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Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
Wily Coyote - Roadrunner
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Wily Coyote - Roadrunner

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Biz Innovation presentation

Biz Innovation presentation

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  • Assumption: People are eager to pay to avoid risk. Insurance changes the costs of misfortune. Solve moral hazard in setting price ceiling, so the risky drivers bare significant risk on dangerous driving behaviors.
  • Transcript

    • 1. Project Wily Coyote The Roadrunner System Team Wily Amer Bukhari, Bosco Lau, Kelvin Chiu, Candy Tang, Derek Leung, Sumi Cheung
    • 2. Introduction <ul><li>The story starts… </li></ul><ul><li>One of group mates needed to arrange renewal of the third party insurance of his 7-seater private car </li></ul><ul><li>He is… </li></ul><ul><ul><li>more than 10-yr driving experience </li></ul></ul><ul><ul><li>no accident nor claims record </li></ul></ul><ul><ul><li>30+ years old </li></ul></ul><ul><ul><li>2nd car </li></ul></ul><ul><ul><li>only drive 1-2 times per week </li></ul></ul><ul><li>Premium quoted by insurer: HK$4k per annum </li></ul><ul><li>He thinks insurer charged him too high </li></ul>
    • 3. Market Observations <ul><li>Third Party Liability Insurance...compulsory for licensed vehicles </li></ul><ul><li>Average premium for private car is about HK$3k in 2009 </li></ul>Source: Office of the Commissioner of Insurance
    • 4. Market Observations * Transport Dept, HKSAR - Road Traffic Accident Statistics 2008 Risk assessment criteria How relevance to risk? Considered? Driver’s particulars Age Highest risk age group: 20-29 Yes Gender Casualties rate: Male 3.6 per 1000 * Female 1.8 per 1000 * Yes Occupation High risk occupation: Logistics, construction, engineering, security. Yes Claims history NCB (Non-claims bonus) Yes Vehicle’s particulars Make/Model Powerful car vs saloon Yes Price Only applicable for comprehensive insurance Yes Driving attributes Frequency of car usage - Business use vs personal use - Mileage Partial Date/time of car usage accident rate doubles*: 17:00-19:00, Saturdays No Normal average speed >10% fatal accident is due to speeding * No Driving locations Higher risk locations: Yau Tsim Mong, Shatin, Kowloon City * No
    • 5. Fill the Gap <ul><li>New Product Development </li></ul><ul><ul><li>The Roadrunner System </li></ul></ul>✔ ✔
    • 6. Adverse Selection Effect <ul><ul><li>Solve asymmetric information with objective verification </li></ul></ul><ul><ul><li>Riskier drivers, higher premium </li></ul></ul><ul><ul><li>Set price ceiling towards risky drivers </li></ul></ul><ul><ul><li>Qualitative drivers are attracted to purchase comprehensive policy </li></ul></ul><ul><ul><li>Balance avoidance of adverse selection against the potential business from people who seek higher coverage </li></ul></ul>
    • 7. Market Need List / Features <ul><li>Privacy vs high accuracy tracking – a configurable system </li></ul>Party Needs Priority Features Insurer Mileage ★★★★★ Odometer / process Geo data Districts covered ★★★★★ Process Geo data Speed ★★ Process Geo data Easy collection ★★★★ Wireless comm. Of data 3 rd party access ★★★★ Common platform Low Cost/Maintenance ★★★★★ Off the shelf component Risky Analysis ★★★ Data processing capability Driver Privacy ★★★★★ Filter/Hide location tracking No need to go to garage ★★★★★ Wireless comm. Of data Cost covers insurance ★★★★★ Cost benefit Logistics Real time location tracking ★★★★ Location tracking (high accuracy) Car Rental Recovery ★★★★★ Location tracking (on demand) Banks Recovery ★★★★★ Location tracking (on demand)
