By: Sam Fitros, Hanan Alalfi, Usama Ahmad, Claudia Komperda

December 2019

Executive summary:

SmartCuts is an application that allows the consumer to visual their hairstyle through integrated AI technology and opens communication channels between the client and their stylist for a more inclusive consultation. This business plan will first provide an explanation of the problem and opportunity through mapping out the steps the client will go through using the app. Next, the solution that the app creates will be outlined and explained in how it creates and delivers value for the client in ways that haven’t been integrated in the market yet. The competitive advantage demonstrates how SmartCuts differentiates itself from its competitors in the hair salon/apps industry in the types of services and value it offers. We will discuss the customer acquisition and sales model-how SmartCuts will generate a consumer base in order to grow awareness of its product and the financial analysis of the app and its growth projections. The economic and financial model goes into more detail of the financials of the business model, including revenue stream. The productization strategy describes the four milestones that SmartCuts needs to overcome before it launches its final product. Finally, the launch pilot strategy summarizes how SmartCuts decides to put its finished product into the market, while the scalability assessment hunkers down on the feasibility and scope of the project. Overall, this plan should provide the reader with information to declare the Smartcuts a feasible model to market into the self care industry.

Explanation of the problem and opportunity (job mapping, problem mapping):

The consumer's journey begins with a person feeling uncertain about his/her hairstyle, length, or color. This person then makes a decision on whether to get their hair serviced (changed) or not. Currently some options someone can use is the internet, friends or family to help them make a decision on what direction to take with their hair style. This person might make a decision about their style fast or take their time, however, they will choose a style. Once they have decided upon a new or existing look they find a new or current stylist to perform service. After the service is complete, they might love their look or dislike it.

Through our customer interviews we found a problem with interviewees search routine for new styles. This creates an issue with the execution (books appointment & gets serviced) part

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of the customer routine. Most people are influenced by the media and the internet to help them make a decision on what direction to take with their style. For some, these looks and styles will not work with their facile shape characteristics. These people are starting to change their hair with unrealistic expectations on what they can pull off. This then creates an issue when the client goes into salon and gets service. They have high expectations of what they what achopleshed, however, the stylist might steer them in a different direction on what style that works best for them. This process is unnecessary and can all be avoided by having effective communication on both sides of the process.

Solution and how it creates value:

We will close this gap of uncertainty by allowing clients to try on different hairstyles virtually and engage with licenced experts in their area, all on a convenient smartphone application.

Our application is like google for your hair. Users will have the ability to use advanced face-capture technology like snapchat or instagram filters, but will see these new hairstyles & looks in real time. They will have the ability to get advanced information regarding their head shape and what hairstyles that are tailored to them. This will be shown by categories of images based on the tailored results of the face-capture technology.

Stylists and clients will have a better understanding of desired results before their service is performed. This will be achieved by messaging and communicating with an affiliated stylist prior to service through our application. Also, users will have a map of smartcut experts in their area. This will give them the ability to look for new stylists and see important information regarding each stylist (availability, salon information, & profile of expertize). Having that option helps new or existing customers have the ability to search for stylists easier than searching through existing options.

Competitive advantage:

One current way someone can get advice on their hairstyle is to talk with an expert. This can take time and requires the user to cover a lot of ground before talking with a licensed expert. Currently, there are only few solutions that help with the aid of someones hairstyle, but they are not doing enough for someone to make adequate decisions regarding their face or head.

We separate ourself from current solutions out in the market by offering a more personalized experience when it comes to someones hairstyle. Current solutions don’t offer a tailored experience to when it comes to hairstyles and doesn't give relevant information that best fits the users characteristics. When users use our application we want them to have a feeling of relief because changing your appearance is never easy.

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We have the advantage to look at the current hair routine process of and inject new possible ways someone can go about changing their appearance. Our main advantage that separates us from the competition is that users can try on new styles anywhere on their smartphone. Also, by giving the user the ability to talk with experts in their area to make any hair experience better for both parties.

Customer acquisition

To acquire new users we will market exclusively online. We will target young professionals (18-35 years old). We will attract these users by modern and hip marketing campaigns to convey a message that they are not alone when it comes to their hair needs because Smartcuts is here to help. These campaigns will display images and videos of people destroying their hair to show anyone can make mistakes when it comes to their style, but as well as reassure the potential user that Smartcuts is here to help every step of the way.

After we attract new customers through these social platforms, potential users can try our advanced face capture technology. These users will be able to try out and use a part of our advanced facile AI through the advertising space on these social media platforms. The potential user will be asked for basic information about themselves (i.e. email, address, phone number) to sign up. By offering a new and unique experience these users will get a first look into what we are about and why we will be effective in helping them with their hair needs. Showing new consumers a part of our valued solution through social media will hopefully push those who would use our service to download and take action about their style.

After new users download our application we will close them by our free features and information. These users will have the ability to use our application completely and have an abundance of the best hair information right at their fingertips. To keep our users loyal we will send out email campaigns regarding hair trends and styles tailored to them. Also, promoting local stylists affiliated with Smartcuts. More ways we will keep users loyal will be by our Smartcuts Youtube channel learning about everything hair related (i.e trends, styles, hair care, & product reviews). To keep our brand relevant with the younger generation we will use influencer marketing to show how Smartcuts works in their everyday hair lives.

