be produced by cameras or even by smartphones. This trend gives WiMic a great opportunity because this business leverage on smartphones. Forth, there are more smartphone accessories available in the market to support video-shooting. With this trend, people are more willing to shoot better quality videos by using these accessories, including WiMic in the future. Fifth, live streaming is more popular and more accessible in the market. When these people do live streaming, they need the solution for noise reduction to share with friends or followers.
WiMic will be the only one solution provider for them.
5.4 Threat
It is possible that Chinese or Korean companies will copy the same concept and produce same product quickly. When WiMic launch in the future, other potential competitors will have the opportunity to copy the design and make it a new because WiMic is more relative to hardware product which is much easier to be copied by others.
In other hand, although this business can gain some revenue from crowdfunding platforms, people are becoming more distrust about crowdfunding platforms such as Indiegogo. It will decrease the number of backers and the money raised from them.
Strength Weakness
• It provides single stop smartphone solution for video-shooting users.
• WiMic is compact and light weight.
It is very easy for carrying
• There is no similar solution in the market
• Noise reduction feature for Smartphone users to shoot video
• The simplest and cheapest solution for YouTubers/micro-film
• This solution is totally new. It means huge marketing effort is needed
• Initially mobile APP will be only available for iOS user. Android users will be missing in the initial business model
• The technology initially is only available for HD quality of
recording (4k is not available now)
• Users still need to bring WiMic out.
It will reduce the willing of purchase
• Hardware related company need a lot of capital
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Opportunity Threat
• The more stronger features of video on smartphones, the more people are willing to use smartphones to shoot video
• More and more YouTubers/
mircofilm
• People now tend to consume more video than words/articles
• There are more smartphone
accessories available in the market to support video-shooting
• Live streaming is more popular and more accessible in the market
• It is possible that Chinese or Korean companies will copy the same concept and produce same product quickly. because WiMic is more relative to hardware product
• People are becoming more distrust about crowdfunding platforms such as Indiegogo
Table 2: SWOT Analysis
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Chapter Six Marketing Strategy 6.1 Target Segment
WiMic’s target audience are prosumer level users, where the level between consumer and professional level. They shoot videos with smartphones and they have some skills of photography. What’s more, they sometimes use smartphones accessories like stabilizer and do post-editing to enhance video quality. The consumer level is that the people who use smartphones to shoot video without any specific skills. professional level is that the people who use DSLR or handheld camera and do post-editing in PC with Adobe Premier or AE (AE means After Effect). The examples of target audience are as below. First, YouTubers who frequently shoot videos to entertain their followers or fans. Second, micro-film
producers who make a living or earn some money by shooting relatively easier micro-film.
Third, travel lovers who love traveling around the world and are willing to shoot better quality of videos to preserve memories. Fifth, parents who love their children and treasure the moments with them by shooting better video to preserve the memories of their children’s play time or performance in the school, Sixth, advertiser who need to advertise their small business with limit budget by shooting some videos to share on social platforms and websites. Seventh, live stream users who need to shoot good quality of videos without too much noise in the form of live streaming. Bands who shoot videos to preserve the
performance with the features like multiple sound tracks mixing and noise reduction.
The age of these target audience is from 23 years old to 50 years old. These people are from graduate students with little money to parents with some time and money.
There are two main categories of user scenario as bellowed. The first case as bellowed.
There’s a YouTuber who is 25 years old and focus on sharing videos of trying different kind of delicious foods. In other words, He has about 300k followers on YouTube. One day he heard his friend told him that there is a great Chinese restaurant just nearby his home. In that weekend, he went to the restaurant and he want to shoot the video for introducing the
Chinese food. However, he found that there’s too much noise surround him. Then, he clip the WiMic on the cloth and start to connect it to the smartphone. After he shoot the video and did the post editing, he shared the video on his YouTube channel. Followers found the video with not much noise and the quality of video is good, then they click the like button in the end. The other case as belowed. There is a live streamer who is heading to Computex, the
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exhibition which is specific for PC related industry. When he arrived there, he found out that the place is too crowded and too many people are talking, if he just do the live streaming, the audience will hear nothing but noise. Then he clip the WiMic on the cloth and connect it to the smartphone. Then he can do the live streaming with noise-reduction in real time.
