More Than Horses

1
More Than Horses

• Feasibility Parts I and II
• Lydia Genner
• Marshall Custer
• Chompreeya Baiphowongse

2
Overview

• The Opportunity
• There is a shortfall of space in the Boulder
  area due to high commercial real estate prices
  and the lack in underdeveloped land. This
  creates a lack of affordable space in which
  resident and traveling artists can rehearse and
  perform. Additionally, there is no convenient
  outlet where artists can converge and interact
  with each other feeding their psychological
  need for re-affirmation and collaboration while
  creating a creative space and community comprised
  of artists from different backgrounds and
  abilities.
• Our Purpose
• To address this opportunity by establishing a
  multidisciplinary membership based arts
  co-operative that seeks to cultivate a sense of
  community and creativity in providing affordable
  access to work, rehearsal, and display space for
  Boulders performing and visual artists.

3
Market Size and Growth

• Of 129 million employable Americans, 2.5 million
  consider themselves artists.
• Source 2000 US Census
• In Boulder
• 200-300 People are actively and consistently
  attempting to participate in the shared gallery
  and home gallery tours
• Over 1,000 general public attend these tours
  annually with the main thrust coming in the Fall
  Home showings.
• At least 150 young emerging visual artists, that
  are not part of gallery showings.
• At least 500 non-professional (hobbyist)
  musicians
• Usually between 20-35 years of age
• 20 unique postings per day seeking Boulder
  musicians
• Source craigslist survey and personal
  interaction in the musician community
• 20 dance companies in Boulder with 10 dancers
  per company
• Dance genres range from modern to ballet and tap
  to traditional native dances, with a growing
  trend towards modern dance
• Approximately 50 undergraduate dance majors and
  13 graduate dance degree candidates at CU
• Assumption
• There will always be a thriving arts community,
  since artistic outlet is more a function of
  personal need rather than that of economic
  fluctuation.

4
Market Trends

• Theater and Dance
• Movement towards more non-traditional venues and
  genres
• Ex. Shakespeare in the Park, Frequent Flyers
  (aerial modern dance)
• Smaller, but more collaborative short term
  pick-up groups
• Less reliance on classical repertoire and more
  focus on innovative material
• Ex. Colorado Ballets spring performance of Where
  the Wild Things Are
• Public performance exhibitions gaining in
  popularity
• Ex. Success of 365 Plays in 365 Days and the
  Boulder Fringe Festival

• Visual Arts
• Rise in collaborative showings with a common
  theme vs. traditional single artist showings
• Ex. Pretty Baby photo exhibit, BMOCA trending
  away from single artists showing
• Trend towards more installation art
• Often requires multidisciplinary skills and the
  help of various artists to create and assemble

• Musical Arts
• Through the rise of sites such as myspace and
  craigslist, musicians have become much more
  collaborative and less willing to commit totally
  to one musical project
• Technology to create and distribute music has
  lead to an explosion in the number of
  self-proclaimed musicians

5
Generational Trends

• 60s Children baby boomer were the first
  generation to massively rebel against the values
  of the previous generation they married later,
  began careers later, spent early 20s pursuing
  self interest and generally began the early
  adulthood characteristics we still see today.
• Late baby boomers exhibited a slight return to
  more traditional values more career oriented.
• Gen Xers Further pursuit of self interests
  during their early 20s considered lazy with a
  lack of optimism. Little trust in traditional
  values.
• Gen Y The EcoBoom, current generation coming of
  age. Largest demographic since the baby boom.
  Often a second round of children for baby boomers
  as such the these children are often raised in
  financially sound environment. EcoBoomers can
  afford the luxury of leisure and value
  self-fulfillment. Comfortable with technology,
  optimistic, accepting and highly interested in
  other cultures.
• Conclusion Large Population of EcoBoom
  generation have views in line with the goals of
  More Than Horses giving us a broad base of
  potential members across the country.

