Funding application

As an initial source of funding, we are applying for a start-up grant of $15000 from the government. The first step for approval is to answer the following questions: The business

''1. Describe the business - what will be the major activities? Please provide a scenario.''

The business is a website which helps users buy and sell virtual currency (or 'gold') in a more ethical or 'fair trade' way.

Details:


 * Gold farming is the industry where people play massively-multiplayer online games, like World of Warcraft, to gather virtual goods and services that other players purchase in exchange for real-world dollars (more information here and here)
 * Around 400 000 people globally earn a full-time living from gold farming. A 2009 study from within the World Bank valued the this market at over $3bn per annum globally. (More on this study here).
 * Most commonly, farmers collect in-game currency (known as gold farming) or build high-level characters/avatars (known as power leveling) which are then sold to wealthy players who are willing to exchange their money for the time taken to perform these tasks.
 * In order to sell at the cheapest price, businesses usually employ very poor people in developing countries.
 * These people typically work long hours, in bad conditions, and for poor pay. Many gold farming operations have been compared to sweatshops.
 * Many gamers complain about the current gold farming industry for two reasons:
 * First, the gold farmers spam in the game. And second, the gold farmers are treated poorly.
 * This is caused by the fact that gold farmers are typically very poor. Their bosses allow them to use computers, and in exchange push them to spam and work very hard. These bosses then sell the gold on the workers behalf, and take a cut.

Please provide a scenario:
 * Alex is working in Melbourne and likes to play World of Warcraft sometimes with her friends. She also likes to excercise, and recently this has meant she has had less time to put into the game. In order to still play with her friends as they improve, Alex decides to exchange $10 real-world dollars for some more experience or some better equipment on a gold farming website.
 * Alex is unsure about this, because lots of other players are really against gold-farming.
 * One reason is that gold-farmers send spam messages within the game, another is that it is unfair, another is that it's unethical because the farmers are exploited by bosses.
 * After a while Alex's friends tell her about a website where she can connect with gold farmers directly. This allows her to do three things differently: filter for farmers who don't spam, filter for farmers who work in nicer conditions, and filter for farmers who don't farm in certain games or worlds.
 * Her friends say its like fair-trade coffee but for goldfarming. She feels better about buying gold.
 * The website is a portal that connects players directly with farmers and the transaction is free - the farmer gets all the money given. The portal supports running costs by offering people website space to advertise other goods and services.


 * This allows Alex to buy gold that doesn't bring a bad conscience, doesn't spam the game, and cuts out the intermediaries.

Business objectives: Detail what you can realistically expect to achieve over the first (3) years of business - with particular emphasis on the first (1) year.

By the end of the first year we hope to have a centre and a website.
 * 1. Help build a centre for the workers where they all lead themselves:
 * A place where the computers and bandwidth have been donated, and aren’t expected to return on the investment. This would allow farmers to not have someone take a cut of their wage. Because they can now earn more, they might be able to work more freely, according to their needs. For this part of the mission we're going to raise a few thousand dollars on kickstarter.


 * 2. Build a portal that connects these farmers directly to buyers:
 * This will be a website where farmers can sell their goods and services directly to buyers without commission – they can charge their own price and keep it all. For buyers, this will be a place to purchase gold and services that is humane and non-exploitative, and perhaps even cheaper (no intermediaries).

In the first year, we would like to have a site up selling gold and making 1500 a month (18 000 per annum) from advertising. Also a prototype studio in India. And a network of student farmers and buyers in Australia.

By the end of the first three years, we would like to have a hub of ethical gold farming online, making 4500 per month (48 000 per annum) from advertising. And 5 ethical studios worldwide, expanding to Vietnam, Mexico, Romania, and the Phillipines.

3. Please detail specific objectives such as: no. of clients, no. of sales, sales forecast (year 1, 2 & 3), AND NET PROFIT for the first 12months.

Our clients really are advertisers. We need to learn more about the web ad business.

How much traffic does a site need to generate 1500 a month revenue?

