C2 c finalpresentation
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This document summarizes the development of an idea for a customizable cookie cafe business. Initial customer interviews found high interest in customization. The business pivoted to an online customizable cookie model allowing customers to pick dough, mix-ins, and toppings. An MVP demo was tested on campus with positive feedback. Further market testing found acquisition costs would be high. The document analyzes costs and revenue models for retail-only, web-only, and combined models. It determines this could be a viable business if started web-based with a partner for baking and fulfillment to reduce costs initially.
C2 c finalpresentation
- 1. Kavya Desai Devon Chen Emmiliese von Clemm Princeton University, Lean LaunchPad December 12, 2012
- 2. Initial Idea: DIY Cookie Cafe • Baking as bonding and entertainment for family and friends • Assumptions- People appreciate: • Dessert, more specifically cookies • No mess/cleanup • Customization • Warm, freshly baked cookies provide a sense of love • Cupcakes recently experienced a boom in popularity; could cookies be next?
- 4. Feedback: Customer Interviews • Tested various value propositions through conversations and surveys: • Baking as an activity: families with children are somewhat interested, but low among other groups • Hassle free, no mess: not as highly valued as expected; many consider the trip to be a hassle • Customization: Customers got really excited about customization!
- 5. Trip to NYC • Explored dessert scene in NYC and learned about their business models • Learned about cupcake trend • Branding, individual portions, atmosphere, focus • Georgetown Cupcakes, Baked by Melissa, Levain Bakery, Insomnia Cookies, Rice to Riches, Molly’s Cupcakes, Babycakes
- 6. Pivot: Customizable Cookies Step 1: Pick a dough Step 3: Pick Toppings • Original • Double Chocolate • Nutella • Peanut Butter • Caramel Drizzle • Oatmeal Step 2: Pick Mix-Ins • Milk Chocolate Chunks • Dark Chocolate Chunks • White Chocolate Chunks • Butterscotch Chips • Macadamia Nuts • Reese’s PB Cups • Dried Coconut • Potato Chips • M&Ms • Craisins • Twix • Pretzels
- 8. Key Interview: Loren Brill • Founder of Sweet Loren’s • Product: All-natural, frozen, ready-to-bake cookie dough and brownie batter that contains the finest unrefined ingredients • Target Audience: Upscale grocery store customers • Insights: • Her customer discovery process and pivots • Co-packers • Simplicity of break and bake dough • A need for packaging that jumps off a shelf
- 9. MVP: Website • Testing: Web Channel • Allowed for online ordering • Results: • Limited programming experience/time prevented us from having a more trustworthy looking site • Had trouble getting people to pre-order cookies for our Demo Event • Moving forward, a more interactive online ordering process is key
- 10. MVP: Demo Day • Testing: Physical Channel • TapRoom Café, Campus Club • 8 hours long • 130 cookies sold • $145 in profits • Price: $2.50 per cookie • Positive feedback on customizability, deliciousness of cookies • Negative feedback on wait-time • Complicated operations
- 11. Key Interview: Modern Cookie Co. • Failed customizable cookie business in northern California • Insights: • Conveyer belt oven • Minimizing wait time is critical • High foot-traffic location is necessary • Barriers to marketing cookies as “healthy” • Need for consistency in product offered
- 12. AB Testing • Tested different value props through 4 campaigns • Facebook Ads • Google AdWords • Splash pages • Indicates out customer acquisition costs will be high • Low click through rate for all • High cost per click • Very few sign ups • 251 page visits to 4 pages between Google & FB Ads • Caveats: • Customizable cookies are a new concept • Very low word count: other methods may be more effective
- 13. AB Testing: Advertising Campaig 1 2 3 4 n Company Cookies to Cookies Cookies to The Cookie Name Crumbs to Crumbs Laboratory Crumbs (Crowdsourced) Order 2 Dozen ½ Dozen 1 Cookie 1 Cookie Size Min CTR .25% .22% .28% .26% CPC $.52 $.42 $.41 $.52 Campaign 1 2 3 4 Advertising Holiday Convenienc Customizability The Cookie Angle e Laboratory CTR .0063% .0043% .0049% .0073% CPC $.81 $1.27 $1.01 $.79
- 14. Cost Analysis: Summary • Prices: • Retail: $3/single cookie, $16/half-dozen, $30/dozen, $1.50/milk • Web-based: $30/dozen (+$5 shipping), $50/2dozen (+$8 shipping) • Breakevens: Year 1 / Future Years CHANNEL SINGLE ½ DOZENS DOZENS GLASSES DOZENS 2DOZENS COOKIES OF MILK (WEB) (WEB) Retail Only 100 / 95 12 / 10 6/5 50 / 48 - - Web Only - - - - 25 / 16 8/2 Web - - - - 16 / 12 8/6 w/Partner Retail& Web 85 / 77 9/7 4/3 44 / 36 16 / 11 6/4
- 15. Cost Analysis: Highlights • Human Labor: • Web Developer ($10,000 retail vs $50,000 web) • Employees ($85,000) • Insurance ($7,200) • Major fixed costs: • Utilities ($7,800 retail vs $10,000 web vs $16,000 both) • Commercial ovens ($2,000 retail vs $10,000 web) • Freezers & Fridges ($3400 retail vs $5,200 web) • Variable Costs: • $0.98 per cookie (retail), $0.33 per glass milk, $1.30-$1.58 per cookie (web)
- 16. Customer Flow Customer Places Order Online Customer Orders in Key Activities Person Receive & Organize Order Mix Dough with Mix-Ins Shipping Bake Cool and Notify Customer Package for pick-up Delivery Service
- 17. Revenue Flow Overheads (Utilities, Rent, Salaries, etc.) Pay for Ingredients Pay for Suppliers of Mix- Doughs Co-packer Ins, Beverages, Pay for Pay for Shippin Serves g Shipping Company Cookies Cookies Delivery Service Customers Pay for Delivery (i.e. Seamless)
- 19. Is this a Business? • Great potential: Overall concept, customer interest, value propositions, and partner possibilities • Considerable hurdles: High start- up and fixed costs, wait-time in retail channel, driving web traffic • YES, this is a business. Roll-out needs to be strategic though.
- 20. Is this a Business? • Start web-based with a baking facility partner • Cut major costs of rent and equipment • Focus on developing a marketing campaign, branding, and a great site for sales • Move into a retail location that doubles as a processing facility • Split time between operating physical channel and web channel out of the same location • Use pre-existing website to facilitate sales • Both channels can grow off each other in terms of building brand • Depending on performance, invest more in web, retail, or both. • If web channel is overflowing with orders, invest in processing facilities and hire more employees to fulfill orders • If retail location is building popularity, consider franchising into similar locations, malls, etc
- 21. Moving Forward: Next Steps Immediate: • Establish critical partnerships • Baking facility to use in part-time for web channel • Co-Packer • Build a fully functional, aesthetically pleasing website • Online ordering capabilities Next Steps: • Explore different levels of customizability- crowd-sourced “cookie of the month” flavors • Build a mobile app
Editor's Notes
- #3: Devon
- #5: KavyaDon’t talk about pivot yetMore about what we learned from customers Emphasize that customization thing was really cool
- #6: KavyaBranding
- #7: Devon
- #9: EmmilieseFewer words
- #10: Emmiliese
- #11: Devon
- #12: Emmiliese
- #13: Kavya
- #15: Devon
- #16: Devon
- #17: Kavya
- #18: Kavya
- #20: Emmiliese
- #22: Emmiliese