Proprietary and Confidential
ONElist | Mailing List Communities
Business Plan
by
|
Mark Fletcher
President/CEO markf@corp.onelist.com |
Mark Maxwell
VP Sales and Marketing maxwell@corp.onelist.com |
ONElist, Inc.
951 Old County Rd. #107
Belmont, CA 94002
(650) 631-2940
November 17, 1998
Proprietary and Confidential
MISSION STATEMENT ...
EXECUTIVE SUMMARY ......
COMPANY HISTORY.......
CURRENT STATUS........
SERVICE DESCRIPTION ..
REGISTRATION.....................
CREATING AND MANAGING LISTS.............
FINDING AND SUBSCRIBING TO LISTS.......
ADDITIONAL FEATURES...
BUSINESS MODEL ..............
ADVERTISING........................
UP-SELLING.
LICENSING...
MARKET ANALYSIS ........
COOLLIST.....
LISTBOT.......
FINDMAIL....
OTHERS......
DESCRIPTION OF TECHNOLOGY
DATABASE SYSTEM......
EMAIL PROCESSING MACHINES
WEB SERVERS......................
ARCHIVE SERVER.......
OTHER SYSTEMS....
MANAGEMENT AND KEY PEOPLE...........
MARK FLETCHER, CEO & PRESIDENT
SCOTT SHAMBARGER, VP OF ENGINEERING......................
MARK MAXWELL, VP OF SALES AND MARKETING......................
ETHAN KAN, SENIOR SOFTWARE ENGINEER...
KATE SHAMBARGER, TECHNICAL SUPPORT....
CARISA CANNAN, ART DIRECTOR..
FINANCIAL PROJECTIONS
MONTHLY EXPENDITURES TO RUN ONELIST FY 1999..............
ADDITIONAL ANTICIPATED EXPENDITURES (ANNUAL) FOR FY 1999
ANTICIPATED REVENUES (QUARTERLY) FOR FY 1999
GOALS.......... 14
ONElist is seeking funding from strategic partners and/or venture capital firms so that we can maintain our current high user satisfaction and accelerate our already explosive growth of users and lists. Our goal is to have over 5 million users and send out over 15 million emails a day by the end of 1999. Funding will provide the resources necessary to initiate programs to monetize our large user base and web and email traffic. Funding will provide the opportunity for the ONElist team to focus their professional efforts solely on the future of ONElist and allow us to maximize our potential for growth and long-term success.
Internet communities have recently gotten a lot of press, as companies start to provide services catering to small groups of people based on a common topic of interest. Mailing lists, which have been around since the beginning of the Internet, are the original Internet community system. A mailing list is defined as a group of people focused on a particular discussion topic or interest, who use electronic mail as the primary medium for their discussion. ONElist provides free mailing list communities. People can create new mailing lists, subscribe to existing mailing lists, or view archives of past list messages using our system.
ONElist facilitates the easy creation and running of mailing lists at no cost to the list creator or to the subscribers. In return for this service, an advertisement is appended to each email message sent to the mailing lists. We also sell advertising on the web site, in the form of ad banners.
We provide additional features for our list subscribers, which is why we refer to our lists as communities. We provide a group bookmark area, where subscribers can share links with other subscribers. We will also be adding several other community features, designed to drive subscribers back to the web site.
ONElist communities provide many exciting ad targeting opportunities. Each list is a self-categorized micro demographic. We ask each user for demographic information, which we refer to as a user profile. With this information, we are able to mine very specific demographic profiles of our lists. ONElist has users from all possible demographics, as evidenced by some of our lists:
· Titanic. ONElist was launched at the height of Titanic fever. We have hundreds of lists dedicated to all aspects of this film. These lists are typically populated by young women, aged 10-18. One example of these types of lists is TitanicRPG which is a role-playing list, where people pick characters from the movie and role play.
· Genealogy. We have many lists dedicated to genealogy. People interested in researching family histories use ONElist to trade information. These lists are typically populated by an equal mix of older men and women. One example of these types of lists is LDS_Genealogy, which is dedicated to genealogy issues of the Church of Latter Day Saints.
· Parenting. We have many lists dedicated to parents of young children. Many of these lists are segmented by the birth month of the children. For example, one list is called Aug97Moms and is for mothers of children born in August, 1997.
The combination of user profile demographic information and the specific topics of the lists provides very powerful targeting possibilities.
