BAX-tivities & Costs

This week team BAX figured out how our startup would run once we start getting our hands dirty with hires, costs — our gross burn rate, our revenue, and our net burn rate.

BAX Costs

One of our biggest mysteries and concerns we had as a team was whether or not local business would be willing to advertise themselves on our platform for discoverability in order to get revenue from them.

Since we don’t have the time or the money (yet) to go to a study-abroad destination such as Paris, Milan, or Rome, we used what we had here in San Francisco and went out to the most touristy place in the city — Fisherman’s Wharf, where small local businesses that attract tourists thrive.

Through talking with some of the managers of the local businesses, we discovered there is a pattern of three common ways of attracting new customers: Direct in-person sales, social media advertising, and TripAdvisor. Given that TripAdvisor already already has a strong online presence, and travelers have already built a strong trust relationship with it, it only makes sense for these local business to opt for such platform to advertise themselves.

Through this, we validated that instead of having the local business advertise directly through our platform, it would make more sense to partner directly with TripAdvisor, where local business and activities for tourists would be advertised on BAX, while we direct traffic to their platform whenever users tap on an add.

BAX Revenue

After doing our meticulous calculations of our total gross income and our total gross burn rate, we discovered that our total net burn rate would be in the negative numbers. At first two of us in the team freaked out, however we came to the realization that it’s completely okay, given that one thing we learned from our first pitch was to always have something ready to ask.

BAX Net Burn Rate

Well, this this time we’re asking for something, and it’s big — a seed round of $100,000.00 each year for a total of three years. This will help us get on our feet as quickly as possible before we start expanding into our Serviceable Available Market and our Total Available Market — general group travel in the U.S. and worldwide.

What’s next?

Well, now that we’ve got our costs and activities figured out, we’ve already started discussing as a team on how to prepare for our final pitch to our target audience, and our investors. How will our demo be conducted? What will be show in the deck? How will we break-up time during the presentation to be more efficient? All these questions and more have arisen, and will slowly be answered and worked on.