Why I Love Waze

Waze, a community-based navigation app used by millions of people, is the most recent product I have fallen in love with due to its simple driving solution, community ethos and clean UI. As a second year business school student at UCLA, I constantly drive through Los Angeles for meetings and events. The city is unique in that car commuters go through all of the stages of grief when it comes to L.A. traffic: denial, anger, bargaining, depression, and acceptance. I spend an average of 60 minutes a day driving through city traffic. Waze helps me maximize the value of my day by pinpointing the quickest route from point A to point B. Without Waze, I would likely spend an extra 15-20 minutes a day driving around the city.

Waze’s user-centered design features are one of my favorite aspects of the product as it maximizes my situational awareness while driving. Furthermore, the interface is frictionless enough that real-time decision-making is barely affected. The navigation map is legible while also providing the right balance of data to process (highway speed, roadblocks, distance to destination / next turn), voice activation works extremely well and the icons are visible in almost all lighting conditions.

The community network is one of my favorite features of the app as users work together to report road hazards, construction, and police speed traps. On several occasions while driving on the highway, I have been immediately rerouted to take advantage of an empty side street, cutting my commute by 5 minutes. It is like receiving a personal heads up from acquaintances on the road. The community reporting feature is also controversial, as the National Sheriff’s Association believes that it puts police officers in harms way by reporting their location. Waze insists that this feature makes for safer driving conditions, as the company believes that people tend to drive safer when they know they are in close proximity to law enforcement.

Acquisition analysis

Over the last two weeks I have been working on the competitor / acquisition analysis for our funding plan.

The interesting aspect of our business sector is that the market is highly fragmented. We have hundreds of small players, facing limited growth opportunities beyond their niche product. The larger competitors are Chinese government affiliated and there is heavy association with weak organization and strategy. Chinese media players typically have issues achieving critical mass and exiting via public markets due to limited size / scope. This context lends us an attractive opportunity for consolidation, given our market positioning. Furthermore, as we sharpen our acquisition platform, we can virtually guarantee that a targeted acquisition's cost structure will be reduced when integrated. We can also push the acquisition's sales products through our national network. In return, we share the management infrastructure to more rapidly achieve critical mass and market influence.

My focus at the moment is on niche assets in our targeted verticals: Nutraceuticals and Biotech. Our previous round of funding involved the acquisition of a pharmaceutical research firm which completed our company's ability to serve all aspects of the pharmaceutical supply chain.

The key issue behind the acquisition analysis is to explain to potential investors the strategic reasoning for targets for our acquisition / consolidation platform. Hence I have to analyze company products as well as various key metrics to determine suitable targets. In the coming weeks, I will evaluate whether the target(s) will help us reach critical mass, i.e. enough interest generated for an IPO.

First Steps

The business plan is a work in progress...

That being said, I am tasked with tackling the first version of it. At the moment we are creating the outline and drafting in prototype wording. The following is an extremely high level overview:

1) Market Overview
2) Who we are
3) 'xy' (our project)
4) How 'xy' will work
5) Financial model
6) Milestones
7) Management Team
8) Exit Strategy

The 'Market overview' is a justification of the reasoning behind our project ( and our requirement of expansion capital). This justification is achieved via analysis of the market potential for our project. This area is important because investors are looking for maximized returns on their investment. Investing in a company always bears some form of risk, hence we need to portray the reward potential for our would-be investors.

The 'Who we are' section is fairly simple on the surface, however, it needs to successfully distill the essence of what the company is into a few pages of the business plan. In this case, our company offers various media / marketing materials in online / offline formats. The end result is to create a 360-degree platform for marketing in the Chemical industry. How is each product important? How does it contribute to the 360-degree platform? How can I explain this to investors without having their eyes cloud over? I have reached the intersection of business analysis and creative writing and it is tricky to navigate.

The 'xy' section is a description of our project and how it will fit into our platform. It is the 'Big Idea' explained for our potential investors.