One thing that has characterized ONElist since our inception is our high growth. We are averaging a 1% daily growth rate and will have over 1 million users by the end of 1998, less than a year after we went on-line. This is without any advertising on our part. The reason for this is the viral marketing that our list owners do for us. A list community is nothing without subscribers. When someone creates a list community with ONElist, they have a strong incentive to advertise their list. When they advertise their list, they are advertising ONElist.
Work on the ONElist system began in August, 1997; the system went on-line in January, 1998 at www.onelist.com.. To announce the ONElist system, we told one person who was looking to start a mailing list. Over the next several months, our growth rate exceeded our expectations. So much so that, in July, 1998, we were faced with a dilemma: continue on with our current infrastructure and risk the overall performance and stability of the system or suspend the creation of new lists and swiftly upgrade the system. With our technology at the time, we couldn’t guarantee a quality service if we continued to accept new lists. The prudent choice was to proactively upgrade the system. We embarked on a two month upgrade process, where we created a scaleable, distributed system to handle our continued growth. With the upgrade completed, we started accepting new lists again in late August, 1998. The service was uninterrupted for existing lists.
Mark Fletcher designed and developed the initial ONElist system and was the sole person supporting ONElist from its inception through May, 1998. Realizing that ONElist was already too much to handle for one person, Mark brought in Scott Shambarger in June, 1998. Scott has an extensive database background that has proven invaluable. In August, 1998, Ethan Kan was brought in to help with the continuing software development of the ONElist system. In September, 1998, Kate Shambarger was brought in to handle the email technical support for ONElist. In October, 1998, Mark Maxwell was brought on board to help with the business side of ONElist, including partnering and pursing additional funding. ONElist has been funded to this point by Mark Fletcher and Scott Shambarger.
Keeping up with our explosive growth has been a continual challenge. It is not difficult to create a basic mailing list system. What is very difficult is creating a system that is distributed and scaleable to keep up with growth and to provide a reliable service. This is the real barrier to entry for a mailing list service. The ONElist system is based on an Oracle database, which provides the scalability that we need to continue to grow at current rates.
As of November 15, 1998 ONElist membership consists of:
· 850,000 Users
· 42,000 Lists
· 1 % average daily user growth
· 3 - 5 million email messages sent out daily
· 7 - 8 million page views per month on the ONElist web site
The ONElist system is running on the following hardware:
· 5 Linux based PCs dedicated to sending email
· 1 Linux based PC dedicated to running the web site
· 1 Linux based PC with RAID dedicated to list archive storage
· A Sun Ultra Enterprise server with RAID running an Oracle database
The hardware is leased from DigitalNation, an Internet Service Provider.
ONElist provides community services through mailing lists. A mailing list is a group of people focused on a particular topic of interest. Communication is done primarily through the exchange of emails, although we are adding new features to increase usage of the web site.
Before a user can create a list or subscribe to a list, they must first register with ONElist. They supply us with their email address and a password. In addition, we ask several demographic questions. These questions are optional and can be changed at a later time. All of this information is collectively referred to as the user profile.
To create a mailing list through the ONElist system, a user goes to the ONElist web site, at http://www.onelist.com. Creating a list is a simple process that is accomplished through the completion of a couple of forms on the web site. The user must define the list, including the name of the list, a description of the list, the category of the list, the primary language of the list and the maturity level of the topic of discussion. At this point the list is created and is operational. The person who created the list is referred to as the list owner, or list manager.
Once a list is created, subscribers of that list can send email to listname@onelist.com, where listname is the name of the list. Messages sent to this address are automatically forwarded to the other subscribers of the list. ONElist appends a brief text advertisement to each message sent out.
ONElist provides several functions for managing the list once it has been created. These functions are only available to the list managers. Management functions include the ability to add users to the list, approve messages to the list, edit the list archives, and change any attribute of the list.
The ONElist web site, in addition to providing the ability to create and manage lists, also functions as a search engine for mailing list communities. People looking for mailing lists can search the ONElist database of lists. Lists can be viewed by category. ONElist also supports keyword searches as well as more advanced searches on list language and maturity.
Once the user has located a list of interest, they can view the archives of the list discussion, if the list has public archives. They can also subscribe to the list.
We provide additional features to each of our lists. We provide a group bookmark function, where subscribers to a list can share links to web sites. We also allow people to post to lists directly from the ONElist web site.
