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4 pages consulting proposal for consulting management course

This is a group project which these parts belong to me .preparing some parts of proposal based on attached case ( cover page letter, project purpose and scope, project schedule and milestone dates, anticipated outcomes and benefits )

The sample proposal and case study have been attached. Parts that should be done have been highlighted in pink in the attached sample proposal.

I need a very professional proposal that considers every concept and can evaluate the case and declare the outcomes and benefits with accurate time scheduling.

Nov 2007 Materials and concepts used in this proposal have been reproduced with permission of the Author and Client.

BUSA 695 – Organizational Consulting Project

SAMPLE PROJECT PROPOSAL

<>
Catalyst Paper Crofton Division, Crofton BC

Dear <>:

Re: Human Resource People Strategies – Performance Management Consulting Project for
Catalyst Paper Crofton Division

Thank you for the opportunity to explore potential consulting project ideas with you for Catalyst

Paper Crofton Division. I appreciate the time you spent with me sharing information about your

organization, current situation and plans for

the future.

I understand the many challenges your

organization currently faces. The recent downsizing and reorganization of your management

workforce directly affects your employees and increases the risk of morale, retention and

performance issues.

Following careful consideration of our discussions and your current situation I am pleased to

submit the attached proposal to help you address challenges with your current employee

performance management program. The proposal further explains the purpose, scope, objectives

and anticipated benefits of the services I have to offer. As a human resources professional and

MBA student, I have professional experiences and interests that align with your need to improve

the performance of your staff workforce as you work through significant organizational change.

I appreciate your review and consideration of this proposal. I would welcome another opportunity

to meet with you to further discuss the details of the services I have to offer and answer any

questions you may have.

If you accept the terms and conditions presented please indicate your acceptance by signing the

OCP proposal agreement form located on the last page of the attached proposal.

Sincerely,

<>
MBA Candidate

Nov 2007 Materials and concepts used in this proposal have been reproduced with permission of the Author and Client.

A Consulting Proposal for

Catalyst Paper Crofton Division

Human Resource People Strategies:
Evaluating the use of the Performance Management Program

Submitted to:

<>
<>

and
Mr. Michele Vincenti

Organizational Consulting Project Coordinator
Royal Roads University

Prepared by:
<>

Nov 2007 Materials and concepts used in this proposal have been reproduced with permission of the Author and Client.

INTRODUCTION
The pulp and paper manufacturing facility located in Crofton, BC began operations fifty years ago

as part of British Columbia Forest Products Limited (BCFP). Now owned by Catalyst Paper

Corporation, Crofton Pulp and Paper operates as one of four independent manufacturing divisions

within the company’s current structure. With five manufacturing lines, Crofton produces pulp and

paper products for global customers.

Many changes have impacted the Crofton employees over the past decade including multiple

changes in company ownership and identity. Major organizational transformations involving

restructuring took place in 1996, 1998 and again in 2001. By the end of fiscal 2006, the company

employed 768 union employees and 209 non-union management staff.

The senior management team (SMT) relies heavily on the skill and talent of its workforce to

manoeuvre through constant change and industry challenges. A performance management (PM)

program exists for non-union staff employees. According to past practice the SMT communicates

expectations to managers and employees by providing a yearly timeline for PM related tasks and

deliverables such as completion of yearly performance evaluations for employees. Unsure of the

state of the actual PM practices at Crofton, Vern Phillips, the newly appointed Director of HR

requires consulting assistance to enable a well informed and strategic decision making process for

addressing Crofton’s PM in support of the future direction of the company.

PRESENT COMPANY SITUATION
Many changes have occurred within the organization over the past year:

In early 2007 a financial investment group, Third Avenue Management, purchased a large

quantity of Catalyst shares making them the company’s single largest shareholder. Declining

market prices, fiber supply challenges and a higher Canadian dollar have placed the

profitability of the business in jeopardy and company strategy has turned to cost

improvements.

In August 2007, Crofton’s SMT announced and implemented a new organizational structure

involving an approximate fifteen percent downsizing of the non-union management

workforce. Some employees were terminated immediately; others were notified of their

termination with an effective date at year end. For many remaining employees, reporting

structures, home departments, job positions and responsibilities as well as future

opportunities within the company have or will change.

Nov 2007 Materials and concepts used in this proposal have been reproduced with permission of the Author and Client.