    • 8. Scope of Project Scope of Project - Roadrunner Product Description <ul><li>A low cost, configurable device to collect vehicle information including, GPS location, mileage, speed </li></ul><ul><li>Wireless communication of data, configuration & software updates to and from central server </li></ul><ul><li>A common platform for access of the information </li></ul>Key Business Goals More profit for insurers, high market transparency, lower cost for low risk drivers Primary Markets Insurance companies, drivers Secondary Markets Commercial sector: Car rental companies Logistics companies with fleet of vehicles Banks Assumption <ul><li>Relatively new market, few competitors / existing product & service </li></ul><ul><li>Configurable services to expand secondary markets </li></ul>Stakeholders Manufacturers, mobile operators, internet providers, drivers, insurance companies
    • 9. Product Concepts - Data Collection & Storage <ul><li>Data Collection </li></ul><ul><ul><li>Raw data </li></ul></ul><ul><ul><ul><li>GPS location (32bit x 2) </li></ul></ul></ul><ul><ul><ul><li>System clock (32bit) </li></ul></ul></ul><ul><ul><li>Derivative information </li></ul></ul><ul><ul><ul><li>Distance travelled( Δ location / time) </li></ul></ul></ul><ul><ul><ul><li>Speed (distance / time) </li></ul></ul></ul><ul><ul><ul><li>Time (day vs night) </li></ul></ul></ul><ul><li>Data Storage </li></ul><ul><ul><li>512MB [31 x 86,400 x (96 / 16) byte ≈ 15MB ] </li></ul></ul><ul><ul><ul><li>Batch update (e.g. once per month) </li></ul></ul></ul>Δ x Δ y (x1,y1) (x2,y2) Δ z Time (X,Y) 10:42.00 110,223 10:42:15 113,225 10:42:30 114,230 … …
    • 10. Product Concepts - Communication Process <ul><li>2 way communication </li></ul><ul><li>BlackBox  Server </li></ul><ul><ul><li>Mileage </li></ul></ul><ul><ul><li>Traffic blackspots info </li></ul></ul><ul><ul><li>Speed </li></ul></ul><ul><ul><li>Geo-location </li></ul></ul><ul><ul><li>Depends on configuration </li></ul></ul><ul><li>BlackBox  Server </li></ul><ul><ul><li>Update configuration </li></ul></ul><ul><ul><li>Update software </li></ul></ul>
    • 11. Design Overview
    • 12. Product Concepts Geo-location vs Privacy Issue – A Solution <ul><li>What is the objective? </li></ul><ul><ul><li>Insurers : risk assessment </li></ul></ul><ul><ul><li>Exact geo-location NOT required </li></ul></ul><ul><ul><li>Geo-location mapping to risk value e.g. 1 to 5 </li></ul></ul><ul><ul><li>Solution : score based system </li></ul></ul><ul><ul><li>Server updates BlackBox with reference location & scores </li></ul></ul><ul><ul><li>BlackBox sends cumulative score </li></ul></ul>
    • 13. Product Concepts - BlackBox <ul><li>Technology </li></ul><ul><ul><li>Convenient data collection </li></ul></ul><ul><ul><ul><li>GPS, wireless 3G, battery powered (car & backup) </li></ul></ul></ul><ul><ul><ul><li>Software configurable, updatable via wireless network </li></ul></ul></ul><ul><li>Platform </li></ul><ul><ul><li>Stability, cost & easy to maintain </li></ul></ul><ul><ul><ul><li>Off the shelf components (ARM, Android) </li></ul></ul></ul><ul><li>Physical </li></ul><ul><ul><li>Easy to install </li></ul></ul><ul><ul><ul><li>Benchmark: IPhone 3GS – small size </li></ul></ul></ul><ul><ul><ul><li>PCB board : 105mm (l) x 60mm (w) </li></ul></ul></ul><ul><ul><li>Tamper proof, withstand extreme weather conditions </li></ul></ul><ul><ul><ul><li>Durable casing, water-proof, tamper-proof </li></ul></ul></ul><ul><ul><li>Design </li></ul></ul><ul><ul><ul><li>Functional, visual appeal not necessary </li></ul></ul></ul>