6
Artist Segmentation

• Professional Artists
• Making a living from their art
• (Age range 35)
• They are the gate keepers that control
  recognition of new artists
• They have their own highly guarded network
• They enjoy helping and inspiring young artists,
  yet do not want to be burdened with over
  involvement.
• Participate in Master Classes, Music Camps,
  Foundations for the Arts

• Aspiring Artists
• Semi-professionals
• (Age range 25-40)
• They are seriously attempting to make a living
  from their artistic output
• They often end up as teachers
• They have less interest in social collaboration,
  yet more interest in actual networking for the
  benefit of their career

• Emerging Artists
• Young, artistic socialites
• (Age range 16-35)
• They have often just started their life on their
  own recent grads
• They are just beginning the exploration of their
  artistic tendencies
• They are very impressionable and highly inspired
  by group interaction
• Deep desire to interact
• Want a sense of community

7
Current Market

• Theater and Dance
• Dance studios Cater to professional and
  aspiring artists
• Churches and community rooms Cater to all
  artists
• CU and Naropa dance facilities Cater to all,
  emphasis on emerging artists
• Visual Arts
• Arts Galleries Cater to professional and
  aspiring artists
• Art work studios, CU and Naropa facilities,
  Boulder Co-Rec Cater to aspiring and emerging
  artists, mainly through class offerings
• Music Venues and Resources
• Fox Theater, Boulder Theater Cater to
  professional artists
• Churches and community rooms Cater to
  professional and aspiring artists
• Co-op Market, Trilogy, various small venues
  Cater to aspiring artists
• CU student union, rehearsal spaces, moms garage
  Cater to emerging artists

8
Value Chain What needs can we address

• Professional Artists
• Often primary need is short term space
• Recording rehearsal
• Performance prep
• Meeting places
• Secondary need is psychological fulfillment
• Desire to give back to arts community
• Reconnect with roots
• Wish to inspire and be inspired by next
  generation of artists

• Aspiring Artists
• Primary need is work exposure to tastemakers
  (professional artists) and the public
• Secondary need is for space
• Work space and storage
• Teaching lessons (group and individual)
• Further need to develop their network through
  interaction with professional artists and
  professional showcase/ performance organizations

• Emerging Artists
• Primary need is for affordable work space
• Strong secondary need is for a sense of community
• Environment for collaboration
• Desire feedback from peers
• Further need is for help in facilitating
  performances and exhibitions
• Establishing in-roads with gallerys and
  performance spaces

9
Threats

• Inability to establish ourselves as a credible
  institution in the artistic community
• Inability to differentiate ourselves from
  existing art service organizations
• Competing with free space
• Ex. Churches, community space, and university
  resources
• Not financially feasible
• Is it possible at a low enough rate to attract a
  base of membership, given Boulder high real
  estate prices?
• Customization costs of individual spaces for each
  discipline
• Are we attempting to cater to too many groups?
• Unwillingness of member artists to participate in
  creating the desired community environment
• Possibility that we could attract members that
  wish to operate independently
• Risk of substitution with private rehearsal and
  specialized spaces

10
Market Concentration

• Deferring market saturations for different
  services
• Performance Space
• Marginally to adequately addressed professional
  acts do not lack space to present a production,
  though it is more difficult for less established
  performers to find space
• Shortfalls correspond with performance weeks (ex.
  late summer - Boulder Fringe Festival, early
  spring university/high school recitals, holiday
  season performances Nutcracker Suite Ballet)
• Gallery Space
• Large number or galleries in the boulder area
  that cater primarily to professional with limited
  access for aspiring artists
• We consider this portion of the market bordering
  on saturation
• Little to no gallery space allocated to emerging
  artists
• General Work Space
• Woefully under addressed
• All interview point towards a dire need for
  general work space, regardless of artistic
  discipline or ability
• Community Involvement and Other Observations
• Currently, there is no organization committed to
  fostering multidisciplinary interaction between
  artists
• Little to no availability for multidisciplinary
  artists to practice more than one art form in one
  space

11
Degree of Stability

• Key Assumption
• For the foreseeable future it seems that Boulder
  will have a strong and thriving artistic
  community. Boulder is a creative environment
  with a long history of attracting creative
  individuals. This creates a constant inflow of
  new artists at all levels of ability.
• Effects on Stability
• Artists are transient by nature, however this
  transience tends to equate to a constant, yet
  dynamic, artistic population
• Leads to the possibility of franchising the
  organization to other artistic cities (ex.
  Minneapolis, Austin, Portland, Seattle, San
  Francisco, Chicago, and New York) where
  membership can transfer as members move
• Boulder has a reputation for embracing and
  supporting the arts

