or pster final 416

8/6/2019 Or Pster Final 416

http://slidepdf.com/reader/full/or-pster-final-416 1/25

Sport Stock Market Business Plan

Orpster737 Comstock Avenue

Syracuse NY 13210

(413) 244 8495

Prepared by Rehan Hussain and Austin Williams

This document contains confidential information. It is disclosed to you for

information purposes only. Its contents shall remain the property of

Orpster and shall be returned to Orpster when requested.

This is a business plan and does not imply an offering of securities



Table of Contents

1. Executive Summary

2. The Company

a. Ownership

b. Company Location

3. The Target Market

a. Target Market

b. Market Analysis

c. Demographics

d. Company Strengths

4. Competition

a. Direct Competitors

b. Competitive Advantages

5. Marketing Outline & Sales Strategy

a. Company Logob. Marketing Strategy

c. Customer Service

6. Technology Outline

a. Website

b. Software Needs

c. Hardware Needs

7. Management & Organization

a. Management Team

b. Staffing

8. Milestones

a. Goals

b. Strategies

c. Milestones

d. Risk Evaluation

9. Financial Data & Projections

a. Capital Requirements

b. Income statement

c. Expected growth

d. Risk Analysis

10. Exit Strategy

I. Executive Summary*All market research is based on the Fantasy Sports Trades Association as

well as survey results

Opportunity

According to the Fantasy Sports Trades Association, the fantasy sports industry has

grown to an $800 million industry with over 29 million users. Fantasy football is



estimated to have a $3-$4 billion annual economic impact across the sports industry.

This is an industry that has barely been tapped. Creating a way for those 29 million

people to make money based on their skills and speculations could potentially create a

colossal industry as well as a brand new market.

The Concept

Orpster.com is developing an innovative stock market of sports. It will allow those 29

million NFL fantasy football users to take their knowledge of fantasy sports and apply it

to the market along with other users using our real time software and our iPhone and

Android mobile app.

The user will be able to buy and sell virtual shares of NFL players based on their

speculations just like fantasy football. The incentive is an easy way to make money while

maintaining the same core concepts of fantasy football. The user will be able to buy and

sell shares while the game is going on based on the players performance.

Imagine buying 20 shares of Peyton Manning for 10 dollars each. You are watching the

game and he just threw an interception. His share just dropped to 5 dollars in front of

your eyes via software. The user worries and sells his shares and cuts his losses. The

user can buy other shares if he or she desires, or exit the market.

Each NFL player will be assigned an algorithm that will determine their stock value,

based on their past two years of performance. For example a top tier quarterbacks such

as Peyton Manning stock will reflect a lesser gain if he threw a touchdown as opposed

to a lower tier quarterbacks such as David Garrard. This is because Peyton Manning is

much more likely to throw a touchdown than David Garrard. Meaning when Manning

throws a touchdown his stock rises less than if Garrard threw one. Each players stock

will rise or fall strictly based upon their on field performance. There will be a limit of

shares a user can purchase based on the player. This is to create an aspect of

competition. If there is a limit of shares it will create competition among users. No other

market variables will be taken into consideration.

Also there is some risk for the user such as an injury. To give the user confidence

Orpster will offer .25 cent insurance on every share. Generally speaking if an injury were

to occur the share would drop highly and if it was a season ending injury the share

would drop to 0.00. To prevent this, the user can purchase 25 cent insurance which

would freeze the shares and put the money back into the users account in the case of an

injury. Orpster would not make any money off of the insurance; instead it wouldcirculate back into the market.

Initially there will be a large pool of capital invested into the market to get it started.

This initial capital must be enough to account for the worst market days, which would

be if every player did abnormally well.



The stock market will open one week prior to the first scheduled game of the NFL

season and end at the conclusion of the Super Bowl.

User interaction will be facilitated through downloaded real-time software as well as the

mobile application. Stocks will be rising and falling in front of the users eye based on all

of the metrics. For example if a quarterback throws an incomplete pass, you see theincomplete pass as well as the share drop via the software. Through this, players stock

values will reflect their current in-game performances providing users the ability to buy

and sell league players throughout the course of the live games.

