THE OPPORTUNITY
LURNT is currently in the midst of seeking out angel investors for an initial seed funding round. The ideal partner will have a focus on educational technology portfolios and bring a wealth of experience and business acumen and contacts to help LURNT flourish. The equity stake will be commiserate with the investment and value which the investor can bring to the organization.
researching best use principles
LURNT represents a new innovative repository for educational resources. It is most appropriate to look at similar sucessful technology enterprises to estimate the size of the potential investment opportunity as well as identify best practices.
As LURNT is modelled after reddit's successful structure, we will look at how Reddit is valued and the various methods which it uses to generate income.
According to Investopedia, reddit is currently valued at 1.8 billion dollars and generated over 100 million dollars in revenue streams through various sources in 2018.
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Revenue Streams:
Main revenue sources include advertising revenue, Reddit Gold, as well as revenue from reddit-branded products.
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Reddit advertising revenue
Managed ads starting at 30K and self-serve advertising at 5 dollars Cost per thousand impressions
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Reddit Gold
Users can purchase gold as a way of recognizing and thanking other users for their submissions and/or comments. Gold grants users access to a premium experience allowing further customization, an ad-free experience, exclusive discussion forum access and recognition next to their usernames. Click here for more information
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Reddit merchandise
A small percentage of revenue is from reddit branded merchandise sold through their reddit marketplace. These include hats, t-shirts, and mascot toys.
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Key business and use principles: The following are the use principles that have primarily led to the success and reach of Reddit.
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Karma points:
Users are encouraged to post and are rewarded for quality postings by Karma points (upvote to downvote ratio). Resources from users with higher Karma points are more visible on Reddit. Some subreddits require users to have a minimum number of karma points before postings will be allowed.
User experience prioritized
Reddit prioritizes user experience and has very limited advertising and sponsored advertising space.
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Simplified login with limited user information required
Users are not asked for email addresses or personal information as part of the registration process. Users can also browse the website anonymously without having to log in.
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User moderation
Subreddits are moderated by subreddit creators and users designated as moderators from the creator. This ensures that the subreddit has quality postings and a minimum level of etiquette in the post discussions.
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Quora
Quora
Another popular website using a similar upvote/downvote mechanic is Quora which is also valued at 1.8 billion according to TechCrunch. Quora is a question and answer platform where users can upvote the best responses to a particular question.
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Launched in 2009, Quora reported 8 million dollars in revenue from 693 million unique monthly visitors in 2018. Quora's revenue model is largely derived from advertising.
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Key business and use principles: The following are the use principles that have primarily led to the success and reach of Quora.
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Real names policy
As a question and answer platform, the credibility of the users is important. Quora requires the use of real names rather than pseudonyms.
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User moderation
Most moderation on the website is done by users though staff will also moderate.
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Recognition of top users
Quora will recognize the top users who contribute the best quality content to the website. This is a highly exclusive group. The Top Writers program recognizes 150 writers per year from their pool of over 200 million monthly visitors.
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User experience prioritized
Quora prioritizes user experience and has very limited advertising and sponsored advertising space.
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International users
Quora has a large worldwide reach and is available in nine languages (English, French, German, Hindi, Indonesian, Italian, Japanese, Portuguese, and Spanish). According to Alexa.com 38 percent of their traffic comes from the united States followed by 20.6 percent from India.
LURNT design principles
LURNT will follow in similar paths to Reddit and Quora. As a start up with a focus on developing a strong and thriving community of lurnrs, the following principles will guide our development.
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Karma points
User content will be rated using upvote/ downvote mechanics similar to Reddit and Quora. Users will accrue "karma" according to how well their posted are received by the LURNT community. Postings from high karma users will receive more visibility. ​
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The User experience will be the number one focus (Limited advertising)
In your face advertising and avoid advertising methods which detract from site usability will not be used. All advertising posted will be clearly marked as a sponsored post or advertising. This will ensure that our user base is not discouraged from using the site regularly and will rapidly grow through positive word of mouth.
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Users will guide the development of the website
Users need to feel a part of a learning community. Any attempts to explicitly monetize the user base can alienate the core user base. Privacy policies and website changes will involve an open and democratic discussion with the user base to ensure that user feel as though their voices are being heard.
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Lurnt will be a welcoming and inclusive learning community
(Simplified login and only limited user information required)
No email or personal information will be required for registration. While this may hurt advertising revenue in the short run, this policy will increase the LURNT user base and also assuage those with privacy concerns. The website will have use a combination of LURNT staff as well as user moderation. User moderators will be selected from users with a strong posting ranking and will receive additional benefits as incentive for their participation.
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Recognition of top users
LURNT will recognize top contributors with prizes or added incentives to ensure that they continue to post or moderate.
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THE plan
Early North American focus with expansion at a later date
LURNT will be primarily focused on the Canadian and American market although any learner in the world will be able to access and contribute to LURNT. This decision is made to prioritize the limited start up funds in the most receptive market and the market which the leadership team has the most experience in. Future expansion can occur to other regions which demonstrate an interest or show a significant growth opportunity. According to the National Center for Educational Statistics there are 50.7 million enrolled students in K-12 schools in the US and according to Statistica, there are 2 million k-12 students in Canada.
Focus on the Grade 4 -12 market with a possible expansion to higher education markets
LURNT will initially focus on the Grade 4-12 market. Grade 4-12 students have the computer skills necessary to adequately surf the website but may not have the search prowess to navigate through the plethora of information available on the Internet. LURNT can prove to be a very effective tool for them. Educational standards while differing slightly are generally similar in North America from Grade 4-12 making it easier to standardize Grade level or age filters for students to find appropriate information on the site. Further growth into the Higher education markets may be possible as students already familiar with the site in their K-12 education can continue to use it to for post-secondary studies. Challenges in the post-secondary market include less standardization as well as a more savvy search ability to navigate the Internet by themselves.
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Focus on growing the user base
As a hybrid social media/ resource aggregator and question/answer site - an adequately sized user base is critical to the early success of LURNT. No actions will be taken that could possibly turn off potential users. This includes intrusive in-your-face advertising, a laborious registration process or compromising privacy practices. Like Facebook, Reddit, and Quora, strategies to monetize the user base should be discussed once this critical mass has been achieved, likely 5-6 years.
Marketing through word of mouth and social media sites
Early marketing will be done through channels where Grade 4-12 students are active such as Reddit.com and youtube.com. LURNT will look towards youtube reviews and reddit discussion forums to spread the word about the product.
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THE return
ipo or acquisition
We recognize that the Return On Investments for new ventures such as LURNT are, as always, inherently risky. Looking at market readiness, market size, and educational trends, however, we believe we have the expertise and insights to bring LURNT to a successful venture capital round, an IPO or a strategic merger or acquisition which will provide the investor with a more than adequate return from their private equity investment.