NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES

SCHOOL OF BUSINESS MANAGEMENT

Managerial Communication II

Group Project

Proposal for Investment in ChatChat

FTMBA, Trimester 2, 2021-22

Submitted To Faculty: Prof. Santana Pathak

Submitted By: Group 6 – Division D – I Year

Team Member SAP ID Roll No

Mohit Agarwal 80512100727 D006

Abhay Kumar Singh 80512100251 D016

Prakriti Tiwari 80512100588 D017

Pranjal Verma 80512100238 D046

Amber Goel 80512100735 D056

1
 Cover email/Letter of transmittal

October 06, Year1

To:  Casey Parker and Quinn Nguyen
Subject: Proposal for investing in ChatChat

Dear Ms. Parker and Mr. Nguyen, 

We would like to thank you for considering our company, ChatChat, as a potential beneficiary of
your investment. As per our previous conversation, we have attached our business development
proposal including the timeline, budget and organizational credentials.

We at ChatChat aim to build a messaging app that would allow real-time advertisement-free
communication with anyone around the world. Our app would use a mobile phone number for
one time login, hence giving us the first mover’s advantage. 

We believe with our association, we will be able to create new history in instant-messaging
space. Please feel free to contact us for further queries or amendments in the proposal. 

Regards, 
Hayden Mendez (Co-Founder, ChatChat)
Sasha Belenko (Co-Founder, ChatChat)
 
 
 
 
 
 
 

2
  
 

Proposal for investing in ChatChat

 

Name of recipient Name of sender

 Casey Parker (Investors, Arrow  Hayden Mendez (Co-Founder,

Ventures) ChatChat)
 Quinn Nguyen (Investors, Arrow  Sasha Belenko (Co-Founder,
Ventures) ChatChat)

Submitted on

October 06, Year1

3
Executive Summary

We (Sasha Belenko & Hayden Mendez) are aiming to enter the instant messaging space
through our product called ChatChat.

The proposal has been written with the intention of seeking a funding of $1Million. ChatChat
with its first mover’s advantage, adaptability to work across all mobile platforms, ease of use
will grow in the market. We believe an advertisement-free experience by paying a one-time
upfront cost has the potential to attract customers. 
We project that in the first year of operation our market penetration will be around 5% and
it is expected to increase rapidly to 35% in the 5th year which means that our user base will
be around 420 million users generating profits worth $1,944.72 million.

Initially a private beta version would be created, following which the Version 1.0 of ChatChat
will go live in the next quarter. The funds raised will be utilised for Application Development,
Testing, Infrastructure, Advertisements, Overheads and Business development. ChatChat is
expected to be launched by the next year. The smartphone industry is growing at an
unprecedented pace, now is the time to disrupt the instant-messaging space.

Table of Content

4
s
Introduction...........................................................................................................................................6
Background/Problem Analysis.......................................................................................................6
Scope/Opportunity........................................................................................................................6
Our Plan/Activity/Solution.....................................................................................................................6
Financials...............................................................................................................................................7
Our Organization...................................................................................................................................8
Conclusion.............................................................................................................................................9

5
Introduction
Global connectivity has reached a point where we strive to stay connected to our social
circles. Traditionally the costs of sending media were very high especially if we take into account the
international charges. Slowly many competitors have come up but these being freeware have a high
level of intrusive advertisements that needs to be toned out and provide a hassle free experience to
our customers.
ChatChat is a messaging service that allows users to connect with any phone number
worldwide. In the past apps like Skype, BBM required additional profiles to be registered once you
are on the platform, ChatChat simply takes your phone number and uses that as a single login across
all the devices without any extra logins apart from your phone itself. ChatChat is ad-free with a
seamless user experience that has a one-time subscription of 5$ which allow users all the services
for lifetime across all the operating systems.