In September 2007, senior management announced changes to employee performance

contracts, a component of the performance management program, directly altering the

employee variable pay structure.

Continuous change, looming uncertainty and increasing workloads are affecting employee morale,

motivation, and retention. With a leaner management workforce any employee performance and

retention issues pose a significant threat to the business. As the SMT moves forward with plans to

reestablish Crofton Pulp and Paper as a profitable, cost effective global competitor, the HR director

is faced with the challenge of developing strategies to ensure the organization has the people

resources it needs. The current situation highlights the importance of assessing the existing PM

program to understand how it is being used and to ensure this component of the HR strategy

meets the current and future needs of the business and its employees.

Problem Definition
A preliminary SWOT analysis reveals multiple challenges facing the company:

External Factors

Strengthening Canadian dollar adversely impacting profits

Lower cost producers entering the market, specifically in China

Increasing raw material costs, specifically oil and gas

Internal Factors
Financial:

Declining EBITDA

Weakening and extremely low share price; share price below book value

Declining availability of capital for reinvestment

Marketing:
Shrinking market in North American

Customers losing confidence in products due to disruptions in fiber supply

Customers demanding guaranteed production and sourcing alternate suppliers

Operations:
Aging assets without sufficient reinvestment

Union labour contracts expire in April 2008

Human Resources:
Reduced workforce resulting in a loss of talent and manpower

Morale, motivation and retention issues

Lack of focus on human resources processes, specifically performance management and

training and development.

Nov 2007 Materials and concepts used in this proposal have been reproduced with permission of the Author and Client.

Technology:
Increasing complexity of technology

Loss of advanced technical support due to restructure

PROJECT PURPOSE AND SCOPE
Purpose
The purpose of the proposed consulting project is to conduct a Performance Management

Program Evaluation that provides a narrative description of how the PM program is actually used

by employees and managers within the organization and to develop recommendations for

improvement. The project will be conducted through a research based methodology. Major project

components include: discovery based research to investigate current practices, best practices

research, gap analysis and recommendations for improvement.

Scope
As currently proposed, the project involves:

Completion of one formal document, a Performance Management Program Evaluation that

will provide the information and analysis required for the HR director and SMT to understand

the current state of the PM program in order to strategically plan for the future of PM at

Crofton.

Recommendations for improvement based on short and long term needs of the business,

employees and managers and a proposed implementation plan for recommendations where

applicable. (Short term refers to the immediate year following the project; long term refers to

beyond the first year).

As the project progresses, depending on findings and timing, recommendations and / or

revisions to the current PM training and communication materials may be included.

The project does not involve:

Analysis of any PM type activity related to bargaining unit employees who are currently

excluded from the PM program.

Implementing recommendations or any implementation plan.

Gap analysis in comparison to best-of-class research.

Evaluation, analysis or research related to technological PM solutions.

Nov 2007 Materials and concepts used in this proposal have been reproduced with permission of the Author and Client.

APPROACH and METHODOLOGY
Approach
The project will be conducted according the following steps:

1. Project set up:

Develop research plan

2. Detailed SWOT analysis:
A preliminary SWOT analysis was conducted in preparation of this proposal.

Conduct a thorough SWOT analysis to identify strengths, weaknesses, opportunities and

threats impacting the business.

3. Best Practices Research
Conduct secondary research to investigate PM best practices from literature.

Research will focus on PM concepts and approach, rather than technological solutions.

4. Internal Organizational Research
Develop an interview instrument and submit an ethical review for research approval to the

Royal Roads University (RRU) Ethical Review Board.

Conduct primary research to investigate the current PM practices and needs at Crofton

through staff and management interviews.

5. Internal Data Gathering and Review
Collect and review relevant available data on PM program related activity within the

organization.

6. Analysis

Incorporating information collected in each of the previous stages, analyze gaps between

current practices and: a) senior management expectations, b) employee and manager

expectations, c) strategic goals of the business, d) performance management best practices.

7. Recommendations and Implementation Plan

Develop recommendations for improvement based on short and long term needs of the

business, employees and managers.

Develop a recommended implementation plan moving forward based.

8. Presentation of results

Review draft with client followed by presentation of final document.

Methodology Details
Develop research plan:

Determine needs and methods for gathering information relevant to existing / past

performance management program activity.

