OKTOBERFIST ApS
CVR: 35400001
Business Plan
April 2014
Submitted to Venture Cup 2014
Contents
1 Executive Summary
2 The Product
2.1 The Customer Pain
2.1.1 The Maß Glass
2.1.2 The High Cost of Lederhosen
2.2 The Innovation
2.3 The Value Proposition
2.4 Idea Protection
3 Market and Customer
3.1 Customer Profile
3.1.1 The Party Person
3.1.2 Corporate Customers
3.2 Testing
3.2.1 Prototype Testing
3.2.2 Production Model Testing
3.3 Market
3.3.1 Oktoberfest(s)
3.3.2 University / College Students
4 Industry and Competition
4.1 Competition
4.2 Competitive Advantages
4.2.1 One-of-a-kind / First Mover Advantage
4.2.2 Exclusive Design Rights
4.3 Strategic Partners
4.3.1 Manufacturer
4.3.2 The Oktoberfest
4.3.3 Beer-related Novelty Websites
4.3.4 Lederhosen Boutiques – Munich
4.3.5 Stardust DTU / Createch Business Incubator
5 People and Organization
6 Money and Feasibility
6.1 Business Model
6.1.1 Sales Channels
6.1.2 Product Type
6.2 Economies of Scale
6.3 Financing
6.4 Risk Analysis
7 Implementation
7.1 Implementation Plan
7.1.1 Idea to Prototype
7.1.2 Webshop sales
7.1.3 Expansion to distributors
7.2 Marketing and Sales
7.2.1 Marketing
7.2.2 Sales
8 Budget
1.0 Executive Summary
Every year millions of patrons visit various Bavarian themed beer festivals, also called Oktoberfests
all over the world spanning from Argentina to Japan. Common for these festivals are that the beer
is served in the iconic 1 liter beer glass, the Maβkrug. However, enjoying a 1-liter beer glass
(Maβkrug or mass glass) of beer at the Oktoberfest is not a trivial task. When full, the glass will
have a total weight of 2.35 kg and will cause considerable strain on the holder’s wrist. Additionally,
the hard glass handle focuses this weight on a small section of the holder’s hand, which results in
discomfort and bruising. Furthermore, some people attending these festivals will dress up in
traditional Bavarian attire to get into the festival spirit. Others find investing in a whole Bavarian
folk costume (Lederhosen) too costly for a single day event.
To fill an obvious hole in the market for beer drinking party attire with built in functionality we
now introduce:
The OktoberFist™
The OktoberFist™ is a Bavarian-styled glove with integrated padding and support to increase
comfort while drinking beer, specifically in one-litre glasses. The padding and support reduce
wrist strain as well as abrasions to the index finger and thenar space (region between index finger
and thumb). Further functionality is added by an integrated pocket providing quick access to coins,
cash, cards, and other items typically carried in a wallet. The OktoberFist™ is designed to emulate
the appearance of Bavarian lederhosen, and to be either an accessory or alternative to them.
2.0 The Product
2.1 The Customer Pain
2.1.1 The Maβ Glass
Based on reports from over 20 Oktoberfests in Munich, Denmark, Japan, Malaysia, and Italy, the
average adult guest to the beer tents is estimated to purchase and try to consume 3 liters of beer
per day. The beers are all served in the iconic glass mug called the Maβkrug (Mass glass). When
empty the Mass glass weighs in at 1.35 kg thus bringing the weight of a full glass to 2.35 kg. The
market research we have conducted has discovered that a large part of the participating
population suffer from sore wrists caused by straining of the ligaments after prolonged holding of
the Mass glass.
Figure 1. The 1-liter glass causing strain on the wrist (left), and applying pressure
between the index finger and thumb (right), causing discomfort and bruising.
Additionally, as the handle of the mass is ~1cm wide, the pressure on an average sized finger is
230 kPa. Consumers have complained about soreness and bruising of the thenar space and second
metacarpal which supports the 2.35 kg mass.
2.1.2 The High Cost of Lederhosen
Lederhosen, literally “leather pants”, have become synonymous with the traditional Bavarian
culture. While lederhosen is the beloved unofficial Oktoberfest garment adopted by visitors and
Bavarians alike, real lederhosen can costs between €200 and €900. Many tourists completely
forego lederhosen as they are only attending Oktoberfest (be it in Munich or elsewhere) for a few