12
Barriers to Entry

• High Initial Investment
• Price of real estate in Boulder is high and
  climbing (ex. 561/sq. ft. for downtown Boulder
  space)
• Importance of location for convenience and image
  leads to need to place facility near center of
  Boulder
• Customization of facility would be very expensive
• High build out costs for sound proofing, kilns,
  potter wheels, photography equipment, art
  material disposal and other environmental issues
• Real estate and build out cost lead to possible
  difficultly in meeting competitors price on space
  rental
• Possible Reluctance of Investors
• Traditional investors may be hesitant to fund
  this type of business
• Not a traditional business start-up (i.e. no new
  technology, etc)
• Return on investment will unlikely be as high as
  other investment opportunities given the nature
  of our intended pursuit
• Solution Approach professional artists as
  potential angel investors
• Government Regulation
• Compliance with 501c3 requirements for non-profit
  recognition and accreditation
• Possible upside in the availability of grants as
  funding however grant funding tends to go
  towards large scale arts centers vs. small arts
  co-ops and initiatives. We have a better chance
  of receiving grants with a larger scope of
  services and artists, demonstrating a larger
  impact on our community

13
Degree of Rivalry

• The community of Boulder is known for its
  friendly nature. It has a reputation for openness
  to new partnerships in the arts world. This is a
  result of over saturation of the number of
  artists in the community and not enough outlets
  to meet their needs.
• Approach to be taken
• Focus on community and partnership not rivalry
• Arts communities dont like competition they
  embrace cooperation
• Aggressive pursuit of establishing our image as a
  leader of multidisciplinary arts in the Boulder
  community
• For future consideration
• Higher propensity towards rivalry exists in
  larger cities (franchising consideration)
• Arts communities in other locations are
  territorial due to the nature of their funding
  (ex. Hull House in Chicago primary provider of
  amateur arts services)

14
Competitors
15
Competitors (cont.)

• Mgmt Characteristics
• Art boards are typically comprised of individuals
  with a vested interest in the organization and/or
  affluent members of the community looking to
  promote the arts through their personal
  involvement
• Galleries Single owners and groups of artists
  interested in showing their own work and
  promoting similar art forms and styles to that
  matching the gallerys image

16
Basis of Comparison
17
Basis of Comparison how we compete

• Quality of our services
• Facility
• Spaces must be appropriately lit for arts area
  no sun/hard light damage
• Acoustically accurate and non-tiring to the ear
  quiet
• Facilities must be secure, but accessible
• Implement lockers/closets or lock away
  drawers/desks in large group use rooms protect
  instruments and artwork
• Artists want to keep supplies available and
  secure in close proximity to their work space
• Storage areas/building must be humidity and
  temperature controlled for the protection of
  artwork and instruments
• Parking space and loading dock for ease of
  loading equipment
• Traveling professional artists need quick access
  to facilities
• Aspiring artists often transports their equipment
  and displays for outside showings and
  performances
• Community
• Encourage artistic exchange through multi-use
  areas, gathering rooms, and multidisciplinary
  showings/events

18
Control of the Market

• Price
• Will be dictated by the willingness to pay by the
  target market
• Will artists be willing to give up 50/month for
  a home base
• Apparent target market does not possess high
  amounts of disposable income, but are willing to
  pay to support and pursue their creative
  endeavors
• Price on value added
• Addressing an unfulfilled need for space
• Addressing psychological need for community
• Promoting career advancement through classes and
  networking
• Cost
• Space and renovation are main driver
• Degree of renovation needed to adequately support
  desired services necessitate facility purchase
  not rental.
• Reduction could come through donations and grants
• Leverage strong interest in advancing the arts
  community to help fund initial investment and
  sustain the organization.
• Successful professional artists are often looking
  for opportunities to support artistic endeavors
  (i.e. potential angel investors)
• Market Fragmentation
• Many galleries/spaces are highly specialized and
  not in direct competition with one another
• Excess demand for our services, not excess
  capacity

19
Conclusion

• Boulder has a large and diverse artistic
  community with needs that are unsatisfactorily
  met at this time. In particular, we believe
  there is a large enough segment of emerging
  artists that are almost completely ignored by
  current arts organizations and facilities to
  warrant the establishment of More Than Horses.
  We see a tremendous opportunity in addressing the
  needs of emerging artists while simultaneously
  serving the needs of professional and aspiring
  artists. The next step will be to fully identify
  how we can meet these needs and if it is possible
  to do so in a sustainable way. Currently, the
  biggest hurdle to overcome appears to be the
  price of real estate in Boulder.