Nov 2007 Materials and concepts used in this proposal have been reproduced with permission of the Author and Client.

Primary research:

Conduct interviews with an appropriate sample of management and employee stakeholders.

Secondary research:

Literature review of performance management best practices focused on concepts and

approach not technological solutions.

PROJECT SCHEDULE and MILESTONE DATES
Project work will begin following your acceptance of this proposal with completion of the final

deliverables on or before March 14, 2008. Your acceptance is required within 5 days of receiving

this proposal for the project work to be completed within this time frame.

MONTH (Nov to March) PROJECT PHASE
N D J F M

COMPLETED BY

1. Project Set Up November 30, 2007
2. SWOT Analysis November 30, 2007
3. Best Practice Research November 30, 2007
4. Internal Organizational Research December 21, 2007
5. Internal Data Gathering and Review December 31, 2007
6. Analysis January 11, 2008
8. Draft Report and Presentation February 15, 2008
9. Final Revisions February 29, 2008
8. Submit Final Report
(sign off by client, advisor and RRU)

March 14, 2008

TIMING AND COST ESTIMATES
The final project will be completed over a 4 month period requiring a minimum of 360 hours of

work. Final deliverables will be provided to you the client and submitted as a requirement of the

Royal Roads University MBA program and therefore offered free of consulting fees. Limited

expenses include office supplies, printing and copying costs. Royal Roads University estimates a

project value of $30,000 to the client based on scope and required hours of work.

ANTICIPATED OUTCOMES and BENEFITS
The project will provide an analysis of Crofton’s performance management program that will assist

senior management in:

Understanding how the current PM program is used at Crofton.

Revising the current program to meet organizational needs and business objectives.

Setting a benchmark and measuring the success of improvement strategies implemented in

the future.

Nov 2007 Materials and concepts used in this proposal have been reproduced with permission of the Author and Client.

Enabling the organization to efficiently and effectively conduct PM activities.

Improving the PM skills and knowledge of managers.

Improving the value of PM to individual employees and their managers.

Improving motivation, morale, retention and performance of the staff workforce.

Identifying and planning for required employee development and succession planning to

meet the future needs of the organization.

SUMMARY of PROJECT DELIVERABLES
Following completion of the project you will receive 2 printed copies and 1 electronic file of the

following documents:

1. Performance management program analysis document (approximately 75-100 pages plus
appendices) including short and long term opportunities for improvement and applicable

recommended implementation plan.

2. Power Point Presentation summarizing findings and recommendations

CONSULTANT’S CREDENTIALS and CONTACT INFORMATION
I completed a Bachelor of Science (B.Sc.) degree from the University of Waterloo in 2001 and 6

years working experience in the human resources field. I began my MBA in Executive

Management in April 2006 at Royal Roads University. To date I have successfully completed the

required course work for the program preparing me with skills and knowledge essential to working

with clients to investigate potential business concerns, diagnose issues that need to be addressed

and deliver effective solutions.

MBA course work specifically relevant to this project include: Project Management, Business

Research Methods, Consulting Skills, Change Management and Organizational Relations.

My consulting philosophy centres on client partnerships; working directly with clients to provide

tools, information and mutually developed solutions to ensure the client’s specific business needs

are addressed.

Contact information:
Office: 250-246-6079
Email: mary.winchell@royalroads.ca

9B18M027

PASSION CONNECT: TURNING PASSION INTO PROFIT

Monique Tuin wrote this case under the supervision of Professor Dominic Lim solely to provide material for class discussio

The
authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised
certain names and other identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.

In February 2017, Karthik Kittu met in Bangalore, India, with his co-founders, Abdul G Sait and
Shubham Deva, to discuss possible monetization strategies for his start-up, Passion Connect. Passion
Connect was a start-up that helped people discover and pursue their passions, through a platform of
curated content, targeted experiences, and specific services to connect with mentors and other users who
share their passions.

The company was founded in August 2013, but the team needed to consider the company’s current situation
and was trying to raise a Series A round of financing by the end of 2017. However, with increasing
pressures for returns by Indian venture capitalists, the co-founders needed a monetization strategy in place
first. In its first few years, their company site had gained 40,000 registered users but had not made a return.
While the business was operating on a lean model, further investments in sales and marketing were
necessary to continue to grow the platform. The co-founders needed to know how Passion Connect could
begin generating revenue, turn users into cash, and help others like themselves discover their passions.

