Challenge 3

Short summary

Our team created a website called Penn Marketplace which facilitates the exchange of a variety of goods and services throughout the Penn community. We originally intended to focus on buying and selling furniture, clothing and household items. As our venture developed, however, we realized that people were looking to sell all sorts of items. As a result, we decided that in order to make the most money, we should allow people to sell almost anything they wanted. In order to initially gauge the interest of the Penn Community we developed a survey, conducted interviews, created a Facebook page and a Quick MVP landing page. After receiving positive feedback, we went on to create a website where people could sell and buy different items/goods. When marketing our venture, we employed both traditional and untraditional forms of marketing. We started off by creating a Facebook page as aforementioned, a twitter page with live updates on new items posted on our website. We also flyered throughout campus with and without a QR code and even advertised by writing on whiteboards in GSRs throughout huntsman. For the final challenge we created a negotiations page on our website.

Financials

Our sales at the start of the challenge were zero. By the end of the second challenge we had made 5 sales totaling $47.00 in transactions leaving us with $2.35 in revenues. Our profits at the end of the second challenge were negative, however, because we had spent $15.00 on Facebook Advertisements and $5.40 on updating our website. This left us with a profit of $-18.05. By the end of the third challenge we sold 3 more items off our website which increased our total to 8 sales which totaled $337.00 which left us with $16.85 in revenue. Our total expenses were $6.84 from the facebook ads and $5.40 from the website upgrade. This left us with a total of $4.65 in retained earnings.

Product/Service Innovation

We created a negotiations page on our website to reach an optimum margin between the buyer’s willingness to pay and the seller’s asking price. It increases interaction between customers, which is a great way for them to be engaged with the product. The goal of this website is to streamline transaction processes within the Penn community so we made sure that the added feature of negotiating does not decrease inefficiency. Therefore, we set up the negotiations page such that Penn Marketplace will still be the intermediary between the two parties to avoid added administrative work for either the buyer or the seller. This would also avoid the loophole wherein buyers and sellers can just contact each other, (which is further explained in the next section). Of course, this new feature is entirely optional, thus giving customers the best of both worlds.

In addition, we hoped to expand our customer base with this product innovation to those who want to buy higher-priced items to increase the margin we get. From the data we have gathered throughout this project, we see a greater turnover in low-priced items (< $10), compared to the more expensive items (> $50) such as mattresses and branded clothing, which remain unsold. Therefore, having the chance to negotiate provides an incentive for both parties: Naturally, buyers will want to negotiate a lower price; on the other hand, sellers know that expensive items are harder to get rid of, so they would benefit from knowing what interested buyers are willing to pay.

The last product innovation we added was a delivery service for the products sold on our website. After employing the attribute mapping tool we learned in class, we realized that our lack of delivery service was a basic non-negotiable feature that all of our competitors such as eBay and Craigslist already offered. By not having this type of service we realized that we were likely disatisfying our customers and potentially causing them additional stress. For example, if someone were to purchase a mattress through our site, they might find it extremely inconvenient and bothersome that they would be required to set up a time to pick up the product and move it to wherever they needed it or even hire a moving service depending on the type of the service. Using attribute mapping enabled us to quickly identify this basic need amongst our customers and to improve our services.

Idea Generation

Customer interviews

Although we were getting much more clicks because of heightened advertising, our sales were not increasing. We discussed what could be causing potential customers not to follow through despite landing on our website, and decided to test whether more people might be interested in buying products knowing that they could potentially lower pricing. Moreover, this idea stemmed from the fact that while interviewing a few interested customers who have not made any purchases yet, a number mentioned that they hoped to get sellers’ contact information in order to bargain for lower prices. However, we wanted to prevent exchanges from occurring without the facilitation of Penn Marketplace. If buyers could contact sellers before paying for their item/s, they could easily purchase straight from the sellers, eliminating the 5% cut Penn Marketplace had hoped to gain as profit. Likewise, among those who have posted items for sale on the website, some included the word “Negotiable” under their product descriptions, but were unable to negotiate prices. As a result, we decided that having a page for anonymous negotiations between buyers and sellers would be the best way to respond to requests for bargaining opportunities.