The 'How 'xy' will work' section will be the area heavily scrutinized by the venture capital firms. We introduced the Big Idea in the previous section, but the question of how we will manage it once financing is achieved is a wholly different beast. Benchmarks must be formed in order to gauge progress. A clear description of the implementation process will be explained.

The 'Financial model' section is a summary of the inputs utilized and the resultant numbers. It is a dry explanation but it explains our assumptions in the financial management of the project and why the financial return is as such.

The 'Milestones' section describes the achievements we have garnered via our past round of Series A financing. It will also be utilized as a gauge of progress for investors in this current round of financing.

The "Management Team" section will describe the people leading the company. Each management person will have a short Curriculum Vitae describing their previous business experiences. Focus will be placed in relevant industry experience and previous experience with managing start-ups and handling VC fund-raising.

The "Exit Strategy' section describes how the investors will recoup their investment. This could be from either an IPO, secondary buyout, etc..

I will be working on this first draft, coupled with a Needs analysis and input from my higher-ups over the coming weeks. The aforementioned sections may be added upon or cut out when the final product is rolled out.

1st VC Funding Round

The company signed off on its first round of venture capital funding last July and the total value of the VC financing was $5 million. The financing value was derived from two different vectors . One section of the financing occurred through a simple equity buy-in (cash infusion), the second via the acquisition of a pharmaceutical research company which was integrated into our business platform. The value percentages are not to be publicly disclosed.



Morningside Group, the group which funded us, is known for VC financing in the telecom / internet, media and healthcare sectors. Our business extends out to all three of these areas. Morningside gained their visibilty through several successful early-stage investments: Paypal, Sohu, The9, and Ctrip. The latter three investments retain extremely high visibility in China.
As an aside, the company which I work for was in business 8 years prior to financing; by age, it is not a startup. However, the atmosphere within the company certainly feels like a startup.

During the initial VC fund roadshow, the company pitched itself as an established platform within a vertical market. Moreover, the company positioned itself as such so that venture investment would allow us to rapidly expand post-funding. Thus, the essence of the pitch was ideal market positioning and platform expansion via acquisition of assets The initial VC roadshow occurred in mid-2008, hence it took a full year to land financing.

Background Check

I stepped foot outside of the Pudong airport and was immediately enveloped by a suffocating wave of heat and humidity.

"What did I get myself into?!" I asked as I threw my bags into a decrepit van and took off towards central Shanghai. The original 8-track player wobbled in sync to the bumps which the aged shocks failed to absorb. The miniature music speakers blasted out a tinny melody from a Chinese crooner who was undoubtedly in his golden years by now.

I traveled halfway across the world to take part in helping a small business grow. My previous job at a Japanese bank in London was hectic and rewarding, but at many points I felt like a cog in a well-oiled machine.

In order to fully explain my actions in moving out to China. It makes sense to shed some light on personal history:

When I was 9, my father started up a company called New Wave Enviro . The main office was in our family basement. He had purchased a company 4 years previously in LA but it had dissolved after the business declared Chapter 7 liquidation. My dad took this hit on the chin, learned from his mistakes, and started anew. When I hit middle school, I started doing basic work for New Wave, i.e. filing invoices, entering warranty cards, etc. Although it was rote work, I had officially landed my first business internship at age 12. For the next 10 years I worked alongside New Wave Enviro as it reached positive cash-flow, expanded out to a full-time office and gained market share in its focused industry.

This experience got me hooked on business development, venture capital financing, and business expansion. In college, I was lucky enough to experience TechStars, a Boulder-based incubator providing seed capital for tech-based startups, and its InvestorDay presentation. I ended up investing in my first business, Search-to-Phone, alongside investors such as Brad Feld, co-founder of the Mobius and Foundry VC funds, and Jared Polis, who sold two of his businesses for $780 million and $470 million respectively.

Now I am in Shanghai, angling towards securing a second round of venture capital investment for the company I work for. In the coming months, I hope to shed some light on the experience of raising venture capital in China. So stay tuned...