Site traffic scenario assumption - Monthly and annual - 2022 (starting year) - 2028 (terminal value)
Orders details - variable + one fixed cost - orders placed - 2022 (starting year) - 2028 (terminal value)
Fixed costs - G&A - 2022 (starting year) - 2028 (terminal value)
Capex (financing + financing + valuation) - 2022 (starting year) - 2028 (terminal value)
Cash flow statement - 2022 (starting year) - 2028 (terminal value)
Customer metrics - 2022 (starting year) - 2028 (terminal value)
Our valuation model - 2022 (starting year) - 2028 (terminal value)
Cash balance vs Burn rate - 2022 (starting year) - 2028 (terminal value)
Margin rates - 2022 (starting year) - 2028 (terminal value)
More realisitic - Cash balance vs Burn rate - 2022 (starting year) - 2028 (terminal value)
More realisitic - Orders selection - 2022 (starting year) - 2028 (terminal value)
More realisitic - Customer Acquisiiton - 2022 (starting year) - 2028 (terminal value)
Children and adolescents have many physical and digital competencies that make them equal regardless of long term illnesses, disabilities or without. By creating an app that can be used to track activity limits, we are creating an opportunity for supervised and peer led exercises. The Stay Active app is designed to encourage more physical activity throughout the day by means of a rewards system on an ecological farm. The ecological thinking helps youth understand the basics of climate change and is in alignment with the SDGs. For ideation we used the Design Thinking methodology using a Miro board.
What it does
Users download the Stay Active app to track their physical activity, and are motivated to do more physical activity through the day.
Features include: 1) A Reward system 2) Opportunities to connect, engage with friends online for group exercises. 3) Creates Climate Consciousness
- The reward system is based on an ecologically built farm. Users navigate through their farm to grow produce, and points are gained for different seeds and fertilisers for growing food. There is a target for getting ingredients for certain recipes, and more points are gained from this. Movement is tracked by the app, and the movement score is converted to rewards.
- A network of building friends is encouraged by attending group exercises that are supported by trainers created by application of computer vision (AI) first, and at later stages by real trainers.
How we built it
Using the mooven system to recognise movement to convert the information into points. The app interface was created by unity. The ideation process, user personas, stakeholder map was made in Miro. The business model was created by Marko Peric, Data Consultant and Finance Professional with entrepreneurial knowledge in venture capital and private equity.
Our scenario model represents sustainable growth rates for four categories that define revenue streams of our app solution from 2022 till 2028: consumption by email, consumption by organic search, consumption by paid search and affiliates programmes.
The reason why we choose 2022 as a starting year (reporting results on 31 st December 2022) is based on the next: a) need for funding activities until the end of 2021 b) needs for research&development process for the app and tracking device, c) testing result and collaboration with industry experts d) connecting with industry stakeholders d) maintaining and creating supply chain and e) pivoting business model and rotation of the industry experts.
While taking these facts into consideration, we want to point out that our growth rates are based on the industry benchmark ratios in the venture capital and start-ups ecosystem. Moreover, these rates should grow at a maximum rate of 15% as an industry acceptable level (as a standard). More info: https://www.valuespreadsheet.com/blog/how-to-determine-a-realistic-growth-rate-for-a-company
Cost structure Fixes cost – office rent, salaries, wages & benefits, professional fees, software tools and equipment for application
Variable cost – email (cost per click), organic search (cost per click), paid search (cost per click), affiliates (cost per click), freight/shipping per order, labour/handling per order
Revenue streams Revenues: consumption by email, consumption by organic search, consumption by paid search, affiliates programmes, vouchers offered for coins, short commercial on the app (visual or audio), short term sponsorships from supranational sports organizations/charity organisations
Important and relevant information from our business model:
a) Our scenario assumptions provide information yearly while describing total monthly and annual visits. b) Variable marketing costs are declining from EUR 1.5 (2022) to EUR 0.4 (2028). c) Variable fulfilment cost is declining from EUR 10 (2022) to EUR 3.20 (2028). d)The contribution margin per order explains the net cash generated mechanism (after all variable deductions), which is progressively growing from EUR 21 (2022) to EUR 149 (2028). e) LTV/CAC ratio explains overall true profitability and subtle growth from 2023 to 12.4x in 2028. f) In the DCF valuation method, by including EBITDA multiple 9x (terminal value of multiple) and the NPV of forecast at least 5%, the total enterprise value will be approximately EUR 239mil. g) The payback period is relevant for delivering info about profitability (which can be before 2027). h) Genaral&Administrative cost is every year growing by at least 10% (max 20%). i) Capital expenditures are mostly related to the acquisition cost of software and licenses, equipment and infrastructure relevant for daily operation (also the same for the backup process). j)The cost of capital for startups in venture capital is between 5% and 10%. For this occasion, we use a lower limit (to support this idea and the possible business model). k) Customer acquisition cost is mainly related to the tracking devices and their supplier (there is always a lot of space to reduce it; if supply chains of the tracking devices are entirely transparent). l) By 2024 cash balance and position will be positive in terms of declining burn rate and balancing the cash role position m) The average item in gross value is and stands for EUR 200 – it represents the cost of software on the mobile and the tracking devices for the subscription for the first 12 months (subscription is free for the basic modules). To reduce total cost, we offer discounts and token-vouchers for services and products for our customer base.
We certainly believe if we were given the opportunity to get funding or funds for this application in the amount of EUR 350.000 on a 3 year period, this app can be operational and profitable in terms of every product offering and solution within it.
Challenges we ran into
Trying to agree on the key features and the target group; the ideation process had diverse perspectives due to a diverse audience. Coordinating due to various time zones.Testing the movement sensor from the mooven. Also the interoperability between different devices and connecting with the app to send the same data. Agreeing upon how much movement would contribute to a seed. Building a bank of recipes to get from the farm. Keeping the level of engagement high across the age ranges.
Accomplishments that we're proud of
We have a gamification model that aligns with the SDGs and aligns in a ubiquitous way to encourage physical activity for both the individual and group activities. Only three members were from last year, and the rest came together from various parts of the globe to work on this project and brought in fresh perspectives. All had really good ideas to make this product more feasible than last year, and a more engaged, relevant offering.
What we learned
There are many differences to group exercise for children and adolescents. Wearable technology can help, but also not everyone has access to it. The financial viability of this is an important aspect to go from design to implementation.
What's next for Stay Active
To go beyond the concept and build on ways, on how to reach all children and adolescents (with and without long term illnesses or disabilities). To get to work on it in real time during incubation order to make it a reality. Build more nutrition-laden recipes and extend the user engagement with the application of AI and real life trainers.