At the conclusion of the final game of the week, all shares will be converted into a

monetary amount that will then be credited to the users account. The stock of each

player will then be reset to the original algorithm plus the last games performance.

The user will then have the choice to buy new shares based on their speculation for next

weeks games, or cash out from the market pool if they please.

Each user will be able to deposit real money into their account and buy any shares of athletes.

This stock market will create a large monetary circulation. The users whose speculations

were correct will take money away from the market. The losers money will be put back

into the market and it will be circulated. Orpster never takes money out of the market

The Following figures show how the market and user will interact as well as how capital

will circulate



Represents the shareholders initial deposit of capital

No wins or losses

Market Capital

USER

USER

USER

USER

USERUSER

USER

USER

USER

USER



Represents the winning shareholder at end of the

week

Awarded by the market

Represents the Losing shareholder at end of the week

Their capital is circulated back into the market

As the figures show initially the user will deposit money into their account. They will

then be able to buy shares based on the amount of money they have. Depending on

their speculations and how the players perform they will either beat the market or lose

to the market. The user will be able to buy and sell real time while the game is going on.

For example if a Quarterback throws an interception and a user owns that share, the

user than can sell that share back to the market if they please. At the end of the trading

week there will be users whose speculations will be rewarded by the market and users

whose capital will be circulated back into the market

Market Capital

USER

USER

USER

USER

USER

USER

USER

USER

USER

USER



Mock Ups



Mobile Application Mock Ups



Sources of Revenue

y Orpster will initially make its revenue off of a 5% per transaction cost

y Orpster makes no money off of losing users; instead their money goes back into

circulation in the market. This keeps the money circulating and the market stable.

Competition

Presently, there is one firm that has a similar concept to Orpster, Startstreetsports.com.

Unlike Orpster, Startstreet does not have any real time software or mobile apps for the

iPhone or Android devices. Starstreet also applies a more complicated economic model

which Orpster believes drives the fantasy user away.

Market Overview

y 29 Million Fantasy Users

y Strongest Demographic- 18-35 White Male

y Fantasy Football draws the biggest attention in the United Statesy Average Person Spends $300.00 a year on Fantasy Sports

y Average User spends 30 minutes a day fixing their teams

Funding and Use of Proceeds

In order to accelerate Orpsters growth, the company is looking to secure funding to

accomplish the primary goals: (1) Obtain one million users and (2) to start the initial

market so the money can start circulating.

Management Team

Our management team combines the experiences of students with extensive

backgrounds in managing and developing successful businesses. Our backgrounds make

up Finance, EEE, and IT.We all grasp the knowledge of fantasy sports because we are all

passionate about them.

The Company

a. Ownership

Orpster.com as of now is a sole Proprietorship looking for funding.

b. Location

Orpster is based out of Syracuse, New York

II. The TargetMarket

a. TargetMarket



Through intensive research Orpster has come to the conclusion that our target market

will be males age 18-34. Our shares will be aimed to attract the college student. The

shares will be valued at an attractable price so that the typical consumer can try to

make a few hundred dollars on weekly basis. Millions of college students participate in

fantasy sports competitively. Our research also shows that over 500 million college

students gamble on sports annually. This could be a new incentive to use their skills andspeculations to make educated investments instead of gambling.

b. Market Analysis

While fantasy sports games have existed in the UK since the early 1990s, it is in America

that the product has become an enormous business. The United States fantasy football

market is already an immense one. The games are extremely sticky, combining the

competitive pay-to-play and reward tournament provision of rich sports and related

content.

In the United States alone, over 29 million people currently play fantasy sports. Theleading operators such as Yahoo, ESPN, and CBS experience millions of users per month

visiting their websites, spending an average 30 minutes per user session. The average

person spends around $300.00 a year on fantasy football according to the Fantasy

Sports Trade Association. This clearly proves that the average user is willing to invest

their capital based on their knowledge of pro athletes.