We have several additional features that we plan on implementing in the near term. We will be adding a survey tool. List owners can specify a question and a set of answers and request that list subscribers answer the survey. We will also be adding a calendar function, where list subscribers can share events.
We will also be adding file sharing capabilities. We will give each list community a fixed amount of disk space. Subscribers can then share files within their community. Files can be uploaded and downloaded easily, and viewed through the web site. In addition, we will be offering the ability to purchase additional disk space for a monthly fee. We believe this will be key distinguishing feature of ONElist. People will have a common shared space accessible anywhere, where they can easily share files.
The business and revenue model for ONElist consists of three parts: advertising, up-selling additional features to our users, and technology licensing. To this point, we have not actively pursued any of these options, choosing instead to concentrate our limited resources on engineering issues and new features to grow our user base.
ONElist provides two different media options for our advertisers: banner ads on the ONElist site and a footer text advertisement which appears within every electronic message processed by ONElist. The banner option is fairly standard; the text message holds exciting potential. Because ONElist lists are user defined and segmented around interests, topics, or affinity groups, ONElist can offer advertisers specific market demographic groups.
· Sales and Marketing. We will sell both banner and text ads ourselves and in conjunction with ad brokers.
· Besides the basic advertising, we have many targeting possibilities. Lists are specific, segmented groups of consumers. Combined with information from user profiles, we have the ability to be very precise in our targeting. We are planning a two-tier pricing scheme for the text advertisements: general broadcast messages at a bulk rate and targeted ‘narrowcast’ messages at a premium rate.
· How will advertising through email work? Will small ads at the bottom of email messages be enough, or will we have to use a different model?
As ONElist expands its features and product offerings, we will offer premium service packages to individuals and groups. One such feature, discussed in the previous section, is file sharing. We will be able to up-sell additional disk space to lists for a monthly fee. This is similar to the free home page services, except that we will be able to charge more money for additional disk space than they can charge. This is because a list is a collection of people, where a home page is generally one person.
We are currently offering one up-sell feature, the No Ads option. For $4.95 a month, a list owner can specify that there be no advertising included on their list messages. We started offering this service after Findmail started offering it. Very few people have used this.
· For people to spend money on a service such as ONElist, they must be able to trust ONElist. This is accomplished through prompt technical support as well as a reliable service. Ensuring both of these costs money.
· This can add up to a significant percentage of our revenue. It also has the effect of tying users to our service; if they spend money for an additional service they are less likely to leave to a competitor.
· How many people are willing to pay for additional features from a free Internet service? What specific feature set(s) customers would require in a ‘premium’ service pacakge
· Will competition undercut margins?
ONElist has already been contacted by several parties regarding licensing the ONElist technology. We are currently pursuing deals with major Telco and ISP firms. Exact terms are handled on a deal-by-deal basis. Licensing the ONElist technology is a potentially lucrative revenue model, but must be handled delicately so as not to create additional competition for ONElist itself.
There are a couple of different ways that we can license our technology. We can license the system, meaning the source or compiled programs, to a licensee and they can run it on their hardware. ONElist would provide additional engineering support and consulting for additional fees. Also, we can provide end-user tech support for such licensees. Or we can run a system outright for the licensee.
· Sales and Marketing. We would need an expanded business development and sales staff.
· Engineering. We have some work to do to turn the ONElist system into a licensable product. This includes a tech writer to document the ONElist system.
· Support. Depending upon the licensing agreement, there could be considerable support costs.
· License and consulting fees. The deals we have put forth so far include an up-front fee as well as an ongoing charge.
· Ad revenue sharing. We can arrange to sell advertising for partners who don’t wish to do so themselves.
· How much support will a licensee require?
There are differing estimates as to the number of mailing lists currently on the Internet. Some estimate that the number is in the hundreds of thousands. We believe that there are at least this many lists already existing. Mailing lists are a popular form of communication.
ONElist is not alone in providing list services. The companies who provide list services can be divided into two groups, those who provide the services for a fee, and ad supported free services.
There are several companies that provide list services for a fee. These are not direct competitors of ONElist. Some provide services for as low as five dollars a month. These are not viewed as a large threat to ONElist. Any fee is going to be a barrier for people.
Coollist, at http://www.coollist.com, has been around for approximately two years. Like ONElist, they provide free mailing list services. There are several differences, however. ONElist provides several additional features that Coollist does not have, including the ability for list users to subscribe either to a normal or digest version of a list. This is a key feature not available with any of our competitors. Also, Coollist does not archive list messages for viewing on their web site. Coollist has a poor reputation for reliability. There is no way for people to search the lists that Coollist hosts. This combination of more features and better reliability makes ONElist a better choice for users.
