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Young people spend long hours at college campuses and apart from comfortable places for studies and rest, they need an opportunity to have a snack or a cup of coffee. Students at colleges and universities are frequently preoccupied, limiting their access to food off campus. At the same time, the few restaurants available on campus have some problems that do not let them serve all customers. These three major problems include long lines, expensive food, and limited food options. Restaurants outside campus could have been a solution, but not all students have enough time to go there between classes. Thus, a food delivery service is one way to solve this problem. It will provide students with an opportunity to get food delivered from their favorite restaurants located in the neighborhood. However, the disadvantages of such service include high delivery fees and long delivery time before the students can get their food.
CrowdSurf is not an ordinary delivery service. It is a college student delivery application that follows a peer-to-peer model to tackle the problems of high fees and long delivery time typical of delivery service. CrowdSurf provides an opportunity for student to deliver food to other students while they walk back to their original destination. In exchange, the student deliverer receives $1, and the recipient gets their meal delivered quicker and cheaper.
The research of the target market revealed that 78 out of 85 participants ordered food from or around campus at least once a week. Also, 73% of students on the survey answered that they would use a food delivery application exclusively for college students if there was one. Apart from low delivery fees, students would appreciate quick delivery between 10 and 30 minutes.
Business Model Canvas
Business model canvas for CrowdSurf project will include the following aspects. The key partners will include restaurants on the Ave, potential investors, and campuses of colleges located in Seattle. Moreover, google will be involved for valid online maps. The key activities will comprise the production of the application (design, make, ship, and support for different mobile operating systems), and problem-solving (covering the issues of promotion, updated for application, customer service, inclusion of the application to Apple App Store and Playstore). The value proposition presupposes that the application will be cheap, fast, with peer-to-peer delivering options for college students, and also additional revenue stream for students.
The key resources for the business model are physical (work space and devices such as computers), intellectual (knowledge of food delivery industry, creation of logo for the trademark, experience in copyright law), human (developers, designers, marketers, deliverers), and financial (investments). The cost structure comprises fixed costs (salary for the developers, marketing activities, cost of physical resources) and variable costs (salary of the hired specialists, advertising expenses, maintenance cost of physical resources). The customer segment includes college students, primarily those who are busy and do not have time to buy food, and students who have some spare time and want to make money.
A solid team is significant for any startup (Patric). The team for the project has evident strengths while some gaps are also present. That the major strengths of the team are as follows. First of all, this diverse team has an insatiable desire to be successful. Michael and Sunshine know the principles of internet advertising (e.g. on Facebook and Google) and have experience in starting ventures. Arjun knows how to code and can try to develop an application. Another strength is that Bryan and Sunshine have marketing experience.
The key gaps of the team are the lack of mobile application designers, no experience in launching a startup related to software, and no experience in raising money for a project. To make this venture a success, the team would need designers, specialists in marketing and PR, delivery experts during the initial phase of the project, advisors on raising money, and mentors. The team would need experience and skills in food delivery, so the help of an expert can be necessary. Also, mentors with experience in launching and running a venture can be helpful. Specialists with experience un coding, building a brand, customer engagement, and ability to juggle a business should be consulted. They can be attracted to the team through LinkedIn and leverage Alumni network, Lavin network, Lavin Seed funding, and some personal networks. We would have to describe the advantages of the project with focus on its necessity for students to attract the necessary specialists.
Partners and Allies
The major partners for the project will include restaurants on the Ave, college campuses in Seattle (in the beginning of implementation with possible expansion to other areas in the future), and potential investors. Some online resources such as Google for maps to build delivery routes and social media services (Facebook, Twitter, Instagram) for advertisements will be also involved.
The key product of the project, i.e. a mobile application to empower peer-to-peer delivery service is expected to be developed by the project team. Arjun will do the coding and collaborate with a designer who is going to help with the interface of the application. No involvement of external suppliers is expected.
Partners and allies will be attracted during the presentation of the project. Whey will be informed on the perspectives of the startup. It should be considered that the target market research proved that the perspective consumers are not satisfied with long waiting for expensive delivery and are likely to use an application for peer-to-peer delivery. Moreover, food delivery startups are getting more popularity and have good chances to succeed (Field).
This venture is expected to be funded for the costs of investors. They are likely to be interested in a food delivery startup because this service is very popular in the American society. 52% of Americans usually order food for lunch and 70% order food from quick-service restaurants (Food Delivery Industry in the U.S. – Statistics & Facts). Moreover, such segment of delivery service as peer-to-peer is gaining popularity. The food delivery market is observing then interest of investors in on-demand meal delivery (Zaleski). Apart from investment, there is an opportunity to apply for a grant for student startup that will cover the expenses on project development and implementation.
The rough estimates of initial startup cost are as follows:
- $10,000 for physical resources (computer, software, electricity, etc.)
- $1,500 for logo development, design and licensing
- $2,000 for the application development
- $2,500 for first quarter marketing activities
- $1,500 for first quarter advertising expenses.
Total estimated initial expenses for the startup make up $17,000.
On the whole, the funding is expected to come from such sources as investment, grant, and personal funding.
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Every startup can face diverse risks and challenges even despite careful preparation. One of the common people risks for e-commerce and startups such as CrowdSurf is wavering customer loyalty (Dua). Thus, with the diversity of choice (ordering delivery through the application, other delivery service, going to a restaurant on campus, having lunch outside campus, etc.) makes the customers hesitate while choosing a delivery option. Another people risk is related to logistics. While the majority of respondents of the market research admitted they would use peer-to-peer delivery application, many of them also noted that it would be difficult for them to be a deliverer themselves given their school schedules and other personal factors. Finally, there exists a financial risk. In case the project does nor receives a grant or investment, personal funding can be not enough for the project launch.
The first risk to address will be a financial one because funding is crucial for the project. It can be managed during negotiations with future investors through discussing revenue streams such as percentage of sales or promotions.
Sales and Marketing Strategy
The product will be distributed through different channels. They will include social networks such as Facebook, Twitter, Instagram, LinkedIn, etc. Also, fraternities and sororities as well as college campus community can be involved, finally, the application can be distributed through personal networks.
The demand for the project can be created through advertising in social networks and on campus. Moreover, personal experience will be applied for the promotion of the application. The team members will conduct unofficial meetings explaining the benefits of peer-to-peer delivery.
Dua, Amit. “Challenges that Online Food Delivery Restaurants and Services Face.” YourStory, Web.
Field, Anne. “A Start-Up Taking a Bite Out of the Food Delivery Business.” CNBC, Web.
“Food Delivery Industry in the U.S. – Statistics & Facts.” Statista, Web.
Henry, Patric. “7 Keys to Building a Winning Startup Team. Hire Smart, and Be Transparent from the Start. Entrepreneur, Web.
Zaleski, Olivia. “VCs Hunt for a Food Delivery Business That’s Sustainable.” Bloomberg Technology, Web.