Entrepreneurship

Introduction to the Entrepreneurial Opportunity
My entrepreneurial idea combines two major trends in business today – inbound marketing and artificial intelligence. This section will highlight literature to support these themes as providing opportunity for entrepreneurial activity. First, inbound marketing in its current form evolved roughly with Google's Panda update, as this changed how the search giant's bots evaluated website. Prior to this update, search rewarded sites for activities like keyword stuffing, excessive internal links, and the change placed emphasis on information architecture, and creating quality content. This change heralded a new era of inbound marketing (Wainwright, 2011). Companies could no longer fake their way to the top of Google's listings; now they were rewarded for the richness of their content. This unleashed a wave of trends in marketing, including now every company needs to have blogs that contain not only material about the company and its products, but company sites are rewarded for things like thought leadership as well. With quality the name of the game, thousands of jobs for writers and other content creators were essentially created overnight (Mak, 2014).
Marketers today must act almost like media companies, the content they create being a major contributor to the value that they are creating as a company. This content attracts eyeballs of the target market, and which then feeds into the buying cycle, which is usually short for consumers, and longer for business customers. Technology, especially software-as-a-service (SaaS) tools have become the stock in trade of the modern inbound marketer (Law, 2017). Most of the tools in the average marketer's tech stack still rely on the marketer to be able to create high quality content.
Another major trend in business is artificial intelligence. What exactly this term means is subject to debate, but using computing power that adapts to feedback is the general principle. Early adopters of AI or near-AI technology include marketers seeking to gain an edge in the marketplace. Artificial intelligence, according to many observers, is disrupting the inbound marketing profession, which already relies heavily on applications and automation (Velli, 2017). There are numerous use cases for AI in inbound marketing (Bernzzani, 2017).
The entrepreneurial opportunity involves the application of AI to inbound marketing. Many companies need content creators, but good writers are hard to find, so many companies rely on freelancers. There are a lot of freelance sites out there, but even then, parsing through the thousands of candidates to find the one that fits well with your company is a time-consuming task. Our company intends to use AI to scan the leading freelancer sites and match writers with what you are looking for – what content, what industry, what target market, and other specs. The AI comes into play when data is integrated – who did companies like yours rate highly? What writers have similar profiles to the ones you've had success with? By using the power of Big Data to link up small businesses that need content creators with the content creators themselves, while still allowing the middleman site to take its cut, our AI will add value to smaller companies that want to play the inbound marketing game at the enterprise level, but don't have the capacity to take on full-time content creators.
Value Prop
The value proposition is relatively simple. Most businesses are small businesses. But these do not necessarily have the time to create inbound programs, and especially not to create their own content. Yet there is a world of writers, graphic designers, artists, video producers, and editors out there looking to take advantage of the trends towards inbound marketing. Because there are so many small businesses, and so many content creators, finding the right match between the two is about as easy as finding your soulmate. The reality is that if an AI application can do the work for you, it will save you hours. Not only will you reduce by over 90% the time spent evaluating potential writers, but you'll have a more powerful, data-driven decision-making heuristic than you would otherwise use. Your best writer could be in Nairobi for all you know – and if you find your best content creators you'll spend less time cleaning up their work, or worse yet paying for work so bad you can't even use it. When you're trying to grow your business, you need to spend your time doing the things you do best – and that's probably not sifting through piles of writers on Mechanical Turk or Freelancer.com, nor is it writing blog posts that, because you wrote them, aren't even that good anyway. What's your time worth to you? That's how you determine your ROI. That ROI is your value prop – you accelerate the inbound marketing process, do it better, and ultimately grow your business more quickly with our AI-driven CreativeFinder app.
Description of Themes
The first theme is opportunity recognition. This theme focuses on recognizing an opportunity in the marketplace. There are a couple of different ways to do this, but both involve being intuitive, paying attention to what they are seeing, and interpreting what they see, hear and read in a different way than others have done. The first is to scan the environment in order to understand what the current trends are. The ideal situation is that you see a trend, and before the market becomes saturated, you move to exploit that trend. You might not gain first-mover advantage, but in most markets there is room for more than one company. In this case, the idea comes from the intersection of two trends that are influencing business – especially small business – today. Inbound marketing is a recent trend that really only took its current shape, wherein it relies heavily on high-end content creation and information architecture, in 2011.
Since that point, the inbound marketing business has evolved rapidly. The emergence of so many SaaS applications to support inbound marketing has been a significant trend in the past few years. This in turn has lowered the cost of inbound marketing programs. Marketers today are data-driven, focused on administering programs, and rely heavily on the promotion of high-end content. While larger companies will typically have content creators in-house, many smaller companies struggle. They lack sophisticated marketing operations, and usually it is one of the principles who does all the blogging and social media, which means that these activities are often pushed to the sidelines. Yet, if the same company had regular content creation, it would be able to build a proper inbound marketing rhythm, which in turn would help it to grow more quickly. Inbound marketing is to some extent scalable, too.
One of the barriers to the inbound approach is that it relies so heavily on content, that companies often struggle to maintain a content pipeline. That is where freelancers have been a boon to many small companies. Competition has kept the cost of freelancers down, but there is still room for high quality, knowledgeable writers, and these are able to earn a good living as freelancers. At the end of the day, however, finding the right balance between cost and quality, and making sure that person can write well, has English fluency, and can meet specs and deadlines – none of these things are easy. Star ratings aren't enough; especially when you have to sift through hundreds of writers. Companies using online freelancing services either cut corners by hiring the first decent person they see, or they spent far too long evaluating potential writers. This is a genuine pain point for small businesses, and one that we have recognized.
The second theme is opportunity creation. Understanding the pain point is one thing, being able to create a solution to it is another thing entirely. In this case, it is understood that nobody is really addressing this pain point, and as a result of this there is an opportunity. However, to genuinely solve the problem, creation must occur. The opportunity therefore has to be created, and that is through the creation of a new product or service that did not previously exist. In this case, the AI application that will pore through the thousands of writers to find the best fit needed to be created. In a sense, we could have retrofitted one of the applications that does this for employees on the large job listing boards, but given the unique nature of the work that creatives do, and the desire to create something with AI because that is a great selling point, we built our own solution. Building the solution is a matter of having a developer on hand, and then finding ways to get the product to market.
These entrepreneurial themes are important because this illustrate how great entrepreneurial opportunities come about. There has to be some gap in the market that you've been able to identify, but you also need to be able to create a solution. Creating a new product or service is one way to start a business, and so it identifying the opportunities that exist in the marketplace already. In our case, we have done both, and so we really have hit upon something that ticks a lot of boxes in terms of being a strong entrepreneurial idea. The only real issue left is to execute on the idea, and bring the product to market. The subsequent section will outline how we intend to do that.