Another competitor to ONElist is ListBot, at http://www.listbot.com. ListBot was recently bought by LinkExchange, which in turn was recently bought by Microsoft. Because of this, Listbot has access to better resources, including increased advertising. Like ONElist, ListBot sells advertising on the list messages it sends. ONElist has several advantages over ListBot. ListBot does not provide for a means to find lists hosted by it, nor do they provide the ability to search over their archives. They do not provide the ability to subscribe to either a normal or digest version of their lists. Their list messages contain both a message header and footer with advertising, which is unpopular with users. They cannot cope with their current message load; emails take up to 8 hours to be delivered to lists. They do not provide any additional community features. That said, they are still a strong competitor, because of their backing by Microsoft.
The third competitor is FindMail. FindMail probably hosts the most lists of all the free mailing list services. This is not because they started before ONElist, however. During our two month upgrade process, we were not accepting new lists, so most people went to FindMail. FindMail is our closest competitor feature wise, although ONElist still offers several key features that FindMail does not yet offer, including digests of list messages. FindMail is our strongest competitor. With their new web site, eGroups.com, they are also moving into the community space. FindMail has a branding problem, however. They started as FindMail, but added MakeList.com, as their free mailing list service. They soon abandoned that and have now created eGroups.com. Because of FindMail’s technology, not all people who are subscribed to their lists can use the FindMail web site to access their subscriptions. If a person subscribed to a FindMail list through email, then they will have to register again if they wish to use the web site features, including their new eGroups site. This is very confusing to users and is a shortcoming of their technology.
In addition to the mailing list providers mentioned above, we have a couple of indirect, yet large, competitors, specifically Yahoo Clubs and Excite Communities. Both services provide community based services, including web based message boards. ONElist's advantage is that mailing lists are more popular than message boards. By providing messaging through mailing lists, we have an advantage over these services. We will soon be completing additional features to match the features provided by these services.
ONElist is a distributed, scaleable system able to send out millions of emails a day and handle hundreds of thousands of web server hits a day. The ONElist system consists of several components, including the database, the email processing machines, the web servers, the archive server, and other systems. All of our software is written in C, and runs on UNIX based systems.
The core of the ONElist system is an Oracle database. Currently, the database is running on a Sun Ultra Enterprise Server with a RAID system. The database stores all user information, list information and subscription records. The database is on a RAID system, to protect it against disk crashes. The Oracle system provides several options for upgrading database capacity in the future, including data replication across multiple machines. Access to the database is done through custom software written by us. This allows all of our machines to access the database across the network.
The ONElist system currently handles between 3 and 5 million emails a day. We have built our email system on top of an existing system called Qmail ( please see http://www.qmail.org for more information on Qmail ). By using existing technology for the actual handling of email, we were able to save a lot of development effort. We have written several programs that interface between Qmail and our database system to handle the processing of email. Our email servers are running Linux on Pentium PCs.
We currently have 1 machine dedicated to serving web pages and we are in the process of bringing a second server on-line. Our web site consists of approximately 70 programs that generate custom web pages. We use the Apache web server running on Linux powered Pentium PCs.
We archive mailing list messages if specified by the list manager. These messages are currently stored on a RAID system for redundancy. We have approximately 7 gigabytes of compressed messages stored in our archives.
There are several other parts of the ONElist system. We have an autoresponder detection server, a email bounce server, and an ad server. These servers are written in C and run on Linux powered Pentium PCs.
ONElist consists of 5 people, with an additional person helping out in an unofficial capacity. A majority of the ONElist team has worked together before. Mark Fletcher, Scott Shambarger and Ethan Kan all work in the same division of Sun Microsystems, and already had a good working relationship outside of ONElist. With the addition of Mark Maxwell, ONElist is slightly less engineer-based, but we understand that we need additional people with business management experience.
Mark founded ONElist and was responsible for the initial development of the ONElist system. Currently, Mark oversees the operation and management of the company. Prior to founding ONElist, Mark held various senior software engineering positions with Pixel, Diba, and most recently at Sun Microsystems. Mark holds a B.S. in Computer Science from the University of California, San Diego.
Scott coordinates the ongoing software development and database operations for ONElist. Scott has held senior technical positions with Oracle, Diba and Sun Microsystems. Scott holds a B.S. in Engineering from the University of Pennsylvania and a B.S. in Economics from Wharton.