days, viewing the cost too high for such a brief use. Thus a large number of Oktoberfest attendees
wear normal street clothes and are unable to fully experience the splendor of the Oktoberfest
atmosphere.
2.2 The Innovation
We introduce the OktoberFist™, a leather beer-drinking glove in the style of Bavarian lederhosen.
The product is engineered to support the wrist against the weight of the beer glass, as well as
prevent bruising and abrasions to the hand from the pressure of the glass. An integrated pocket in
the wrist grants the wearer easy access to cash, coins, and cards for buying beer, and provides a
safer alternative to a wallet in such crowded environments.
Figure 2. The OktoberFist™ in action. Comfort and style, the Bavarian way.
Along with practicality, the style and fun of wearing lederhosen on your hand will attract
customers. It also acts as a conversation starter, especially useful for you people eager to meet
new and interesting friends of the same or opposite sex. Utilizing laser branding, we provide the
possibility to customize the OktoberFist to include names, nick-names, initials, group names
(sports clubs, student groups), or special events (bachelor parties, pub crawls). Thus, the more
bold and outgoing person will wear this to stand out in any festival or party situation, not only the
Oktoberfest.
2.3 The Value Proposition
The OktoberFist™ offers the “spirit” of traditional lederhosen at a fraction of the cost and without
the impracticality of leather pants. Additionally, it makes drinking from 1-litre beer glasses
significantly more comfortable, and provides a safer alternative to a wallet in festival
environments. Its customizability (colors, embroidery) make it a great choice for sports clubs,
bachelor parties, pub crawls, and fraternities all year round.
Finger support
Pocket
Wrist support
Figure 3. The OktoberFist™ emulates the look of Bavarian lederhosen, while enhancing user
comfort and practicality.
2.4 Idea Protection
Protection of the OktoberFist™ product was accomplished in two ways. First, we have acquired a
European Community Trademark (CTM) for the word “OKTOBERFIST”, and have been granted a
priority date of April 9, 2013. This grants us protection in the EU for the next 10 years, as well as
giving us filing priority world-wide for the next 6 months. This grants us the exclusive right to use
the word mark “OKTOBERFIST” for clothing, clothing accessories, and retail sales (NICE classes 25,
35), and ensure that only our designs can be referred to in this way.
Second, we have submitted an EC design registration for the
physical appearance of the lederhosen look of the OktoberFist™.
This grants us the exclusive right to produce gloves in the style
of the iconic Bavarian lederhosen and dirndl costumes. This step
was specific importance as it allows us to reveal our designs to
not only prospective manufacturers to obtain accurate
production cost quotes, but also to present the product to potential partners (e.g. Carlsberg), as
well as begin to build public interest in the product.
As described above for the EU, we have also acquired both design and trademark registration in
both USA and Japan as these have shown to be lucrative markets. Furthermore we own the rights
to www.TheOktoberfist.com as well as variants of them (.net, .de….etc.) as well as twitter and
facebook accounts www.facebook.com/theoktoberfist
3 Market and Customer
3.1 Customer Profile
3.1.1 The Party Person
Based on gatherings and festivals where we have conducted
market research, we believe our target customers are between
the ages of 18 and 35, typically single or without children,
socially active, with a large amount of disposable income. They
are also trendy, taking an interest in unusual or novelty
products, such as those seen on webshops such as
thinkgeek.com,
thebeergearstore.com
or
mandesager.dk.
Specifically, university or college students meet these criteria,
and attend beer-related events in large numbers, often trying
to “out-do” one-another in competition for attention from the
opposite sex or a general show of social dominance.
Specific settings where such customers can be found include:

