Truckbay was founded in October 2002. After an initial five-month software development period, the website launched in February 2003. Currently, the core business model consists of recurring monthly revenue from a membership fee charged to heavy duty truck and trailer dealers. This membership fee allows access to a private e-community of like dealers who utilize this industry specific software to buy and sell wholesale equipment online.
Truckbay did not meet revenue expectations during the first two years of business, even though over one-half the potential market tried our limited services and over 800 trucks and trailers are listed on the site. Unfortunately, a majority of the members that utilize Truckbay are not listing their equipment at wholesale prices. Since this is the core business, the membership cannot gain momentum as long as Dealers try to sell their wholesale inventory at retail prices. This delay in market acceptance has unexpectedly exhausted the working capital budgeted for this start-up.
It has become evident that continuing to nurture this business model will not allow the company to reach its goals. Through informal market studies and surveys, Dealers have consistently said they are eager to utilize new online services that will help increase sales and exposure. In order to achieve these goals, the following new features are necessary to increase the value of our services.
The new fundamental business model for Truckbay is to become a heavy equipment listing service on eBay Motors and build a comprehensive network of linked websites that deliver increased sales and exposure. The ultimate goal is to build Truckbay into the leading classified listing service in the global heavy equipment market. The best way to achieve this goal is to provide the most views per listing of any service.
eBay Motors is positioned to be a key retail lead generator for this market as they have already accomplished this with the automobile industry. Truckbay will leverage this extensive marketplace by providing Dealers a listing service to eBay Motors which will, in turn, establish a massive collection of equipment listings. In addition, we will build a group of twenty specific websites interlinking to Truckbay.
For example, a Dealer lists a tractor on eBay Motors utilizing the Truckbay service. We will take that listing and send it to eBay, Truckbay and potentially to twenty other similar Truckbay websites. By utilizing eBay, Google, MSN and Yahoo search technology, this listing and websites will appear in the top percentage of search results. This type of exposure will provide the customer with optimum value and certainly with the results they are looking for.
2.1 Company Ownership
Truckbay, LLC is a Limited Liability Company organized under the laws of Georgia and established in October 2002 by co-founders Cab Trucker and John Speed. Membership interest is 80/20 respectively.
Cab Trucker is President of Truckbay. In addition to growing up in this business, Cab has spent the last 10 years buying and selling heavy equipment across the U.S. Most recently, Cab served as Branch Manager for [proprietary and confidential information removed]. His strengths include Sales, Marketing and Financials.
John Speed is an investor with Truckbay. John is CEO of Company A and participates in numerous entrepreneurial ventures. John was awarded the Entrepreneur of the Year for Technology by Ernst & Young's in 2002. Subject to shareholder approval, Company A is being acquired by Fidelity National Financial in the 4th quarter of 2004.
In September, 2004, a proposed merger was discussed between Truckbay, Mr. Y and Mr. Z. The purpose of this discussion was to analyze the benefits Truckbay would receive from a consulting arrangement with the fore-mentioned gentlemen.
Mr. Y and Mr. Z founded Company X in early 2000. Company X became the most successful listing service for eBay Motors, capturing over 21% of their total automotive listings in their brief history. Mr. Y and Mr. Z agreed to sell their company to eBay Corporation in January 2003 returning over 800% return to their original investors. Their success and expertise in eBay Motors and Search Engine technology are ideal compliments as Truckbay turns its focus on this similar business model.
Mr. Y and Mr. Z have agreed to contribute capital, business and technical consulting, along with a venture capital pool, in exchange for 15% ownership in Truckbay. If accepted, the new membership structure would be dispersed accordingly:
51% Cab Trucker - President and CEO
35% Mr. Y and Mr. Z - Investment Group and Consulting (Y and Z with 7.5% each, 19% for Private Investors, 1% for API Developer)
13% John Speed - Consultant
1% Attorney Services
2.2 Company History
Truckbay has been able to stay profitable by maintaining a low overhead. However, the company's lofty financial goals can not be achieved without integrating new services to generate more revenue. In order to build these services, the company will need to raise $500,000 in capital to be utilized for technology enhancements, office infrastructure, personnel wages and office rent.
The company will continue to maintain the lowest possible overhead and will not incur any debt unless absolutely necessary. The founders believe that keeping fixed costs down is a key to success. This has been shown during the first two years of business.