Mark oversees all of the non-technical business aspects of ONElist. Mark has seven years experience in Sales, Marketing, and Product Management with Silicon Valley firms, including Adobe Systems and Connectix Corporation. Mark holds a B.A. in Philosophy and Religion from Middlebury College.
Ethan works with Scott on the development of the ONElist system. Ethan holds a B.S. in Computer Engineering from the University of Michigan and an M.S. in Computer Science from Stanford University.
Kate leads our email tech support for ONElist. Kate received her B.S. in Psychology from the Glasgow University, Glasgow, Scotland.
Carisa works in a part-time capacity for ONElist designing and improving the user interface of the ONElist web site, as well as providing general corporate marcom services. Carisa holds a B.F.A. in Industrial Design as well as an M.F.A. in Computer Animation from the Rochester Institute of Technology.
Currently, ONElist’s only monthly expenditure is the leasing costs of the machines running ONElist. This is currently $5000 a month. Below is a table of the ONElist monthly expenditures based on the current employees receiving salaries/benefits, having office space, and continuing to lease/host our machines off-site.
These numbers are what it would cost to run ONElist with our current employees.
|
Description |
Cost (per month) |
|
· Salaries & Benefits for: ¨ CEO/President ¨ VP Engineering ¨ VP Sales/Marketing ¨ Software Engineer ¨ Tech support/customer service person |
$40,000 |
|
· Facilities |
$5000 |
|
· Equipment leasing (offsite hosting) |
$5000 |
|
· Other/ Misc. |
$1500 |
|
Total |
$65,000 |
|
Total Per Annum |
$780,000 |
ONElist is growing at a large rate. To continue to provide the level of service that our users are accustomed to, we will need to expand our engineering and support teams. We also need a sales and marketing department, to maximize our advertising potential. Our web site does not fit into one category, which precludes using an ad broker service. Also, our email ads are text, which means we have to sell them ourselves.
The ONElist service is currently hosted by DigitalNation. The ONElist machines are leased from DigitalNation and are not owned by ONElist. While this has been cost effective until this point, with our continuing growth it will be less expensive for us in the long-term if we owned our own equipment and utilized a local co-location service like Exodus or Frontier GlobalCenter.
|
Description |
Cost |
|
· Equipment leasing (offsite hosting) |
$60,000 |
|
· Marketing |
$150,000 |
|
· Headcount ¨ Sr. System Admin ¨ Jr. System Admin ¨ Software Engineer ¨ Customer Service Rep. ¨ Administration person/office mgr. ¨ Business Development/Sales Mgr. (1/2 year) |
$430,000 |
|
· Facilities (new employee costs) |
$30,000 |
|
Total |
$580,000 |
During this past year, we have been focusing solely on the technology side of the ONElist service. We have not pursued revenue. While we do offer the No Ads service, at $4.95 a month, only 4 lists have opted for it. All figures below are anticipated based on the initiating the Revenue Model activities outlined previously.
|
SOURCE |
AMOUNT |
|
ADVERTISING |
$15,000 |
|
LICENSING |
$50,000 |
|
UP-SELLS |
$0 |
|
SOURCE |
AMOUNT |
|
ADVERTISING |
$30,000 |
|
LICENSING |
$100,000 |
|
UP-SELLS |
$0 |
|
SOURCE |
AMOUNT |
|
ADVERTISING |
$75,000 |
|
LICENSING |
$100,000 |
|
UP-SELLS |
$1,500 |
|
SOURCE |
AMOUNT |
|
ADVERTISING |
$125,000 |
|
LICENSING |
$100,000 |
|
UP-SELLS |
$5,000 |
|
1999 TOTAL |
$601,500 |
We have set several goals to achieve for the year ahead:
1. Continue to grow our user base. Increase average daily growth rate to 1.5% and have over 5 million users by the end of 1999.
2. Continue to grow our email and web traffic. Our goal is to send out over 15 million emails a day by the end of 1999..
3. Implement our planned new features, including surveys, group calendar and file sharing.
4. Continue to provide quick email delivery.
5. License the ONElist system to 2 companies.
6. Develop an effective email based advertising system, whether that continues to be ads at the bottom of emails, or separate messages.
7. Internationalize our system. Localize the web site and email messages into the top 5 foreign languages and make it easier for non-English speaking people to use the ONElist system