Student: Rahul Zaman Student Number: 500702537 Student Email: rahul.zaman@ryerson.ca Assignment: Executive Summary Course: ENT 526 Due Date: 13/07/2018 Michael Back, CEO and Founder Honk Mobile Elevator Pitch HonkMobile is a mobile application and e-commerce website that enables users to find and reserve empty parking spaces that are displayed on a virtual map for a particular site, it then grants the ability to pay for the parking space directly from the app using a mobile phone, and sends reminders of the time left until parking expiration with the option of extending the time limit and thereby eliminating the possibility of obtaining a parking ticket. In essence, Honkmobile will lead to the creative destruction of traditional parking meters and there vendors by enabling parking spaces to establish an easier parking process for their customers. Company Overview HonkMobile is a canadian based e-commerce website and mobile application company that was launched and incorporated in the year 2013. The company had achieved revenues in the range of $2 million to $5 million in the year 2016 and had 16 full-time employees working for the firm in 2016 as well (Canadian Business, 2017). The company has recently become a high-growth firm as it experienced a 2-year revenue growth rate of 1,431% in 2016 (Canadian Business, 2017). The overall business model for any given company identifies the business operations that will generate revenue for the firm (revenue model) and how those same business operations will also generate costs (cost model). HonkMobiles’ revenue model entails multiple business operations known as revenue streams. The most fundamental revenue stream includes charging users such as municipalities, airports, hospitals, colleges, universities, condos, and any place that offers paid parking a monthly subscription fee for the right to use the HonkMobile software (Financial Post, 2014). In addition, HonkMobile is compensated a transaction fee for every parking spot that is paid for and reserved though the HonkMobile app. HonkMobile has also created an access control product that replaces cards, tickets, garage door openers and transponders (Financial Post, 2014). Furthermore, they created a digital permit as a solution to the traditional paper permit displayed on windshields (Financial Post, 2014). Introducing both an access control product and a digital permit as new revenue streams demonstrates that HonkMobile has utilized the concepts of double dipping and idea multiplication. A businesses’ cost model generally consists of cost of goods sold (COGS) and operating expenses. Since Honkmobile is a software based service business they do not have any (COGS) simply due to the fact that they do not hold or sell any type of inventory. The majority of Honkmobiles’ operating expenses can be attributable to the salaries of the software engineers responsible for developing, maintaining, and improving both the mobile app and e-commerce website. Since HonkMobile has absolutely zero (COGS) and the firm has experienced exponential revenue growth ( 2-year rate of 1,431%) that has been driven primarily by consumer demand signifies the scalability of the business. By assessing the business model of HonkMobile it is evident that the company has achieved frugality as its overhead costs are almost not existent, they own minimal capital assets, and the volume of parking transactions they process makes them a high productivity firm (Bygrave et al., 2015). Industry Size & Structure Honkmobile competes in the parking management industry, which has a market size worth over $100 billion in North America and $1 Trillion globally in the year 2014 (Financial Post, 2014). The parking management industry is currently in the growth phase of the product life cycle as the industry is expected to gain new strategic investment of $200 million to $250 million by the end of the decade with the goal of abolishing the current inefficiencies that exist (Pando, 2014). Industry Value Chain HonkMobiles’ Systems Manufacturers HonkMobiles’ Software Developers HonkMobiles’ Systems Integrators Paid Parking Providers End Users: (Motorists) (Unique due to the nature of HonkMobiles’ digital based business operations) (Grand View Research, 2016). More often than not, motorists go through a tedious and time consuming process to find parking for their vehicles, and then paying the meter, printing the permit and returning to your vehicle to display the permit on the windshield is another headache altogether. The overall parking process is the ‘pain’ HonkMobile is attempting to address and make much simpler. Opportunity Motorists have been irritated by the parking process ever since the introduction of modern automobiles and parking spaces. The ‘pain’ of the parking process mentioned previously has been experienced by a driver at some point in their lives and only in contemporary times does the technology exist to relieve this ‘pain’. Given that the technology exists and the ‘pain’ of the parking process still exists, an eventual solution seemed inevitable and HonkMobile is at the forefront of this solution. “Right now, paying for parking is archaic, so why shouldn’t you be able to pay using your smartphone by downloading an app that acts as a payment portal?” – John Cho, Partner, KPMG Enterprise (Financial Post, 2014). The oldest competitors of HonkMobile are the traditional parking spaces that rely on parking meters. Vendors of parking meters not only fail to address the ‘pain’ but also perpetuate the very ‘pain’ of the parking process that HonkMobile is attempting to eradicate. Basic parking meters continue to be the alternative used by potential future clients and it is the goal of HonkMobile to replace this inefficient and soon to be obsolete alternative. Product/Solution The mobile app and e-commerce website that HonkMobile has created will resolve numerous complications that the traditional parking spaces that utilize parking meters had established and will deliver an excellent resulting experience for new consumers. Firstly, HonkMobile produces convenience in the parking process by letting motorists pick and choose a parking spot ahead of time. Such a feat could not have been done with ease in earlier times in the parking management industry, but with technological innovation, this is a constraint of the past. The HonkMobile app can also manage multiple vehicles on the same account (HonkMobile, n.d). Moreover, HonkMobile eliminates the ordeal of having to stand outside waiting for a parking permit to print and then displaying that permit on a vehicle’s