6.2 Channels
Channels are means employed to distribute goods or services from producers to consumers.
There are three kind of channels for WiMic as below. First, initially before product launch, crowdfunding platforms such as Indiegogo or Kickstarter for US, Makuake for Japan, ZecZec for Taiwan, are the best choices of channel because of making sure that people want to buy WiMic first, then WiMic will be manufactured based on their requirements. By this method, the business can get not only money but also exposure at low cost. After WiMic launching and finishing crowdfunding, it is quite important to cooperate with retail stores such as Best Buy and costco because they have the brand awareness and huge coverage in Europe and US so that this business can leverage their existing customers for exposure and sales. In addition, E-commerce is also considered, such as Ebay, PChome, Amazon. The last channel is the official website. When the brand awareness increased to certain level, WiMic can be sold on official website in the future. By adding the e-commerce feature on the official website. It will be without commission for sales so that the busibess can get the highest margin of WiMic.
Figure 9: Channels
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WiMic is a smartphone accessary, so the price of it should not be too high. The market price for single WiMic is $120 USD which is for both retail and official website. This price is perfect that it will not cost a lot for people to try WiMic which is a new type of smartphone accessary. However, before launching, the price for crowdfunding platform will be lower than $120 to test the market. An early bird special price is for only $79 USD, which means that buyers will get discount from crowdfunding platforms in first month. After one month of launching on the crowdfunding platforms, the price will increase to $99 USD for single WiMic. And it cost $179 USD for two WiMic and $249 USD for three WiMic.
6.4 Promotion
Startup actually sometimes rely on promotion more than product itself. A good product without successful promotion can still be failed. While startups usually don’t have much budget for promotion. So it is quite important to choose the ways of promotion. There are some methods are considered as below. First, crowdfunding Platforms is a good start for startup companies in the field of hardware. Exposing WiMic on crowdfunding can nearly cost no promotion expense. However, if funding process is successful, WiMic can get huge
exposures and a great deal amount of money. But the first thing is that shooting a good introduction video for WiMic in English and Chinese. An inspiring introduction video can demonstrate the core value to potential customers. After the introduction video had been done, it would be the best promotion with less expense by sharing it on YouTube and social platforms. Before launching crowdfunding project, sending pitch mails to media so that the business can get the coverage to maximizing the exposures to make crowdfunding success.
Second, Media are quite important for startup to get enough exposure in a short time.
However, media usually have their own specific target audience. Online media are better than offline media because WiMic supposed to be exposed to media with audience of technology lovers. It is wasting time of promoting WiMic on TV or newspapers in the beginning. There are some online media are related to the category of WiMic, such as TedCrunch, Engadget, Digital Trend, extremetech.com, AudioXPress, crowdfundinsider.com, Inside and DigiTimes.
In the meanwhile, social platforms should be ready in the very beginning. What’s more, there should be regular posts on social platforms at least one article per week, such as Instagram,
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Facebook, Twitter and Vimeo. However, posts need to be different on each social platform so that readers or followers will not feel these message are annoying. In addition, in every generation, word of mouth is still a powerful promotion method. The starting point will be from YouTubers, because these people are the ones who need to shoot videos in good quality without noise. Providing free WiMic to these famous YouTubers and ask them to shoot a video for showing the core value or benefits of WiMic. And then, sharing these videos on social platforms to draw attentions.
The most important of all, collecting all of the e-mail for potential customers, and continually sending them e-mails for updated news of WiMic. And if these starting point of marketing strategy is successful, then Facebook advertisement should be considered in the future.