Oktoberfest; international tourists, many in the middle of a cross-Europe tour

Fraternities; which would buy a customized color and Greek-letter-designation on the
glove.

Student groups; i.e. engineering disciplines are known to compete with one-another in
friendly beer-related competitions

Music festivals; large groups, carrying a wallet can be inconvenient

Pub crawls; customized with the name of the specific group or tour

Bachelor parties; customizable for the person of honor
3.1.2 Corporate Customers
The customizability of colors and embroidery also makes the product attractive for companies. By
releasing a special edition, i.e. Carlsberg or Paulaner Beer, the organization can place advertising
directly on and among its target customers. We have discovered this market segment to be
surprisingly large and have already made substantial bulk sales to companies in and outside
Denmark, that want to distribute them to either their own employees or as a novelty gift to
clients. This segment will be addressed by focused targeting and personalized sales efforts.
3.3 Market
3.2.1 Oktoberfest(s)
The Oktoberfest in Munich sees nearly 7 million visitors annually, with half of those being male.
Of that 3.5 million we expect 1 million will drink 5 liters of beer (€50) and spend €40 on food per
day, plus spend €250 on accommodations, over at least three days, for a total Oktoberfest
spending of €520. These 1 million make up our hard-core Oktoberfest demographic, that are likely
to spend 10% of their total budget on some sort of novelty item (hat, glass, shirt, glove). We
believe we can effectively address 10% of this market through viral advertising, thus resulting in an
addressable market of 100,000 Oktoberfest patrons in Munich alone.
In recent years many cities around the world have held their own annual Oktoberfest-themed
beer festivals. For example, a private enterprise has been carrying out a relatively large festival in
Copenhagen for the last 4 years (http://www.oktoberfestdk.dk). Further, countries such as the
United States, Canada, Brazil, Argentina, Singapore, Italy, Japan and India (to name a few) all hold
one or more Oktoberfest themed parties, most with attendance of several hundred thousand,
several even approaching 1 million. Based on this we estimate at least 10 million Oktoberfest
patrons worldwide (excluding Munich) per year, 1.4 million of which are hard-core patrons, and an
addressable market of 140,000 customers.
3.2.2 University/College Students
Another group well known for their beer-drinking prowess are university and college students.
Looking at the United States (2005 statistics) there are 4140 post-secondary institutions, with 14.5
million undergraduate students nation-wide. One in four of these students is known to consume 5
or more drinks in a single sitting (our hard-core demographic), with roughly half being male. Thus
we find a market of 1.8 million university and college students across the United States, with an
estimated 360,000 (20%) being addressable by our marketing.
4 Industry and Competition
4.1 Competition
There is currently no product resembling the OktoberFist™ on the market. There are numerous
products on the market designed to support / protect ones wrist after an injury or to prevent it
(e.g. wrist braces for rollerblades). However these are not specially designed to enable the user to
hold a mass glass and don’t have the finger support to prevent finger bang or a pocket. In addition
none of the existing wrist braces have the “cool factor” of a themed glove such as the
OktoberFist™.
Conversely, there are a number of products in the beer novelty market that resemble lederhosen.
The official Oktoberfest website’s online store sells a variety of lederhosen themed items,
including smart phone cases made of suede leather.
A recently introduced product is a
lederhosen-styled wine-bottle holder, which simply makes a wine bottle look like its wearing
leather pants. Further competition comes in the form of Oktoberfest novelties and accessories
such as t-shirts, hats, beer glasses, shot glasses, and similar items sold in Munich and specifically
on the festival grounds.
4.2 Competitive Advantages
4.2.1 One-Of-A-Kind / First Mover Advantage
There is no other product on the market that either resembles the OktoberFist™, or offers the
same value proposition. As such, we gain the advantage of introducing a one-of-a-kind product