INDIA’S START-UP SCENE

With a population of 1.3 billion people1 and a projected gross domestic product growth rate of 7.2 per
cent in 2017,2 India was attracting attention as the world’s fastest growing economy. The opportunity for
technology start-ups was compounded by record-breaking growth in smartphone adoption (see Exhibit 1),
in a market expected to have 730 million Internet users by 2020.3

Start-ups in India faced an increasingly favourable regulatory environment with Indian Prime Minister
Narenda Modi preaching the importance of entrepreneurship and technological innovation. In 2016, the
Startup India Action Plan was launched with the directive to “build a strong ecosystem for nurturing

1 “India Rising,” PRB: Population Reference Bureau, December 2015, accessed July 16, 2017,
www.prb.org/Multimedia/Infographics/2015/india-story-map.aspx.
2 “India Development Update: Unlocking Women’s Potential,” The World Bank, May 2017, accessed July 16, 2017,
http://documents.worldbank.org/curated/en/107761495798437741/India-development-update-unlocking-women-s-potential.
3 “The Future of Internet in India,” Your Story: Nasscom, 2016, accessed July 15, 2017,
www.communicationstoday.co.in/images/reports/20160820-nasscom-the-future-of-the-internet-in-india-19082016 .

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mailto:cases@ivey.ca

http://www.iveycases.com/

Page 2 9B18M027

innovation and start-ups in the country.”4 The government decreased bureaucratic hurdles to launch new
companies and provided support for start-ups through government schemes. For example, start-ups could
self-certify regulatory compliance with a smartphone and use a fast track for patent applications.5 The
Indian government also launched a Fund of Funds, which invested in venture funds to provide financing
to start-ups, with a value of ₹25 billion6 (approximately US$3.9 billion) per year.7

One city in particular had been the focus of much entrepreneurial activity—Bangalore, the capital city of
the state of Karnataka, with a population of over 10.8 million people.8 The South Indian city, officially
known as Bengaluru, was heralded as the Silicon Valley of India. Home to numerous multinational IT
companies, the city also accounted for 28 per cent of domestic start-up activity.9

India had already witnessed the emergence of several “unicorns” (pre-initial public offering companies
with a valuation of over $1 billion). Bangalore-based Amazon competitor, FlipKart, raised over $2.4
billion in funding by July 2015, at a valuation of $11 billion. Taxi-hailing start-up Ola, with a valuation
over $5 billion, moved its headquarters from Mumbai to Bangalore.10 The enormous domestic market
positioned Indian start-ups for significant growth if they capitalized on the unique challenges and
opportunities they faced in this rapidly developing country.

VENTURE CAPITAL FUNDING IN INDIA

Entrepreneurs had several options when raising funds to start and grow a company. In the early stages of
a company, founders typically approached family and friends, applied for a bank loan, or sought financing
through an angel investor—wealthy individuals who invested their own money—in order to raise a seed
round to get the idea off the ground. In India, seed rounds were typically smaller than in the United States,
averaging $100,000 to $250,000.11

Following a seed round, a company’s first significant round of venture capital (VC) financing was known
as a Series A round and was followed by subsequent rounds (Series B and C) to raise more funds as the
company grew. While venture capital funding was focused on early-stage companies, Indian funds
typically wanted to invest in firms that had a track record of performance. Consequently, the majority of
investments were made in companies over five years old,12 which showed a contrast to the investment
trends in other countries with similar VC activity.

