White Paper for ‘The Matchmaker Project’
Craig M. Gilkey
Student ID D005
CS 411W Lab Call Number 29333
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The U.S. Census of 2000 states that ‘incompatibility between former
partners’ is the primary factor behind the increase in the percentage of divorced
men and women in the United States between 1970 and 2000 (U.S. Census,
2000). The Census of 2000 also contends that the percentage of unmarried
adults in the United States increased between 1970 and 2000, while the number
of married adults in the U.S. declined (see Figure 1; U.S. Census, 2000). Dating
experts attribute numerous societal factors as the cause for these occurrences.
These factors include media influence, a lack of stigma associated with single
parent homes, an increased number of children being raised by single parent
homes, and/or a lack of compatibility between married couples (U.S. Census,
2000). Of these four factors, dating experts agree whole-heartedly with the
findings of the U.S. Census. They insist that for long lasting relationships to
succeed, compatibility needs to be the primary component (Mason, Sullivan,
2003).
Nowhere is the need to utilize compatibility for singles more evident than
at social gatherings. Recent data states that 82% of singles social gatherings
provide singles no means of meeting others with whom they are compatible
(MSNBC, 2003). Those singles without a means of other compatible singles are
left to utilize a process that could be described as anything but ‘timely.’ On
average, singles interviewed by MSNBC reported that on a typical night at a bar
or club, they spend 3.3 hours trying to ‘meet someone.’ And by no means does
this infer that they are truly compatible with this person; this is just to ‘acquaint
him or herself where there may or may not be some basic attraction’ (MSNBC,
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Figure 1 details the increase in the
percentage of Divorced/Separated (Men
and Women) since 1970, along with a
decrease in the percentage of Married
Men and Women since 1970 (taken from
U.S. Census.org). The Census terms
‘unmarried’ as individuals who are either
divorced, have never been married, or are
widowed.
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2002). Furthermore, the majority of singles’ events that utilize match-up methods
are described as either ‘poor’ or ‘less than adequate’ (Frommers, 2003). The
singles’ events that do utilize ‘compatibility’ usually determine it based on one
category of an individual’s lifestyle. While singles gather at these functions with a
single common interest, there is no way to bridge multiple interests together for
large numbers of individuals. For example, a member of the Wasamutten Ski
Club will have no way of identifying which members are Jewish, much less which
are married.
Such limits on existing match-up methods create our objective for pushing
the MatchMaker Project into production (and beyond). This objective is to create
a product that will infuse compatibility-based communication into a single’s social
experiences. We have designed the product to meet this objective: the
MatchMaker device (MatchMaker Group, 2004).
This device will be utilized by singles that travel or frequently attend social
gatherings like singles’ cruises. To meet these specifications, the MatchMaker
device will be small (4.46 in. x 2.75 in. x 0.50 in.), lightweight (4.37 oz.) device,
powered by a rechargeable battery. A user will answer a multiple-choice
questionnaire concerning his or her interests, and this information will be stored
as the device’s ‘user survey.’ The user’s device will then broadcast its own user
survey and work in tandem with other MatchMaker devices to determine which
user’s surveys are compatible. The surveys are relayed from device to device via
a wireless, electronic signal each one broadcasts. After receiving another user’s
survey, the user’s device uses an algorithm to determine if the two profiles are
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‘compatible.’ Once compatibility is determined, the device transmits a picture
image to the other device along with a picture request from the other device. The
vibrating mechanism in each MatchMaker device activates, and each user sees a
picture image and profile in the Liquid Crystal Display screen.
Our SBIR Phase I findings concluded that the MatchMaker device can be
built utilizing existing, readily available hardware technology. In fact, our Phase II
SBIR pre-production prototype (and Phase III products) will be composed entirely
of one COTS (Cost Off The Shelf) Component: the Hewlett Packard Ipac Pocket
PC. The HP Ipac meets all of our specific technical requirements. It’s small,
lightweight, and utilizes existing wireless technology that has been on the market
for over 3 years. By utilizing an existing HP distributor, our price per unit (single
Ipac) will be $200 per unit (including shipping). Our initial estimate of cost to
design and produce the hardware in-house came to $260 per unit. But reduced
production costs are not the only benefit gleaned from utilizing the Ipac.
