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United States, Ne... "1 Executive Summary The vision for eYoda.com is to become the premier Internet based, intelligent, automated corporate procurement decision support system that is interactive, secure, and easy to use. Corporate procurement managers will use eYoda.com to secure MRO and direct materials from multiple online suppliers at the best available terms and prices. eYoda is an intelligent, automated agent that incorporates the business rules of the buyers, understands the requirements of the seller, and is able to find on the Internet the best value to help its clients fully realize the promise of business-to-business eCommerce. eYoda has already developed and filed patents for the core technology. The basic prototype is ready as a proof of concept. eYoda is seeking first round equity funding of $1.5 million based on a Year 1 valuation of $7 million to setup the infrastructure, basic management team, marketing campaigns, strategic alliances, business development, and product development. Second round financing in the amount of $5 million to be secured in the same year would be used to grow aggressively, hire and place a top-notch executive team. In Year 2, third round funding in the amount of $15 million will be used to prepare for an Initial Public Offering. This business plan summarizes the strategy, business model, operating model (including organizational structure), action plan and business case for launching eYoda.com. 1.1 Industry Overview By 2004, B2B electronic commerce conducted over the Internet is forecasted to reach $2.7 trillion, compared to $43 million in 1998. Of this, up to 53%, is expected to be conducted via electronic marketplaces . Electronic marketplaces enable and provide a forum for online transactions between businesses. It is predicted that electronic marketplaces will generate $57 billion savings for their participants by lowering processing costs and improving product pricing . Leah Knight, senior analyst at Dataquest, explains that the rapid expansion and considerably higher sales volumes of online exchanges will be driven by how these exchanges transform the markets they serve . In this landscape, global online procurement is expected to grow at a 69% compounded growth rate between 1997 and 2003, faster than any other aspect of business-to-business e-commerce . Current and emerging B2B eCommerce trends include: Fragmented Marketplace - Analysts predict that multiple players will enter the marketplace in a short time, significantly raising the number of online sources for MRO and direct materials. These B2B eCommerce marketplaces include Vertical Marketplaces including eSteel.com, Horizontal Marketplaces such as MRO.com, Broad Marketplaces such as Ariba, or CommerceOne, and Enterprise Marketplaces such as Dell. Dynamic Pricing - B2B online marketplaces (NetMarkets) are adopting dynamic pricing models that include forward auctions, reverse auctions, exchanges and dynamically priced catalogs. Monitoring 24/7 marketplaces that are growing in number and shifting towards dynamic pricing models including multiple terms will make manually driven traditional procurement process extremely difficult, if not impossible. The eYoda.com system is an automated corporate procurement decision support system, positioned to significantly facilitate the B2B procurement process. 1.2 Business Model & Competitive Advantages The eYoda.com system is an intelligent corporate procurement decision support system that virtually consolidates multiple electronic marketplaces to obtain the best available prices and terms. In addition, the system will intelligently act on behalf of its user by automatically engaging in negotiations with the supplier to further obtain the best terms possible. Revenues will primarily be generated by charging the buyer a transaction fee. The eYoda system will take the buyer's request for product specifications, maximum unit price, delivery schedules, etc. and assist the corporate purchasing manager in deciding from which online manufacturers/dealers to obtain the products. Further, the eYoda system will intelligently decide to bid, should the required product be available in a dynamic pricing environment such as an online auction. Such bids reflect the requirements and criteria set by the buyer, and are automatically adjusted in a competitive bidding situation. eYoda will function as a decision support system capable of finding the best prices and terms across multiple vertical and horizontal hubs, marketplaces, product/material databases built on various technology platforms. Instead of having to access multiple netmarkets, procurement managers only have to enter product specifications once to activate the eYoda procurement system. The eYoda system virtually aggregates multiple online sources and thereby reduces the cost and the time required to find the best value. To date, eYoda.com faces no direct competition. The company has invested over $250,000 of the past ten months to develop the backend technology and forge relations with leading companies in the industries that eYoda targets. By capitalizing on its first mover advantage, eYoda can establish a leadership position in the marketplace. 