Last Friday was the final stage for the 2nd Annual TEC Business Plan Competition. My EzCar business plan placed 2nd in the competition. I am pleased with the result which
recognized my hard work over the past months and proved the attractiveness of the EzCar idea. The format of the final competition was that each team had 10 minutes of presentation followed with 15 minutes of Q & A time.
There were four judges at the final: Dr. P.V. (Sundar) Balakrishnan, Professor from the UW Bothell School of Business.
Trisha Gross, President and CEO at Hubspan.
Dave Parket, CEO of bundled.com, Inc., and Director of Founder Institute Seattle.
Richard Shea, President & CEO of Spiration.
The four finalists are very different businesses:
1. Valeni Boots – The winner of the competition. It’s a company
2. EzCar – The first runner up. A Chinese based car-sharing business that brings the Zipcar model to China.that imports the Russian leather boots to the U.S.
3. CondoBids.com – The second runner up. A vacation booking website that lets its customers to book privately owned vacation houses in an auction style manner.
4. Art of The Soul – The third runner up. A premium jewelry designer business focus on selling uniquely designed jewelries directly to its customers.
My partners and I came up with this business idea last November. We finished a business plan in both English and Chinese in December last year. At the time, we named it as NeighborCar (一迈). We then decided to gather more feedback about our plan in both countries (US and China) while we finish our last 6 months of MBA classes. In February this year, I learned that The Entrepreneur Center
of UW Bothell was holding a business plan competition. At the time I thought that we already have a completed business plan, I should just submit it and see what happens. Also I wanted to put our plan to the test and get a sense of what most of the other people think about the plan.
After the first round of selection, we changed our name into EzCar (随意开) and made into semi-final round with 16 other teams. I received numerous advice on the problems on our original plan. I added in specific details on the population with drivers license in China, compared the number to the passenger car ownership to find out our target customer’s basic criteria to identify the total market size in China. Then narrow down to just the city of Shanghai, which is 4.71 million drivers who have valid driver’s license but don’t have a car.
I also learned a lot more the Zipcar
model from Skip Walter
‘s Entrepreneurship class before going into the semi finals. I learned that in Zipcar
‘s model, the technology, the car sharing concept, and the Eco friendly aspect is not the driving force for potential customers. And it took Zipcar
7 years to figure out that the only factor that will make a potential customer to sign up for a Zipcar
membership is proximity of cars. Customers will only sign up to become a member if there is a Zipcar
within 5 minutes of walking distance to the customers. This is a valued experience from Zipcar
and helped me to shape our strategy to distribute cars to the densest areas surround the potential customers with cars. Another major advice I received at this stage was the marketing aspect. We need to identify the high reference value customers with referral systems and leverage these high reference value customer’s social networking power to acquire members.
In the semi-final round, I’ve got even more feedback on the details of the plan. First is about the financials. In our initial financial projection, we underestimated leasing cost of cars and marketing budgets. I revisited the relevant costs and found out that the member to car ratio is the main factor of the costs. After comparing other car sharing model’s ratio, I raised ours from 18:1 to 36:1, which significantly lowered the number of cars needed in the fleet. Compare that to Zipcar
‘s ratio of 76:1, it is still very conservative which leaves a lot of room for us to adjust in the future. During the research of finding out cost of cars, I come to figure out it is actually cheaper to purchase than leasing. On top of that, I discovered the potential of electric cars with government incentives.
I revised our plan to incorporate half of the fleet as electric cars which not only significantly lowered our fuel costs, but also consistent with our mission to reduce carbon emission which can be used as a strong point to leverage government support.
Another major break through of the plan before the final was to emphasis on valuation instead of profits. .
For our business, the traditional view of value is captured through membership growth. However the potential of this model is the unique traffic and travel data that can be collected. These data can be analyzed for fleet optimization as well as create additional revenue streams to increase government or corporate fleet efficiency.
Competing in the TEC Business Plan Competition helped me refined many details of the idea. In the final round, one major concern from the judges was the capital intensive structure of the business which makes it hard for judges to make the final decision to
“write the check”. Even though I did not win the competition, it helped me adjust and revise the business plan to become a feasible, viable plan. In addition, after the final presentation, a fellow student approached me and told me that her family owns an electric car company in China. She would like me to contact her family in China when we start it. All in all, this has been a very good experience for me and I learned a great deal by doing the whole thing