Junior World Entrepreneurship Forum 2011 Junior World Entrepreneurship Forum

Building a Leading Global Institute for Online Coaching in Finance

Team Name:

FinB

Executive Summary
Our core idea is to provide online test preparation (CFA, FRM, etc.) and online learning management systems (for financial or management institutions) focused in the finance domain for Indian as well as international markets. Currently there is a distinct lack of quality and affordable services for these services, especially in emerging markets. We launched a beta version of the plan FinBricks.com in late 2010 to test our business model, customer response and operational challenges. The target market for this product is global and as an online model it does not suffer geographic stickiness. The best way to reach the target customer segment (consumers) is through the digital media route. Further the global curriculum, content created and brand developed can be leverage to undertake consistent high-growth projects going forward. Our business model derives unique cost advantages through decentralized delivery of live classes. This involves recruiting faculty through network /contacts of the team qualified working professionals around the globe delivering lectures over weekends from their home. Thus we achieve cost-effectiveness & efficiency against delivery through in-house studios. Also, in order to provide affordable services, our low cost model can effectively deliver services at fees 20% to 50% below competition. The beta version of the plan FinBricks.com is running successfully, coaching about 30 (including 5 international) online students for CFA level-1 and is profitable in the first year. We have segmented our future plan into 2 phases: Phase-1 over the next 3-4 years will focus on expanding online coaching to international markets, as well into other verticals CFA level 2&3, FRM, CFP & CPA. With the online coaching segment, we expect to reach annual revenue of ~ USD 3 mn by 2015, with an operating margin of 66%. This would involve an initial investment of ~ USD 160,000 over the next 2 years, and will generate an IRR of ~130%. Phase-2, starting 2014 would focus on the institutional segment, as we gain credibility in the market for coaching in finance subjects. We would start with developing a software platform for service delivery in late2013, followed by content development and marketing efforts in 2014. We plan to be commercial in this segment by 2015. Our management team of 5 members brings in the diverse skills and views required for this venture to succeed. Sonia brings in the subject knowledge of Finance and education sector experience. Vaibhavs past experience as a management consultant will help in creating strategies to grow and market. Sourabh an operations expert would help in the integration of various business activates, Sajid, a senior software developer with Linkedin would help in product development while Gowrishankar with rich start-up knowledge in the online marketing space would help create a global brand for our company. Additionally, all members have rich industry contacts among professionals in finance industry, as well as graduates from IITs, IIMs and global business schools.

Core Idea / Product

Online test preparation and online learning modules focused in the finance domain for Indian as well as international markets (we have already launched beta of the plan FinBricks.com) Live Classes & On-Demand Videos using Adobe Connect (launched) Exam-focused online community through a discussion forum (ready for launch) Online assessment tests with high quality video explanations (Prototype ready) Dynamic & rich content with a personal tracker to optimize learning (pipeline) Holistic Self Assessment tools created through extensive and sophisticated software programming. Includes peer benchmarking (pipeline)

Our Product FinBricks (www.finbricks.com) Virtual classroom + Interactive Learning Management System

Growth potential over the next 3-4 years to be driven by growth in CFA registrations
Core Opportunity: The distinct lack of quality & economical test preparation solutions for international-level finance exams such as CFA, FRM, CAIA, CPA, CFP etc., especially in emerging countries Lack of online learning modules, self-assessment tests and learning management system in the field of finance in emerging countries such as India These exams have high career impact potential for students and willingness to pay for a product that works is high

Market Demand: Americas & EMEA -High broadband penetration, highacceptability of e-learning platforms -About 25 classroom and ~10 online coaching institutes globally for CFA + related exams, charging hefty fees (~$1500 per student) -FinBricks will offer services with comparable world-class quality at more affordable prices -Finbricks online classes delivered at convenient common local time zones, with a mix of local (International) & Indian (low-cost) faculty Asia (India & China): -Fragmented customer base, looking for reliable coaching; high growth (20%-40%) -Currently a dearth of organized, quality coaching institutes in Emerging markets -FinBricks will try to build early mover advantage, and create barriers to entry through a worldclass coaching platform -Unique cost advantages through decentralized delivery of live classes by faculty home-location

We believe Online Fin Coaching solutions to be a high potential market that can be tapped. Given the current market scenario, we find it to be a lucrative proposition for us to pursue

Note: 1. 2009 & 2010 data collated based on actual data provided by CFA Institute; projections till 2015 are estimated based on current growth by geography; 2. Based on average fees charged for different services by leading providers of CFA preparation coaching institutes

FinBricks Typical Customer Base

Consumers
Working professional well equipped with technology, hard pressed for time, looking to prepare for exams in spare time Students in the final year of college or attending an MBA program well equipped with technology, hard pressed for time and trying to multitask efficiently Customers are highly fragmented with time constraint demands, thus having physical classroom sessions is an unviable model to scale up in the long term Primary Issues Faced by Customers: a. Poor access to quality content at affordable rates b. Poor access to quality teachers given location constraints c. Unstructured & inefficient learning methodologies in preparation Online classes is a viable option. However, lack of qualified teachers and the complexity involved in setting up an effective delivery mechanism are deterrents -

Institutions
Higher Educational Institutions offering courses in management, economics and finance; looking for online solutions to support their class-room teaching through pre-term courses and learning management systems

FinBricks Value Proposition An all new smart way to deliver finance coaching at affordable prices

Secret sauce
Unique cost advantages through decentralized delivery of live classes Faculty recruited through network /contacts of the team qualified working professionals around the globe delivering lectures over weekends from their home Cost-effective & efficient against delivery through in-house studio

We believe the Online Coaching solutions to be a high potential market that can be tapped. Given the current market scenario, we find it to be a lucrative proposition for us to pursue.