In the United States, NFL draws the biggest fantasy sports audience, followed by the

NBA and MLB. The importance of the fantasy football product such as this innovative

sports market is that it turns sports fans into even bigger sports fans. Much of the value

of the fantasy sports product is that it is highly content driven. The major fantasy sports

operators provide daily news and stats updates as well as providing in game and historicresearch tools. This depth of up-to-date information is extremely valuable to the sports

enthusiast and drives further information. Now imagine if the typical user could put

their knowledge against the market to make money. Orpsters uniqueness is something

that has not been seen before, it eliminates all economic factors. There are only two

factors, the users knowledge and the players performance. This has the potential to

attract millions of users as an incentive to make money.

c. Demographics

The typical fantasy football user is anywhere from 12-48 years old. The strongestdemographics are users from 18-35 years old. 93 percent of users are males and 91

percent are white. Our intensive research shows that there are over 29 million fantasy

football participant. This makes up around 11 percent of the US population. Also there

has been a 69 percent growth rate since 2003. Orpsters target is the primary fantasy

users which are from 18-25 which is composed of college students.



Fantasy football participants spend about 3-4 hours per week managing their teams.

That is around 30 minutes per day managing their teams. This is all predominately done

over the internet. We took a survey of 200 respondents and these are the results.

y Only 15% of respondents said they would not use our service

y 90 percent think they know just as much if not more about fantasy football

than anyone in their league

y 60 percent spend anywhere from 30 to 60 plus minutes playing fantasy football

y 85 percent play fantasy football for money

y 25 percent spend more than 60 minutes a week

y 80 percent would spend anywhere from 30 to 60 dollars a week on Orpsters

services

d. Company Strengths

Orpster has positioned itself in many ways against competitors. There is no real time

software or apps for the iPhone or Android devices similar to an E-Trade or Scott Trade

for the sports stock market. The software will be the core of our firm. Again it will show

all of the NFL Players stats real-time while the game is going on, and their share rising

or falling respectively to their performance.

Also unlike the others, Orpster incorporates no economic factors in the trade. We have

simplified this to the fantasy user. The stock rises and falls strictly based on performance.

There are also only two options to simplify this, the user can either buy from the market

or sell back to the market.

Orpster also believes we have a very good marketing strategy as of right now. The

Orpster team has very good networking at this point and we strongly believe we can

market this to its highest potential.

III. Competition

a. Direct Competitors

Starstreet is the primary competitor with the most similarities. The issue with Starstreet

is that this firm incorporates too many economic factors that push away the fantasycrowd. They limit the amount of shares which incorporates supply and demand. This

causes the share to rise and falls based on economic aspects as opposed to strictly

performance. The problem with StarStreet is that they do not understand that the

fantasy user is much different than the day trader and they try to combine both. This is

a huge mistake because the typical fantasy user most likely does not know about IPOs,



supply and demand, selling short or going long, and other economical aspects of their

site.

b. Competitive Advantages

Orpster has numerous advantages over these competitors. Orpster will create real time

software and application for the iPhone and Android devices unlike any other

competitor out there. This software will provide real time statistics as well as scores of

the current games. If our user does not happen to be near a computer they can access

our product through an iPhone or Android platform regardless of their location. The

share will drop or rise in real time before the users eye depending on the players

performance. There are also no economic factors that affect the share of a player.

Orpster strongly believes that when factors other than strictly performance affect a

share, it pushes the fantasy user away .

Our interface will also be very simple for the consumer to use unlike some of thesewebsites. It will be geared towards the fantasy user not the day trader which is a vital

mistake competitors have made.

On Orpster there will be a large amount of capital spent to get the market started which

will be the core of the monetary circulation.

IV. Marketing Outline & Sales Strategy

a. Company Logo

b. Marketing Strategy

The Product

Orpsters product will be the ability to purchase virtual shares of players that the user

thinks will do well on a weekly basis. Orpsters marketing program will be implemented

in conjunction with the beginning of the NFL Season in 2011. A variety of marketing

tools and programs will be used to reach Orpsters primary customers, college students



and just graduated men. Described below are Orpsters initial marketing tools, positions,

etc.