There are two other advantages in using the Ipac as our sole hardware
component. First, it reduces our development costs to software only. Shock
testing, ergonomics testing, and a hardware replacement warranty are all costs
absorbed by Hewlett Packard. And secondly, our engineering staff is reduced
from our original projection made during Phase 0. Our original plan called for two
level 3 engineers; that plan now consists of one level 3 engineer (the Software
Engineer). Besides the 30 Ipacs purchased, the only hardware cost incurred from
Phase II is the cost of two desktop computers (a total cost of $1,200).
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Thanks to the incorporation of the Ipac, the most essential tasks to get the
MatchMaker device into production will center on software development. At the
completion of Phase I (June 15th, 2004), the MatchMaker Project will have a
completed, compatibility-based software program to compare user profiles. This
program will be transferred onto thirty (30) HP Ipacs for field testing, through the
utilization of a Bluetooth Developer Kit (at total costs of $7,500 and $10,000,
respectively). Field tests will include indoor and outdoor range tests, to determine
the effectiveness of the Ipacs at given distances from each other. These tests will
also include load testing (groups of Ipacs will ‘load’ each other with survey
requests), fault seating, and will utilize obstacles and walls of various
thicknesses. To ensure these tests are executed on a scientific and timely basis,
the MatchMaker Project will hire a level 3 software engineer at the beginning of
Phase II.
The level 3 software engineer will be the overall administrator of the
software development. He or she will be employed to work 100% of the time of
Phase II, at a total cost (from June 15th, 2004 to January 15th, 2005) of $35,000.
To assist the software engineer in the field testing, two ODU undergraduate
computer science students (each who have completed CS 250) will be employed
as software testers as well. The undergrad students will be employed for the
entire phase as well (100%), at a cost of $40,000. To further justify their use, the
undergrad students will be utilized for essential clerical/secretarial tasks as
needed, including answering the office phone. During Phase III, software
development tasks are nonexistent. The software engineer will ensure that the
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MatchMaker device’s software is ready for mass production by January 1 st, 2005.
However, our budget realistically accounts for ‘error recovery time,’ in case
software needs to be fixed after production (at an estimated cost of $250 per
error). Therefore, the software engineer and software testers will be employed for
only a fraction of the length of Phase III (at a combined cost of $55,250).
The second most essential group of tasks to ensure the MatchMaker
device reaches production focus on generating a sales contract with a cruise line.
For this purpose, the marketing staff, initially consisting of our own marketing
director, will expand to include both a marketing consultant and a legal consultant
(Lawyer) at the start of Phase II.
The priority of accomplishing the cruise line sales contract cannot be more
emphasized. Therefore, the marketing consultant will be employed on a full-time
(100%) basis during both Phase II and Phase III. The total (salary and benefits)
cost of the marketing consultant during both Phase II and Phase III will be
$133,000. Considering the essential nature of the sales contracts (and the fulltime employment of the job), this is an adequate financial representation of what
will be accomplished. During Phase II, both the marketing director and the
marketing consultant will be directly tasked with traveling to and lobbying the
three largest cruise lines, Carnival, Norwegian, and Royal Caribbean.
Conveniently, all three cruise lines are headquartered in Miami, Florida.
As a result of this, the marketing consultant will be renting a studio to work out of
in downtown Miami for the entirety of Phase II (six months). This studio will be at
a total cost of $12,000, including the price of utilities and rental deposit. The
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marketing director and marketing consultant will together have an additional
$38,000 in travel expenses, to be used in pursuit of a contract to sell a bulk order
of MatchMaker devices to the before mentioned cruise lines.
The legal consultant is utilized for two purposes. The first is to oversee
and draft sales contracts. These sales contracts include those between the
MatchMaker Group and potential cruise line customers, and the Phase III order
contract for our COTS hardware, the HP Ipods. The second purpose will be to
keep the legal consultant on retainer in case of any unforeseen legal difficulties
or lawsuits arise (at the combined cost of $30,000, including both retainer and
contract fees).