''Please provide adequate evidence and research material to demonstrate a need for your business. (for example: letters from prospective clients, letters of support stating a demand for your product or service, research demonstrating a ‘gap’ in the industry in which you can fill)''

The 'feel-good' gap in this industry has been demonstrated by the World Bank, and a report by Richard Heeks at the University of Manchester. There is a huge space in this industry for a comany that was offering 'gold' or virtual work that was ethical and gave buyers a better conscience.

The 'spamming' gap in this industry has been demonstrated in multiple articles and forums about the gold farming industry. Many players feel it ruins the game. By making farmers autonomous, this allows buyers to report them directly to us, and us to form a guild of farmers who comit to no spamming.

THE MARKET ''C.1. Give details of the Market Research you have carried out on your products or services, have you spoken to people currently in this industry? What were the results? Have you tested the market with your product/service? Explain how. Detail the results.''

Support from these institutions. Also research onto player sentiment and identified a need. Here and here.

C.3. What is the area of your intended market and the population? (Include the geographical area and the number of potential customers) Example: How many people living in this area will purchase your product/service?

For the moment we are going to focus on the Australian gold farming market. Every Australian person who buys goods or services in MMOs is a potential customer. That is true globally, but our test case and marketing and focus will initially be the Australian market.


 * Users get to buy cheap virtual goods and services that they know are humane and not exploitative.
 * Farmers get to keep all their earnings, better work conditions, and more freedom to determine their own work hours.

How many people playing mmos in australia? How many wow? others? how many gold buyers? what percentage of players buy gold?

these are your customers.

Describe the product(s) and/or service(s) you will provide?

There is a gap in the market for a company that can offer a place where buyers can connect to farmers directly and ethicaly.

To achieve this, we will use a model developed by the ethical outsourcing company Samasource:


 * 1. Help build a centre for the workers where they all lead themselves:
 * A place where the computers and bandwidth have been donated, and aren’t expected to return on the investment. This would allow farmers to not have someone take a cut of their wage. Because they can now earn more, they might be able to work more freely, according to their needs. For this part of the mission we're going to raise a few thousand dollars on kickstarter.
 * 2. Build a portal that connects these farmers directly to buyers:
 * This will be a website where farmers can sell their goods and services directly to buyers without commission – they can charge their own price and keep it all. For buyers, this will be a place to purchase gold and services that is humane and non-exploitative, and perhaps even cheaper (no intermediaries).

What trends are evident in the proposed market? (ie: Is there growth in this industry?) Please provide evidence of the trends.

Who are the major potential CUSTOMERS and where do they currently buy the products/services your business will supply? Please detail the demographics of your potential customers.

''4. Who and where are your major COMPETITORS? ''
 * Other gold farming operations. Maybe this needs to be a project where we build a 'free studio' or gold farming centre in more than one place simultaneously: China, Vietnam, India, Mexico, Phillipines, Romania - and do it all together. Form this ethical union and that connects online, enabled by the crowd-funded studios.
 * MMO operaters like Blizzard? They are generally against gold farming. But could this help them?
 * Gamers who are against gold farming. Perhaps these new gold farmers could agree to some rules, given by the players. No spamming, no hacking. These could be the basis of membership in the ethical farmers guild. There would still be blackhats who don't obey. We can allow reporting and exile. While exile offers freedom from the rules, there are distinct benefits to participating.

Why will customers purchase your products/services rather than competitors?

''Ethical. A better consience. No spamming. Also, a very competitive price because the trade is very free and efficient - a direct connection between player and farmer so intermediaries are reduced.  '' it provides them with a clearer consience. it should also be cheaper as it cuts out intermediaries?

How will you promote and sell your products/services? '''

in game: play games and talk to people about this idea in a non pushy mutually beneficial way.

PRICING STRUCTURE OF YOUR GOODS OR SERVICES

''D.1. What prices will you charge? If you have a price please include with this application.''

We will charge for space on our website.

What NET PROFIT do you expect to achieve in the first 12 months?

$ 15 000

''WHO are your suppliers for the service? ''

'' For the farmers, they are located in India and the Phillipines. For the advertisements, they are located globally. And in Australia. WE are focusing on ads for australian gamers. ''