Social Media- Social media has become one of the most powerful ways to get your

message out there. Utilizing Facebook, Twitter, and other social media tools are a very

effective and inexpensive way to market any product. Creating a business Twitter andFacebook page with updates and upcoming events will create a lot of conversation.

Print/Online Ad Space- We plan to publish on the inside cover of Fantasy Football Index

Magazine. This is the largest fantasy sports publication in the nation and will cost our

firm $1800.00.

We also plan to utilize banner advertising on popular websites that may attract our

market such as barstoolsports.com, bleacherreport.com, and various sports related

websites and blogs.

Campus Representatives- Having a physical presence on some large campuses to

perform duties such as marketing materials distribution is very important to us. Theywill be distributing free marketing tools such as t-shirts, shot glasses, etc.

Networking and Word of Mouth- Each member of the Orpster team has been

participating in fantasy football for over 10 years. Whether it has been with family,

friends, or coworkers we have all utilized fantasy football. Each one of us is also the

demographic we are aiming to attract, meaning our networking and word of mouth of

Orpster is also going to be a large determinant of its success.

Travel/Promotion-Orpster will purchase various products and distribute them for free

such as T-Shirts and hats at popular locations such as bars and sporting events. Orpster

will start with appearances in the northeast in large cities such NYC, Boston,Philadelphia, Hartford, and many others.

First 500 Incentive- Also as a marketing tool, Orpster is campaigning that the first 500

Users will receive a free 20 dollars to try our software out. We believe that once those

users make money off of the market, word of mouth will spread and it will attract that

many more users.

Pricing

There is one primary component that will go into the pricing of the shares. The

performance of the player based on the previous 2 years will determine their prices.Again this market is geared towards the college student and it is essential that the

pricing is attractive to them. Therefore, as of now, the shares will vary from $5.00-

$25.00. The better the player is the higher the share will be.

c. Customer Service



Customer service will be available via email throughout the week. There will be a FAQ

sections as well as a help section for the user if need be.

V. Technology Outline

a. Website

The Website is going to be simplistic with a few tabs to it. There will be a free

downloadable software link on the home page, where users can create accounts for free

and get started .The home page will provide the concept of what Orpster is trying to

provide. There will be an About us tab, letting the consumer know what Orpster is

about. There will be a The Team tab which will provide information about the

founders and how it started. There will also be statistics on what shares have been

doing well and which ones have been doing poorly. As of now to conserve capital, since

the website is going to be very simple and the software will be the importance of our

firm, the website will be a simplistic inexpensive one.

b. Software Needs

The software is going to be the core of Orpster. It will provide a real time trading market

that has not been done before similar to an E-Trade or Scott Trade for sports. The user

will be able to download it from the website. Once the user has logged in the software

will provide Real Time feeds of the players. As the player performs play by play, the

stock will rise or fall accordingly. The software will also have to take many aspects into

account such as rookies or retired players. Each year Orpster will value the rookies and

bring them into the market accordingly.

There are four core areas for the development of the software

1. Real Time Feeds

There is plenty of example code out there for this and can be duplicated pretty easily.

The challenge is assigning each player a certain algorithm based on their previous years,

and each players algorithm is different.

The data will be provided by one of the following vendors which upload the files every

30 seconds. All plays are accounted for

This data will be purchased from Data Suppliers

Stat Inc---- NFL

XML --------NFL



2. Implement the Trading System

Our platform is going to be much simpler than a standard trading platform. The user will

either buy from the market, or sell to the market. Therefore there is no issue in

matching up a buyer and seller as the market acts as both. Also supply and demand is

not an issue because economic factors will be eliminated. There are many templates outthere that we can base our software off of.

3. Developing the User Interface

Developing an attractive user interface will be very important. Again we are aiming at

the fantasy user, not the day trader. Meaning instead of having a tab for my portfolio,

it would instead say my sportfolio. There will only be two options, which are buying or

selling.

4. Testing and Debugging

Lastly, we will we need to test and debug this software so that it is fully functional.