20
More Than HorsesVenture Analysis

• Feasibility Parts III
• Lydia Genner
• Marshall Custer
• Chompreeya Baiphowongse

21
Market Industry Analysis

• Size and Growth
• We assumed that there will always be a thriving
  arts community, since artistic outlet is more a
  function of personal need rather than that of
  economic fluctuation.
• 200-300 People are actively and consistently
  attempting to participate in the shared gallery
  and home gallery tours
• At least 150 young emerging visual artists, that
  are not part of gallery showings.
• At least 500 non-professional (hobbyist)
  musicians.
• 20 dance companies in Boulder with 10 dancers
  per company.
• Trends
• All disciplines (Theater Dance, Visual Arts,
  and Musical Arts) are moving out of traditional
  styles and becoming more creative through new
  innovation, technology, and advancement in
  communication.
• Large population of the current generation (a
  second round of children for baby boomers
  EcoBoom Generation) have consistent views with
  the goals of More Than Horses giving us a broad
  base of potential members across the country.

22
Market Industry Analysis (cont.)

• Market segmentation Value chain
• There are three main market segments -
  Professional Artists, Aspiring Artists, and
  Emerging Artists across all disciplines in
  which each plays different role and has different
  interests and needs.

23
Market Industry Analysis (cont.)

• Current market
• Theater and Dance Dance studios, churches and
  community rooms, CU and Naropas dance
  facilities, The Dairy
• Visual Arts Arts galleries, Art work studios,
  CU and Naropas facilities, Boulder Co-Rec,
  Rembrandt Yard, The Dairy
• Music Venues/Resources Fox Theater and Boulder
  Theater, churches and community rooms, co-op
  market, Trilogy, various small venues, RMCMA,
  CU student union, rehearsal spaces, and moms
  garage
• Threats
• Main threats are inability to establish
  creditability and to differentiate services,
  financial feasibility, risk of substitution by
  free space or other private/specialized space,
  and unwillingness of artists to create the
  desirable community environment.

24
Competitive Analysis

• Market Concentration
• Access to work and rehearsal space is woefully
  under addressed to marginally or adequately
  addressed depending upon the market segment. In
  addition, there is no organization committed to
  fostering multidisciplinary interaction between
  artists and currently there is little to no
  availability for multidisciplinary artists to
  practice more than one art form in a single
  space.
• Degree of Stability
• Boulder is a creative environment with a long
  history of attracting creative individuals. It
  has a reputation for embracing and supporting the
  arts, therefore, we can assume that there will
  always be a constant inflow of new artists at all
  levels of ability. Since artists are transient by
  nature, this trend tendse to equate to a
  constant, yet dynamic, artistic population.
• Barriers to Entry
• High initial investment Price of good location
  and renovation of building
• Possible reluctance of investors Nature of
  services and objectives of organization are not
  attractive to traditional investor, but
  possibility for professional artists whose
  objectives are more than a financial return.
  
• Government Regulation Compliance with 501c3
  requirements

25
Competitive Analysis (cont.)

• Degree of Rivalry
• As a friendly community by nature, Boulder has a
  reputation for openness to new partnerships in
  the arts world. There are a large number of
  artists in this community with limited space to
  satisfy their needs. Rivalry is minimal as arts
  communities tend to encourage cooperation not
  competition.
• Competitors
• Main competitors are Dairy Center for the Arts,
  churches and free spaces, galleries, Fire Station
  2 Boulder Pottery Lab, and Rocky Mountain
  Center for Music and Arts.
• Basis of comparison
• Arts services offered Storage,
  multi-disciplinary community interaction, work
  space, rehearsal space, recital/display space,
  master classes, and music lessons/workshops
• Quality of services Temperature and humidity
  control, security, accessibility, sufficient
  parking space and loading dock, and community
  gathering space

26
Competitive Analysis (cont.)

• Control of the market
• Price Depends upon willingness to pay by target
  markets. With the exception of professional,
  artists might not possess high amounts of
  disposable income
• Cost Main drivers are space and degree of
  renovation
• Market Fragmentation Specialization creates
  fragmentation. There is a high demand with a
  very limited supply of space.
• Conclusion
• We believe that establishing More Than Horses
  would be a good opportunity to pursue because of
  the size of market and the needs of all
  identified market segments that are not currently
  satisfactorily being met by existing services.
  However, further analysis in the next sections
  will help identify whether More Than Horses will
  be possible and sustainable.

