Thought I'd bring myself into the conversation at this point. I'm working with Kain on this "stealth" venture but thought I'd add a bit more information to the table to try and shed some more light on the specifics.
Basically our product is targeted at a specific group of professional service providers. We estimate our target market in the US to be between 125,000 and 200,000 of these professionals. In Australia, it's more like 10,000 - 20,000. The product itself is SaaS. There are no barriers to entry. Anyone can sign up. It's basically a turnkey solution that provides the user with everything they need to move a large part of their business into the e- commerce world. Including Merchant facility, automated ordering and delivery to their customers as well as a fully customisable we presence. The user pays when their customers buy their products and services through our system. We take a small commission to cover merchant costs, infrastructure and also make a profit. The particular profession we are targeting, provides their services to the general masses. That is, most families in the USA would use one of these professionals at least once in their lifetime, quite possibly numerous times. The company that is seeking an exclusivity agreement with us (we'll call them the Vendor), provides a service that is required by these professionals in order for them to deliver the final product to their customers. There are quite a few of these Vendors all competing for the professionals business. Our product, provides an all in one solution to these professionals that allows them to streamline the way they interact with their customers and also take most of the grunt work out of what they do. In order for our product to achieve this, it needs to integrate with these Vendor(s) to automate part of this process. If a professional doesn't use our product, they deal directly with one of these Vendors in order to get their final product. However, if they use our product, it's already integrated with a Vendor(s) and therefore they no longer need that direct relationship. This means a number of things to the Vendors. * If a professional has been using Vendor A and then decides to start using our product, and our product is integrated with Vendor B, then Vendor A, just lost a customer and obviously in turn, Vendor B just gained one. * If our product is marketed wide and far, there is the potential for Vendor B, to gain a much greater market share through indirect use of their services through our product. Without exclusivity, we could integrate with Vendor A, B and C, and therefore the market share gained would be distributed to competing Vendors. * Our product solves a problem that these professionals have. There are competing products, but most of them are very specific and only solve a part of the overall problem. If a Vendor integrates with us, it's in their best interests to push our product because we fill a reasonably large gap in their product offering in quite a unique and innovative fashion. For want of a better term, it's "sets them apart from the rest". In terms of current value, we've spent 15 months, around (3,000) hours in developement. We've fleshed out a roadmap as well as collected a group of 15 professionals who are about to start using the product in Closed Beta. The response we have had from the market and the Vendors so far has been very positive. We can certainly see the value for the Vendor in entering in to an exclusivity agreement with us. However, the difficult part is determining the potential monetary value of such an agreement. As far as we're concerned. We never planned for an EA, and don't need one. We have a number of Vendors that have expressed interest in integrating with us and so we have can have our pick. If this falls through, it's not a problem for us. But from a financial standpoint, it would be beneficial for us to endeavor to pursue it. Your comments are much appreciated. I apologise for the Cryptic nature of this post. But we're currently in talks with entities that are somewhat sensitive. - Derek On Nov 27, 11:34 pm, Kain Tietzel <[EMAIL PROTECTED]> wrote: > I'm working on an online business that's currently in stealth. We're > aiming to start our private beta in December and have a closed beta in > January, but that's not why I'm writing this post. > > We've garnered a lot of interest in our product and a large, > prestigious business in the States would like to partner with us and > has asked for a 36 month exclusive agreement. Whilst we're considering > the pro's and con's of working out what we'd want out of the > agreement, our biggest problem is knowing what sort of $$ we should be > asking for. > > Has anyone in the SBA had any experience with exclusivity agreements > (especially with OS/States based companies) and have any advice to > share with us? Whilst we're by no means wanting to be greedy, we want > to negotiate a fee which is fair and realistic. > > kain --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