These are the following requirements for the technology

- Project needs two major components: server-side application and client-side

application (this ignores the website aspect, assuming it is only a front to

download the executable for the program, obviously this changes if the website

is to offer any features such as account management)

- Server-side application

o Handles XML statistics data Starts by establishing baseline statistics by pulling down previous

data and summing it up

All player statistics, names, teams, etc. must be parsed from XML

files and stored in relational MySQL database

Once files are parsed and data stored, algorithms must read (by

player, using for loop) data for each player and then generate

share prices

Share prices then stored in database as well along side player

statistics, last updated time, etc.

Process must be repeated as often as desired (every 30 seconds?)

This means constantly pulling down the XML files (large amounts

of bandwidth and parsing them (large amounts of computational

power), as well as generating share prices (heavy

math/computational power) and database read/writes

y Will likely require a server for handling pulling the files and

doing the math, as well as a separate database server

o Manages account data



All users stored in database, along with their information

Users linked via primary key of user id to table containing shares

purchased

Stores encrypted passwords, so on

Heavy amount of database reads and writes as users modify their

accounts (adding and selling shares, account info, etc.)o Allows for administration

Summarizing current state of market

Billing, paying users, etc.

- Client-side application

o Should minimize number of tasks at hand, with majority of work being

done server-side

Less control on client-side

Risk users intercepting data

Use encryption

o

Essentially an interface for connecting with server-side data, particularly

database

Pulls player information (stats, names, teams, share prices, etc.)

from server

Caches data, updates with pushes from server, should be synced

Massive amount of network bandwidth

Notably more complicated than using a web-browser-site

interface

o Must offer login system, account management, billing, etc.

o Needs to provide quickly-updating and user-friendly interface

o Responsiveness key, must be optimized to provide good user experience

while constantly processing data and working with network traffic- Personal assessment

o Too large scale of a project for one man team

o Multiple components that will require specialized workers

Database architect

Algorithms expert

Data parsing expert (some work may be able to be handled by

various open-source libraries)

Application networking specialist

Security expert

o

May require experienced software development house due to nature

Dealing with real money, credit card/PayPal transactions,

equipment, user management, so on

Must be professionally secure and tested for exploits that could

potentially harm any of the following:

y Users

y Owners (financially)

y Data integrity



Will need someone experienced with large scale data processing

to be able to provide estimates of how much server power and

space will be necessary

c. Hardware Needs

The only hardware that Orpster will need really will be server space. After doing

research we found it is much easier to rent server space which can save us a large

amount of capital.

To rent the amount of server space necessary to handle our data as well as expected

users the cost will be roughly $2,000-$3,000 monthly.

VI. Organization

a. Management Team

Presently our team consists of several students with different strengths. All with a very

large passion for fantasy sports. As of right now there are two major officers who are in

charge. Rehan Hussain and Austin Williams

Rehan Hussain CEO- Major in Information Management and Technology/ISCHOOL

y In charge of all the Operations as well as the management team

y Responsible for directing the vision of the team

y Responsible for directing the operational activities of the company by scheduling

the utilization of the companys resources, including people and capital

y Responsible for establishing and executing the companys operating plan that isnecessary to achieve the companys objectives

Austin Williams COO- Finance and EEE Major/Whitman School of Business

y Profitably manage rapid recent growth and future expansion plans

y Lower cost through optimization of People, Processes, Technologies

y Integrate people through Vision, Mission, Values and Org Structure

y Manage day to day operations through effective action oriented approach



b. Staffing

As of right now Orpster needs to fulfill several positions

y Marketing Team/Campus Reps

y Web Designer

VII. Milestones

a. Goals

Our goal at Orpster is to create a new market for the fantasy sports world. We want to

take all 29 million users and reward them for their knowledge and speculation. We want

to take fantasy sports to a level that it has never gone to before. As college students theOrpster team knows how hard it is to make money in any way shape or form. It is tough

to get a job while taking 18 credits in Finance. So we thought lets create an opportunity

for the average college student to make money on Sunday game day. Using their

knowledge correctly they can make themselves good money weekly.

b. Strategies

RehanHussain

President,CEO

AustinWilliams

COO

Sigmen GroupWeb Designer

TBD

MarketingTeam

TBD



Our strategy is to generate a very strong marketing team who can advertise this to the

fullest. The Orpster team is very confident that we will also be able to generate many

users through networking and word of mouth, but we understand the importance of

strong marketing. The product that Orpster is creating has never been seen before.

c.

