# Enterprise Plan FY2 S1 V1 # Philosophy on Shopping ## Shopping Shopping can elevate comfort and fashion of the shopper. This year, I started using a fragrance diffuser at home. A bottle of fragrance diffuser only costs a small fraction of my yearly spending, but its sweet scent vitalizes me all day everyday. I feel like I am now able to better live each day thanks to discovering the utility of fragrance diffusers. I am similarly happy about my coffee maker, thanks to which I can start every morning with coffee that tastes better and costs less than Starbucks, and my cleansing oil thanks to which I get to remove sunscreen more properly every evening. These products that are great for me might not be so great for others, and there will be products that are great for others that are not great for me. That is what makes shopping a complex problem. Shopping is a matching problem. Whenever a great matching happens, the consumer gets to enjoy great benefits from hard work of others, and hard workers get to enjoy proper reward for their work. Only when a consumer can easily discover and properly assess products, the consumer can shop successfully. And only when a consumer can shop successfully, the consumer can get full utility from the economy. ## Product Discovery Problem Amazon, the biggest shopping mall on the internet, is a great place for ordering specific products in mind, but a terrible place for discovering and assessing new products. Due to this, consumers today must choose between two options: 1. getting too much information from social media which is open to all reviewers (e.g. YouTube) 2. getting too little information from editorial media which is limited to expert reviewers (e.g. Consumer Reports) To get all the information one needs, a consumer today must hop between multiple locations, from Instagram to YouTube to Reddit to the brand website to Wikipedia to Consumer Reports in order to gather sufficient information on the product category and specific products. This messy process frustrates consumers. Frustrated consumers leave shopping journeys undone. And a mutually beneficial transaction that was able to take place does not take place. # Expansion Plan See [Product Plan FY2 S1 V1](Product%20Plan%20FY2%20S1%20V1%20f4db08e9b24043b9b35442da0716efb4.md) to understand the immediate Santana (the starting point before any expansions). - More product segments fashion, furniture, electronics, cosmetics, toys, …, books, songs, movies, …, flight tickets, hotel reservations, cars, homes, credit cards, insurances - More differentiated services 1. Collection Completion: High Unit Cost 2. Customer Protection: Costs Sellers 3. Offline Mall Companion: Costs Online Sales - Shopping together online 1. Messenger features 2. Forum features 3. Live Multiplayer Mode - For sellers 1. Advertisements 2. Delivery Logistics 3. Market Insights - Emulate old retailers 1. Membership Benefits: Deals and Rewards (not only exclusive deals but also perhaps even tailored limited deals) 2. Payment Processing: Credit Cards, Installment Payments, Gift Cards 3. Private Label: Using market insights, identify high profit margin product segments where consumers are not getting great deals, then step in to help consumers. One day, we may be able to let consumers design products using Content Generation AI then get manufactured products delivered to them using our factory and logistics. 4. Subscription Box: Member pays $N at the start of month, and gets a box full of products that add up to $N+ of nominal price. We use sales volume to negotiate price with sellers. 5. Volume Discount: Sell products in bulk or in bundle so that members can purchase at lower unit price. - General AI 1. Grow AI to provide more services to members (e.g. news, research). Establish position as the place where consumers can get services from AI companions. 2. Let other developers develop and distribute AI companions on our platform. Let them access features on our platform such as Live Multiplayer Mode. # Company Roadmap We are committed to [FY1 S0 Founding Philosophy](../../FY1/FY1%20S0/FY1%20S0%20Founding%20Philosophy%205a5c08dc8c804a5ba200ff8b78889719.md) and [FY1 S2 Company Roadmap](../../FY1/FY1%20S2/FY1%20S2%20Company%20Roadmap%2024bfdb4901ab495e91aacfa9f2480cb2.md). In [FY1 S2 Company Roadmap](../../FY1/FY1%20S2/FY1%20S2%20Company%20Roadmap%2024bfdb4901ab495e91aacfa9f2480cb2.md), we presented our plan to get into give consumers the power to make information products using Generative AI in stage 1, then give people the power to make material products using Generative AI and our supply chain in stage 2. Distributing Santana to consumers will establish us in the position of distributing Interactive AI companions to consumers. We strategically start with a focus on shopping, because utility delivered by us to them is easier for them to monitor in commerce than in other domains such as contents or contacts. While delivering utility in shopping journey, we will gain trust and information with which we can better operate (and deliver greater utility) as we expand our role in people’s way of living. Remember Company Roadmap. Remember that Santana is a step (a great step) in our journey on a greater roadmap so that we do not end at a local optimum within the domain of shopping where we end up with affluence but not with the ability to help people better in the future. Remember to communicate with stakeholders accordingly so that our product, our technology, and, most importantly, our brand which is people’s understanding of our role in the society and their way of living are able to support the businesses that we desire to operate for people now and later. # Business Thesis We need not test whether consumers desire to discover great products. Success of existing businesses such as Google and Facebook already prove this point. The thesis we must prove is the following: “**Many consumers will pay to access a superior product discovery experience**”. We will consider the thesis proven if we can get “100 members each paying $10 monthly fee” this season. In order to make sure that we are delivering real utility (instead of false promises), we will count a customer as a member if the customer interacts with Santana on 3 out of 7 days. If the thesis is proven correct, then we will likely be able to establish a sustainable position for us in the economy and continue to provide differentiated benefits to our stakeholders. (See FY2 S1 Enterprise Plan for detailed discussion of how we will go from Santana the single product to an ongoing business operation). # Competitive Strategy - Take position from older entrants (Amazon, Google, Facebook) - Zero