Introduction
To preface the explanation of Agglu, it should be noted that Agglu’s services are broken into two segments: (1) for merchants and those that consult and/or buy media for merchants: a deal distributor recommendation and insights platform and (2) for deal distributors: a merchant acquisition channel. For the purposes of the lean startup, I will focus on the development and maturation of the merchant solution. My strategy is to initially develop and grow the merchant solution to gain a valuable dataset of merchants to present to deal distributors or to create a baseline to transform the service as a tool for marketing consultants.
Problem:
The daily deal industry is currently structured to fuel to the rapid growth of the deal distributors. Massive revenues are realized by distributors at the expense of merchant profits. Merchants lack the knowledge and the collective bargaining ability to change the merchant terms with distributors and choose between the ever increasing number of deal distributors in their market.
Solution:
An online solution to enable merchants (small/med businesses) to analyze the rapidly growing number of daily deal providers (e.g. Groupon, Living Social) to find which distributor can best help the merchant achieve their promotional goals within their financial and operational means. The solution will ultimately provide power to merchants when working with daily deal providers and new types of Internet marketing and collective/group buying products.
Business Model Canvas
Below is the current canvas as created in LeanLaunchLab::
The major risks to the model is the ability to attract merchants to use the product and understand their willingness to pay for such a product. In the later weeks I will test merchants willingness to pay.
Current State of MVP
The MVP is still in the development stages and a private beta is not yet available. I’m currently bootstrapping the project but have managed to find a very talented development group which I’m working with based in Bangladesh. Fortunately, the developers are large proponents of agile development and have implemented some of their own products using the lean methodology. By using technologies such as Skype, Google Docs and and Pivotal Tracker, the distance and time factor hasn’t hampered the development efforts. I expect that a MVP will be available with the next month for a limited market and limited number of distributors. Full implementation requires a large data gathering process, while possible at this point, isn’t being pursued until later in the development process.
Current Lean Startup Goals
Verify Hypothesis: Channel – Merchants are interested in comparing deal distributors, they are looking for such answers online, and I can attract such relevant traffic to the website
Verify Hypothesis: Revenue Stream – Merchants will find value in comparing deal distributors and will be willing to pay for deal optimization, additional detail or simulations. Merchants may be interested in advanced/higher priced solutions or more customized consulting.
Verify Hypothesis: Customer Relationship – Merchants will be able to utilize the web solution effectively. Relevant traffic will be retained and converted to signups or sales.
Test Stages:
Below is a high-level overview of the tests I plan to perform validate the above hypotheses.
- Attract relevant traffic to site
- Convert traffic to perform recommendation simulations
- Covert simulation users to signup
- Understand who the users are
- Optimize what information/output to withhold from the free product to test merchants willingness to pay for certain features
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Agglu