27
Venture Description

• Our Proposed Service
• To create a multi-use building and community
  center that caters primarily to the needs of
  aspiring and emerging artists in the artistic
  disciplines of dance, music, and visual arts. We
  will offer affordable work, rehearsal, teaching,
  and storage space, as well as assistance in
  placing work and staging performances with
  partner arts galleries and venues.
• More Than Horses will be a 24 hour accessible
  facility that promotes collaboration and
  community in the aspiring and emerging artists
  segments. Further, we will reach out to
  professional artists by offering short term
  rehearsal/prep space for recording and
  performances as well as the opportunity to give
  back to the arts through instructing master
  classes, providing guidance, and possible funding
  support.

28
Market Opportunity

• Opportunity
• There is a lack of affordable space in which
  resident and traveling artists can rehearse and
  perform. In particular emerging and aspiring
  artists are underserved and dissatisfied with the
  arts offerings in Boulder. Additionally, there
  is no convenient outlet where artists can
  converge and interact with each other in an
  environment supportive of their work.
• Compelling Need
• Artists, especially young artists, have a need
  for community interaction and acceptance of their
  work. These same young artists often lack the
  financial resources necessary to maintain a
  private studio or work space. Aspiring artists
  often face difficulty in navigating the
  complexities of placing and selling work in the
  evolving bureaucracy of gallery and performance
  venue businesses.

29
Compelling Needs of Artists
30
Servicing Needs of Artists

• Perceived Performance of More Than Horses
• Focus on Styling, Safety/Security, and
  Dependability of access and use
• Styling Input from members and recruited artists
  in the development of our interiors and facility
  layout. Create open space within a flexible use
  shell facility that can be re-designed with ease
  on a continual basis.
• Safety/Security Member equipment, work, and
  supplies will be covered under More Than Horses
  insurance policies (further adding to economic
  benefit for members). Facilities will be
  humidity and temperature controlled to protect
  work. Controlled access through secured
  membership cards, check-in, and video
  surveillance.
• Dependability 24 Hour access to work/rehearsal
  spaces, common areas, and truck/car loading dock.
  Guaranteed available space in ready to work
  condition through planned adequate excess
  capacity.
• Quality
• Of Community Gained through purposeful
  recruitment of desired key artists in the Boulder
  community through membership grants taste
  makers. Also, through fostering relationships
  with professional artists.
• Of Facilities Modern equipment, availability of
  quality supplies, sound isolation, clean,
  well-lit studios appropriate for each discipline.

31
Servicing Needs of Artists

• Membership Fee Structure of More Than Horses
• Different pricing structure for per-use, monthly,
  or annual membership
• 20 per use
• 50 per month
• 500 annually
• Classes and Teaching Room Rental Fees
• 5 per hour for members
• 20 per hour for non-members
• Employment Discount
• Minimum of 15 hours per week
• complementary membership
• 10 per hour compensation
• These fees are comparable to and provide the
  same access as owning own studio. (Found to be
  150-500 per month in Boulder)

32
Servicing Needs of Artists

• Access to More Than Horses
• Will strive to ensure that space is available for
  any type of artist at any time.
• 24 hour member access Individual key cards and
  front desk check-in
• Ample parking available both for member use and
  visitors to the facility
• Loading dock for equipment transport and art
  installation
• Social Reputation of More Than Horses
• Membership adds to the artists social status
  within the greater arts community when associated
  with our organization Street Cred. This
  creates an image of legitimacy for aspiring and
  emerging artists. As a member of More Than
  Horsees artists will have access to more
  resources and more exposure to current trends
  within their own and other art movements.

33
Range of Services

• Size, Décor and Layout
• Estimate a need of 12,000 square feet per 300
  members
• Highest number of members at any given time using
  facilities would be 20
• Décor will be created by members through their
  projects and displays
• Open layout
• Common area/display area/performance area
  centrally located within the building
• Work space areas/teaching rooms/rehearsal rooms
  branch off of the common area
• Employee Qualifications
• No formal dress code
• No specific previous training
• Number of workers based upon number of members
• starting with 10 employees (2 per shift)