Background/Problem Analysis
Factors impacting Target Sector: User experience which includes No advertisements, Single time
Login, Global Connectivity and Compatibility Across Platforms along with lower Cost of service  

Target Audience: Smartphone users across the world

Competitors: Skype, Gtalk, BBM
Ideal Customers: Smartphone users across the world who send more than 100
messages/month

Scope/Opportunity
Since last decade we have seen the “wants” from a phone evolve where 1000s of apps across sectors
have tried to come up in the market. But the basic “need” from a phone are still calls and messages.
Although multiple players have entered here with freewares, those products actually have attracted
a large influx of advertisements. This gave us the opportunity to bring in our product, a simple global
messaging app that people can pay a nominal one-time fee to have ad-free and distraction-free
communication.

Our Plan/Activity/Solution
Below is the plan of development and launch of ChatChat. The rollout is planned to be held
in two parts separated by 1 month.

1. US Geography Launch 
2. International Launch

6
 Channels to Reach Target Audience

 Email Targeting 
 SMS Targeting 
 Bill Boards 
 Marketing during events
 Invitation by friends 

Financials
Revenue Model:
o Small upfront cost to purchase the app (estimate $4.99 - $9.99)
o No additional usage charges or advertising

Years 1 2 3 4 5 Net
Present
Value

PROJECTED REVENUE

Smartphone Users (in 300 500 725 1000 1200

millions)

Market Potential (in $2,250.0 $3,750.0 $5,437.5 $7,500.0

million $) 0 0 0 0 $9,000.00

Market Penetration 5% 13% 23% 30% 35%

7
 Predicted revenue $1,223.4 $2,250.0
(million $) $   $   468.75 4 0 $3,150.00 $4,109
112.50

Advertising Revenue ( $1,000.0 $2,000.0

In million $) $   120.00 $   500.00 0 0 $2,500.00 $3,526

PROJECTED COST

App Development $ 0.80 $   1.60 $   3.20 $   9.60 $ 11.52

App Testing $   0.40 $   0.80 $   1.60 $   4.80 $   5.76

Infrastructure $ 12.00 $ 24.00 $ 48.00 $  144.00 $  172.80

Advertisement $ 50.00 $   $   $   $  900.00

125.00 250.00 750.00

Overheads and $   8.00 $ 16.00 $ 32.00 $ 96.00 $  115.20

Business

Total cost $ 71.20 $   $   $1,004.40 $1,205.28

167.40 334.80

PROFIT $ 41.30 $   $   $1,245.60 $1,944.72

301.35 888.64
Assumptions

 Discounting rate - 15%

 The average Revenue per customer is assumed to be $7.5

Our Organization
The company envisions creating a messaging app that would allow real-time communication with
people around the world with a smartphone. It will be devoid of advertising after purchasing the app
with a small amount.

The people involved in this endeavor are:

Sasha Belenko
Sasha came up with this idea of messaging application while pursuing a master’s degree in computer
science. She brings in the expertise to create a simple messaging app which is free of advertising and
other distractions on payment of a nominal amount.

Hayden Mendez
Hayden Mendez, Sasha's Friend and an MBA by education bring in expertise in managing costs and
monetizing applications.

Skyler Greer
He is an iPhone developer. We hope to have a private beta version within the next 3-4
months to start collecting the feedback.

8
With Sasha’s software engineering experience and Hayden’s background in business, we are
confident that ChatChat will turn into a promising start-up.

Conclusion
            At ChatChat, our team intends to raise $10 million against 10% equity of our company in angel
funding for further growth. We strongly believe that user experience is central to the success of our
application and hence it must remain advertisement-free. As per our projections, ChatChat will be
more profitable if we use the licensing model against the advertising model by approximately $600k
(at a discount rate of 15%).

We are very bullish about our growth and are confident about acquiring 420 million customers in the
next 5 years. This will help our investors achieve an ROI of almost 1000%. With investors coming in,
we foresee ChatChat to propel to newer heights fuelled by Arrow Ventures’ expertise, network and
investment.