Individual Diary

I was beginning to stress and thought I’d better hurry. My last attempt was to check the discussion board on Blackboard to see if anybody else was looking and luckily enough, there was. I met with my new partner, Xx Yin, after class on this particular Thursday so we could discuss the basics, that Is, how we wanted to approach the task we had been set.

We laid out some ground rules including; where ND how often we would meet, how we would communicate in-between meeting dates, key expectations and more. Once this was established we moved on to making a formal start on our Idea. Some Interesting Ideas were discussed, however, we had no foundation from which to draw inspiration from so we decided we would spend some time, between meeting next, studying and narrowing down ideas of interest. 2: Consolidation of Ideas: 24/04/2014 our decision was one of external stimulation, given that we weren’t able to Identify a need through our own experiences.

Rather, we had stumbled across an idea that already existed, though, we felt had opportunity to be refined and re-modeled. Our Idea was for a peer-to-peer based lending platform in Australia. I found this Idea through browsing various websites In search of successful startups In foreign countries within the past two years. Xx Yin had some great ideas as a result of her own research, though collectively, we felt that our APP lending idea would be the most viable. Our basic research told us that In the U. S.

A, startups such as Prosper and Lending Club had been effectively disrupting the credit lending market, however. In Australia much less was happening. We set out to discover what business model we could utilities to replicate the success of our foreign counter-parts. It was also in this meeting that we decided, going forward, our venture would be named, The Lending Bay, 2 1 OF 7 Xx Yin and I met again to discuss some of the further research we had conducted. We had hoped to better understand the life-cycle and competitive environment of APP lending in Australia.

We both discovered that there was several companies operating these platforms, however, only one in particular, Society’s, stuck out as being a major threat. Society’s was offering similar value to customers that we had opted to capture. That was; low-interest rates for borrowers, a platform for both investors and convenience. This was a similar model to U. S. Ass first movers, Prosper and Lending Club. We also realized that being a credit licensee would mean competing with traditional financial institutions such as; banks, short-term lenders, credit-card companies and more.

This gave us a better perspective on how we would differentiate our business model. Our goal for the next week was to understand, through research, the aspects of our competitors that were either strengths, weaknesses or opportunities. By understanding this, we could differentiate our business model so as to service an undeserved niche within a growing market. Specifically, it was my mission to understand what value was available to be captured and what need/want could potentially be created. For Xx Yin, it was a matter of understanding what were our critical assumptions. : Collating information: 8/05/2014 The week that passed had been critical in the formulation of our start-up. A lot of research had been collected and it was now a matter of making definitive decisions toward the ventures direction. As a result of analysis (environment, situation), I was blew to narrow down our value offerings to cater a specific market segment. Research indicated that competitors, especially Society’s, were largely focusing on clientele that had mid-high disposable income. It was clear that they had pursued a consumer base that were willing to take larger loans for longer periods of time.

This, I felt, was an attribute of their slow growth within Australia. Not at all mirroring the exponential movement of similar U. S start-ups. This became the first real critical assumption. It was quantity over quality, meaning that, The Lending Bay would expect more customers if there were more accessible loan sizes and time frames. From this point, I found value through how we would offer our services. I wanted a similarly convenient platform, like Society’s, with attractive returns for investors and borrowers as well as having unique loan characteristics. We had a much clearer vision now.

The following week would be spent finalizing information and creating an effective presentation. For me this meant; creating the PPTP, aspects of our value proposition, competitive analysis and more. 3 5: Addressing concerns and formulating solutions: 1 5/05/2014 After completing our restoration we met to discuss critiques, thoughts and feelings regarding our for several reasons. Whilst we had aimed to cover all bases, we hadn’t. Some concerns were raised around the following issues; security of consumers’ money and the business itself, heavy regulation, lack of compelling value and competition.

Personally, we also felt that we had not effected sufficient testing of our assumptions. This is crucial to the success of a firm, we realized, and set about understanding how to achieve this. In the week that would follow, we made our mission to dig deeper in order to rectify the problems that had become apparent in our presentation. 6: Choosing areas of focus: 22/05/2014 Our subsequent research was vital in that it cleared up areas of misinformation within our business model. One such area was around regulations. Luckily, my research had led me to the associated government bodies that withheld such information.

It allowed me to understand what impact these bodies would have on an firm such as ours. It was quite an impact too. As a result, we needed to readjust our budget and loan system. We required more initial capital as well as a system that ensured consumers were informed on their decisions and were not entered into, recommended or suggested contracts which were not viable for their financial situation. We were able devise a more efficient lending system from these findings, which was discovered through researching loan management software companies within Australia. : Finalizing writings and decisions: 29/05/14 Now that we had acquired the necessary information to finalist our efforts, as well as having finitude our previous work, it was a matter of writing a compelling, easy to digest business opportunity report. It was my responsibility to discuss the Opportunity Evaluation – Feasibility Analysis” and “Assumption Checklist” sectors of the report. During this time, extra research was conducted to ensure structural soundness of ideas and as well to ensure relevance to learning in class and the objective of the report. 8: conclusion: 12/06/2014 Having completed the Business Opportunity report, I am now able to reflect on the progress I have made since the beginning of this course. These learning have helped me to gain a more focused perspective on the processes of a venture, from it’s inception, execution and it’s sustainability. I feel now that I am better equipped to aka part in similar undertakings in the future, having felt the benefit of the guiding principles, frameworks and methodologies that were taught in class.

Furthermore, my learning experience was enhanced by facing real-life objections and problems that forced me to think outside the box in order to find solutions. I also felt that this difficult situations within our venture, communicate and negotiate effectively with my business partner, use creativity as well as existing frameworks to make decisions and to document my progress. I am looking forward to applying what I have learnt to a venture of my own in the near future. Key Decisions 6 Business venture idea Like many, the first most important and difficult decision was where to start with the venture.

