TimeCrunch Get Active

Business Plan Amanda Demetrio, Ladidi Garba

Lauren Goode, Jason Levy Paolo McCarty, Steve Skentzos

June 4, 2014 Contact: jlevy10@stanford.edu

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I. Executive Summary Problem Despite the health benefits associated with physical activity, people struggle to find the time or motivation to get active. According to the CDC, nearly 80% of American adults do not get the recommended amount of exercise – 2.5 hours/week – and more than one third of American adults are obese. Falling behind on physical activity can happen for a variety of reasons: some people have trouble making time for it in their schedules while others simply do not have the drive to get themselves moving.

Whether you’re a stressed out college student trying to get through midterms or an office employee working in a cubicle, staying active is hard. Millions of people need a tool that will help them find the time to be active, and that will suggest specific activities based on their schedule and preferences.

Solution Meet TimeCrunch – a mobile app that connects to your calendar and gives you health and fitness tips that fit into your busy day. The app syncs with people’s calendars, alerts people when it’s a great time to get moving, and suggests activities based on their location and preferences. Specifically, the app provides the following services:

• Reminders throughout the day for the user to stay active and well (e.g. looking away from the computer screen, stretching, walks)

• Notifications about opportunities to be active near the user’s location • Curated and customized content relevant to the user’s preferences and health concerns • Notifications about friends exercising near the user’s location • Social component that ranks user against his or her friends and awards badges for

personal goals met

For example, TimeCrunch might notice that an office worker has a 45-minute lunch break between meetings. It might send a notification that reads, “Now is a perfect time to get active. Why not walk to the park at Mayfield Ave.? Studies show that a 30 minute walk each day gives people more energy.”

Business Model TimeCrunch will generate revenue in three ways.

1. We will enter into advertising contracts with health and fitness companies that want to market their products through banner ads within the app

2. We will form partnerships with local gyms and restaurants and promote special offerings and rewards

3. We will offer a subscription-based version that offers premium content and customized fitness plans

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II. User Experience Users download the TimeCrunch app and enable the app to sync with their calendar (or input their schedule). Then, users receive suggestions based on their calendars on how to get active. These suggestions may encourage the user to stretch, to look away from their monitor, to make the next meeting a “walking meeting”, or to exercise. In each case, the suggestion is as specific as possible. The suggestions are serious but friendly (our user testing revealed that people prefer this tone).

As the user establishes his or her preferences and habits, the suggestions will become more personalized. Users will also receive content (e.g. articles, blog posts, etc.) relevant to their location and to their behavior (e.g. “5 tips to form good habits”). Finally, users have the option to add friends that are also using the TimeCrunch app so that they can receive notifications about when and where their friends are exercising. The app will rank users against their friends by the number of goals completed, and reward users with discounts at businesses for completing goals.

III. Market Opportunity

Users: Two primary segments TimeCrunch serves two primary segments of customers. First, TimeCrunch targets people who want to stay fit but cannot do so because of their busy schedules. According to a survey conducted by the TimeCrunch team, 60% of people cite a lack of time as the biggest obstacle to staying active. We address this by suggesting convenient activities to do at appropriate times in a user’s schedule.

Second, TimeCrunch targets people who want to stay fit but lack the day-to-day motivation to do so. According to our survey, 39% of people cite a lack of motivation as the biggest obstacle to being active. We help these people by offering encouraging reminders and educational content throughout the week.

We see a current market opportunity of approximately 104 million people in the United States. In the U.S., 130 million adults use smartphones (according to the IDC), and 80% of adults have sedentary jobs (according to the New York Times). We see this potential market growing as the number of smartphone users grows (Statista projects 207 million users by 2017) and as people grow more comfortable using apps for wellness.

Business Partners: Three primary segments TimeCrunch will partner with three primary segments of businesses on revenue generation: organizations with corporate wellness programs, local businesses, and advertisers. First, TimeCrunch will partner with corporate wellness programs, beginning with Stanford’s BeWell, which offers $480 to Stanford employees for participating in health screenings and activities. In 2013, 9,700 employees participated in the program, as did 2,000 spouses of employees. We will partner with BeWell to include TimeCrunch as part of the program. We will then expand to other

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campuses and to companies like Twitter, where approximately 20% of the organization’s 2,700 employees use the company’s wellness program. At a macro level, corporate wellness is a $2 billion per year industry, according to IBISWorld. Second, TimeCrunch will enter into partnerships with health clubs and restaurants. TimeCrunch will highlight partners that are close to a user, and will offer coupons to users to incentivize them to visit the partner’s location (i.e. a coupon for 20% off a yoga class at a local health club). Health and fitness clubs constitute a $26.5 billion industry, and there are 30,500 clubs in the US. There are 990,000 restaurant locations in the US with annual revenues of $683.4 billion.