4 “Startup India Action Plan,” Government of India: Ministry of Commerce and Industry, January 16, 2016, accessed July 16,
2017, http://startupindia.gov.in/pdffile.php?title=Startup%20India%20Action%20Plan&type=Action&q=Action%20Plan &
content_type=Action&submenupoint=action.
5 Ibid.
6 ₹ = INR = Indian rupee; all currency amounts are in US$ unless otherwise specified. US$1 = ₹65.4 on October 8, 2017
7 “Startup India,” op. cit.
8 “Bangalore Population 2017,” World Population Review, October 20, 2017, accessed January 14, 2018,
http://worldpopulationreview.com/world-cities/bangalore-population/.
9 “India 3rd Largest Base for Start-ups in the World,” The Hindu Business Line, October 29, 2014, accessed June 4, 2017,
www.thehindubusinessline.com/info-tech/india-3rd-largest-base-for-startups-in-the-world/article6545415.ece.
10 Shilpa Phadnis and Shalina Pillali, “Bengaluru Is Home to 5 of India’s 8 Unicorn Startups,” Gadgets Now, October 12,
2015, accessed June 4, 2017, https://www.gadgetsnow.com/tech-news/Bengaluru-is-home-to-5-of-Indias-8-unicorn-
startups/articleshow/49316190.cms.
11 Ajay Yadav, “How Securing Startup Funding in India Differs from the U.S.,” Forbes, September 22, 2016, accessed May
11, 2017, https://www.forbes.com/sites/ajayyadav/2016/09/22/how-securing-startup-funding-in-india-differs-from-the-u-
s/#faddeda6b1b0.
12 Thillai Annamalai and Ashish Deshmukh, “Venture Capital and Private Equity in India: An Analysis of Investments and
Exits,” Journal of Indian Business Research 3 (March 2011): 6-21, accessed May 11, 2017,
https://www.researchgate.net/publication/235317490_Venture_capital_and_private_equity_in_India_An_analysis_of_invest
ments_and_exits.

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Page 3 9B18M027

The early appearance of modern venture capital in India came through the establishment of the Technology
Development Fund of the Industrial Development Bank of India in 1987.13 When India’s IT sector took off,
domestic funds emerged to provide funding at the same time as foreign funds entered the country looking
for significant returns. National level organizations, including ICICI Venture Funds and the National
Venture Fund for Software and IT Industry (NFSIT) were complemented by state-level venture capital
organizations such as Gujarat Venture Capital Finance and the Karnataka Information Technology Venture
Capital (KITVEN) Fund.14 Several American funds established large and active Indian funds, including
IDG Ventures India, Sequoia Capital India, and Accel India.15 Other local players, such as Mumbai-based
Blume Ventures, emerged through investments by successful Indian entrepreneurs.

In 2016, $3.3 billion in risk capital was deployed through 859 venture deals in India.16 Of these deals, 68
per cent were made in pre-series start-ups,17 showing more difficult access to capital for companies in
later stages. Overall, 2016 investments represented a decline of 60 per cent of capital invested in 2015
(see Exhibit 2). While the investment climate remained positive, deal cycles became longer, and investors
looked for companies with proven business models and unique value propositions. Companies copying
existing business models to the Indian market had trouble raising funds, as financing shifted to companies
with unique business models in prominent industries such as financial technology (fintech) and
healthcare. With increasing pressures to make a return, Indian venture capitalists shifted their focus from
users and growth to sales and profit.

Passion Connect’s co-founders recognized it would not be possible to raise venture capital financing
based on users alone—the company had to demonstrate an ability to generate revenue and a concrete
strategy to make a profit if it were to have any chance of catching the interest of investors.

IN PURSUIT OF PASSION

In India, social acceptance of non-traditional career paths was low. Young adults faced pressure to
graduate with university degrees and become engineers, doctors, or businesspeople. Indian parents’ most
popular goal for their children was career success, and over three-quarters of parents wanted their child to
pursue studies in medicine, business, engineering, computer science, or law.18 These societal and familial
expectations meant that young people were often discouraged from pursuing careers in fields such as
music, arts, or social sciences—despite these being popular areas of interest. As a result, while young
educated Indians were making money and accessing the latest technology, they often were disinterested in

