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Startup Nation StrategyProposal by:
Bentley Tang, Cambria Sawyer, Yanusha Yogarajah, Justin Hartzler
November 15, 2014
McCombs Case Competition
TEAM TALL
Introduction
Introduction Solution Financials & Risks
Conclusion
Appendices
Problem: Which market should be the highest priority for Dropbox for Business? For the market your team chooses, what strategy should Dropbox for
Business take to ensure maximum profit? Solution:
Dropbox should prioritize Brazil’s market. ~53% of Brazil’s population are Internet users and thus are potential
consumers. The company should focus on startups and small businesses because new
companies have an influential presence in Brazil. Most startups network with each other and build their businesses together.
The Startup Nation Strategy will lead Dropbox to maximize their short and long term profits.
Solution
Introduction Solution Financials & Risks
Conclusion
Appendices
Dropbox for Business Priority: BRAZIL
Maximize Profit and ROI: Target Brazilian STARTUPS
Where Dropbox covers . . .
Introduction Solution Financials & Risks
Conclusion
Appendices
Economic Situation
Introduction Solution Financials & Risks
Conclusion
Appendices
GDP Growth 2.5% 7th Largest Economy 6th Largest Population 200 Million Citizens SMB 96% Brazilian Jobs Government funded programs encourage entrepreneurial
efforts
Startup-Targeting Strategy
Introduction Solution Financials & Risks
Conclusion
Appendices
High start-up rank and culture Major start-up
investment Investments in
internet penetration The 8.5 billion dollar
plan aims to “take 11.9 million households online.”
– [it] decisions, 2014 Infrastructure for
Dropbox diffusion Positioning of Dropbox
‘personality’
“Last year, the Brazilian government created and invested up to $78 million in the Start-Up Brazil program for local and foreign startups.” – TECH Cocktail, 2014
Startup Culture Boom in Small/Medium entrepreneurial enterprises SME’s main focus
Introduction Solution Financials & Risks
Conclusion
Appendices
Startup Culture & Needs
Introduction Solution Financials & Risks
Conclusion
Appendices
Entrepreneurial job creation peaking
Entrepreneurially-related unemployment decreasing
Inherent needs for successful startups
Positioning Dropbox
Introduction Solution Financials & Risks
Conclusion
Appendices
Verifying a market for the product Does it meet a need?
3 Key Needs of a Startup: Organization Communication Security
Dropbox meets those needs Value gained > $15 per
month Position Dropbox as
consistent with their goals
Enhancing brand dominance: Consideration (evoked) Set
Minimize distance Aspirational and
Associative reference groups
Organic Diffusion 84% of Brazil’s internet users in
urban setting Issue of such massively spread
population Maximize ROI by impacting dense,
technologically literate population Investments in internet penetration
The 8.5 billion dollar plan aims to “take 11.9 million households online.”
[it] decisions, 2014 Infrastructure for Dropbox diffusion
Potential for exposure and diffusion into Business to Consumer market as well
Introduction Solution Financials & Risks
Conclusion
Appendices
Internet Use in Brazil
Introduction Solution Financials & Risks
Conclusion
Appendices
Risk:Wireless Internet
Connection Penetration
Key Takeaway:Over 88 million Internet Users, 45.6% Penetration
Rate, Accelerating Growth
Dropbox Infrastructure
Introduction Solution Financials & Risks
Conclusion
Appendices
Risk:Infrastructure Investments
Key Takeaway:Amazon Datacenter in Sao Paolo with Services
Dropbox Uses.
Dropbox Infrastructure
Introduction Solution Financials & Risks
Conclusion
Appendices
Operationally, the average monthly wholesale cost for high-bandwidth Internet data delivery has fallen from $75 in 2005 to $5 in 2010. Although additional storage is required for each SMB product, the company would benefit by greater margins due to lower data costs. (International Data Corporation, IDC)
Financial Analysis
Introduction Solution Financials & Risks
Conclusion
Appendices
See Appendix 1 for Baseline Customer Assumptions
Risk:Capital Flow from Startups vs. Large
Firms
Key Takeaway:7,602 Dropbox for Business Customers needed to
break even.
To Reach and Exceed Breakeven Point:
Introduction Solution Financials & Risks
Conclusion
Appendices
Two-Way Business Referral Program Accelerate growth Maintain customer satisfaction
Simplify and Emphasize Transition from Individual to Business Users Organic Marketing
Social Media Presence in Brazil Inside-Out Implementation
Timeline of Implementation
Introduction Solution Financials & Risks
Conclusion
Appendices
Month 1 - 6: Market research of startups and small businesses in Brazil
Month 6 – 12: Network with startups in São Paolo and Rio de Janeiro; organic marketing
Month 12: Expand Referral Program
Month 6 – 18: Establish connection with consumers and further integrate Dropbox into Brazil
Forever: Maximum Profit (indication at Month 24)
Where we are now . . .
Where we want to go . . .
How to get there . . .
Conclusion
Introduction Solution Financials & Risks
Conclusion
Appendices
Which market should be the highest priority for Dropbox for Business? Brazil
For the market your team chooses, what strategy should Dropbox for Business take to ensure maximum profit? Target Brazilian startups and small businesses
As Brazil’s startup and small business market grows, startups will generally have a need for organizational infrastructure. And they will turn to Dropbox. Meet the need/consumer demand Low financial costs Organization, Communication, Security Aspirational and Associative reference groups
References
Introduction Solution Financials & Risks
Conclusion
Appendices
World Bank Harvard Business Journal
Thomas Eisenmann, Michael Pao, Lauren Barley Dropbox Brazil Amazon Cloud Storage Forbes Entrepreneurship.org http://www.keepeek.com/Digital-Asset-Management/oecd/industry-and-
services/entrepreneurship-at-a-glance-2014_entrepreneur_aag-2014-en#page39
http://www.internetlivestats.com/internet-users/ http://www.startupranking.com/countries
Appendix 1
Introduction Solution Financials & Risks
Conclusion
Appendices