Third, TimeCrunch will pursue advertising contracts with health and fitness companies, and with other companies that target this market (i.e. fitness book publishers). According to Stuart Goldman (Executive Editor of Club Industry), fitness centers are investing a higher and higher percentage of their advertising budgets in digital media due to the expanded reach and lower cost (as compared to traditional media campaigns).

IV. Competition Key Competitors The mobile app market has many fitness apps, though none can replicate TimeCrunch’s services. These apps fall into four categories.

1. “Passive” movement tracking apps like RunKeeper Breeze, Fitbit Mobile Track, Moves, and Nike+ Move, which run on mobile devices and act as smartphone pedometers

2. Apps that guide you through a gym workout like GAIN Fitness, which tries to replicate the personal trainer experience

3. Running and cycling apps like WalkJogRun, Strava, and RunKeeper, which are aimed at dedicated sport enthusiasts

4. Exercise log and calorie counting apps like MyFitnessPal and Gympact, which take the measurement-to-manage approach; Gympact even holds users accountable by charging them for missed workouts

Many of these competing apps either a) address a niche market, such as dedicated cyclists, b) actively or passively track activities – without offering guidance as to when a user should get moving, or c) send unoriginal or repeat notifications that do not necessarily inspire or motivate the user further.

TimeCrunch is not aimed at fitness buffs; it is for people who need the motivation to get moving, and who need help finding time in their schedule and thinking of specific activities (e.g. “You have time right now for 5 minutes of stretching and a 15 minute power walk around Tressidor”).

Competitive Advantage TimeCrunch’s value proposition is unparalleled. While other fitness apps might serve as a tool to record exercise or guide the user through a specific workout, TimeCrunch integrates with

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people's schedules to remind and encourage them to get active. It provides hyper local, convenient suggestions for how to fit in activity, and offers links to content that is both customized and curated.

SWOT Analysis Below is more detail on our strengths, weaknesses, opportunity, and threats.

Internal Strengths

• Multiple potential revenue streams, i.e., premium subscription, advertising, business partnerships

• Low-asset business • Aggressive targeted customer

acquisition plan with multiple distribution points

• Seasoned team with backgrounds in engineering, operations, business and content as well as a strong passion for wellness

Weaknesses

• Limited experience with health-based startups

• Do not yet have a dedicated, full-time engineer

External Opportunities

• 80% of adults do not get recommended activity (2.5 hours/week)

• Mobile app market saturated with hard core fitness apps but lacks apps that encourage healthy habits and an active lifestyle, and that coordinate with users’ schedules

• Health and wellness is becoming increasingly important in the workplace as companies like Twitter start their own wellness departments

Threats

• There are more than 40,000 health and fitness apps, and user loyalty is low

• More hard core fitness apps could expand into the more casual active lifestyle space, e.g., RunKeeper Breeze and Nike+ Move

• Traditional healthy lifestyle alternatives such as health coaches, health magazines, pedometers, etc.

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V. Strategy and Implementation

Customer Acquisition To acquire customers, we will pursue the strategy employed by Facebook: focusing on gaining critical mass in highly targeted areas before moving to the next targeted area. The quality of TimeCrunch increases when more users in your area engage with the app (more ratings, recommendations, potential workout partners, etc.), and we plan to develop a segment of avid followers. To do so, we will initially target two segments: college campuses and workplaces. College Campuses: College students and employees will be a core user group for TimeCrunch. We will launch TimeCrunch by partnering with Stanford’s BeWell program to target employees. We will also partner with campus eateries (we are in discussions with Axe and Palm, for example) on advertising and referral arrangements. Finally, we will market to students through email list blasts, newsletters, and targeted online advertising.