13 B. Bowonder and Sunil Mani, “Venture Capital and Innovation: The Indian Experience,” Paper presented at International
Conference, November 7, 2002, accessed May 10, 2017, www.insme.org/files/148.
14 S. Jayalakshmi, “Problems and Prospects of Venture Capital Undertakings in Tamilnadu,” Alagappa University, October
20, 2015, accessed May 10, 2017, http://shodhganga.inflibnet.ac.in/bitstream/10603/54276/9/09_chapter%203 .
15 Snigdha Sengupta, “Venture Capital Firms Shy Away from Backing New Start-ups in India,” LiveMint, June 2, 2017,
accessed July 14, 2017, www.livemint.com/Companies/12mjDmcMQyanFPlwsol2SL/Capital-crunch-Venture-capital-firms-
shy-away-from-backing.html.
16 “Venture Pulse Q4 2016: Global Analysis of Venture Funding,” KPMG Enterprise, January 12, 2017, accessed June 4,
2017, https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2017/01/venture-pulse-q4-2016-report .
17 Emmanuel Amberber, “In 2016, $4 Billion Invested in Indian Startups—Deal Value Decreased 55%, Volume Increased by
3% from 2015,” Your Story Research: 2016 Year-end Funding Report, December 31, 2016, accessed May 10, 2017,
https://yourstory.com/2016/12/indian-startups-funding-report/.
18 “The Value of Education: Learning for Life,” HSBC: Global Report, 2015, accessed May 10, 2017,
https://www.hsbc.ca/1/PA_ES_Content_Mgmt/content/canada4/pdfs/personal/HSBC_VoE_LearningForLife_Global_Report .

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Page 4 9B18M027

their jobs, and stress levels were at a record high. Over 42 per cent of Indians working in the private
sector suffered from depression or generalized anxiety disorder.19

In 2013, to build social acceptance to pursue passions outside of traditional career paths, the friends had
founded Passion Connect to help more Indians realize their passions. After nine years of work for
companies such as Infosys and KPMG in the IT Industry, and as the president of Rotaract South Asia,
Kittu noticed that there was an opportunity to help others like him discover their passions and receive
career guidance to realize those passions. When he was studying for his MBA in 2004, Sait had started his
first entrepreneurial initiative—a risk and wealth management company called Basket Option Pvt Ltd.
While working with other entrepreneurs, he realized that many had passions that were unfulfilled,
negatively affecting their quality of life. Deva could see the same happening to his classmates at the
Indian Institute of Technology Kanpur; many were graduating and entering unfulfilling career paths that
left them feeling unhappy and unmotivated. Deva joined the team after graduating in June 2014. The three
came together to research platforms to help people maintain their passions while they pursued their
careers—finding none, they decided to build one.

Passion Connect initially began as a psychometric test to help users identify their passion (see Exhibit 3),
whether it was music, painting, extreme sports, or social work. The co-founders realized the need to provide
an ecosystem for users to nurture their passion once it was identified, and gradually extended the platform to
include several products catering to passion discovery and pursuit. In July 2015, Passion Connect was
accepted into the Jain University Incubator Centre (JUIC), a joint initiative by the Department of Science
and Technology (DST) in India, ALSTOM India Limited, and Jain University, based in Bangalore. Through
JUIC, the co-founders were able to access entrepreneurship services, training programs and mentorship, and
an initial round of seed financing to help get the company off the ground.

In the three years since the company had been founded, the team had grown substantially, with the three co-
founders at the helm. Sait, the managing director, focused on finance and strategy. Kittu led research,
networking, and marketing as the chief executive officer. Deva, as chief technology officer, led technology
engineering and product innovation. A team of 12 people, including developers, a marketing team, and
content curators, supported the company. While the initial seed funding had helped the company grow to
this stage, and they operated on a lean model made possible due to the low cost of human capital in India,
the co-founders realized that to continue to support the team’s salaries and business expenses and to provide
more funding for marketing, monetization and further investment would be critical.

PASSION CONNECT PLATFORM

Passion Connect provided a website and mobile application to help users discover and connect with their
passions. The platform was centred on the concept of a three-step module:

1. Identify—Identifying and connecting with passions through psychometric tests, curated articles,

blogs, quizzes, polls, and videos
2. Nurture—Nurturing one’s passion by sharing it with buddies and getting mentored by experts who

have made a career from their passion
3. Live—Providing access to mentors for users to live their passion and facilitating organized events,

mentor meet-ups, and internship opportunities offered on the platform

19 PTI (Press Trust of India), “42% Indian Private Sector Employees Face Depression: Poll,” The Economic Times, April 6,
2015, accessed June 4, 2017, http://economictimes.indiatimes.com/magazines/panache/42-indian-private-sector-
employees-face-depression-poll/articleshow/46827593.cms.

Page 5 9B18M027

These three elements were supported through the various features available on the platform. Passion
Connect employed five in-house team members and five freelancers who curated around 70 articles. The
company also offered targeted experiences such as workshops or performances to help users build a social
group around their passion. These experiences were identified through partnerships with local groups in the
community.