In addition, crowdfunding strategy is that before launching it, there should be preparation for six month. This preparation includes in managing Facebook fan page, managing the official blog, sending as many as possible pitch mails to digital media, and the most important of all, sending enough free samples to blogers or YouYubers for writing recommendation articles or shooting videos of product introduction. With enough exposure, it will be more likely that the crowdfunding can grab enough backers and lead to success.
6.5 Growth Strategy
Growth strategy is that the strategy aimed at winning larger market share, even at the expense of short-term earnings. Based on the marketing strategy, we should get 200 backers and their mails in each crowdfunding platform. As for social platforms, the target is that increasing for 1000 Facebook fans, twitter and Instagram in first three months, then 5000 fans in the first year for Facebook. As for the YouTube videos, 10000 times review rate of introduction video on YouTube and Vimeo in the first year. On the other side, channels are the most essential part of growth rate. cooperation of retailers such as Amazon, Ebay, Best Buy and PChome will be necessary.
As a startup, market share is relatively low in the beginning, it needs a lot of effort from marketing. The target of market share, from 2018 to 2021, are 0.005%, 0.01%, 0.05%, 0.08%
and 0.1%.
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Chapter Seven Product Roadmap
Initially, there is only one product available in the market which is in prosumer level.
Prosumer level means that it is the level between consumer level with basic features and professional level with higher specifications for professionals. If WiMic get positive feedback and gain enough revenue, WiMic professional model, called “WiMic professional” will be taken into consideration. The specifications of these two products are descripted as below details.
First, WiMic only support IPhone in the beginning, then after some time, if the market feedback is positive, supporting Android system will be considered in the future. The intention is that users of IPhone with higher purchase power, they are more willing to buy accessories. It will be the best starting point. While the WiMic professional will support DSLR and any handheld camera.
Second, WiMic will be without microphone sponge which will increase the quality for receiving audio. While, WiMic professional will be with sponge.
Third, WiMic support three soundtracks for audio and video mixing with three WiMic recording simultaneously. However, WiMic will support up to seven sound tracks because some professional usage will require more sound tracks such as big bands.
Forth, WiMic only provide mono recording mode for these users use it for speaking as main purpose. They are not so demanding for exquisite audio quality. But WiMic professional will provide stereo sound for the professional users.
Fifth, WiMic’s battery operation time only up to 4 hours. However, WiMic professional will include a stronger battery up to 8 hours so that these professionals don’t need to charge it frequently.
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Chapter Eight Risk Analysis 8.1 Regulation
All of the electrical devices are required to have some certificates so that they can be sold in specific regions. The basic necessary certificates are CE and UL. The CE marking is the manufacturer's declaration. The letters ‘CE’ appear on many products traded on the extended Single Market in the European Economic Area (EEA). They signify that products sold in the EEA have been assessed to meet high safety, health, and environmental protection
requirements. CE marking also supports fair competition by holding all companies
accountable to the same rules. As for UL, UL provides safety-related certification, validation, testing, inspection, auditing, advising and training services to a wide range of clients,
including manufacturers, retailers, policymakers, regulators, service companies, and consumers.
However, based on this situation, the business require huge amount of expense for certificates. The expense of CE is about $20,000 USD and the expense of UL is about
$30,000 USD. So the total expense of certificates is $50,000 USD.
8.2 Risk Factor Analysis
The objective of the RFA is to identify and understand the underlying factors that ultimately will drive the behavior of the top level schedule, cost, and technical performance measures for a project. Table 3 risk factor analysis show the possible rick that the impact on this business model and the proposed methods to overcome risks.
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Table 3: Risk Factor Analysis
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Chapter Nine Financial Analysis 9.1 Source of Revenue
Major income comes from the sales of WiMic & Crowdfunding. The details of revenue from sales as below analysis. First, the price of WiMic is $120 USD. And the margin of WiMic is 30%. The assumption based on the cost of manufacturing is about 30% of price and
distributors will earn 40%. So the margin of WiMic is 100% - 30% - 40% = 30%. Besides, the goal of total sales volume for the fifth year is 1325000,000(total number of people who shoot video) * 10% (10% of people who shoot good video) * 0.1% (only 0.1% of these people buy WiMic) = 132500. Hence, revenue from sales in first year will be 132500 * ($120
* 30%) = $4,770,000. What’s more, revenue from Crowdfunding will be $30,000 and the total gross profit will be $5,100,000. Details of market share and gross profit as shown in the Table 4.