windshield. This saves motorists from having to possibly endure precipitation and thereby allows the payment for parking to be maid in comfort, safety, and from any location (HonkMobile, n.d). HonkMobile demonstrates green entrepreneurship and social responsibility as it provides receipts via e-mail and displays records of all parking transactions directly in the app. In essence, HonkMobile simultaneously removes the need to use paper for both permits and receipts, saving trees (HonkMobile, n.d). Finally, HonkMobile supports multiple payment platforms including VISA card, Mastercard, American Express, Paypal and Apple Pay with motorists who use the app having only to pay for the parking time used (HonkMobile, n.d). Technology The existence of the HonkMobile app and e-commerce website can be attributed to the internet which is responsible for the cloud-based technology that HonkMobile is built upon. Cloud-based technology is significantly less expensive than other forms of information technology and therefore fosters a competitive advantage for HonkMobile by reducing operating expenses. Technological Milestones Date: Milestone: 2013 Launches on the App Store and Google Play Store (HonkMobile, n.d) July, 2017 Partners with ZipCar (HonkMobile, n.d) August, 2017 Introduces Apple Pay as a payment option (HonkMobile, n.d) Company The biggest factor that will help HonkMobile win the future of the parking management industry is that it is a company that has a first-movers advantage. HonkMobile is one of the first companies to introduce a digital alternative in the parking management industry and have already captured a large percentage of the market indicated through their revenue growth rate. This is evident by the fact that HonkMobile has partnered with multiple municipalities and postsecondary institutions around Canada and the U.S. The app currently hosts over 150,000 parking spots across 1000 locations in North America merely 5 years after launching (HonkMobile, n.d). HonkMobile is creating partnerships with ZipCar as a way to expand their already growing business and this is their next “big winner” strategy (Marketwired, 2017). Done to Date Timeline Date: Event: 2013 Launched HonkMobile (HonkMobile, n.d) 2014 Pitched on Dragon’s Den, securing a $200,000 investment from Arlene dickinson and David Chilton for 20% equity. (CBC, 2018) 2015 Obtained $3 million in seed funding from Im pression Ventures along with other angel investors. (Yahoo Finance, 2015). 2017 Earned 6th place in Canadian Businesses’ Startup 50 for fastest growing companies. (Canadian Business, 2017). Leadership The Talent Triangle describes 3 elements that define a successful management team and they are Domain knowledge, Business acumen, and Operational experience. Domain knowledge is the understanding of the particular industry where a business is situated in. Tony La who is the CTO of HonkMobile has graduated from the University of Toronto in Computer and Electrical Engineering and has worked for Microsoft and other companies as a software developer and engineer. Given his impressive resumé, Tony La definitely has the domain knowledge to serve HonkMobile (LinkedIn, n.d). Business acumen is the knowledge and ability to effectively run the operations of a business so that it achieves and sustains success. Kacey Siskind is the director of business development at HonkMobile and has had numerous jobs entailing management. Kacey Siskind had worked as Director of Sales and Marketing at Capitol & York Event Theatres, as a Senior Event Producer and Project Manager at Jacob's Ladder, The Canadian Foundation for Control of Neurodgenerative Disease, and as a Marketer and Social Event Planner at Kacey Siskind Events ( Linkedin, n.d). Her experience working in these jobs has undoubtedly garnered her the business acumen to be an effective director of business development at HonkMobile. Operational experience is self-explanatory, and CEO/founder Michael Back has plenty of it. Michael Back had created a startup company before known as Collective Point of Sale Solutions Ltd., the company specializes in offering alternative credit card processing services available to medium and large business offered by major banks (Linkedin, n.d). Michael Back had brought the sales of that company to $18 million before selling the business to the global payments provider Elavon (Financial Post, 2014). Michael Back then used the experience he had obtained from running Collective Point of Sale Solutions Ltd., a payment processing company, to launch a payment processing specifically for parking. In essence, the operational experience he had obtained before is responsible for the very inception of HonkMobile. References Bitti, M. T. (2014, November 03). Dragon sees huge potential in HonkMobile, a parking payment solution. Retrieved July 13, 2018, from https://business.financialpost.com/entrepreneur/dragon-sees-huge-potential-in-honkmobile-aparking-payment-solution Bygrave, W. D., Zacharakis, A., & Wise, S. (2015). Entrepreneurship, Canadian Edition. John Wiley & Sons. Dalal, A. (2014, January 30). The future of the $100 billion parking industry. Retrieved July 13, 2018, from https://pando.com/2014/01/30/the-future-of-the-100-billion-parking-industry/ Honkmobile - Pitches - Dragons' Den. (n.d.). Retrieved July 13, 2018, from http://www.cbc.ca/dragonsden/pitches/honkmobile HonkMobile Raises $3 Million in Seed Funding Led by Impression Ventures. (2015, October 02). Retrieved July 13, 2018, from https://finance.yahoo.com/news/honkmobile-raises-3-million-seed-130000251.html Honk Teams up with Zipcar to Make Parking Easier in Canada. (2017, July 5). Retrieved July 13, 2018, from http://www.marketwired.com/press-release/honk-teams-up-with-zipcar-to-make-parking-easi er-in-canada-2224961.htm Kacey Siskind. (n.d) Posts [Linkedin page]. Retrieved July 13th, 2018 from https://www.linkedin.com/in/kacey-siskind-0b869031/ Michael Back. (n.d) Posts [Linkedin page]. Retrieved July 13th, 2018 from https://www.linkedin.com/in/michaelback/?trk=public-profile-join-page#education-section “Parking Management Market Size, Share & Trends Analysis Report By Application (Transport Transit, Commercial, Government), By Parking Site, By Component, By Solution, By Region, And Segment Forecasts, 2018 - 2024"(pp. 1-47, Rep.). (n.d.). Grand View Research. Tony La. (n.d) Posts [Linkedin page]. Retrieved July 13th, 2018 from https://www.linkedin.com/in/tonyla/ 2017 Startup 50 - 6 - HonkMobile. (2017, September 14). Retrieved July 13, 2018, from https://www.canadianbusiness.com/startup50/2017-startup-50-6-honkmobile/