34
Target Market Consumer Market

• Focus is on Aspiring and Emerging Artists, with
  professional services and continued outreach to
  Established Artists
• Overview of Survey Results
• Demographic Information
• Even interest from males and females
• Between ages of 20-30 years
• Self-identified as aspiring or emerging artists
  (most likely are aspiring)
• Artistic Disciplines
• Painting, Drawing, Sculpting, Instrumental
  Performance, Dance
• Most interest shown in Sculpting, Painting,
  Instrumental Performance
• Willingness to Pay
• 90 of respondents willing to pay 51-75 per
  month for membership
• Remaining respondents willing to pay 101-125
  per month for membership
• Current Satisfaction Level
• All respondents are either dissatisfied or very
  dissatisfied with the current offering of
  artistic services available to them in Boulder
  (i.e. work/rehearsal space, performance space,
  display space, and their ability to collaborate
  with fellow artists)
• There is moderate satisfaction with the current
  offering of classes in the Boulder community
• All respondents expressed a strong interest in
  participating in More Than Horses

35
Target Market

• Distribution Channels Introduction of our
  Services and Establishing Image
• Word of Mouth Campaign
• Propagated through fellowship grants for key
  artists in the community (tastemakers)
• Goal bringing in key members of the community
  that will attract others to use our facilities
  and services and add greatly to establishing our
  reputation
• Monthly Events (Parties)
• Goal draw in younger aspiring and emerging
  artists (20-30 yrs) and build excitement about
  the mission
• Introduction to facilities and opportunity to
  meet and interact with prospective members
  (foundation for community feel), and try out
  available services at no cost
• Use Book of List, Publicist, Professional
  Channels
• Reaching out to Professional Artists
• Goal establish relationships and build
  excitement about future involvement with More
  Than Horses. Ability to use artists names to
  further bolster our image and legitimacy
• Secure and schedule master classes in
  coordination with touring schedules

36
Target Market - Business Market

• Forming Partner Organization Relationships
  Creating mutually beneficial relationships that
  add to the visibility and play upon the strengths
  of each organization
• Target Organizations
• Dance Companies w/ Performance Spaces
• Galleries w/ Display Spaces
• Musical Performance Venues
• Other Arts Organizations (The Dairy, Rembrandt
  Yard, Etc.)
• Who Makes the Decisions
• Partnership decisions are made by one director in
  a small organization. Establishing access to
  decision makers is critical and decision can be
  made within a short period.
• Dance Companies/Galleries/Other Arts Org
  Director is decision maker, accountable to
  organization members and/or board
• Musical Performance Venues Booking manager is
  decision maker, only concern is ability to fill
  his space
• Risks
• Budgets All arts organizations are constrained
  by very tight budgets
• Response Focus on ensuring initial joint
  projects are a success for partner organization
• Possibility of perceiving us as fundraising
  competition which can lead to them becoming
  territorial with their resources and facilities
  An unwillingness to partner.
• Response Focus on revenue and fundraising model
  that does not encroach on partner funding sources.

37
Unique Benefits
38
Benchmarking

• The Dairy
• Targets professional and aspiring artists
• Focus on providing performance space
• Very high quality facilities
• Rental rates 700/week for theater/performance
  space
• Limited work/rehearsal space, only available to
  permanent residents (at capacity)
• Established reputation and modern industrial
  décor

• More Than Horses
• Target mostly aspiring and emerging artists
• Focus on providing quality work/rehearsal space
  at an affordable price
• Limited performance space
• We wish to match or exceed The Dairys level of
  quality in terms of its reputation, décor, and
  security while additionally addressing the needs
  of aspiring and emerging artists such as 24hr
  access, storage, work/rehearsal space, artist
  assistance, and affordability

39
Sustainable Competitive Advantage (SCA)

• More Than Horses will seek out a Sustainable
  Competitive Advantage by locating its facilities
  in downtown Boulder and creating a reputation for
  bringing underrepresented and collaborative art
  to the publics attention and appreciation. We
  will be known as the cornerstone of a tight-knit
  and desirable community among artists.
• How Will We Do This?
• Location Possible location between St. Julian
  and former Republic of Boulder zoned by the city
  for civic use such as an Non/Low-Profit Arts
  Organization
• Limited amount of real estate available in
  downtown Boulder creates barrier to entry for
  another establishment seeking a similar location
• Location in downtown Boulder will create easy
  access for many artists along with credibility,
  reputation, and prestige associated with downtown
  location
• Community Creation of a tight-knit artist
  community in which members feel proud to be a
  part
• Create the feeling of exclusivity through
  membership
• Underground reputation generated through write-up
  and placement of promotional materials in artists
  publications such as Ready-Made, Illiterate,
  Westword, etc.
• Currently, the artist community is fragmented by
  artistic discipline and small social circles. We
  wish to exploit the ability to unite these
  fragmented sub-sects into a larger group and
  translate this into a sustainable advantage by
  being the pioneers in this area therefore
  generating a loyalty and local lore behind our
  organization.