I spent a short amount of time agonizing over an ideal model that I could create which required minimal input and maximum output. If there is such a thing, regardless, it wouldn’t have come to fruition easily. I referred back to the readings in class regarding Elizabeth Gilberts and her TED talk on ‘Your Elusive Creative Genius’. I remembered writing about the fact that a genius, to me, is a product of their on- going hard work and not simply a majestic source of ground-breaking potential. This signaled to me that I should at least get the ball rolling, as in, find a place to start.

As mentioned earlier, I required external simulation to give birth to my idea as I didn’t have any internal reference for inspiration. It was at this point that I turned to research. I understood that this wasn’t as exciting or likely to be groundbreaking but I decided it was the work that I would complete later that would decide the fete of my idea. When researching I focused on developed economies such as the U. S and England. What I was looking for was proven results from new, successful, innovative ND potentially disruptive start-ups within these economies.

I found many. The labor was in narrowing down choices based on lower barriers of entry, market attractiveness and potential for competitive advantage. Whilst some ideas seemed more appealing than others, upon research, they were simply not viable within Australia. Subsequently, I came across an interesting start-up within the U. S named, Lending Club. Lending Club was a peer-to-peer lending platform that boasted lower interest rates than typical financial institutions and a win/win offering for it’s consumers, either borrowers or investors.

This peaked my interest immediately as I conducting further research, I realized that indeed there was first-movers within Australia already offering similar services within the lending market. I realized that his must be part and parcel in the process of an entrepreneur’s venture formulation. This presented another learning curve, I needed to understand where to go from here having met my first major obstacle. I had made my decision to commit to my idea however, so it was now a matter of refining my model and producing an opportunity that was unique and compelling in it’s value offerings.

This would be achieved through research and competitive analysis. The result was, we felt, a model that was purpose built for a particular market segment with a valuable distance from our competitors’ positioning. We were excited to go forward with this model and were convinced that our movements would be timely given the growth stage in which our market was in. 7 2) Differentiated value proposition In order to enjoy competitive advantage, it was our task to discover what would create that.

This was one the most strenuous objectives to complete as I understand that value propositions are the determinants of a ventures subsequent success or failure. There were several factors that would influence our decisions. Firstly, it was matter of analyzing the environment in which we would be situated. Specifically; our competitors, environment/market and consumers. The first portion of our research helped us to understand what value our competitors were delivering as well as simply understanding who were our competitors.

The first and most obvious was other APP lending companies. Our main focus was Australia’s first-mover in the field, Society’s. This was an important and necessary road-block as we realized that Society’s was offering a service that mirrored our intentions almost completely. Slightly discouraged, we continued researching their company in an effort to discover areas of weakness and strength as well as opportunities that they were not pursuing. After some time, we were satisfied with our progress having found characteristics that we felt would be unique to our model.

We wanted a platform where almost anybody could potentially receive a loan and we wanted every customer to experience the benefit of purpose-built software that emphasizes convenience and ease of use. Obviously, our main source of value was derived from our loan rates, we acknowledged that this was the most important component of our value proposition. Without this, consumers would continue to rely on traditional financial institutions such as banks, credit-cards and more. These institutions, however, will regardless be threatening competition.

In a time where convenience underpins everything we do competitors. We learnt that traditional financial institutions’ loan services are usually tedious, costly and overall a laborious process, however, boast the benefit of security due mainly to the size of their operations. From this, we made a critical assumption hat consumers would be willing to try APP lending based on our attractive loan rates and convenience. Also, APP platforms have established a culture of trust and reputability as of late, which is something we would aim to exploit where possible.

Overcoming these pitfalls was testing, however, it was necessary in the development of our value proposition. Measuring our success will now be a matter of testing critical assumptions against primary and secondary research. 8 3) Profit & Loss The bottom-line is arguably the most important aspect of any business. Without a healthy bottoming, firm survival is greatly threatened. A lot of time had been spent on less immediate components of our model, only realizing later the urgency of estimating our profit & loss figures, moreover, how we would even make money.

It was not immediately clear how we would make money from our venture but we expected that by analyzing our competitors’ pricing structure, we would have a base from which to start and expand from. The most efficacious pricing structure we found, was a U. S APP lending company named Prosper. Prosper would set their loan properties according to four main factors; loan term, economic environment, competitive environment and a Prosper rating. This model was attractive to us as it had implemented reasonable measures to protect consumers as well as themselves.

Furthermore, it encouraged safer transactions by offering the best rates to those who were less subject to risk. Safety to us underlined profitability because the safer we were able to demonstrate our new technology to be, the more likely we were to attract financially sound investors and as well, prevent consumers from defaulting, which in-turn would decrease the overall attractiveness of our venture. From here, we realized that in order to deliver our service in this manner we would require repose-built software coupled with the associated training involved.

This was a cost that until that point had been overlooked. Now that we understood the format of our pricing and service structure, our focus shifted to the specifics of profit per customer. In order to offer competitive interest rates, we would needed to ensure that our premium on top of transactions were not too high. What we wanted was quantity rather than fewer, larger loans that our competitors seemed to focus on. This was key to our value proposition. We wanted to pride ourselves on the fact that almost anybody as the potential to receive a loan.

After careful consideration, we decided on our finalization of a loan. The amount of our taking would be determined on borrowers’ risk score as determined by; our software, borrowing amount and the economic and competitive environment at the time. Basically, the higher the risk and the larger the loan, the higher the percentage that is taken. Also, late fees will incur if an automatic transaction fails. A fee will total $1 5 per cycle that a failed transaction occurs. This will hopefully enforce a sense of secure lending within our environment to our consumers.