internet marketplace investor presentation

www.meilleurspeintres.com

Your online painting servicesSimple. Transparent. Free.

Vincent Boiteau

HEC Executive MBA 2012

Final Individual Project

[email protected]

SUMMARY VISIONTHE PITCH« Meilleurspeintres.com will operate the most widely used free painting services online marketplace in France, enabling

painters to bid on the projects posted by home owners, creating competition and

transparency. Painters will have access to advanced module to enhance their bottom

line »

THE NUMBERS

THE MARKETIs big, mature but inefficient because:• Highly fragmented (myriad of

local markets)• Intermediation tools are

limited• Painful for client and supplier

to meet• Growth driver is demographic

and housing market (bothpositive in France)

Market Turnover €6BSuppliers 40,000Clients 30,000,000Yearly transactions 3,000,000+Average size of supplier 2-3 people

OPPORTUNITY Problem

THE PROBLEMOn the buy side:• Available information is basically

limited to a phone number• Lack of trust because of low

competition (market is illiquid)• Reliance on word of mouthOn the sell side:• Limited resources/know-how to

enhance processes• Difficult to create/manage growth and

reputation

THE COMPETITORSCurrent intermediation entities thatcan help client and suppliers meet:• Yellow pages• Bulletin boards (online)• Friends

BUT…

They lack some key functionallityand information that would addvalue to both side of the market:• Reputation management• Quoting process• Labor planning• …etc

SOLUTION ProductTHE FUNCTION

THE PRODUCT

Online marketplace

Suppliers• Can bid• Manage

processes• Findlabor Customer

• Specifies project

• Chooses bid• Review

painter

Labor• Bids on project

• Builds reputation

Banks• Finance

projects

Schools• Places appretices

Chamber of commerce• Enhances

market dynamics

A mobile platform:• Buyers place projects• Painters bid on projects• Labor bid on projects• Buyer writes opinionA set of productivityapplications for painters:• Manage schedule• Find labor• Business intelligence• Trade projects• Group buying• Transaction/insurance…

SOLUTION TECH THE TECHNOLOGY

Mobile applicationsMobile applications

Measure roomsMeasure rooms

Labor sourcingLabor sourcingLocal dataLocal data

PlanPlan

Trade projectsTrade projects

Use application to specify works(camera, gps,

multiple choice)

Labor bids on projects won by suppliers, lowers

supplier cost

Supplier canschedule

worksaccurately

Projects canbe traded, shared or

sold.

GPS createsoptimal

logistics for biding,

sourcing and scheduling

Cloud/mobilefunctionality to

enhanceprocesses

SOLUTION ProductTHE VALUE PROPOSITION

Simplify your access to supplierCUSTOMER• Obtain several quotes in 3 taps/clicks (mobile or Computer)

• Specify your project online (powerful algorithm guides you through steps)• Post your project (lets many supplier access and bid on your requirements)• Choose bid based on price/timing/peer-review

Streamline your processesSUPPLIER• Plan your growth

• Access GPS-rich business intelligence, trade project, form partnerships, engage in M&A• Lower your costs

• Outsource labor, improve your logistics, plan your jobs, buy in bulk, schedule accurately

Enhance your workload visibilityLABOR• Offer freelance work (enhance marketability to supplier) by bidding on jobs and building a secured

pipeline of workdays + reputation• Start your business

CUSTOMERS Target

SUPPLIERSMost interested will be entrepreneurs in the growth phase: • Recently formed (Less than 35 y.o.)• Facing strong competition (Urban)• Limited resources (Small)• Internet-versed (Less than 35 y.o.)

XERFI numbers indicate potential of 30,000 such target suppliers

CLIENTSEnd user target are also younger. They are recent homeowner withlimited experience of home renovation activities. House purchase is a strong opportunity to undertake (second hand).Typical would be:• Young family w/ kid(s)• Upper/middle class (not DIY

target)• Urban (same as above) INSEE numbers show +/-300,000 such purchases per year.

A FREEMIUM IDEA CashTHE BUSINESS MODEL

Suppliers

Paying membersM

odul

e 1

Mod

ule

2

Mod

ule

n

Free Members

PremiumFunctionality

À la carte choiceof modules

Pay-as-you-go

Revenue model is FREEMIUM. Basic functionality is free for all and smallpercentage of supplier buys premium modules

Revenue model is FREEMIUM. Basic functionality is free for all and smallpercentage of supplier buys premium modules

Labor

CustomerCustomer

Basic Bid/Askfunctionality

FREE

Acqu

isiti

on o

f Sup

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rs:c

onve

rsio

n of

fr

ee m

embe

rsvi

a fr

ee tr

ials

Acqu

isiti

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f Buy

ers

by m

ass

mar

ketin

g Ac

quis

ition

cos

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ree

cust

omer

: €2

This side derives most value frompresence of the other

This side doesn’t have marketpower and must be free of charge

SUPERIORITY Model

THE COMPETITIVE ADVANTAGEBuild barriers to entry:• 6 month advantage (SW dev time)• Rapid market penetration• Brand/loyalty• Exclusive local partnershipsTechnological superiority:• « Mobile First » SW development• Powerful cloud applications• Social network integration• Pay-as-you go• Peer review (trust factor)Geographical dominance:• Region-by-region deployment

PARTNERS ARE KEYLocal key partnerships ensurebrand legitimacy + defenseagainst competition:

Social networking + easy loginfor traffic generation

FINANCIALS P&L THE PROJECTIONS

FY1 FY2 FY3 FY4Phase 1 Phase 2 Phase 3 Phase 4Study SW Dev Regional start National launch

H1 H2 H3 H4 H5 H6 H7 H8Total suppliers - 0 0 350 1500 7000 13000 18000 25000Paying suppliers - 0 0 62 300 2500 4000 5700 7000Membership € 39 39 49 49 49 49

Total buyers k 0 0 2 35 130 260 450 700Buy/Sell ratio - 0 0 0 0 0 0Income €k 0 0 6 40 450 1000 1500 1900EBITDA €k -40 -140 -270 -350 -180 200 550 750Staff - 1 2 4 4 6 7 9 12Funding €k 40 150 600 300

Phase 13 mth

• Budget app dev

• Fine tune offer

• studies

Phase 26 mth

• Dev apps• Ink

parnerships

• Prep local launch

Phase 312 mth

• business process

• Buildtraffic

• Buildbrand

Phase 424 mth

• Generatecash

• Reducecost

• Buildbrand

CONCLUSION Model THE TAKEAWAYS

Upside

Solution

Opportunity

Is there value in creatingthis online marketplace?

YES

There is no fully functionalintermediary

Modern technologies allows more functionality

Limited competition= rapid traction

Growth Pathsare endless

Model can bereproduced

abroad and to other industry

Exit monetization

of growthpotential

End customerdemands more

services

Free ask/bidplatform, peer

review

Exit monetizationby member

count

Suppliers are small and atomized

Cheap and powerful cloudapps increase

bottom line

Network effect

€1M investment = exit value of €5M-€10M

Multiple exit point = increased investment flexibility

THANK YOU