Why this one instead of others?

Our team was hoping to create a tab where buyers could select categories to find items they were interested in purchasing more easily. We felt that allowing customers to browse Penn Marketplace with more ease would increase the chances of buyers finding exactly what they need. The problem with this innovation was the number of items we currently have posted on our website. If we decided to implement placing items in different categories on our website, buyers would find that each category would not have too much variety in product range, and this might not reflect well on the reputation of our venture. Consequently, we decided against placing products under specific categories for now. Nevertheless, we believe that this product innovation would be very beneficial in the future, once Penn Marketplace receives more submissions from people looking to sell items (which could potentially occur at the beginning of next semester).

Although at first it took some time to create the website and to generate interest, we slowly started seeing results.  After a few weeks Penn Marketplace had eight transactions and over $300 worth of goods were sold. While the numbers were not mind blowing, it became very clear that during the course of this venture people were not only interested in Penn Marketplace but they also were utilizing it.

Reflection

In terms of actually implementing the product innovation, our team did not have many difficulties. It was relatively easy for us to create the actual negotiations page and to incorporate it into our already existent site. The issue for us was the fact that people were unaware of this new feature. Since we had spent the past few weeks marketing our venture in one way, it was difficult for us to switch gears and try to communicate our new value proposition in a quick and efficient manner. We advertised on facebook as well as through flyering again, however, the number of sales seemed to slow down a bit this week and we weren’t seeing as many postings. We did, however, achieve our goal to sell higher-priced items (we sold 2 >$100).

Given a do-over, we would have chosen a venture that is more suitable with both the timing and timeframe that we had. First, because we began towards the middle of the semester, many people were not looking to buy or sell goods at this time. We believe that had we started this at the end of the semester, we would have probably seen better results. The second thing we realized was that our venture was more of a long-term venture rather than a short-term venture. We originally thought that there would be a lot of Penn students looking to buy and sell different unused items and that they would want to do it quickly. Unfortunately, seeing as we only had a total of 8 sales and 20 total posts, we realized that maybe this was not the case after all. Lastly, we didn’t realize at the start of the Entprentice how small our margins really were and how many products we would need to realistically sell in order to break even. Looking back we may have considered a different business model that would have enabled us to retain more earnings.

Challenge 2

Objectives:

For the second challenge, we aimed to increase awareness, posts, and sales through effective marketing. In order to achieve these goals, we implemented many of the lessons we learned in class pertaining to Buzz Marketing. Specifically, our goals were to increase Facebook likes to 100, to sell a total of 5 items, to reach a total of 10 seller submissions, get featured in a publication (Under the Button), and achieve the average click-through rate of 1.19% for our Facebook ads. In order to achieve these goals throughout the past week, we created a Facebook advertisement, created a Twitter account, and flyered throughout campus.

Metrics:

Goal	Results
1.19% Facebook click through rate (news-feed ads)*	1.846%, 1.657%, 1.463%
0.04% Facebook click through rate (sidebar ads)*	0%
100 Facebook likes	98 likes
10 item seller submissions	17 submissions
5 sales	5 sales
Feature in a publication	Under the Button article

*Facebook CTR Source articles:

• http://digiday.com/platforms/facebook-ads-are-killing-it-but-why/
• http://www.internetretailer.com/2013/10/17/facebook-ads-click-through-rates-soar-q3

In order to achieve our goal of getting more Facebook likes and increasing sales, we first put our money towards creating a Facebook Advertisement that will run until March 5th. This cost us $15 in total. After researching some information about facebook ads*, we discovered that the average clickthrough rate for news-feed ads were 1.19% and the clickthrough rate for sidebar ads is .04%. We decided to set these rates as the metrics we would benchmark ourselves against.

We used the same logo we had created during our first week and were able to run a campaign that read “Need to buy or sell your things quickly and efficiently? Check out Penn Marketplace!” We also created a slogan, “We’ll help you sell the things you don’t want and buy the things you need” for our company that was placed in the lower section of our advertisement in addition to a “Shop Now” call to action. We also used the class lessons to target our specific advertisement so that we would get the most effective results. We limited our ad to people who live within the 19104 area code, people between the ages of 18-24, people studying at UPenn, and people who speak English.