Passion Buddy was a location-based system that helped users connect with others who shared their passion,
allowing them to discuss, meet, and motivate each other to create their own support systems as they pursued
their passion. In addition, organized events such as the Bengaluru Passion League and the National
Corporate Passion League allowed users to share their passions through performances and contests.

While intending to encompass all passions its users might have, the team decided to initially focus on a
limited number of passion areas: travel, food, fitness, music, technology, dance, and photography. By
2017, Passion Connect had amassed 313,000 likes on Facebook and attracted over 100,000 unique
monthly page views.

Kittu, Sait, and Deva recognized the need for additional financing to fund additional marketing to grow
the platform’s audience and to attract new types of users, including more mentors, to the site. Further
investments would also be made into product innovation and support for the team producing and
gathering content for the site. These investments required the team to focus on a monetization strategy
ahead of raising their Series A round. With the users in place, the team needed to begin generating cash.

MONETIZATION STRATEGIES

Consumer-facing start-ups had several options to monetize their large and engaged user bases. As new
companies and business models emerged, monetization strategies were constantly evolving, targeting new
customers, or experimenting with different pricing models. By considering other technology platforms
serving similar users, the co-founders identified several different possible monetization strategies, which
could have been grouped into business-to-consumer (B2C) or business-to-business strategies. Developing
a set of criteria was important to qualitatively evaluate each of the options for Passion Connect and to
consider the quantitative implications of their decision. They decided to separate and evaluate each of the
potential strategies, before reporting back to their team to make a decision.

Business-to-Consumer

The Passion Connect platform was created for individual users, and several B2C strategies could generate
revenue from the users themselves, either directly for use of the platform or indirectly for ancillary
products or services. The potential strategies the co-founders identified included a subscription fee to
access the platform, a “freemium” model that was free but some features were provided for an extra
charge, an e-commerce store for products related to users’ passions, or a marketplace where mentors
listed their expertise.

Subscription Fee

Users could sign up for and use Passion Connect for free. The co-founders considered whether users
would be willing to pay a subscription fee for access to the platform.

A subscription business model charged customers a monthly or yearly fee for access to a product or
service. Businesses benefitted from this model because it provided a constant, predictable revenue source

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and increased customer lifetime value.20 However, given that the platform was available to users for free,
the co-founders needed to consider how users would react to the introduction of a subscription fee.

If Passion Connect were to begin charging a subscription fee, there were several questions the team
needed to answer: Should the fee be charged monthly or annually? What fee would provide sufficient
revenue while remaining affordable enough to convert users to paying customers? Should the company
offer a free trial period or any incentives to early adopters of the platform?

Freemium Model

A freemium pricing strategy offered the basic product or service free of charge but charged (the premium)
for additional features of functionality. Passion Connect could allow users to access the basic site for free,
but charge an additional fee to access certain features or areas of the platform. This approach was
expected to be less alienating to existing users than a full subscription model, and would allow Passion
Connect to continue to grow their user base through their free offering. However, the added features
available would need to be compelling enough for users to be willing to pay a premium.

LinkedIn had been one of the most successful sites at implementing a Freemium model. Most of the site’s
features, including profiles and connections, were free for users. LinkedIn Premium offered additional
features, such as advanced search or the ability to see who had viewed the user’s profile, and additional
services for users such as recruiters and head hunters. In 2016, premium subscriptions generated $155
million in revenue for LinkedIn,21 after about 20 per cent of the site’s 500 million users signed up for a
premium account.22

The Passion Connect co-founders’ first consideration would need to determine which website features
would be free to users, and which would need to be paid. They would also need to consider what price
users would be willing to pay, and more importantly, how many users would be converted to paying
customers. Would users be willing to spend money on their passion?

E-commerce Store

Passion Connect considered adding an e-commerce store to their website that would allow users to
purchase products related to their passion, directly from the platform. The co-founders imagined t-shirts
and mugs that allowed users to share their passions with the world, as well as more specialized products,
such as paint brushes or musical equipment. Given that the Passion Connect platform already did the job
of discovering a community of passionate people, they were well-positioned to sell directly to an engaged
customer base.