M

ilestones

Our milestones are strictly based on the number of users we want to get

y Year 1-10,000 Users




y Year 5- 500,000 Users

Orpster is very confident that we can achieve these numbers and are actually more

confident that the users will grow faster than this. This is because our market grows

larger as we add more sports. Also our initial market is 29 million which is larger than

most industries.

We also intend to extend our market to the NBA, MLB, NCAAB, NCAAF, and FIFA

Year 2- NBA+NCAAB+MLB+NCAAF

Year 3-Growing period

Year 4- FIFA

d. Risk Evaluation

The greatest risk that Orpster entails is the market crashing. This would occur if every

player in the NFL or any other league did abnormally well. There are a few measures

that prevent this from happening

y The algorithms will be determined by Orpster to prevent risk but at the same

time maximize the users profitability.

y The insurance fees would just be circulated back into the market so there is

more than enough capital to be supplied back out.

y If the market did crash, Orpster would be able to tap into its transactions fees

and put a large amount of capital back into the market.

VIII. Financials

a. Capital Requirements

Orpster is looking to obtain a $250,000-$350,000 investment for our initial

launch. This will primarily be used to build the infrastructure required to

operate. A large amount will also be used to insert capital into the market to

get it started. The rest will be applied to advertising and technical costs.



b. Income Statement

Projected Users 10,000 75,000 150,000 300,000 500,000

Y1 Y2 Y3 Y4 Y5

Sales $596,000 $1,860,000 $3,720,000 $7,440,000 $12,400,000

Expenses:

Initial Market Capital $100,000 0 0 0 0

Development $65,000 $60,000 0 $100,000 0

Real-Time Data $30,000 $90,000 $90,000 $120,000 $120,000

Salaries $0 $300,000 $600,000 $1,000,000 $1,500,000

Advertising $20,000 $25,000 $30,000 $100,000 $150,000

Server Space $50,000 $100,000 $200,000 $200,000 $200,00

Technical Maintenance $15,000 $20,000 $20,000 $20,000 $20,000

Total Expenses $280,000 $595,000 $940,000 $1,540,000 $1,790,000

Net Income $316,000 $1,265,000 $2,780,000 $5,900,000 $10,610,000

*Orpsters business model is based solely on the expenses listed in the income

statement. All projected revenues are reflected by net income.

c. Expected Growth

Orpsters growth could be extremely larger than the numbers shown above. Orpster is

expected to grow at a very fast pace. We believe that the fantasy market is a very

addictive one. Adding incentive to make money off of it just made it more addicting.

Again there are 29 million fantasy users. If by year five Orpster can tap into even 1/29th

of them, there will be average revenue of $24,800,000 million dollars yearly in revenue.

IX. Exit Strategy

The investors that provide the capital that is the subject of this document will have

several exit opportunities available to them if Orpster does not succeed. Although, it isimportant to know that the ultimate goal of Orpster is to stay private and create

maximum profitability. Orpster hopes to see a great amount of profitability and success.

We see the potential for great cash flows and the ultimate goal is not to exit. It is the

owners' intention to run this business until they are ready to retire or have decided to

sell the business and start another.



Management believes that the most likely exit will come from the failure of Orpster to

make money.

In the event the proposed plan is not successful the owners will implement necessary

measures to exit the business endeavor with minimal damage to the owners and

investors

The success of the business will be monitored monthly in the first year and quarterly in

subsequent years. The owners are aware that it usually takes new businesses three

years to start turning a profit and that the business could operate at a loss during that

time. The owners will keep this in mind when evaluating the state of the business, and

make adjustments when possible to keep the business running with a positive cash

flow.

Acceptable loss has been determined; if the business exceeds this amount and is

unable to compensate the owners, we will begin the process of closing the business and

paying back debt.

or pster final 416

Documents