To make sure we delight our new users, users, and potential users we need to give back and make a solid connection with each and every one of them. First, we will give back to local communities where our affiliated styles are located. Per invitation, we will invite our Smartcut Experts (affiliated stylists) to come and help people who are homeless or can't afford basic hair care once a month. These events will hopefully give back in many ways by bringing people together to help the less fortunate. Having these once a month, we can pair up with local hair school so the inexperienced students can get practice hours and help others. Being the host of these events we will hold a good connecting with local communities and create high brand

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loyalty, a good reputation with users and stylists. At these events we will collect new data about people's hair needs by surveys and online forms.

Sales Model

We will focus on B2B sales, which has higher order value and longer sales cycles. To convince the stylists to sign up with us and use Smartcuts application, we are going to talk to them by selling in person. We are going to present them our new services in the Smartcuts application. We will show them some of our data that we collected from our study of the consumers’ problem with their hair services. Other than that, how we solved the problem in the hair industry and the pain point of the client, their needs and dreams to what they are looking for to get when they want to get their hair done. We will make sure that they get the message of our service and the application. And how Smartcuts will make a huge change in the hair industry. They will be able to get to use the app for one week for free. Then, we will present their benefits once they sign up with us for long partnerships. First, they will get the values and the benefits of our brand and add it to their businesses, which will give them a new brand image. By using the application, it will attract the new generation who use and live on technologies and get more customers which will increase their revenue. They will get in our application’s space to add their personalized marketing in the stylist’s area and that will be a great advertisement to their businesses. More to all of that, signing up will give them a chance to have professionalized stylist portfolio showcasing client work, hours, and expertise. So, our new service and application will give them exclusivity from other businesses that won’t have our services yet. Being a part of us will give them the feeling to feel something great and special to their clients and business. Finally, they will see in Smartcuts application the unique service of communication in various ways with their clients, which will make their life and business easier, more professional and more organized.

Economic and financial model

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After interviewing a handful of stylists we determined a subscription price point for the initial launch of our service to have two different price points. For cosmetology students and graduate students of cosmetology school will get a discounted subscription for only $15.99 a month the first year. For experienced stylists with more than one year experience they will be charged $29.99 per month. We broke up experienced and inexperienced stylists because new licenced cosmetologists most likely will not have a sufficient client base right when they get out of cosmetology school to afford a higher payment per month.

We will work closely with these initial round of stylists to get more paid users by word of mouth from their peers. Also, we will work with cosmetology schools to grasp hold of the expanding market of new stylists and inject our solution early on in their careers to maximize the stylists and users on our platform. In an article called, Hair & Nail Salons in the US, from 2017 by Kelsey Oliver, states that hair and nail industry's revenue is $55.9 billion dollars in the United States and will increase by 2.1% in the next five years. Currently we are in the middle of the $1,239,000,000 billion dollar market increase and hopefully we will grow with the market in the following years.

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Productization strategy (build strategy)

As we continue to develop and refine our solution there are some milestones we need to get over first before we launch our service. Our current prototype has been derived from basic discovery interviews. To further develop and understand more about the hair industry market we need to run more discovery interviews with licenced stylists and potential users. After we run these interviews we will refine our prototype further to meet their needs, as well as find early investors to finance this venture further. This is the main area where we need to take time and understand the issues that revolve around being a hairstylist in the industry.

After these two months of development we would move into creating the actual application. Launching the solution out in the market and tracking and refine in the future months. Possibly add or take away features based on user interaction and review surveys administered by us.

Launch strategy/pilot strategy:

Getting our service to launch will take time and resources to accomplish. Through our interviews and multiple pilots we will have a cohesive application to launch to the public. Before we launch we need to make sure we have all our bases covered in development and the solutions to really resonate through the pilot interview. The graph below shows a roadmap of how we will launch our solution.

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Getting our service to launch will take time and resources to accomplish. Through our interviews and multiple pilots we will have a cohesive application to launch to the public. Before we launch we need to make sure we have all our bases covered in development and the solutions to really resonate through the pilot interview. The graph above shows a roadmap of how we will launch our solution.

We will have to conduct new interviews with users and stylists need to be performed so we can get a better understanding of what will benefit them from using our service. Next, we need to create the face capture technology from images based on face shape. We will get these face images by marketing on social media platforms. In return the participant will get a $5 Amazon gift card for their full face image and extensive online survey about our service. After getting this information we will organize them by face shape and create the AI with engineers. These steps will take time and expertise before we launch anything in the market.

After we launch into the market we will hopefully grow and have users benefiting from our service. Once we have enough revenue and subscribers to add new features and keep gaining market share.

Scalability assessment

Based on interviews and feedback we will innovate in various ways after we have a good standing in the current market. We can add new features like an online retail shop that sells hair care products (shampoo, conditioner, & hair tools) for users, and for stylists create their own shop selling commercial hair products (shampoo, conditioner, brush, straightener). Another feature we could add in the future is SmartDeliver an advanced in home salon service, and

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depending on the market we might even open up our own hair salon. Adding these features will be easy to scale because these stylists and users are based by location. Testing these out in a small test area first will insure maximum exposure.

When trying out these different features we want to enter as many markets as possible so we can make our application as unique as possible. We want to dive into these different markets one at a time so we can grow steadily and effectively. By using these techniques we believe we can maximize profits and disrupt the market. Overall, these features would take some patience and a lot of research but we believe we are on the right track to achieve these goals and making our product a neccalisty in a customer's everyday life.

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