Business Idea Development
The operational plan is to develop the product and bring it to market. The company is a SaaS company, so the staff needs to be focused mainly on development of the AI application. That means having an AI expert, a few different types of developers, a QC person, a UX/UI person, and then a small team of sales and marketing people who can get the service to the marketplace. Unsurprisingly, one of the main approaches we are going to take in terms of marketing is to utilize our own application to find writers. We will need one or two people to administer the inbound marketing program, but without question we have to use freelancers as a means of demonstrating to our clients that our service works. We will be our own guinea pigs and our successes will be critical elements of the marketing plan.
All told, the staff are going to be the majority resource. Developers in particular are expensive and can be hard to come by, so they will be the biggest cost. There will be some overheads, such as having an office and the computers that people work on. There will be a marketing budget, and a few support staff, but in general HR is going to be the biggest expense for the first few years at least as we develop the product. Our lean approach to inbound marketing will be one of our biggest selling features – we buy into our own value prop.
We are going to start with the basic product, and then begin marketing this via inbound methodology. Because of that, we are not 100% sure what geographical target market we will appeal to the most (but it will probably be the US, the largest English-language market in the world), and we are not 100% sure what verticals will find our idea most attractive (though it will probably be small businesses). We are basically going to grow by using agile development that allows us to get the first functioning version of the product to market quickly, as this will help us get some early customers, whose testimonials and case studies are actually important to inbound methodology. The agile approach to development will also put us in a position where we are able to add new features with regularity, giving our marketing team something to talk about in their content. Again, this approach keeps up a regular "news" cycle, as befits the media aspect of an inbound organization.
Developing this way allows us to leverage our two talents, in development and marketing. We are good at these things, we believe, and by tying them together in this way, we put ourselves in the best position to grow. We want to grow quickly. Despite having patent protection on our product, we will also have fixed costs. We will probably have to explore either a fixed pricing or a monthly recurring revenue model but in either case it is imperative that we surpass our breakeven point as quickly as possible.
Marketing
Market research is, quite frankly, expensive, and we can actually start with a product launch without doing a whole lot of it. Our entire research will focused on whether the app works, and what the approximate value this will be to small businesses – they won't pay less than what it's worth to them in time savings. Once we start to have clients, it will be more important to listen to their feedback, and let that feedback guide development of new features, in order to continue to improve the product.
The marketing plan otherwise is going to be reliant on inbound methodology, using our software to get the best content creators .To be able to run a 1-2 person marketing department that can drive business is exactly what we want to achieve so that we can sell that story to our prospects. In terms of the marketing mix, we've described the product, and it will be a SaaS product, so via the cloud. We are going to explore different pricing options – whether a one-off search is more enticing to the market or whether a monthly recurring revenue model is better. We hope the latter, but will have to respond to what the market feedback tells us. We have described the promotion plan – a classic inbound strategy focusing on the creation of great content and then marketing that content extensively via blogs, social media, paid social campaigns, and paid search. It will be important that promotion is done via the same channels that we our prospects are using to find their freelancers or learn more about inbound marketing.
Competitor Analysis
We don't have any competitors as such, but there are a lot of substitutes. Because the problem is a pain point for a lot of businesses, a lot of businesses have found workarounds. These include, but are not limited to, writing their own content or hiring an in-house team, sorting through freelancers in a slow, manual manner; using friends or freelancers they know; using the first freelancers that come up on the freelancing site; not doing it at all. Each of these approaches has disadvantages compared with our service. While there are definitely some companies that will prefer one of these substitutes, the reality is that the substitutes are not going to be as effective, and our job is to ensure that the perceived value for the customer is high enough that they are willing to sign up for our software.
Financial Plan
The principles of the business are a marketer and two developers. This will keep startup costs low, but there is a need for at least one outside hire right way – a sales person. It is difficult to win sales without a bona fide closer on the team, and proven closers are by no means free. Thus the biggest issue financially is going to be the burn rate. The principles are likely going to have to start the business part-time, or otherwise avoid taking a large salary, in order to ensure that the business stays afloat. It is unlikely that the company will earn a profit right away, but some SaaS companies can turn a profit within 2 years. Arguably, if we are unable to do so, we might be faced with a decision about the viability of the idea in our hands. The reality is that a lot of SaaS companies also fail, so more important than pulling a timeframe for profitability about of thin air is setting at the very least a set of criteria to determine whether or not we wish to pursue the business further. But since we're supposed to have a breakeven chart it looks like this:

Cost per unit
240

Units
584

Revenue
140160

Variable Costs
20000

Contribution to Fixed Costs
120160

Fixed Costs
120000

Net Income
160




Breakeven point
584 units



If we price at $20/mo, these would be the annual figures. This shows a breakeven point of 584 customers. We can actually use this figure to determine how many customers and what growth trajectory we need by end of year one or year two to determine if we are going to continue the business or not.


References

Bernazzani, S. (2017). AI in marketing: 10 early use cases. Hubspot. Retrieved March 7, 2016 from https://blog.hubspot.com/marketing/ai-marketing-use-cases

Law, R. (2017). 21 inbound marketing tools you'll fall in love with. CoBloom. Retrieved March 7, 2018 from https://www.cobloom.com/blog/inbound-marketing-tools#

Mak, S. (2014). How does Google Panda help marketing? iSmart. Retrieved March 7, 2018 from https://www.ismartcom.com/blog/how-does-google-panda-help-inbound-marketing

Wainwright, C. (2011). Everything marketers need to know about Google's Panda updates. Hubspot. Retrieved March 7, 2018 from https://blog.hubspot.com/blog/tabid/6307/bid/28763/everything-marketers-need-to-know-about-google-s-panda-updates.aspx

Velli, E. (2017) How AI is disrupting the inbound marketing space. New Breed. Retrieved March 7, 2018 from https://www.newbreedmarketing.com/blog/how-ai-is-disrupting-the-inbound-marketing-space