2018 2019 2020 2021 2021
Price 120 120 120 120 120
Market share 0.00005 0.0001 0.0005 0.0008 0.001
Margin 30% 30% 30% 30% 30%
Total market volume 132,500,000 132,500,0 00 Target sales volume 6,625 13,250 66,250 106,000 132,500
Projected sales 238500 477000 2385000 3816000 4770000
Table 4: Market Share and Gross Profit Forecast
9.2 Fixed Cost
To launch this product, there are some minimal fixed cost associated with this project. Main fixed cost will be towards
• The expense of registration that includes getting legal license, corporate identification, and tax identification. The number is $1700 per year
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• Rent of the office space, setting up the office cubicles, conference room, meeting room needs and internal infrastructure cost. The number is $4500 per month
• Startup expense includes I.T infrastructure cost like personal computers, laptop, projectors, local area network, printer, facsimile and telephone lines to be connected.
The total number is $7000 per year
• Information technology cost will be segregated into hardware and software. Hardware part covers the webserver, license, domain etc. and software part will be the cost associated with the I.T vendor for developing the portals. These cost for systems and UI development is $8,000. The cost for hardware, server, license, domain registration, SEO and google analytics. The total number is 10,000 per year
• Mold is a great amount of cost for hardware companies. Usually, the cost of mold will be at least $30,000
• CE/UL Certificates will cost 20,000 plus 30,000, the total is 50,000
The total expense is $101,200. And the depreciation of mold and IT infrastructure is about 5 years
9.3 Variable Cost
Major variable expenses can be summarized as below items
• Rent of office space is $6000 for each month
• Full time employee’s salary including three directors and 6 subordinates.
Administrative wages for directors will be fixed during the first five years of
operation. RD will be hired every year, from two RD during the first year to five RD at the end of the fifth year. However, the salary of each RD will still increase 5% each year to retain talents
• Utility fee like electricity and water is $200 for each year. In addition, we make the assumption that it will increase 10% each year
• Misc. cost associated with janitor services which is $800. In addition, we make the assumption that it will increase 10% each year
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• Marketing expenses such as exhibition for Cebit, press cover and advertisement. It cost around $20,000. In addition, we make the assumption that it will increase 50%
each year. Marketing budget will increase by 50% regarding to the previous year during the five years of operation because the necessity of promoting the services to attract customers
• Travel budget is around $30,000 because we need to discuss the cooperation with channels or business partners.
Some details of operation expense and wage expense as shown in table 5 and table 6.
Total variable cost is $1,017,500 operating
Table 5: Operating Expense
2018 2019 2020 2021 2022
total wage 121800 140390 159910 180405 189425
Table 6: Wage Expense
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An income statement is a financial statement that reports a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities.
The detail of income statement for first five years as shown in Table 7.
2018 2019 2020 2021 2022
Gross profit 238500 477000 2385000 3816000 4770000
crowdfunding profit 30,000 0 0 0 0
total profit 268,500 477,000 2,385,000 3,816,000 4,770,000
operating expenses 91020 91120 91230 91351 91484
wage expense 121800 140390 159910 180405 189425
marketing expense 20,000 30000 45000 67500 101250
certificate expense 50,000 0 0 0 0
income before tax -77,760 183,750 2,057,121 3,445,004 4,356,101
income tax(5%) 31237 349711 585651 740537
Net income -77,760 152,513 1,707,410 2,859,353 3,615,564 Table 7: Income Statement
The first year, there will be negative net income. But after one year, it will be increased to positive net income. As for net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows. The value of NPV is
$3,205,366. The internal rate of return (IRR) is 544%. It means that this business is really profitable. However, it is important to overcome the huge expense in the first year to survive.