Being located in our own Computer Science department benefits our
project both in manpower and in reducing overhead. The MatchMaker Project will
employ the original SBIR Phase 1 team. This will eliminate both advertising costs
and the need to include a week-long ‘employee indoctrination’ period for the first
six members. This one week, although it seems like an insignificant period of
time, translates into $11,350 of cost savings for Phase 2. The location also
supplies the MatchMaker Project with an excellent source of qualified software
testers and software engineers to hire from. This reduction in advertisement
reduces the total initial hiring costs of our personnel to a final cost of $6,300.
Furthermore, office space and utility costs will be null, thanks to the space
supplied by Old Dominion University. Office equipment costs includes office
supplies (such as paper and printer cartridges) and the before mentioned
desktop computers for Phase II and Phase III. The total cost of the office supplies
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comes to $4,300, and includes 15 USB storage keys (one for each member of
the MatchMaker Project).
The greatest fiscal savings comes in the way of capital costs. There are
none; the capital costs for this project come to exactly zero dollars. Since the
utilities and leasing fees are covered by Old Dominion University, there are no
‘location/facility’ expenses we need to be concerned with. And since we utilize
COTS hardware components, our project does not need to purchase or rent any
mass production equipment.
Our Phase II time schedule is based on the limited amount of software
work we need to accomplish. Phase II will center on turning our initial ‘roughsketch’ Phase I prototype into a producible, working model for the customer.
Since the hardware development costs are null in terms of time and money, our
Phase II timeline will be as cost effective as possible. Our only tasks to
accomplish in Phase II consist of the software design and marketing contract
aspects already mentioned. Our cost effectiveness is part of the reason our SBIR
Grant Request for Phase II was accepted. Our budget costs for Phase II
($371,000) were well under the SBIR Phase II funding cap ($750,000). But the
greatest advantage of the Phase II schedule and budget is this: there is no cost
to the MatchMaker Group for any part of Phase II whatsoever.
During Phase II, the number of employees we hire is quite small. This
reasoning is validated in terms of cost. Personnel salary costs, accounting for
88% of the total costs of our project, are by far the most expensive costs of the
project. By limiting our Phase II staff to nine employees, we limited the total cost
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of personnel for Phase II to $272, 500. Our Phase I project staff consisted of the
following members: project manager, operations director, SBIR director, technical
service director, research and development director, and marketing manager.
The nine employees of Phase II include the original Phase I project staff, the
software engineer, the marketing consultant, and the two software testers.
If our management structure in Phase II is meant to minimize costs, the
management structure for Phase III is meant to expand our operations.
‘Expanding our operations’ consists of two key objectives: to expand our market
and to develop a management structure capable of handling customer service.
During Phase III, the marketing director and marketing consultant will work
in concert with other members of the MatchMaker Project to expand our target
market. By January 15th, 2005, we will expand our potential customer base to
include all 153 cruise liners that sail on the Caribbean. To facilitate this, we will
hire a salesperson for the entirety of Phase III, at a cost of $87,000. The
salesperson will work with the marketing consultant to design and produce webbased advertising for our device as well. This advertising will be aimed at John
Q. Public, and will not be limited to cruise lines and/or resorts.
In terms of customer service, we will employ the minimum amount of staff
required to provide the best possible experience to our customers. This Phase III
customer service staff will include three technical support representatives and
one customer support technician. Starting January 15th, 2004, this team will
operate a Monday thru Friday, 9:00 AM to 5:00 PM trouble call line. This toll-free
trouble call line will answer any customer concerns and/or complaints with the
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device. Total cost of operating this staff and the trouble line over the entire 22
months of production is $282,000.
Our Phase III schedule, unlike Phase II, is not fixed on a cost index.
