AUSTIN, TX: The Netpliance corporation made public its business plan. Here is the executive summary:
Netpliance will sell computers to people who are scared of computers and/or do not want a computer. In order to best attract this type of customer, we will only sell our product in the computer department of consumer electronics stores and in dedicated computer stores. Netpliance remains convinced that little-old ladies and computer illiterates spend their days hanging around computer stores. In order to entice these people into buying our computer, we will sell it for $99 -- representing a loss of about $300. We intend to make up that loss by selling Internet services at $22 per month, or about $10 more per month than we pay. Using this revenue stream of $120 per year per customer, we intend to pay all of our employees, fund capital equipment purchases, pay for rental of our building, pay for advertising, marketing, and R&D. Given this model, we expect to be in debt until the year 2017.
It is assumed for purposes of our business model that no person will ever leave our service due to financial hardship, death, etc.