Flipz is a new start-up business launched by Lee

Flipz is a new start-up business launched by Lee

Flipz is a new start-up business launched by Lee and her friend Chan immediately after graduating from the university in 2016. The start-up was a peer-to-peer platform for selling second-hand items. Their app received an overwhelming response after the launch as within three days. It had close to 10,000 user downloads. However, after three months, the app downloads dropped drastically. Lee and Chan faced several challenges that affected their business, including parental disapproval, funding problems, technical difficulties, and slow user adoption.

Analysis

Few months after a successful launch of Flipz, the start-up faced a severe challenge of slow user adoption that led to a drastic fall of downloads for the app. At this point, both Lee and Chan were faced with the dilemma of deciding whether to spend the little remaining money they had on marketing or product development. Lee suggested that they should invest in marketing while Chan opted for product development. Based on the scenario, I recommend that Lee should spend the remaining funds on marketing. Appropriate marketing plays an essential role in promoting or advertising an enterprise to the potential target customers.

Given that the partners used mouth-to-mouth form of advertisement, they were unable to reach a broad audience and market for their product. As a result, inadequate marketing was the primary cause of the decline in the rate of user signups for their app. Therefore, they should mainly focus on investing in proper marketing techniques to reach a broader market. Again, they should concentrate on advertising the app to the broader general public other than targeting the youths alone. With this, they will be able to increase their customer base.

Lee and her friend should use the remaining funds to market their app through combinations of various marketing tools, such as social networking platforms, television commercials, internet ads, and salespeople. For instance, they can use various social media platforms such as Facebook, Twitter, Instagram, and YouTube to reach a wide range of potential customers. Also, the use of television commercials will allow them to reach a broader market for their app. Moreover, since the business is located in the densely populated Hong Kong market, the use of salespeople to market the app would also be appropriate. By use of proper marketing techniques, Flipz will have a better chance to survive due to broader coverage, thus increased customers. After making some profit from the business, they can use the funds on product development to boost their competitive edge for better performance and success. Therefore, Lee should not think of quitting, but should continue working on the start-up.

Lee is currently facing a couple of issues. Firstly, she is facing parental disapproval because her parents do not support her entrepreneurial idea. After graduating from the university, Lee’s parents wanted her to secure a well-paying job in the corporate world. Therefore, they were disappointed by her decision to engage in entrepreneurship. Also, Lee is faced with financial constraint challenges because she has limited funds and sources to finance her new start-up. The $100000 seed funding she acquired from the hackathon plus the other $7000 seed grant from their lecturer was used to facilitate the launching of their app. Therefore, they lack adequate funds to finance other essential operations, such as marketing and product development. Again, Lee is faced with the dilemma of determining whether they should spend the remaining funds on advertisement or product development. She supports the idea of spending on marketing, while Chan suggests spending the funds on product development. Therefore, he faces a decision-making dilemma. Moreover, Lee also faces the dilemma of deciding whether to quit the business and join the corporate market or not.

There is a business opportunity for Flipz since other peer-to-peer companies, including eBay and Craigslist, have not exploited the market properly. As a result, developing better and appropriate market entry strategies may give Flipz a better chance of survival and success. Also, Flipz is situated in an ideal location in Hong Kong, which is a densely populated. Due to the large population size, Hong Kong can offer a large market base for Flipz, thus leading to success. Between 2011 to 2016, Hong Kong was ranked among the top five countries for ease of doing business. As a result, it offers great potential for the success of Flipz.

Moreover, there is an increasing trend in the shift to online buying and selling due to advancements in technology and improved access to the internet globally. Today, most customers prefer shopping online because it is more convenient and time-saving. Therefore, Flipz has a great opportunity to prosper in the online market. As a result, the partners should focus on finding solutions to the existing issues facing the start-up.

Conclusion.

From the analysis, it is evident that Lee faces a major dilemma of deciding whether they should spend the remaining funds on marketing or product development. However, the funds should be spent on marketing to acquire a broader market base necessary for the success of their start-up. The use of mouth-to-mouth advertising is inadequate; hence they should develop proper marketing strategies to reach all the potential customers. Again, Lee should not quit, but she should focus on solving the existing issues to increase the chances of survival and success.