Instead, we laid out our Phase III schedule based on the time it will take our profit
per month to almost double. This modest estimate is based on the projected
income of selling 250 units to half of the available 150 cruise liners, at a rate of
600 units per month. From the beginning of Phase III, our total cost per month
(manufacturing, personnel and all other costs) is $160,000. Our team will be able
to produce the same number of units that we can sell (600 units per month). Our
Ipac supplier, who could easily supply us with a steady stream of 1,000 units per
month, will have no problem shipping 600 Ipacs per month to satisfy our
production requirements. At a sales price of $400.00 per unit, our revenue
generated per month comes to $240,000. According to Figure 2, Phase III
Breakeven Analysis, by month 26 of production, we will double our profits per
month, from $80,000 per month to $200,000 per month.
But the most astounding aspect of our Phase III budget is the relative
speed in which we will break even and begin making money. The revenue
generated per month assumes no units are shipped until late February, 2005.
The combined expenses for January, February, March and April (2005) are
covered by the revenue generated by March and April. Therefore, the breakeven
point for the MatchMaker Project is the beginning of April. Every month after
April, 2005, guarantees us $80,000 in pure profit. At the meager length of 23
months, that comes to $1,840,000 in net profit over the length of Phase III.
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Phase III Breakeven Analysis
$7,000,000
Cumulative Revenue
$6,000,000
Cumulative Costs
Income
$5,000,000
$3,000,000
Approximate
Breakeven at April
2005
$2,000,000
$1,000,000
Net Income =
$1 million
$0
2-07
12-06
10-06
8-06
6-06
4-06
2-06
12-05
10-05
8-05
6-05
4-05
-$1,000,000
2-05
Dollars
$4,000,000
Month (MM-YY)
Figure 2, the Phase III Break Even
Analysis, details a time-cost relationship
of the MatchMaker Project, starting at the
first month of Phase III (January, 2005).
Note the approximate breakeven point
occurs in April of 2005 (Taken from the
MatchMaker Group Budget, 2004).
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Sources Cited:
Cruising.org (2003). Number of Cruise Ships in the Caribbean. Retrieved March
27th, 2004 at http://www.cruising.org/cruiselines/ShipIndex.cfm
Dynamic Travel.com (2003). Programs Offered by Cruise Lines. Retrieved
September 28th, 2003 at
http://www.dynamictravel.com/singlesguide.htm
Frommers.com (2003). Matching the Cruise to Your Needs. Retrieved
September 21st, 2003 at
http://www.frommers.com/activities/single/article.cfm?destid=SINGLE&arti
cleid=538
Frommers.com (2003). Carnival Cruise Lines (analysis). Retrieved September
22nd, 2003 at
http://www.frommers.com/activities/single/article.cfm?destid=SINGLE&arti
cleid=538
Griffen, Ilene (2002). Singles Guide to Cruising. Retrieved from Caribbean Lime
Travel.com October 10th, 2003 at
http://www.caribbeanlime.com/singles%20guide%20to%20cruising.htm
Hagan, Pat (2002). Even Singles Cruises Have Rules. Retrieved from
Cruisemates.com on October 1st, 2003 at
http://cruises.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fww
w.cruisemates.com%2Farticles%2Fsingle%2F
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Mason, Anthony (2003). Cyber Courtships Catching On. Retrieved from CBS
News.com October 23rd , 2003 at
http://www.cbsnews.com/stories/2003/10/09/eveningnews/main577356.sh
tml
MatchMaker Group Budget (2003). Retrieved on March 26th, 2004 at
http://groups.yahoo.com/group/matchmakerODU/files/
Sullivan, B. (2003). Online Dating: Everybody’s Doing It. Retrieved from
MSNBC.com on September 30th, 2003 from
http://www.msnbc.com/news/806278.asp?0dm=B17GB&cp1=1
Weaver, J. (2003). Video, Voice and Instant Gratification. Retrieved from
MNBC.com on September 30th, 2003 from
ttp://www.msnbc.com/news/809820.asp?0cb=-416105685&cp1=1
U.S. Census.org (June, 2001). America’s Families and Living Arrangements.
etrieved October 5th, 2003 at
http://www.census.gov/prod/2001pubs/p20-537.pdf
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