Electronic Filing Storage Business Plan

 The organizational challenge faced by consumers today is enormous. In 1995, the United States produced approximately 4 trillion documents–over 600 million pages of computer printouts each day! The average American consumer receives 49,060 pieces of mail in a lifetime and uses 250 pounds of paper in a year. Approximately 50% of filed material is redundant or out of date and over 80% can’t be located when it’s needed. The demand for help solving this organizational crisis has spawned an entire industry of professional organizers who charge up to $350 an hour for organizational services.

To further the organizational challenge, consumers are demanding online access to their personal information. The rapid growth in online bill paying services, online financial account management, and online stock trading is evidence of this trend. Other industries, like insurance and health care, are examining ways that they can leverage the Internet to support document distribution. Simply sending information by email places the organizational burden on the customer. MyHaystack.com not only delivers the data, but organizes it for easy retrieval.

A MyHaystack.com account is more than an online repository for electronic files, it is a personalized, interactive, organizational system. MyHaystack.com seamlessly categorizes and stores critical consumer data in a personalized “File Cabinet.” Information includes product manuals, receipts, insurance policies, financial statements, and any other documents typically found in a home filing cabinet. For example, a consumer can register a product online to insure direct access to warranty data, manuals, technical support contacts, and other product specific information. When critical product information changes, the consumer’s file cabinet is automatically updated.

4.1 Market Segmentation

My Haystack.com has two large market segments to target:

• the individual consumer, who needs file storage and organization
• businesses which want to market to, or know about, these consumers

While our sales revenue comes from businesses seeking market research or a marketing audience, we can only provide these services once we have a large consumer user-base to offer them.

The chart and table below outline the total market potential for MyHaystack.com.

4.2 Target Market Segment Strategy

Consumers

Our marketing to end-users will focus on consumers comfortable with technology who want secure online access to their personal documents. Such users are savvy about online marketing, and will appreciate the opt-in nature of our data collection. Easy access to their documents, security, and organizational tools will be offered free, in exchange for receiving marketing messages. For the technologically fluent Internet user, this is seen as a good trade.

Business Clients

Although this consumer base needs all sorts of products, we will first focus on high-tech business clients who are seeking marketing information about the kinds of consumers willing to use online services like ours.

4.2.1 Market Trends

As Internet use increases at the household level, and consumer acceptance of new technology speeds up, consumers are demanding more personalized services. Direct marketing companies have demonstrated that a segment of the population is willing to exchange personal information for customized services or online convenience. Consumers frequently personalize Internet portals and are actively adopting online services like bill paying, investment management, and document storage. The growth in e-commerce creates new customer service challenges for product manufacturers while service providers are seeking new ways to remain competitive in the online environment. Additional relevant market statistics are:

• As of March 15, 2000, there were 259 million Internet users worldwide.
• Opt-in email services yield 5% to 15% response rates, compared to approximately 1% for banner ads and direct mail.
• This year, the average consumer will see or hear 1 million marketing messages–almost 3,000 per day.
• Email marketing expenditures alone will increase 417% to $4.6 billion by 2003.
• Online retail sales will grow to $184.5 billion by 2004 while online spending per household averaged $1,167 in 1999.

4.3 Service Business Analysis

MyHaystack.com provides business clients with market intelligence, targeted marketing, and consumer care services. Clients are product manufacturers, consumer-oriented service providers, and market analysis firms that use MyHaystack.com to streamline their interaction with a consumer base. Market data is acquired directly from consumers through their use of an innovative, online organizational tool.

The market research industry generated $13.4 billion in revenue in 1998. The Internet based portion of that industry is still in its infancy but is poised for rapid growth. Worldwide Internet users are expected to grow from 196 million in 1999 to approximately 502 million by 2003. MyHaystack.com is a pioneer in the Internet-based market research industry and is poised to take advantage of rapid online growth. Unique to the MyHaystack.com methodology is the ability to track detailed data on household product ownership over time, functionality that is not yet available in existing research organizations.