and can capitalize on the “wow-factor” of the product, as well as the curiosity of consumers. This
“wow-factor” has been identified during market research trips to various European countries as
well as in South East Asia and Japan.
4.2.2 Exclusive Design Rights
We have acquired priority for a design registration for the
OktoberFist’s™ physical appearance, which will grant us
exclusive rights to the visual appearance of the product in
the European Community for 10 years, as well as give us a
6 month grace period to register our design in additional
locations. Furthermore, we have obtained design
registration in the USA and Japan.
4.3 Strategic Partners
4.3.1 Manufacturer
The production of the product is outsourced to a specialized leather manufacturer who mass
produces the OktoberFist™. Initially we adopted the strategy of having two manufacturers; one
for initial production in small volumes (on-demand) on short lead times (essentially a 3 man
workshop), and one for production of larger volumes. This is necessary to provide scalability in
production, thus allowing us to meet product demand. Both of these production entities are
located in northern Romania. We have selected Romania for the following reasons:
1) it is much less expensive to produce than in Western Europe
2) stating that the product is made from “European-stitched leather” adds to
perception that this is a premium product (especially in North America and
Japan), something that would not be possible if produced in Asia.
3) a manufacturer in Eastern Europe will be far more convenient to visit for
production meetings or QC.
4.3.2 The Oktoberfest
Several facets of the Oktoberfest festival organization in Munich
make excellent partners for this project. The webshop at
www.oktoberfest.de sells items in the same vein as the
OktoberFist™. Since it is a high-traffic site it is likely to gain us
some publicity, in addition to sales. Certain beer tents at the
festival could prove useful if they can be convinced of the
performance of the OktoberFist™.
Since many beer servers
already wrap their wrists to carry 4 or 5 liters in each hand, the
OktoberFist™ would provide support, while also promoting the
beer being served, or the tent itself. Finally, the novelty sellers on
the festival grounds would provide an excellent showcase for our product.
4.3.3 Beer-related Novelty Websites
In trying to sell a beer-drinking accessory it is only natural to publicize the product where the
target market will see it. Some of the numerous beer novelty webshops could become retailers of
our product.
Some examples of these websites are: thebeergearstore.com, vat19.com,
beergearusa.com, manbase.com, boozingear.com, and kegworks.com.
4.3.4 Lederhosen Boutiques – Munich
These boutiques specialize in traditional Bavarian attire (lederhosen and dirndl) and the relevant
accessories. Striking a deal with some of these boutiques, specifically in Munich, would lend
credibility to the premium-level of our product, as opposed to marketing it in festival kiosks.
These boutiques are also frequented by Oktoberfest tourists looking to purchase quality garments,
and they are likely to spend more on these items than at festival kiosks.
4.3.5 Stardust Createch Business Incubator
We have been accepted into the Createch Incubator at Stardust DTU. This has already provided us
with some valuable advice. Additionally, Createch provides access to lawyers (Lassen Richard)
and accountants (KPMG), to ensure that this venture gets started on the right legal and financial
foot. This assistance has been very useful in setting up the company and registering it with the
authorities.
5 People and Organization
The team consists of the two founders. In addition to these we have assembled a consultant team
working on a provisional pro bono basis with a wide range of competences that complement each
other ideally. It is a relatively large team. However, the team members will work without salary for
the OktoberFist™ until revenue reaches a sufficient level to be able to compensate them, hence
will not be a financial burden in the upstart phase. Lee and Michael run the project, with the
other members contributing to specific parts.
Lee MacKenzie Fischer – Co-creator/founder of The OktoberFist™
B.Sc., M.Sc., Ph.D. in engineering
http://www.linkedin.com/pub/lee-mackenzie-fischer/8/a18/6b3
E-mail: [email protected]
Role: designer, tester, marketing, manufacturer liaison, PR, business strategy
Relevant qualifications:

Over 7 years experience in R&D, prototyping, testing, and optimization

Highly adaptable: proven track record across several engineering and scientific disciplines

Beer enthusiast, well-acquainted with Oktoberfest (Munich and other cities)

Managed a student bar, familiar with the target market

Canadian national with International perspective
Michael Stenbæk Schmidt – Co-creator/founder of The OktoberFist™
B.Sc., M.Sc.-Engineering and Ph.D. in nanotechnology
linkedin.com/pub/michael-stenbæk-schmidt/4/748/494
E-mail: [email protected]
Role: International sales, designer, tester, marketing, manufacturer liaison, PR, business strategy
Relevant qualifications:

Over 9 years experience in R&D, prototyping, testing, and optimization

Has lived and studied in Munich for 5 years. Speaks German. Owns Lederhosen.

Experience with two existing high technology based Start-Ups

Co-Inventor of the technology behind Black Silicon Solar the 2011 winner of Venture Cup
Consultancy Team
Frederik Stenbæk Schmidt – Sales Manager
Masters degree in International Marketing
dk.linkedin.com/in/frederikschmidt
Role: marketing/business strategy consultant
Relevant qualifications:

15 years experience in international marketing, outsourcing and licensing agreements
working at Datapoint Europe, Microsoft and Pharmacosmos.

Has experience working in small startups as well as large cooporations.
Rikke Cathrine Olsen – Financial Advisor
Graduate Diploma in Business Administratoin
dk.linkedin.com/pub/rikke-cathrine-olsen/26/404/276
Role: budgeting, financial planning
Relevant qualifications:

Over 5 years experience risk analysis, credit scoring, and financial advisory
Jesper Aggergaard
Bachelor degree in Physiotherapy
dk.linkedin.com/in/jesperaggergaard
Role: OktoberFist™ wrist support consultant, product photographer
Relevant qualifications:

Over 4 years experience as a successful entrepreneur, business owner (AscendFys
physiotherapy practice)