    • 14. Product Concepts - Central Server <ul><li>Hardware </li></ul><ul><ul><li>Intel based server </li></ul></ul><ul><li>Capability </li></ul><ul><ul><li>Web & database server (Apache, MySQL) </li></ul></ul><ul><ul><li>Redundancy backup (multiple machines) </li></ul></ul><ul><li>Connectivity </li></ul><ul><ul><li>Datacenter rack (co-location) </li></ul></ul><ul><ul><li>Gigabit Ethernet (24/7 Internet Connectivity) </li></ul></ul><ul><li>Software </li></ul><ul><ul><li>Open standard (http, XML) </li></ul></ul><ul><ul><li>Customized web application (Google Map) </li></ul></ul><ul><ul><li>Remote configure BlackBox via web interface </li></ul></ul><ul><ul><li>User authentication access </li></ul></ul>
    • 15. Cost breakdown – iPhone Benchmark Source: http://www.isuppli.com/Pages/Home.aspx CPU /Memory Communications Others
    • 16. Product Cost Analysis <ul><li>Component of the blackbox is similar to a smart phone. Major investment cost includes the software development for mileage & position tracking and central servers </li></ul>
    • 17. Product cost analysis <ul><li>Pricing structure </li></ul><ul><ul><li>35% margin over cost </li></ul></ul><ul><ul><li>Mobile network cost ranges from US$135/yr to US$610/yr based on consumer prices </li></ul></ul><ul><ul><li>US$110 up-front cost for the device </li></ul></ul><ul><ul><li>Rebate given on the following year insurance (Lock in) </li></ul></ul><ul><li>Plan 1 - Standard </li></ul><ul><ul><li>US$180 per year </li></ul></ul><ul><ul><li>20% of typical insurance premium </li></ul></ul><ul><li>Plan 2 – High accuracy location tracking </li></ul><ul><ul><li>US$820 per year </li></ul></ul><ul><ul><li>Value added service </li></ul></ul><ul><ul><li>Note: If we can enough subscribers, we can ask for bulk discount from network provider to lower the running cost </li></ul></ul>Pricing Model (example)
    • 18. Marketing – Wily Coyote <ul><li>Planning </li></ul><ul><ul><li>Articulation of Market Opportunity </li></ul></ul><ul><ul><li>Defining Market Segments </li></ul></ul><ul><li>Concept Development </li></ul><ul><ul><li>Collecting Consumer Needs </li></ul></ul><ul><ul><li>Identification of Lead Users (Target Marketing) </li></ul></ul><ul><ul><li>Identification of Competitive Products </li></ul></ul><ul><li>System-Level Design </li></ul><ul><ul><li>Plan for Product Options and Extending Product Family </li></ul></ul><ul><ul><ul><li>Kill switch for starting Vehicle </li></ul></ul></ul><ul><ul><ul><li>Camera to record the moment of a vehicles collision or impact </li></ul></ul></ul><ul><ul><ul><li>Low-jack device in the case it was lost or stolen </li></ul></ul></ul><ul><ul><li>Setting Target Sales Price Points </li></ul></ul>
    • 19. Marketing – Wily Coyote (Cont’d) <ul><li>Detail Design </li></ul><ul><ul><li>Marketing Plan </li></ul></ul><ul><li>Testing and Refinement </li></ul><ul><ul><li>Developing Promotion and Launch Materials </li></ul></ul><ul><ul><li>Facilitating Field Testing </li></ul></ul><ul><li>Production Ramp-up </li></ul><ul><ul><li>Placing Early Production with Key Customers </li></ul></ul><ul><ul><ul><li>Advertising </li></ul></ul></ul>
    • 20. Target Marketing Market 1 - Driving pattern information driven:
    • 21. Target Marketing Market 2 - Geo-location information driven:
    • 22. Target Marketing Market 3 - Distance information driven:
    • 23. Target Marketing Market 4- Speed information driven:
    • 24. Q & A

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