40
Resources to Create a SCA

• Financial
• Seeking Funding from Established Artists
• Established Artists will not usually endorse
  multiple organizations in a small area such as
  Boulder therefore each artist we partner with
  will likely support More Than Horses exclusively
• Other Private Grants
• Local philanthropists Boulder has large number
  of independently wealthy individuals leading to
  greater ease in seeking donations for the given
  population
• Risk Run into the possibility of encroaching
  upon funders of other arts organization in the
  Boulder area
• Federal, State, and Local Government Grants
• Greatest possibility of grants coming from
  Federal and Local Government (Land Grant from
  City of Boulder possibility of downtown
  location previously described)
• Member Fees Once operational, projected to
  offset 60 of organizational costs
• Possibility of Debt Financing Using high value
  of building and land value as collateral for bank
  loans
• Board of Directors Financial obligation to
  donate/support the organization and to use their
  personal network to aid in the fundraising process

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Resources to Create a SCA

• Physical Assets
• Own our facility through early donations,
  start-up grants and debt
• Location
• Purchase second hand equipment
• Many for-profit facilities replace equipment
  before the end of the equipments useful life.
  This equipment can easily be purchased at a
  highly discounted rate. (ex. Fox Theater upgrades
  sound system every year regardless of condition
  of current system)
• Possibility of absorbing Fire Station 2 Pottery
  club acquiring their equipment for free
• Human
• Member
• Use as labor for construction, design, and
  staffing of facility
• Bring knowledge of how to build spaces (ex. dance
  space design, bricking kilns, sound isolation)
• Social networking and member involvement from the
  early onset of the organization will foster the
  collaborative environment we wish to establish
• Prominent Board Members
• Established Artists on board that can attract
  attention and bring credibility to organization
• High visibility community members that can use
  network to help the organization
• Both are possible angel investors
• Intangibles
• Marshall and Lydias experience in both non and
  for profit arts business spanning multiple
  artistic disciplines

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Capabilities

• Key Strengths
• First hand industry knowledge and experience in
  multiple arts disciplines in particular dance,
  music and visual
• Access to and knowledge of navigating proper
  channels to contact professional artists (ex.
  agent listings)
• Ease of relating and identifying with the need of
  our members
• Service Design our main service will be to meet
  the needs of our members
• As long as members are willing to pay a fee
  capable of sustaining our facilities, our
  services can be modified to the changing demands
  and preferences of members
• Facility design will aid in the flexibility of
  capabilities (ex. Common rooms can be converted
  to performance/gallery space)
• Word of Mouth Advertising
• Small active arts community in which we are
  already engaged will aid in member recruitment
• Transient nature of community will disseminate
  our reputation to locations across the country
  and facilitate expansion when appropriate

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Our Barriers to Entry

• Real Estate in Boulder and High Initial
  Investment
• Price of real estate in Boulder is high and
  climbing (ex. 561/sq. ft. for downtown Boulder
  space)
• Importance of location for convenience and image
  leads to need to place facility near center of
  Boulder
• Real estate and build out cost lead to possible
  difficulty in maintaining an affordable
  membership fee structure and as such we may not
  be able attract our target market
• Limited space to build in downtown Boulder
• Customization of facility would be very expensive
• Build out costs for sound proofing, kilns, potter
  wheels, art material disposal, and other
  environmental issues
• Competition for Fundraising Dollars
• Saturation of non-profits in Boulder area
• Arts funding is historically extremely volatile
  and funding often directly competes against
  current giving trends (ex. Environment, Natural
  Disaster, and Medical Research)
• Government Regulation
• Difficulty in gaining designation and maintaining
  compliance as a 501c3 non-profit organization
• Trend in reduction of government arts funding
  (ex. NEA budget cuts)
• Leads to higher competition for already difficult
  to attain arts grants
• Cost of Membership and Ability to Pay
• Target market does not usually have disposable or
  reliable income