1.3 Operating Model eYoda.com will be developed in phases. To ensure that the site satisfies the business needs of its users, eYoda’s roll-out strategy is to acquire expertise in one initial industry and branch off into other industries only after the concept has been proven. Domain expertise involves understanding the business processes, having a good knowledge of the terminology, negotiation methods and qualification criteria used in that industry, and the ability to bring to the table a critical mass of buyers and sellers. Based on examination of these factors, eYoda.com management determined that the first version of the product would be developed for the Computing and Electronics industry. Chemicals and Steel are being considered as the next vertical focus. eYoda.com will identify early adopters in a vertical industry and approach such companies to refine the product given the adopter’s industry and purchasing process expertise. The early adopters would be the critical to ensure that the site incorporates all the different aspects of the industry’s purchasing process. Sales and Marketing activities will commence at the time of the official product release. 1.4 Launch eYoda.com will be launched in phases, both to manage risk and build capabilities and knowledge. The first phase will include a fully functional Web site by June 2000. This initial phase will be used to prove the concept, gain valuable customer feedback, and optimize the site’s design and functionality. eYoda.com’s feature set will be continuously reviewed, monitored and modified according to changing market dynamics and technology advances. Thus, the later phases will include additional functionality to further facilitate the corporate procurement process and aggressive marketing and sales efforts to capture significant size of the market to exploit the first mover’s advantage. 1.5 Marketing By launch of Phase I, eYoda.com will have secured the strategic partnership of a large buyer in one of the targeted vertical industries. The initial goal is to build brand awareness among the suppliers of this strategic partner. Based on insights gained from the relation, eYoda.com will broaden its reach to include more buyers from within the same vertical industry. Finally, eYoda.com intends to broaden its scope to encompass other vertical industries that exhibit similarly desirable characteristics. The marketing campaigns will be informative and provide timely information about eYoda.com and the business concept. In addition to strategic relationships with large buyers and resulting referrals, the marketing communication plan entails targeted e-mail campaigns, site-specific viral marketing techniques, traditional direct marketing, online and offline advertisements, and public relations efforts especially in form of public speaking engagements. Campaign content will be developed by a new-media agency familiar with the Internet, especially B2B operations. Targeted e-mail messages containing white papers that address drawbacks of current e-procurement strategies and the advantages of eYoda.com will be mailed to Chief Purchasing and Chief Financial Officers. The eYoda.com Web site will contain tools that will enable viral marketing by notifying a buyer whenever a seller runs an auction of interest. Traditional direct marketing efforts will include direct mail to purchasing managers and demonstrations at trade shows and conferences. Advertising will evolve to focus on the placement of print ads in targeted, industry specific online and offline publications perused by corporate purchasing professionals. Placement of advertising banners and negotiation of exclusive contracts on Web sites frequented by corporate procurement professionals will also be integral to the campaign. Lastly, eYoda.com will aim to set up speaking engagements at conferences and in the area of dynamic pricing, business-to-business auctions, virtual exchanges, and e-procurement. 1.6 Organization & Management Team eYoda.com was incorporated in New Jersey in February 2000, and is owned by Simplex Solutions Pvt. Ltd. and Brahm Om Sharma, Acting CEO of the venture. The company’s Chairman of the Board is Dr. Enrique J. Sosa. Dr. Sosa was named President of BP Amoco Chemicals when the two companies merged on January 1, 1999. Prior to joining Amoco he was the president of Dow North America and a member of the Board of Directors and senior VP of the Dow Chemical Company. He also was a member of Dow’s executive committee. In addition, Dr. Sosa was a member of the Board of Directors of Electronic Data Systems (EDS) and of the Chemicals Manufacturers Association where he was a member of its Executive Committee. Other posts have included chairman of the Executive Committee of the American Plastics Council and director of Dow Corning Corporation and Destec Energy. Dr. Sosa is currently the Chairman of the Advisory Board of OneChem.com, a B2B Company in the Chemical Industry. The interim management team includes Mr. Brahm Om Sharma, Dr. Mahatapa Palit, and Mr. Gaurav Bisht. eYoda’s Advisory board includes Mr. Jorn Teutloff, Mr. Vaibhav Gupta and Mr. Kapil Shah. The company is in the process of securing a Chief Financial Officer/Controller, a Chief Operating Officer, a VP Product Development, and a VP of Strategic Alliances. Additional senior management will be recruited to bring proven eCommerce skills and experience to the team. The ...