When we created the ads we wanted to test out different pictures to see which would get the most traction. On one ad, we used our logo and the clickthrough rate was 1.858%. We also created an ad with a picture of money to try out a different marketing tactic and that achieved a slightly lower clickthrough rate of 1.657%. The ad that garnered the least clickthroughs only contained our logo. This marketing experiment allowed us to realize the most effective way to attract potential customers.

Here are our results:

• Website clicks: 30
• Campaign reach: 1,936
• Click-Through Rate:1.846%, 1.657%, 1.463%
• Total cost: $5.84

In class, we also about the importance of reaching your user on multiple platforms. To achieve this goal, we created a Twitter account that we could use to provide our users with live updates of new items for sale. Professor Wry talked about the importance of consistency in our marketing message, so we linked our Twitter account to our Facebook page to avoid the risk of having contradicting posts between the two platforms.

To address our goal of being featured on Under the Button, we submitted a few tips with information about our company and what our goals are. We were featured in an article on February 20th entitled “Hey, They Invented Another Craigslist For Penn!” Although this wasn’t the most positive press, we were happy to garner people’s attention. The article accumulated 8 Facebook likes, and we believe that it definitely helped us gain more awareness for our company.

In addition to social media marketing, we wanted to ensure that we covered our basics as well and reverted  created a flyer that we spread throughout different buildings on campus as well as on locust walk. It was important to us to engage in both traditional and untraditional forms of marketing for this task.

We engaged in guerilla marketing where we wrote on as many GSR whiteboards as we could in Huntsman. We drew our logo, our twitter handle, as well as our website address in the hopes that people may see it while they’re studying and take a quick break to check it out.

Moving Forward:

We wanted to maximize our reach by being accessible to people using desktops, laptops, or mobile phones. As a response, we created a QR code that we unfortunately did not create in time for our flyering. In the coming week, we are planning to create new flyers this week with the code and plan to to spread them throughout campus. We also learned that our Facebook ad with our logo on it did the best, so will switch over our other ads so that they all show that picture (instead of the one with money on it). We will also continue to reach out to our different Penn networks in order to increase awareness through Word of Mouth. Specifically, we are planning to make short announcements in our other classes about our venture and to hand out our flyers. Additionally, after speaking with some of our customers, it was brought to our attention that people wanted to have a feature where they could suggest a price. As of now, our website only allows our seller to post set price, and it is non-negotiable. We believe that this will help us to increase sales in the future. Perhaps the most exciting part of our week was that we were contacted by two potential collaborators from outside the UPenn community who were interested in our company and wanted to learn more. We’re planning to maintain these relationships as we move forward in our venture.

Challenge 1

Following the session with the guest lecturer last Wednesday, we decided to start testing our hypothesis, which assumed that Penn students prefer to buy and sell goods on a Penn-centralized website rather than on external websites, such as Craigslist, eBay, etc. In order to test our hypothesis, we created a survey, quickMVP landing page, and a Facebook page.

Our results:

Survey

• 41 participants
• 95% of participants prefer to sell items on a Penn-Centralized website, and 100% would prefer to buy on a Penn-centralized website
• 93% would sell furniture, while 78% would sell household items, and only 51% would sell clothing
• 82% would buy furniture, while 62% would buy household items, and only 28% would buy clothing

Facebook

• 72 likes
• 727 Total Reach
• 82 People Engaged (Likes, Comments, Shares)

QuickMVP

• 27 people signed up for the service
• 125 unique visitors

We started to use the Lean Method (Build, Measure, Learn) in order to figure out what people are most interested in and how we can continue to develop our ideas. Because we had trouble creating the website, we decided to build an MVP in the meantime to gauge people’s interest and get initial feedback. This revealed that we had 125 unique visitors, showing that many have become aware of our venture. Moreover, the comments we received were all positive, confirming an interest in the idea. However, only 27 people signed-up so we decided to increase our reach through social media. We created a Facebook page containing more pictures and information. We used this platform to send out our survey as well. After getting results back from our survey, we were pleased to find that a large majority would prefer to buy and sell goods on a Penn-centralized website. This was the validation we needed to prove that our idea has a market and can be successful. However, we realized the need to add an additional question that asked whether or not people thought this hub was needed. Additionally, after analyzing the results, we decided to only focus on the exchange of furniture and household items. The survey results also revealed that people were interested in selling and buying textbooks despite the existence of Penn Book Bazaar. Another reason we found it difficult to start the website was that we wanted to include too many features (eg. buying, selling, renting, user-ratings). Using the Lean Method, we learned to prioritize the main services we want to facilitate – buying and selling. We now have a basic website set-up (www.pennmarketplace.moonfruit.com) and we hope to continually improve it.