Experienced in physiotherapy, human biomechanics

Professional quality amateur photographer
6 Money and Feasibility
6.1 Business Model
6.1.1 Sales Channels
Initially all online sales are occuring through our own webshop www.TheOktoberFist.com, with the
cost of shipping included in the product. This will keep revenue high, as a retailer will not receive a
percentage. However, as demand grows, the cost of shipping could be reduced by sending bulk
orders to one or two major distributors (such as the partners in section 4.3.3), from which the
product will be sold. OktoberFist™ sales in real-world vendors will occur only in Munich. We are
currently negotiating an exclusive license agreement with an importer in Japan that will sell the
Oktoberfist at Japanese beer festival and via an upcoming Japanese version of the webstore. We
see the Japanese market as particularly interesting as the target customer has a large disposable
income as well as the fact that Oktoberfests are a year round event in Japan much like a traveling
circus.
Figure 4. The OktoberFist™ in action at one of the traveling Oktoberfests in Japan. Here at Hibiya
Park, Tokyo September 2013.
6.1.2 Product Type
The standard version of the OktoberFist™ will be sold in four sizes as well as left and right versions.
We offer one color with the option of expanding this to three colors (light tan, dark brown, and
green) similar to typical lederhosen colors in the future.
6.2 Economies of Scale
Lederhosen and dirndl costumes are being mass produced in Pakistan today. We considered this
as an option as it would certainly minimize the cost. However we feel that the intellectual
property situation is difficult to control in central asian countries. Thus, production of the
OktoberFist™ has been outsourced to Romania, which has the added advantage of being near
enough to make regular visits for meetings and quality checks.
6.3 Financing
This project has so far been entirely financed by the founders. This product is small and relatively
simple to develop compared to more technically involved projects. We applied lean principles to
test small scale production and sales before expanding, thus reducing or eliminating our need for
external financing.
6.4 Risk Analysis
# Risk description
1 A suitable manufacturer cannot
be found
2 Manufacturer takes our prototype
and IP and markets it alone
3 Insufficient consumer demand to
meet minimum production
numbers
4 Customers injure themselves
while using the Oktoberfist and
we are held accountable
5 We are unable to produce
enough products to meet the
demand of pre-orders
6 Final production cost is too high
for product to be sold at profit.
Probability
Impact
LOW
HIGH
LOW
HIGH
LOW
HIGH
LOW
MEDIUM
MEDIUM
MEDIUM
MEDIUM
HIGH
LOW
MEDIUM
MEDIUM
LOW
7 Marketing efforts fail to go viral.
8
Competition arises in the form of
"knock-off" products of similar
appearance.
Consequences
The Oktoberfist could not be
produced in sufficient
quantities
This manufacturer would
immediately become a
direct competitor
The market would be
insufficiently large to warrant
mass production and sale
We could be sued for
personal damages due to
our product.
Preventive / remedial measures
Several suitable manufacturers have
been identified, and will be contacted.
Design protection will be filed, and
European manufacturers will be targeted
as first choice.
Pre-orders will be taken during marketing
to assess the amount of interested
customers and confirm minimum market
size
Disclaimers will be included to inform the
customer that this is a novelty product
and not a licenced orthopedic device.
There would be a delay for A cap will be placed on pre-orders to
certain customers in their
ensure we do not promise to deliver
order being filled, could lose more product than we can. Additional
customers
demand will be put on a waiting list.
Selling a product with little or Less expensive manufacturers must be
know profit is a poor and
found. Synthetic (non-leather) product
unsustainable business
versions are currently being considered
model.
as well.
An insufficient portion of the Marketing efforts will be targeted at target
market will not be
customer-rich locations.
addressed, resulting in slow
sales.
Customers are lost to knock- We hold exclusive rights to the design,
off products, decreasing
so legal action is possible. Marketing
revenue.
could also adjust to remind customers of
the real, original product.
7 Implementation
7.1 Implementation Plan
7.1.1 Idea to Prototype
The appearance was the first product aspect to be finalized. With that accomplished, we set to
make the glove both fit and support. Upon finding a suitable tailor we had prototypes made,
tested them, and iterated until we achieved an optimal design. Testing also provided us an
opportunity to gather reactions of potential customers to the OktoberFist™, and to get feedback.
This stage ended with a pre-production prototype and patterns ready for conversion to
manufacturing.
7.1.2 Webshop sales
The webshop component of the website is online. Starting as a quite rudimentary site we will
make it more elaborate as revenue trickles in. We will invest most of the initial revenue into
improving the website.
7.1.3 Expansion to distributors
With high enough demand outside of Europe it may become more profitable and convenient to
ship to foreign distributors in bulk as is now the case with Japan. Where these distributors are will
depend on the demand encountered in previous phases.
7.2 Marketing and Sales
7.2.1 Marketing
The humorous tone of this product is ideally positioned for viral marketing. Humorous yet
informative photos and videos will be produced and include “www.oktoberfist.net”,”
www.oktoberfaust.de”, redirecting viewers to our main website www.TheOktoberFist.com
designed to swiftly educate the intrigued potential customers about the benefits of the
OktoberFist™. Getting these efforts on beer and beer-paraphernalia websites and blogs is also
essential. We will likely be able to get mentioned on blogs and in print media such as “M!”
magazine (through an existing contact), whose readership is most definitely our target market.
7.2.2 Sales
Sales will be a direct result of website hits from our viral marketing attempts. First sales have
already been made and will be used to scale up into manufacturing. Following the success of this
campaign, normal website sales will begin, expanding to foreign website distributors as demand
dictates.
8 Establishment Budget – This section has been redacted for publication
Fixed Costs
Development Costs – Designing, building, and testing prototypes. Also includes costs of converting
prototype patterns to manufacturing scale.
Website – Professional setup of website store, and costs of upkeep.
Marketing/Advertising – Production of videos, images, and banner ads.
Warehouse storage – Space to keep product stock before sale.
Business Travel – Traveling to the factory to check production, as well as Munich.
Legal / IP Protection – Initially trademarks and design protection, as well as legal advice (e.g.
contracts)
Accounting – First year is provided free by Createch. Thereafter an accountant will be required.
Salaries – We will be working without salary until the business starts turning a profit, after which
we will decide on appropriate salaries.
Variable Costs
Manufacturing – Our current low-volume per unit production cost.
Transfer – Getting the products from manufacturing to our warehouse.
Labels / Packaging – Instructions for product care, return information, etc.
Shipping – Average cost to ship product in an envelope to target market locations. We expect
lower prices under a large volume deal with a shipping company.
Returned Goods – Added 5% to account for returned defective merchandise.
Thank you kindly for reading our business plan.
We appreciate your feedback