Ads Differentiate business model by choosing to be buyer-centric as opposed to seller-centric. Older entrants with established ads businesses will not be able to surrender ads revenue. By showing no ads in recommendations, we can win trust of customers. Customers will choose our product (the only fair product discovery feed) - High Unit Cost of Generative AI Using Generative AI to generate reports for each customer and to discuss reports with each customer has high unit cost. Older entrants with many existing customers will not be able to introduce a comparable service, because doing so will greatly undermine their profit. - Risks to Business Partner Relations Older entrants will not be able to copy us in procuring contents from content publishers or publishing opinionated comments on products of sellers, because content publishers and product sellers are their existing business partners. Even if older entrants choose to risk undermining relations with the business partners, they will be slowed down by the scrutiny of regulators, reporters, and general public. - Scope Product Segments Since Generative AI is still in rapid development, it will be probably perform strongly on a small set of product segments and weakly on the remaining segments. Since we are not currently supporting any product segments, we can introduce the small set that Generative AI is already strong at, then introduce other segments as the fundamental technology grows. Older entrants already support a wide range of product segments. Providing consistent experience to customers across product segments is necessary for preventing confusion. Older entrants will have difficulty providing satisfactory Generative AI service across all product segments. If an older entrant introduces such Generative AI, we will have an opportunity to compare our strong segment against their weak segment. Comparing us favorably against a company that people already trust will help us gain trust (that we have an advanced technology). - Deep Slow Shopping Older entrants set expectations that their services are fast. It is considered detrimental for a page to load in longer than a second on Google or Amazon. We can consider intentionally making our experience slow. For example, Santana AI might ask for 10 minutes, or perhaps hours, to perform some extensive research for the customer. Older entrants will not be able to copy our deep slow shopping service without frustrating existing customers. We do not suffer the same fate, because customers who will be frustrated by deep slow shopping will not choose to be our customers in the first place. We can address them later when Generative AI technology advances inevitably and becomes fast. - Keep position from later entrants If we successfully get many customers (e.g. 1M members), others may take interest in entering the market to compete against us. We will respond in following ways. - Network Economics We can introduce social features that connect 1M members with each other in doing so creating utility that later entrants (without our 1M members) cannot replicate. See “Shopping together online” features in Expansion Plan section of this document. - Scale Economics We can enjoy lower cost since we are processing more AI computing jobs. We will be able to get server capacity at more favorable price from server capacity suppliers if we do not yet have our own data centers. We can also save cost by distributing cost across overlapping computing jobs. For example, if 1% of customers are interested in the new iPhone, then later entrant and we will spend the same computing cost to generate content on the new iPhone, but we will get to satisfy 10K members (1% of 1M) while the later entrant with only 1K customers will only get to satisfy 10 members (1% of 1K). We will keep finding ways to drive down cost using economies of scale and economies of scope so that we can continue to provide best price for our customers. - Switching Costs We will understand our members better than any later entrants. Not only will we remember which interests a member indicated explicitly or implicitly, but we will also keep finding ways to better understand our members in different ways. For example, we can introduce new features that will help us understand the past and potential purchases of customers, such as letting members record purchases for customer protections and letting members curate product collections for collection completions. - Supplier Relations We can establish favorable relations with suppliers. We will get to let our suppliers distribute to our many members and let our members access great deals (e.g. better quality, better support, cheaper price, early access, exclusive access). We can also collaborate with brands that are popular among our members. This will let us benefit our members, benefit the brands we collaborate with, and grow our brand. - Brand Credibility We will gain trust of customers. When customers are asked where they go for product discovery, they will first remember us. This will let us continue providing great services to our customers. # Defense We do not foresee any extraordinary risks to privacy and brand: like any other businesses in the consumer internet services industry, we will invest in protecting the privacy of our customers and the integrity of our brand, and steer away from actions that will harm our stakeholders. We do anticipate following three specific potential risks for Santana: Misrepresentation of Products, Copyright of Contents, and Impact on Sustainability. - Misrepresentation of Products Distributor of information must anticipate the possibility of relaying wrong information. For Santana, wrong information may originate from 1) Generative AI models, and 2) reference sources on the web. Relaying wrong information about products may harm consumers if the wrong information is incorrectly positive, and suppliers (manufacturers and distributors) if negative. We expect the severity of this problem to decline over time as AI technology advances. In the meantime, we plan to maintain a catalog database that contains true information about products and brands, and point consumers to 3P sources on the web where they can verify the truth of the information on top of our own verification processes. - Copyright of Contents Distributor of information must consider property rights with respect to information such that people can be properly incentivized and rewarded for generation and distribution of information contents. For Santana, an important stakeholder is content providers who review products and brands for or on sites like Consumer Reports and