Workplaces: Startups and tech companies in Silicon Valley place a huge emphasis on the health and wellness of their employees. Tech companies like Twitter often have an entire department devoted to employee wellness and offer organic food and a variety of exercise classes. We will use wellness programs at tech companies in Silicon Valley as a distribution point for TimeCrunch, and we will advertise to employees of these customers through flyers and coupons at nearby restaurants and health clubs. We will pursue endorsements from organizations like Partnership for a Healthier America.

Specifically, we see two phases in our customer acquisition plan.

1. Acquire 15,000 users in year one by partnering with BeWell and Stanford eateries (a partnership with BeWell would account for 10,000 users). Then expand to 25 organizations by the end of year three

2. Employ features in TimeCrunch to encourage substantial organic growth (e.g. ability to invite friends to compete and to coordinate schedules)

Revenue Generation The top revenue generation option is a “freemium model”. TimeCrunch will be offered for free to all users. There will also be an option for a premium subscription-based version that includes handpicked content from our editors and personalized workout plans for $1 per month. Two other revenue sources are: Advertising: TimeCrunch will enter into advertising contracts with health, fitness and cosmetics companies. These companies will be able to advertise their products within the app in the form

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of banner ads. The app will use data from the users’ wellness habits to effectively market products that they would be more likely to buy. Local Partnerships: TimeCrunch will pursue partnerships with local businesses that want to market to TimeCrunch’s user base. Users will receive notifications about promotional deals for gyms, studios, eateries and restaurants that are near their locations and discounts and rewards at these locations for completing workouts or wellness activities suggested by the app. TimeCrunch will also seek to partner with corporate wellness programs that will offer the mobile app as part of office health and fitness initiatives (such as the BeWell program).

VI. Product Timeline The TimeCrunch team plans to achieve at least one major milestone per year.

Year 1: Launch app for Stanford in partnership with BeWell Year 2: Launch app in 4 additional campuses/ workplaces Year 3: Launch app in 20 additional campuses/ workplaces VII. Financials Below is the projected income statement for TimeCrunch.

Key Assumptions: • This is a $125M/ year U.S. market opportunity (104M potential users) • 5x user growth per year • Users use the app on average every 3-4 days

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• The CPM (cost per 1,000 impressions) is $3 (in line with new blogs) • 0.1% of the time, users buy something from a partner because of using app • 5% of users subscribe to paid version

Financial Ask: Our financial ask is for $10,000 for 3 months to cover digital advertising targeted toward Stanford students and employees. Along with partnerships with Stanford’s BeWell and with campus eateries, this enables us to establish an initial user base from which the app can spread.

VIII. Management Team

Amanda Demetrio Born and raised in Brazil, Amanda was a journalist for seven years, before coming to Stanford for graduate school. TimeCrunch is her third adventure in the startup world. She was part of a team hired to create the “TechCrunch of Brazil”, with a US$ 300k seed round from investors like Redpoint e.ventures. Ladidi Garba Ladidi is a graduating senior at Stanford studying Science, Technology, and Society (STS) with a focus in Communication and Computer Science. Her work experience includes working for Apple, with a startup in the hospitality technology business, and with Stanford’s Graduate School of Business. Lauren Goode Lauren has more than ten years of experience in the media business, working at companies such as A&E TV, The Wall Street Journal and AllThingsD. Currently she is a tech columnist at Re/code, where she frequently analyzes the mobile health and fitness market. She majored in English at Clark University in Worcester, Mass, where she played basketball and volleyball. Jason Levy Jason graduates from Stanford’s Graduate School of Business in June 2014. Before joining Stanford, he worked at Apple for five years, focusing on the financial strategy for education-related products and content. He double majored in Economics and English at the University of Southern California. Paolo McCarty Paolo McCarty will graduate from Stanford University in June 2015, with a B.A. in International Relations and an M.S. in Management Science and Engineering. He works as a research analyst at Signia Venture Partners, a $100 million early-stage venture capital fund that makes investments in mobile, enterprise, data, e-commerce and education technology. Steve Skentzos Steve majored in computer science and cognitive science at Case Western Reserve University after serving six years in the military. His work experience ranges from heavy industry operations to computer game development to epidemiology. He is a serial entrepreneur, working

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as the Chief Technical Officer and data analyst of distinc.tt (a social networking start-up based in San Francisco).