pay a patent attorney each quarter. We don’t think it is necessary to keep on paying the patent attorney once the patent is made.

1) We would suggest to patent the technology GenAppeal uses. The technology GenAppeal uses is unique and new, which is very important. If this wasn’t the case GenAppeal wouldn’t be able to patent this technology. GenAppeal specifically takes certain cells that are responsible for managing your immune system, and that combination of body cells of which they determine your DNA is unique.

2)We would suggest to copyright the website.

3)We would suggest to pay the patent attorney only the first and the second quarter.

1)For the patent itself we pay a cost

 for filing the patent and for a novelty research, this amounts to 350€ (In quarter 1 a cost of 350 will be added).

On this amount we pay an annual maintenance fee, starting from year 3, which increases year by year.

The first maintenance fee is €40 (quarter 9), this amount annually increases by €60. In the financial plan we add the row "patent" in infrastructure and operational costs. So in quarter 13 this will lead to a cost of €100 and in quarter 17 €160. (Not taking into account inflation)

2)The total cost of copyright is 1750 per year.

3)The costs for patent attorney will be limited for the first two quarters. We assume that this will be enough time to make the patent. That’s why we take a cost of 9000 for quarter 1 en quarter 2 into account.

2. Value chain

GenAppeal can easily reach the end user.

GenAppeal controls the complementary assets needed to reach this end model control because they have the means to turn an innovation into a commercial product.

We can position Genappeal in the Teece model in fourth quadrant as an idea factory. Because the idea and technology is highly appropriable and the assets are tightly held. We make contracts with other companies in the beginning to try to sell our DNA analysis.

The industry of dating sites is fragmented, in the industry is no single company that has market shares that are large enough to be able to influence the industry's direction.

Although the industry of dating sites who match people based on DNA analysis is concentrated, since there are not many companies that are operating in that field.

3. Business model

1)The pricing strategy that GenAppeal follows is the premium pricing, introducing a new product that has distinct competitive advantages over similar products. We would follow the same pricing strategy since the service they are offering is unique in the belgian industry of dating sites which allows them to charge a higher price.

2)From year 1 to year 2 there is a growth of sales volume of 855.348%, which is extreme.

2)We would follow another growth strategy. The extreme growth from year one to year two seems unrealistic.

2)We expect to reach 0,5% of the singles in the Benelux in year 1. In year 2 we would reach 0,75% of the singles. From year 3 we expect to reach 1% of the singles in the Benelux and from that year on, we would like to expand to France and we think that we would reach 0,5 % there in year 3. In year 4 we would increase to 0,75% in France, and in year 5 0,75 % in France and  0,25 % Germany and the 1% in the Benelux stays stable from year 3.

4. Market

1) Basically, they focus on everybody who is looking for a partner.

2) We believe that the revenues need to be decreased, because in the beginning GenAppeal has to build up a customer database. In order to build this up as fast as possible, it might be necessary to lure customers with a certain offer. We would suggest letting them join the GenAppeal community for free or with a considerable discount.

3) The price of the DNA analysis is €125. Subscription to regular dating sites vary between 10€-100€ monthly.

4) As part of their advertising strategy, Genappeal wants to hand out T-shirts with catchy slogans at parties, universities, beach parties etc. But that is not the group of singles we want to reach.

1) We suggest that they target one particular group. We would chose for singles from 30-70 years because if we would also focus on the singles that are younger than 30, we would compete with other dating sites and apps, among others Tinder. We don’t want to do that since they would be to big of a competition for us because they are very popular among people of that age.

2) In order to convince people to buy the product, and therefore build up the database, we have a special offer for the first customers.

3) We will charge a higher price because we expect that the customers will be willing to pay a higher price for this exclusive product.

4) Do not hand out T-shirts with catchy slogans.

1) In year 1 we expect to reach only 0,5% of the singles because of this change.

2) In Belgium the first 100 clients (quarter 1) get a membership for free. In the Netherlands 200 customers will be getting a free membership since in the Netherlands there are about twice as many singles.In Luxemburg 50 people for free.

3) The total price that will be charged is €250.

4) Not handing out T-shirts means that the publicity cost will decrease with 1175€

5. Team

We don’t think it is necessary to employ more employees in the first five years.

6. Financial plan

1) The capital is financed by its founding member and the FFF’s, up to €300 000. This capital will consist of 300 000 shares with a nominal value of €1 per share. Secondly, for the additional financing, Genappeal will contact banks. According to their financial analysis they might need an amount of 600 000€  above the equity. The problem is that they will need an amount of 600 000€ for additional financing, on top of the equity, but because they don’t have a collateral Genappeal won’t receive a loan from the banks.

2) GenAppeal will be founded as an PLC (=N.V), so they need a minimum capital of 62500€.

Working capital            Working capital need

Year 1: 2 249 866      < Year 1: 2 616 527        

Year 2:        4 741 651        < Year 2: 5 469 314

Year 3:13 713 628        < Year 3: 14 336 488

Year 4:25 044 869        < Year 4: 25 621 356

Year 5:42 927 568        > Year 5: 41 788 213

A company is healthy if the working capital is higher than the working capital needed. Therefore, is the company unhealthy from year 1 until year 4

1) We dropped the loan from the bank and added extra funding from business angels for 200 000.

the FFF’s expect a return of 10% and the BA a return of 15% (according to the percentages we found online).

3) Because we have dropped the loan from the bank, and added extra funding from BAs, there is no cost of debt. The FFF’s expect a return