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Executive Summary for MyNetPhotos.

com

Prepared for the 1999/2000 Duke Start-Up Challenge

February 8, 2000 Written by Ștefan Negrițoiu, stefann@stefann.com

This work is licensed under a Creative Commons Attribution 4.0 International License.

A. Company info Name: MyNetPhotos.com Current members: Stefan Negritoiu Jeremy Jones Florentina Selaru Contact Info: E-mail: support@MyNetPhotos.com B. Type of Business Our company provides mainstream electronic services related to the digital photography industry. We offer a centralized storage facility and additional photo processing services for customers to store and share their digital photo albums on the Internet C. Company Summary MyNetPhotos.com was founded in August 1998 as a result of the growing market for digital photography services. We wish to provide to our customers the ability to process, store and share their digital photos through the Internet. The philosophy behind digital photography is not new, however, a business which would offer a complete palette of services related to the photography industry is. In the traditional way one would have to use a photo-developing center to develop and process their photos. Printing and processing each individual image is expensive and inflexible. There is not cost-effective way of producing and distributing multiple copies of the same image and there is no easy way of "playing around" with how a photo looks so you can get the right results. And if we rule out mass mailings to friends and family there is no way of getting the photos to the right people either. We believe film-less cameras combined with the power of the Internet will change all that into an easy to use, "do-it-yourself", cost-effective service. Digital cameras allow you to download your photos to a computer. We provide the customer with a user-friendly interface to upload the photos to our server. This process is not specific to any digital camera manufacturer and/or technology and does not require the customer to install any software on his computer. This assures that anyone wishing to use our services will be able to, independent of the computer/digital photography equipment they own. Once uploaded onto our servers, the photos can be processed using a number of tools for rescaling, rotating, changing the quality factor (so that they would be easily viewable through the Internet and still at high quality), altering the colors and applying special filters for professional and fun graphical effects. At any point during this process a customer can choose to share his/her photos with friends, family or business partners. We provide them with electronic albums, which can contain any number and type of images. As with photographs, the albums can be easily added, modified, deleted and password protected to be shared only with a restricted group of people. We are not the only ones who have addressed the cumbersome process of developing, processing and sharing one's photos. Kodak has put a lot of effort into developing the Photo CD technology. They'd like to use the compact disc at the common media for sharing digital photographs. Unfortunately, producing and reading the information off such a CD requires specialized technology not available to everyone. All of Kodak, Fuji and Konica have developed "do-it-yourself" photos processing centers adjacent to their

Work by Stefan Negritoiu. This work is licensed under a Creative Commons Attribution 4.0 International License.

developing centers. The only drawback is that they offer limited processing features and they’re still not cost effective. But more on competition in a later section. We just wanted to state our strong belief in the fusion of the digital photography technology and the Internet. D. Management team We believe at present to have a team with the necessary skills to start such a business. We hope, as the business develops, to attract individuals with similar knowledge to expand and materialize the ideas presented above. Stefan, is a Duke undergraduate student majoring in Computer Science and Economics. He specializes in building web applications using the latest technologies and he has gained real-life experience in this field by interning with Microsoft both as a tester and developer. He hopes that his Economics degree will give him that extra knowledge needed by a technical person to coordinate a business. Jeremy is also a Duke undergraduate aiming for a B.S. in Computer Science. His technical knowledge is focused on implementing Internet protocols and he's been interning with a division of IBM in Boulder, Colorado. Florentina holds a B.A. degree in Psychology and is currently an employee with the Duke University Human Resources department and a future Fuqua School of Business student. We hope she'll coordinate customer relations helping us create a user-friendly product. E. Target market Our product is directed towards a lower middle and above income class of customers who currently have access the Internet and who own a digital camera. To compensate for those cases where the customers either don’t have a camera or there are user education issues with using one, we’ll be offering a photo scanning service where they can mail their photos, we’ll scan and return them. Our typical customer is a somewhat technologically knowledgeable individual that uses our site to post and share his/her photos with friends and family. By providing more specialized services such as semi-professional photo processing tools we will be able to attract a more sophisticated type of customer such as graphics artists and designers that want to display their portfolio online. Our competition consists of several web sites that offer similar packages such as Photopoint.com, GatherRound.com, PhotoLoft.com, PhotoIsland.com, Ememories.com, and most importantly a relatively recent Kodak-AOL service, Photonet.com. We have carefully analyzed our competition and there are two facts that put us in a similar if not better position. First, the Internet digital photography market is a relatively new one. None of the competition’s sites is older than 1 year. We already have up and running a beta site (found at http://MyNetPhotos.com) since December last year and we’ve been constantly receiving around 100 hits per day although we have never officially announced our site. Being a new market means there is no definite leader yet. This type of service is still largely undiscovered by consumers so we feel that the present is a suitable time to join the market. Second, apart from two sites that offer a similar package of services, the others lack either technologically convenient solutions or lack a sufficient number of tools to compare with us. Some don’t offer automatic upload of photos (you must either e-mail them to a support person or send them by regular mail) and others force you into installing a separate piece of software to get access to the full palette of services. Sites like Kodak’s Photonet that do offer a full range of photo processing services will charge not only for such services but also for the simple activity of posting your photos on-line. This last aspect is also true of other sites that impose a quota on the number and size of photos you can upload. Our answers to that are free basic service and no quotas. Our study shows that for every $1000 of storage space we buy we can

