EXB Coin White Paper

Use Of Funds Breakdown


In order to be prudent and good stewards of the funds received, we shall phase the build out of both the technical and operational requirements of the project, setting clear priorities and deliverable milestones.

Of primary importance is the technical delivery of the blockchain and integration capability with the other platforms. However the phasing and coordination of the business development, operational, and strategic projects are also mission critical.

Since not all the funds will be spent at once, this section seeks to expound further on the planned phasing of the strategic delivery, including a forecasted projection of gross revenues from the combined income streams. We will include a headline of expectations for each year out to 2025. The chart below is a breakdown of the macro use of funds, having achieved the hard cap target of $101 million. 

Use Of Funds

Revenues and Earnings

Post TGE, there will not be much time remaining in the year for operational expansion, so the main focus will be on recruitment of the key role holders, starting the technical project timetable and setting up the digital infrastructure. There will also be a start to revenue generation albeit a small contribution due to the timescales.

Revenues and Earnings

 

Of note is the shifting prioritization of the major capital expenditure as we evolve through the implementation, although all infrastructure will build concurrently, the capital hungry priorities are: Conversion Optimization, Technical and Operational Expansion, City Expansion and Profit, and Foundation & Conversion Expansion, before Business as Usual.   

Conversion Optimisation 2018 – mid 2019

Post TGE, there will not be much time remaining in 2018 for operational expansion, so in addition to the activity detailed below, the critical operational focus for 2019 will be on recruitment of the key role holders, starting the technical project timetable and setting up the digital infrastructure.

Since we intend to conclude the TGE with an immediate relaunch of the minimum viable product, enabled to accept EXB Coin, while the blockchain technology is developed, the initial focus will be attracting visitors to the site, and optimizing the conversion rates of those visitors to the free green level, with an upsell to the paid levels. This to be within one month of the TGE.

The average Conversion Rate according to Google Adwords for the Education sector is 4.3%24.  .  Marketing Sherpa report this number as closer to 11% for the Education sector. The top 25% global websites of any type can expect a conversion rate of closer to 5.3%. Freemium technology platforms, like Dropbox (4%) or Evernote (4.1)25.  achieve similar conversion performance, although some like Slack and Spotify with high engagement and tailored conversion experiences have achieved as high as 30%26.  Similar to these, Executive Boardroom shall follow a highly personalized engagement and targeted conversion process, built into the platform with Soft Push conversion and Hard Push conversions built into the user experience. In tests of the MVP, Executive Boardroom was achieved a higher than 12% conversion rate to the free level.

To be conservative with projections, and add credibility to our forecasts, we have chosen to set startup conversions at a level lower that we know to be achievable, choosing just a 3% conversion to Free, and an overall 0.2% to any paid level, in the first six months.

The diagram below shows the conversion rate from one propensity level to the next, each as a separate metric and not related to the last. For example, the 4% in the red circle reflects 4% of the total purple universe of members. The 0.8% in the purple circle represents the conversion from the total green universe of members.

Conversion Optimisation

The bulk of revenues generated shall be at the first paid level, Purple, and through a focus on member induction and nurturing the green and purple levels, we expect to see upsells to higher membership levels and some business services sales to begin organically. Revenues of just over $1m in this period will come from the marketing

Revenues Breakdown 2019 Phase 1

Purple Subscriptions

90%

Seminars and Events

0%

Other Higher Subscriptions

5%

City Members

0%

Courses Sales (Singles)

3%

Services

2%

Total Sales Revenue

$1,093,783

Total Full Organization Spend

$5,246,000

Technical and Operational Expansion: 2019

The ramp up and layering of strategic priorities shall see all areas of the organization with simultaneous expansion of their project plans, the bulk being the delivery of the operation infrastructure and first phase of the technical plan.