Because of the setbacks we encountered, we decided to simplify our approach for this venture in order to move forward with the project. Here we see how the Marshmallow activity done during lecture is reflected on our microventure. Instead of spending even more time discussing how to create a website that would function perfectly, we decided to test our service and its potential success given the basics. We’ve come to realize that instead of avoiding setbacks, we should be open to accepting obstacles that come our way and innovating ways to solve these problems. Not only will this allow us to progress, but this will also serve as a learning experience for our team in developing our resilience in a sector not known for its tremendous stability.

Given the chance to start over, we definitely would have done things at a faster pace. We would have gotten started with setting up our website sooner despite the uncertainty regarding how it would turn out given our minimal skills in creating websites. Moreover, our team would have asked for feedback from the entire class sooner so that we could have collected more answers for our survey, allowing us to evaluate statistics more accurately.

Despite what we have been through so far, we remain determined in making Penn Marketplace a reliable hub for students to exchange goods more quickly, especially given the enthusiasm we have received thus far.

Idea Overview

Since there currently is no centralized hub that offers a flexible range of everyday products such as clothes, furniture and household items, we chose to create an online marketplace that will provide the initial platform for goods exchange within the Penn community. Penn Marketplace will serve as an intermediary that will connect buyers and sellers. Sellers will gain the advantage of greater visibility for their goods through search tags and photos. Buyers do not need to post a request for a certain item that a seller has already advertised for in the past. Gone are the days of endless Facebook and listserv requests and offers that will eventually get buried underneath other threads and emails. During our first meeting as a group, some teammates arrived with a number of ideas for our venture. While most of the ideas were simple and feasible, we decided against product-oriented ideas because we were unsure about the production process. Since we would need to get the product out in a very short amount of time with only $40 as capital, this type of venture did not seem feasible. We also didn’t want to hold any inventory as this will further complicate logistics. We ruled out heavily service-oriented ideas since we were certain we could not commit huge chunks of our time to services such as grocery and coffee delivery. Therefore, we discussed other ideas that wouldn’t require too much of our time but could still generate profits. Someone in the group brought up the need for a centralized database where students and employees at Penn can easily find things they need from other people within Penn. To eliminate the need to deliver these goods on our own, we came up with a website that would provide interested buyers with sellers’ contact information so that the two parties themselves will be the ones to fulfill the transaction. While discussing how the website should operate, we focused on devising an incentive system to ensure that buyers and sellers did not just communicate directly and take away from Penn Marketplace's profits. We realized the need for this type of incentive to ensure that we can still secure profits of 15% on top of the sellers’ prices by making buyers and sellers go through us before the physical exchange of goods. To do this, we will ensure that sellers’ contact information will not be released until Penn Marketplace receives payment from buyers through Venmo. Moreover, to ensure that sellers push through with the transaction, we plan to hold any money we receive from the buyers until we receive official confirmation from buyers that the transaction was fulfilled. We will explicitly state in our website that it is the seller’s responsibility to make sure that his buyer confirms receipt of the good/s. Since buyers and sellers will be fulfilling the transactions themselves, we decided to target only the Penn community to make it easier for users of the website to meet up and complete transactions in person. Graduating students will be prime users of this website since they will have a lot of items to dispose of. We plan to market this through word-of-mouth, university journals (DP, magazines) and social media (Facebook, Twitter). Collaborations with sites such as Penn Book Bazaar and the Penn Student Agency can also increase our reach. We believe that this venture has a lot of potential for growth as we expand to larger markets, include more features, and become more literate in technology. We look forward to see where this project will take us.