Adding an e-commerce store, however, would not be easy, and would require a radical shift in their business
model. Should the store be managed internally, with the Passion Connect team responsible for purchasing
items, holding inventory, managing transactions, and handling the logistics of shipping to customers? Or
could some part of the process be outsourced to another company? The co-founders considered the
possibility that users could even sell their own creations and products on the store. To make a decision, they
had to consider the potential sales and margins an e-commerce store could generate, and what kind of

20 Stefan, “Online Subscription Models: 10 Best Practices for Online Subscription Business Models,” Subbly, July 10, 2014,
accessed July 14, 2017, www.subbly.co/blog/10-best-practices-for-online-subscription-business-models/.
21 LinkedIn Corporation Communications Team, “LinkedIn Announces Second Quarter 2016 Results,” Newsroom, August 4,
2016, accessed July 14, 2017, https://news.linkedin.com/2016/linkedin-announces-second-quarter-2016-results.
22 “Free LinkedIn Account Usage among Members as of March 2016,” Statista: The Statistics Portal, 2017, accessed August
13, 2017, https://www.statista.com/statistics/264074/percentage-of-paying-linkedin-users/.

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investment they would need to make to get this idea off the ground. They also thought that, to be able to test
the idea with users, they needed to find out what some of the products would look like.

Mentorship Marketplace

The Mentorship Marketplace was a new feature Deva and his team were developing for the Passion
Connect site. This marketplace would be a section of the site where users could list themselves as
mentors, instructors, and advisors, offering their expertise as a service to users interested in growing their
passions. One user Deva was considering as an example was a professional musician, who charged ₹

500

for a thirty-minute session, and who could talk about how to break into music professionally or deliver
instruction on a specific musical instrument. The goal of the new feature was to help users get more
connected, while allowing some users to find a channel to begin profiting from their passions.

The Mentorship Marketplace could provide a revenue opportunity for Passion Connect by collecting a fee
as a percentage of transactions or by charging mentors to list their expertise on the site. Given that this
feature was under development, the co-founders realized they could design the specifics of the feature to
improve the user experience while tailoring it specifically as a revenue-generating part of the platform.

Business-To-Business

Fees for Transactions on Events and Sign-ups

Passion Connect had already established a number of partnerships with organizations and companies
catering to their users’ passions—for example, music schools offering lessons or drama groups with
weekly meet-ups. While the platform currently curated and linked to opportunities and events related to
each passion area, an opportunity existed to expand the service to include sign-ups for events or classes
directly on the platform. Passion Connect could charge a small transaction fee for every ticket sold or
class registered on the platform while helping local organizations gain publicity from groups of interested
individuals and providing them a platform through which to conduct business.

The co-founders recognized that this idea would be easy to pilot and thought through some of the
important considerations: How would they reach out to potential partners to sell this idea? What features
could they provide to make this service attractive? Should the transaction fee be a flat fee or a percentage
of the transaction amount?

Display Advertising

A popular way for web platforms to monetize their large user bases was through the sale of display
advertisements. Display advertisements could be images, text, or video shown on a website to deliver an
advertiser’s message and generate brand awareness. Passion Connect could sell banner advertisements on
its home page as a side bar or embedded into various places on the site.

Advertisers sought websites with the largest possible reach to share their content, and in the United States,
it was predicted that Facebook and Twitter would take 33 per cent of digital advertisement spending by
2017.23 However, Passion Connect’s Indian presence and niche user groups were a possible advantage.
The Passion Connect platform would be valuable to advertisers due to the user base already being pre-

23 “Facebook and Twitter Will Take 33% Share of US Digital Display Market by 2017,” eMarketer, March 26, 2015, accessed
July 14, 2017, https://www.emarketer.com/Article/Facebook-Twitter-Will-Take-33-Share-of-US-Digital-Display-Market-by-
2017/1012274.

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filtered by their interests. For example, advertisers who sold musical instruments could have access to a
large group of consumers that self-expressed their interest in, and passion for, music.

Passion Connect could either choose to directly reach out to businesses interested in using their platform
to advertise, or could make use of a larger advertising network to serve its advertisements. This option
involved designating space for advertisements on the page, which were then filled by the advertising
network, such as Google AdWords. Advertisers typically paid on a pay-per-click basis, with Passion
Connect receiving part of the advertising revenue. If they chose to monetize the platform through display
advertisements, the co-founders would need to consider how users would respond to this change, and
which option would be the most effective way to acquire advertisers for the site.

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