There is also a phased introduction of each of the strategic business units. We have chosen to retain conversion numbers to Green at the lowest possible level to demonstrate viability, while the internal conversion rates and environment will see improvements to 2.1% of upgrades to Purple, totalling almost 16,000 paid Members from over 700k free subscribers – and an additional 10% of those converting to any further paid service.  We do not anticipate sufficient revenue growth in 2019 to earn profits, yet earnings per free member should rise to over $26

Technical and Operational Expansion

 

Revenues Breakdown:  2019

Purple Subscriptions

74%

Seminars and Events

2%

Other Higher Subscriptions

9%

City Members

1%

Courses Sales (Singles)

4%

Services

10%

Total Sales Revenue

$19,251,800

Total Full Organization Spend

$32,214,000

City Expansion and Profits:  2020

This year sees the returns on the early phases delivering profitable growth, as well as delivery of the main strategic plan in each of the strategic business units. Earnings per Free Subscriber will exceed 13% year on year growth, with Total Earnings expected to reach close to $70 million. There is a significant switch in the focus of Spend, however, from building technical and operational infrastructure, to business development initiatives, including the expansion of the Target City based strategy.

We have revised forecast conversion numbers up from the lowest of the range to a mid point of expectations because brand awareness and organic marketing activity will by now have given sufficient brand equity to deliver a 6.3% conversion to Free Subscription. Much of this change will be coming from referrals, organic, affiliate community, and viral visitors to the site instead of only paid advertising, but we shall top up the visitor traffic with paid advertising as needed to keep the total traffic at the 37 million mark.

City Expansion and Profits

 

The changing sales focus from online to offline also attracts a higher performance, and since we are directly expanding into the Target Cities, we have also increased the higher level conversions to 12%. We expect over 580 City Members by the end of 2020, having reached 60 cities by then. 

This shift marks the main growth in profitability and earnings growth, as can be seen from the shifting revenue breakdown below.

Revenues Breakdown 2020

Purple Subscriptions

59%

Seminars and Events

4%

Other Higher Subscriptions

8%

City Members

15%

Courses Sales (Singles)

6%

Services

8%

Total Sales Revenue

$69,739,700

Total Full Organization Spend

$30,759,000

Foundation and Conversion Expansion 2021

The vast expansion of the 2021 Plan will be in the global expansion of the Foundation, (due to the long lead times of working with foundations and governments, it is not feasible to plan major expansion until year 3), and the offline strategic business units as the expansion into the Cities becomes established. The Foundation shall increase the website visitors while also expanding the performance of the conversion rate to Free in line with the numbers reported by Google Adwords for Education Websites – yet still only ? of the reported performances of Spotify and Slack – so there remains a significant potential and unreported upside to this year’s numbers.

Foundation and Conversion Expansion

 

We shall still spend $35 million, mostly on Foundation level and strategic initiatives, yet expect revenues to exceed $110 million with Earnings of over $80 million. The Offline expansion delivers very strong earnings growth.

Revenues Breakdown 2021

Purple Subscriptions

58%

Seminars and Events

3%

Other Higher Subscriptions

5%

City Members

23%

Courses Sales (Singles)

5%

Services

6%

Total Sales Revenue

$119,872,600

Total Full Organization Spend

$35,121,000

Business as Usual 2022-2025

From 2022 onwards, the polarization of the business shall take effect as the Foundation strategy grows strongly with international influence, it will significantly increase the number of free subscribers to 22% of all visitors, most of whom will not progress to paid membership levels, rendering the Revenue per Free Subscriber irrelevant.

At the other extreme, the Paid Memberships to the lowest level shall grow steadily to reach 533 million by 2025, and the expansion of the City Groups, Events, Conferences and Retreats will have grown the higher levels to over 80,000 members, still only 15% of the full paid membership.

We have kept Revenue Growth modest in these years, however, the shift in business mix shall be infinitely more profitable as the City and Groups continue to expand to the major cities around the world.

Paid memberships will continue to grow strongly as we continue to grow new courses, expansion plans, chairs, and develop out the business model.

Year

Website Visitors Free Subscriptions Paid
Members
Higher
Levels

Revenue Forecast

2022

41.9m

8,380m

157,125

18,855

119.4m

2023

44m

8,800m

198,000

25,740

150m

2024

46.2m

9,240m

 

277,200

38,808

175.5m

2025

48.5m

10,670m

533,500

80,025

202.7m