YouTube. The proper solution to intellectual property rights problem is regulations. The web has existed for multiple decades, and information distributors like search engines have been regulated for multiple decades. However, it is not yet clear to us, our stakeholders, other information distributors, content providers, how Generative AI will be and must be regulated. We do trust that regulators are working hard with stakeholders to prepare regulations for Generative AI in a speedy manner. In the meantime, we plan to uphold correct principles. Laws get invented to uphold principles, not the other way around, so we need not wait for laws to operate in service of our stakeholders. Specifically for content providers, content providers are currently incentivized and rewarded to deliver information to consumers, because delivering information to more consumers increases revenue from advertisements and subscription fees. Santana will enable content providers to deliver contents to more consumers which will fulfill both the intrinsic motivations and the extrinsic motivations of the content providers. Then, once we present this model in which stakeholders are oriented to benefit, we expect regulators will codify laws to enable and protect this model. - Environmental Sustainability Economy exists to enable commerce, but commerce does expend energy and materials. Perhaps one day, the humankind will have the technology to use energy and materials in ways that are sustainable infinitely. But until then, participants of economy must consider impact of commerce (and their own contributions to the commercial activities) on environmental sustainability. For Santana, contribution to commerce is distribution of information which may enable a transaction event (consumer purchases product) that may not have happened otherwise (without existence of Santana). We expect that we will be able to make great positive contributions to protecting environmental sustainability on two fronts. On consumers front, Santana can help consumers choose better products. The humankind makes and delivers products to consumers, not to waste resources, but to put the resources to great use. Overall, it is great that a hiker in California today can get a water bottle that is made using plastic and delivered using trucks, even though the humankind does not yet have the technology to immediately replace all plastic and all gasoline. A great water bottle can elevate comfort, in this case, perhaps also survival, and hopefully also fashion if it is from an environmentally friendly brand that the hiker supports because the brand is pioneering innovate ways to protect environmental sustainability, and we will consider it a pretty wise spending of humankind’s resources since we have the resources in the first place to let our people live well. Waste, and therefore negative impact on environmental sustainability, is if delivered water bottle is not great for the hiker, and therefore the water bottle is returned or thrown away as the hiker keeps searching for an actually great water bottle. Santana aims to prevent such waste by helping consumers find and choose great products, thereby reducing waste. In the future, Santana may also provide helpful information such as properly maintaining products, in order to further reduce waste. On suppliers front, we can apply pressure on suppliers, once we can represent demand of consumers, to operate in ways that are great for environmental sustainability. This is great for suppliers too. Suppliers are also people and people want to be good. Today, some suppliers may be choosing actions that are bad for environmental sustainability, either because they lack information, or because they cannot survive as a business while choosing actions that are good for environmental sustainability. We can help by providing information that can enable suppliers to produce correct amount of correct products, and by giving them ability to operate in ways that are good for environmental sustainability using guidance and incentives. # Talents Best way to understand which talents we need is to actually operate, at a small scale, and encounter real problems. So we will keep this section short. But we do anticipate that we will need following talents. - Understanding Customers We need talents with empathy and curiosity. We need talents who are naturally interested in learning more about people, how people live today, what pain points people are struggling with today and what makes people happy. We need talents who can find or make ways to understand customers. We expect to find high concentration of such talents in the consumer internet services industry. - Indexing Truth We need talents who can develop, maintain, and grow, a robust library which will contain true information and keep expanding, based on information from the internet. Truth will be a foundation to our business operations, immediately and always. We expect to find high concentration of such talents in server infrastructure teams in the software technology industry. - Shaping Contents We need talents with taste. We need talents who can identify contents that will appeal to customers, and shape, not just the contained information, but also the container in which the information will be presented. We expect to find high concentration of such talents in the media industry. - Guiding Suppliers We need talents with diplomacy and assertiveness. We need talents who can orient suppliers with consumers, and make the experience of working with us feel rewarding for our suppliers. We need talents who naturally respect suppliers and therefore treats suppliers in fair but not easy ways. We expect to find high concentration of such talents in the retail industry up and down the supply chain. - Inviting Customers We need talents who bring joy and delight. We need talents who can proactively go out to meet potential customers, as the face of our company, and guide them to our better ways of living. We need talents with natural understanding that the role they play for us and the role we play for our customers is not taking money from customers but is giving them access to our products. We expect to find high concentration of such talents in marketing teams in any industry. For us, all talents must have natural fit with our Company Philosophy, and natural ability to protect and advance our Company Brand and our Operational Excellence. No matter how skilled a talent is in any other ways, including excelling at the skills we listed above, admitting a single one whose nature is counter to who we are and what we stand for will poison our company to death like cancer.