Marketing Strategy
Online search volumes for different finance exam keywords (such as online cfa coaching) are on average ~40,000 searches (estimates are for Google search engine alone) per month per exam Since most of our customers are well equipped with using technology and search the internet to Thus we believe that the best way to spread awareness and gain more customers is through the digital marketing route

Paid Sources Partnering with the CFA, FRM, CFP institutes as the registered prep providers of quality training Obtaining a direct customer mailing list from the certified bodies offering these courses Conducting market research for segmenting markets demographically and geographically to plan phased penetration and then use A) Google Adwords and Facebook ads for creating target ads to be placed strategically on various website. Ad expenses primarily through cost per click model B) And direct marketing through strategic partnerships

Unpaid Sources Social Media Marketing- FB, Twitter, Linked in, Youtube, blogs

Email Marketing- Newsletters Using Analytics tools, keyword search and SEO to improve online search volumes, page rank and understand returns from paid marketing Create and participate in online forum and communities for understanding latent customer demand and improvising on our services

Organize free Webinars and counseling sessions

Competitive Scenario
Currently there is a dearth of organized, quality coaching institutes (total 5-6 registered online test prep solution providers for international financial exam such as CFA and FRM exist worldwide). These players charge a very high prep fees particularly when they offer live classes some even exceeding the examination fees. Players can be segmented as follows:

Premium Segment ~USD 1000 to 2,000 Kaplan (schweser) Stalla Quartic Training

Mid market ~ USD 500-1000 Allen Resources Elan Guides Pristine

Unorganized Segment ~ USD 300 -500 Fragmented players/ Mostly run by individuals

Monetization Strategy and Financial Projections

Monetization
Test preparation: Course fees from students for different modules (20% below market price) 1) interactive online coaching; 2) lecture videos; 3) Test series Learning Management System for Institutions: Annual contracts along with variable fee for number of students served

FinBricks Fee per Student Planned for 2012 (USD) Live class CFA L1 Live class CFA L2 & L3 Test Series 350 400 80

Financial Projections
We have included below estimated budget for next 4 years for online test preparation services. We follow a low-capex model, with primarily variable expenses. Major fixed expenses are in terms of marketing, content development and administration. These numbers indicate current funding requirements of ~ USD 160,000. The model would breakeven in 2013, and generate an IRR of ~130% in 4 years till 2015. Currently, we have not budgeted financials for institutional segment. We believe this would involve significant investments in content and marketing in 2014 & 2015, and might require a fresh round of funding.

2011

2012

2013

2014

2015

Remarks

Activity

Beta operational CFA Level 1 25

5

CFA Level 2&3 International launch 200

25

FRM & CPA launch CFA Test Series (TS) 500 (e-class) 500 (TS)
170 (e-class) 150 (TS)

B2B content development & marketing 1,000 (e-class) 1,500 (TS)

750 (e-class) 1,000 (TS)

B2B commercial launch 2,000 (e-class) 3,000(TS)

2,500 (e-class) 3,500 (TS)

# Students India
# Students International

Revenues (USD)
Operating Expenses (USD)

7,000

80,000

350,000

1,000,000

3,000,000

4,000

115,500

250,500

534,950

1,022,300

Faculty Website Content development

50,000 1,500
10,000

90,000 2,000
12,000

210,000 2,200
15,000

510,000 2,800
18,000

* 70 students/batch * 100 classroom hrs/batch * $ 50 /hr faculty charges for 2012 *Continued investment in content development (coaching material for additional verticals as well as test series, etc.) *Marketing expenses are expected to rise by 1.8 - 3 times annually with reference to that of previous year expenses during 2013-2015 in line with Finbricks' plans to foray internationally, as well as into other verticals

Marketing

40,000

120,000

240,000

360,000

Online infra Registration Staff Salary

5,000 1,000

6,500 3,000

9,750 4,000

19,500 4,000

7,000 1,000 3,000 (37,459)

15,000 2000 105,156

50,000 4,000 584,827

100,000 8,000 1,983,898

*Staff build up for admin/mktg/accounting work * Avg salary of $ 7000/annum/person for 2012. Added inflation

Misc Operating Margin(USD)

Funding Requirement (USD)

115,500

45,000

Requirement in 2012 is 50% expenses of 2013, less 2012 revenues Additional requirements expected in 2014 for B2B launch