Work by Stefan Negritoiu. This work is licensed under a Creative Commons Attribution 4.0 International License.

host 300,000-350,000 photos which at a rough estimate of 300-350 photos per user means about $1 spent for every satisfied customer. Of course we will incur other costs, but for that see a later section. F. Requested funds Since this executive summary is prepared for the Duke Start-Up Challenge a choice whether we’d like to raise debt or equity is not necessary. However, if we were to request real funds we’d initially try to raise debt until we could attain a working business and then we’d raise money in the form of equity for further expansion. If our business idea is considered we will be using the money to pay for (in this order) a fast and reliable Internet connection, graphical face-lift of our site and additional hardware to support the site. We have already invested $2500 of our money in a server currently supporting the beta site so we can put off additional hardware for some time. However, it is imperative that the site be connected to a fast Internet connection since this is the only way we’d be able to support all those additional photo-processing services we plan on having. Professional graphics is a must and since none of us is a specialist in this area we’d probably have to pay an external company. G. Financial projections Revenues for this business will come from advertising, partnerships and professional photo processing services. We will offer storage space and a basic photo-processing package at no cost to the customer. The more sophisticated of the users will be able to upgrade to a professional package which will give them access to image processing tools similar to those found in commercial packages. This also plays on the idea of rented software, which seems to be a future trend with big software companies. A client can pay a low monthly fee for the privilege of using a specific piece of software or they can choose to pay a large sum of money and buy the entire license. By offering commercial grade on-line software we can attract a large portion of those customers that only needs professional services on an “intermittent” basis. Advertising and partnerships with companies within the photography industry will be the other source of income. We expect our traffic to rise from 10,000 hits/day at launch time to 100,000 hits/day within several months to a year. This would enable us to join bigger advertising networks like DoubleClick.com. Partnerships will enable us to provide additional content to our customers. We could partner with a web site that writes reviews for digital photography equipment or with web sites that write tutorials on how to create appealing photographs. Exit Strategy Since the purpose of our business is to generate revenues for both our investors and us, once we launch our site we’ll be looking into ways to expand it and attract more visitors. The goal is to make this a selfsustainable and successful business that we can later sell to a larger Internet service provider for integration with their current services. This is a common practice among companies like Microsoft, AOL and Yahoo. An alternative to this would be to raise enough capital through equity to afford building a high availability web site, localize the content for most popular countries in Europe and Asia, and sustain a nationwide and worldwide advertising campaign for the only place where one should come for their digital photography needs. It is however too soon to make any conclusive statements.

Work by Stefan Negritoiu. This work is licensed under a Creative Commons Attribution 4.0 International License.