Online advertising and direct customer communications represents an even larger opportunity. Online advertising is expected to grow from $5.25 billion this year to over $45.5 billion by 2005–more than that spent in the United States on cable and network TV advertising. More importantly, as the competition for consumer attention grows, traditional Internet banner ads are giving way to permission based marketing. The MyHaystack.com organizational service allows consumers to actively choose the frequency, type, and source of direct communications they receive, positioning MyHaystack.com to become a leader in the online permission marketing industry.

4.3.1 Business Participants

The broader competitive landscape can be broken into three segments. Traditional research companies, as well as a new generation of online market research companies, offer market intelligence to businesses. Direct mail, and direct email, companies typically offer targeted market communications. MyHaystack.com also competes for consumer attention with other organizational systems and Internet destinations.

Market Research

Online market research is a rapidly growing market, expected to reach $230 million by the end of 2000. Current online research companies analyze consumer preferences derived from buyer’s guides, product-rating services, purchase information from e-commerce transactions, and online traffic. New research tools are evolving that allow real-time analysis of these growing information databases.

However, the number of consumers who conduct online commerce is still small when compared to the overall retail industry. Moreover, a limited number of consumers conduct a majority of the online transactions, creating a high bias in online research data. MyHaystack.com provides ownership and usage data for both online and brick-and-mortar goods and services. In addition, the MyHaystack.com database will aggregate detailed consumer ownership and service usage over time. Mining this data will identify previously unknown relationships and lifecycle marketing opportunities.

Permission Marketing

Traditional direct marketing is a $160 billion market. Online direct marketing is less expensive, faster, and more effective. Forrester Research estimates that direct marketing and promotions will control 50 to 70% of the online marketing budgets by 2003, or roughly $10 to $15 billion. Permission-based marketing is rapidly becoming one of the most preferred, cost-effective marketing tools available. In exchange for consumers’ attention, companies offer rewards, sweepstakes, points programs, and other promotions.

Consumers are willing to barter their privacy for personalization, but many don’t want to invest time to receive rewards. MyHaystack.com users will not need to fill in surveys, check boxes indicating categories of interest, or surf for interesting promotions. Cross-referencing a user’s filing cabinet will enable MyHaystack.com to deliver user-specific direct marketing and promotions. The user gains a valuable organizational service and receives relevant information.

A majority of online, permission-based marketing is focused on opt-in email mailing lists. The proliferation of HTML as a standard allows email messages to embed active links for immediate consumer response. MyHaystack.com extends the effectiveness of direct email marketing by building an interactive user service.

Organizational Tools

Consumer oriented organizational tools vary in functionality, cost, and consumer input requirements. Traditional, paper-based systems provide an organizational structure but require the user to do all of the information management and filing. PC-based systems are similar, requiring the user to scan and upload documents or manually input data. Consumers have historically been willing to enter certain data if the service is deemed useful, such as electronic calendars and address books.

More recently, bill-paying services have taken over the burden of scanning and uploading financial statements and bills. These services present an electronic copy of each bill to the user and provide the functionality to pay it online. MyHaystack.com views online bill payment service providers as strategic partners. Most of these companies are using substantial resources to manage paper bills and other consumer mail and are poorly positioned to offer organizational functionality similar to MyHaystack.com.

Product information can generally be found in the original hard copy format or by searching the Internet. Some product information is aggregated online to support the sale of extended warranties or to provide customer service solutions to manufacturers. These sites do not have a personalized organizational structure or integrate different categories of user data.

File storage solutions provide disk space for electronic files. Users are required to scan, upload, or save all information in electronic format. They’re also responsible for creating their own organizational structure. The online storage companies’ economies of scale in personal file storage make them attractive strategic partners. The lack of organizational tools and the inability to source electronic documents limit the immediate competitive threat posed by these solutions

4.3.2 Main Competitors

Appendix B profiles several companies that are potential MyHaystack.com competitors.

**Appendices not available for this sample plan.