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Barriers to Entry We can Establish

• First to Establish Cohesive Community and
  Reputation
• Offer fellowships to key artists in community in
  an effort to bring them and their peer group into
  our organization
• Limited number of Boulder artists from which a
  future competitor could draw from (i.e.
  Population of Boulder may barely be large enough
  to support More Than Horses, and less likely to
  support additional organizations of a similar
  nature)
• Establish unique artist endorsements
• Professional artists usually only lend their name
  to a limited number of organizations
• In a community as small as Boulder, highly
  unlikely one artists would support multiple
  organizations
• Location
• If we can secure downtown location (lot between
  St. Julian and the former Boulder Republic) we
  will inhabit one of the last undeveloped downtown
  Boulder locations. Currently the only open
  location zoned for civic use.

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Key Risks

• Funding Insufficient start-up funding
• 24 months from land acquisition to building
  occupation start-up funding must carry
  organization through this phase
• Number of Members
• Large number of members may be required to fund
  ongoing operations and achieve break-even
• Velocity of Membership
• If we do not attract enough members in a timely
  manner More Than Horses could easily be overcome
  by its start-up financial burden
• Donations will be harder to attract with a low
  capacity slow or non-growing membership
• Swing in Economy
• Will not affect member base much, but will have a
  dramatic effect on the availability of grants and
  donations
• Poor Location of Facility
• Direct effect on our ability to establish our
  desired reputation and attract our targeted
  members
• Tax Law Changes
• Effect our status as a non/for-profit business
• Additional swings in cost of compliance with tax
  code

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Financial Projection

• Assumptions
• 250 members in Year 1 paying an average of 50/mo
  fees based on customer survey
• 20 growth for Year 2, 30 for Year 3
• Minimal marketing cost, mostly comprised of
  fellowship grants used to attract new artists
• Operating loss must be made up through grants and
  donations
• Labor and Utilities based on 10 employees at
  10/hr, 20 days a month and operating a 24 hour
  facility
• No variable cost, break even is the number of
  members required to fully fund More Than Horses
  through membership revenue
• Start-up cost based on locating 12,000 sq. ft.
  facility in lot between St. Julian and Boulder
  Republic
• More Detail in Appendix

47
Conclusion

• There is a compelling need for affordable space
  in the Boulder emerging and aspiring arts
  community. Our survey results show universal
  dissatisfaction with the current availability and
  associated price with work/rehearsal space in
  Boulder and a genuine interest in the other
  services More Than Horses wishes to provide.
  Further, no current Boulder art organizations
  seek to provide the range of services to a
  multidisciplinary population of artists.
• We believe we can create a sustainable
  competitive advantage by being the first to
  establish a recognizable, cohesive, and
  tight-knit young artistic community in Boulder.
  We further wish to create a sustainable advantage
  by locating ourselves in vacant lot between St.
  Julian and the former Boulder Republic.
• Upon review of the financials we show a need for
  800 members to break-even in Year 1, and 1500
  members by Year 3 paying an average of 50/mo.
  If we increase membership fees to 75/mo (a
  number not supported by our customer survey) we
  would require 550 members to break even in Year
  1 (increasing members thereafter). With an
  assumed capacity of 300 members using a 12,000
  sq. ft facility it is impossible to fully fund
  More Than Horses solely on membership revenue.
  This fact will require More Than Horses to raise
  money through donations and grants in order to
  cover its operational losses. This fundraising
  would be in addition to the 6.44 million
  required to start-up the facility in the downtown
  location. Additionally, the artistic population
  of Boulder is highly unlikely to support a member
  base of more than 400 individuals for an
  organization similar to More Than Horses,
• Based on the above we believe More Than Horses,
  as currently conceived, is
• financially infeasible.

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Recommendations

• Possibilities for Feasibility
• Land grant from City of Boulder to reduce
  start-up costs
• Large angel investments from professional artists
  winning the lottery
• Given the amount of money necessary to break
  even, we consider the possibility of raising
  enough donations/grants/investments to be very
  slim
• Location change to more affordable real estate
• This will negatively affect our ability to
  attract members and image creation
• Investigate large arts cities (Chicago, New York,
  San Francisco, Minneapolis, Austin, Portland)
• Cheaper real estate in blighted areas (popular
  with our target market)
• Larger population of artists from which to draw
  membership
• Greater visibility through exposure to larger
  population