Implementation Milestones
We have already started online coaching for CFA level 1 and have given a demo to over 100 students worldwide. We have already trained 35 students for level 1 (15 online and 20 brick and mortar) in 2011 and our website pages have received views of about 15000 with over 10000 unique views in just 7 months of operation

(Beta) What has been done Launched FinBricks (www.finbricks.com) in November 2010

We have a strong teacher pool (5 teachers) who not only have outstanding academic qualifications but also bring domain expertise as well as have great communication skills Our class primarily consists of Indians at the moment, although we do have some participation from International students. We have partnered with Adobe for the live classrooms that provide an excellent interactive network for students, teachers and teaching assistants which is used by global leading players such as Knewton Although out brick and mortar classes (located in Mumbai) have received good traction and is profitable we are currently contemplating on phasing it out and focus completely on Online which is much more scalable Finish work on CFAWire (http://excelwebsolutions.net/client/cfawire/index.php) the independent discussion forum and begin development of interactive learning management system This phase will see us coming up with effective online marketing strategies for Indian and global markets We are currently preparing to launch sessions for CFA Level 2 & 3 and in 2012, intend to expand into other major areas like North America, Europe and rest of Asia The next step would be to develop a high quality test series and we also aim to implement this model for other finance exams like FRM,CFP,CPA etc As growth in CFA registrations flattens, we intend to leverage the experience, content and credibility developed over the next 3-4 years, to launch the second phase of growth institutional partnerships (schools for MBA, BBA, BCOM, BMS, MS in finance) for delivering preparatory courses for their students (online adaptive platform for self-assessment tests, identification of development areas and delivery of relevant cost-effective online lectures / courses) in finance and related subjects of accounting & quantitative techniques

(Phase-1) Near term plans (next 3-4 yrs) Smart Financial Prep Help expansion

(Phase-2) Long term plans (4+ years) Financial Education Outsourcing

Key Risks to Business

Inability to hire and retain quality teachers Our estimates are based on consistent growth of CFA student registrations from emerging markets over the next 3-4 years. Changes in these numbers would impact our projected growth. Example Marcoeconmic factors such as recession which lead to lower enrollment in CFA program may create systematic business risks Increasing competition Change in test structure/curriculum/regulation by CFA can increase costs and may have some negative impact on our plans

Risk Mitigation Strategy

Our network in the industry and lucrative contracts for teachers will help us overcome the shortage of quality teachers and create a strong pool of quality teachers and content Train current student network to take up teacher roles going forward Excellent and innovative online advertisements will help us reach global audiences for diver\\sification of the risks as well as create a strong brand thereby creating entry barriers Providing a secured online platform for students will help us overcome the piracy threat An independent forum will help us collect consumer data and analyse trends helping us to consistently meet their requirements and consistently outperform competition Consistent improvements in technology and ease of use of online material will help us retain students for every level

Our team complements each other, has relevant experience & extensive networks
Current Team (Also B Plan Competition Team)
- Comes from a family of entrepreneurs (leading exporters of footwear to the Middle East) -Brings in the subject knowledge for this project (Completed CFA level 3 and AFP in Investments)

Sonia Topiwala
Finance & Coaching Specialist

-Understands the education sector well- Worked with ICICI as lead equity analyst covering e-learning companies and with KMPG where she worked on prominent Education sector PE deals -Extensive network among finance professionals, CAs, IBs, portfolio & risk management and financial consulting firms - MS from IIT Bombay - 4 years experience in management consulting at Deloitte and Analysis Mason for global & Indian clients in services sectors of telecom, ICT & broadband, information services (online & mobile), and mobile OS,

Vaibhav Saraf
Strategist

applications & VAS - Expertise in growth strategies, go-to-market plans, customer value management and client relationships - Extensive network among diverse professional groups globally (IITs, IIMs and global b-schools) - 4 years of experience in operation management and operation consultancy. Expertise in cost management strategies, increasing operational efficiencies, pricing and project management. He will be looking into general management and day to day operations

Sourabh Singh
Operations Expert

of the firm.

.And believes that Technology has already revolutionized the way people connect, communicate, and do business. Education is about to have its technology moment, and it will never be the same again. FinBricks as an early mover is about to revolutionize the Fin Learning space and create a sustainable competitive advantage

Current Team (Not a part of B Plan Competition Team)

-Ex-software development Engineer with Microsoft, Sajid has the technical depth to quickly develop code for a diverse set of applications, from production system firmware to sample code to drive performance analysis.

Sajid Topiwala
Tech Guru

-One of the core team members which developed x-box, Sajid now works with LinkedIn as senior software engineer and will be a great asset for developing the revolutionary tech infrastructure for this venture

-Has over a year of intensive online marketing experience. Gowri has generated revenues over USD 150,000 (Aug 2010 to Jul 2011) using different online channels including affiliate marketing(both as affiliate and product owner).

Gowrishankar
Online Marketeer

-Has a keen interest in online businesses and wishes to pursue a career path along this line. He will handle online marketing of the venture including traffic generation strategies, search engine marketing and conversion analytics