This document discusses potential distribution channels for a new vertical axis wind turbine product designed for street lamps. It considers selling directly to consumers but finds it not viable due to high customer acquisition costs. Selling through large retail stores is also deemed not suitable due to low volume needs. The document recommends partnering with local governments and utilities which have strong needs and budgets to reduce electricity costs. It outlines a business plan to work with these commercial and municipal customers directly through developing regulatory approvals and long-term maintenance relationships.

1. D.C. VeritasWeek 6: Pivot + Channels

3. Despite cost savings, solar still wins due to other variables

4. Per unit offset not sufficient given size tradeoff

6. “I can either fix potholes and storm drains or keep paying $800,000 a year for electricity.”- Public Works Director Rick Moshier – Santa Rosa

7. City wide distributed energy grid

8. Market best suited for Vertical Axis Wind

9. Visibly local electricity generation

12. Face to face events – Home Garden shows, Home Improvement expos

13. In house sales force not necessary

14. Profit for channel of 15-20%

16. With $700 profit margins, and 20% commission off profit, a full-time sales person would need to make 571 units sales per year

18. Channels – Large Retail Store Large Retail stores need VOLUME they are generalists. Experience with solar panels show that $900 solar panels are too expensive. This channel is only useful to generate leads. Floor sample may be useful to gauge public interest. Manufacturer carries all the risk. The retail store has no stock and manufacture provides sales person. OVERALL: Is not the right channel !!

19. Customer Lifetime Value Customer Call Center Monitoring System Customers Customer Rebuy/ Recommendation 5 Year Warranty 10 Year Warranty After Warranty Maintenance

20. 5-yrs Plan

21. “New” Business Plan Canvas Form partnerships with local governments and understand more fundamentally, the nature of their problem with electricity costs, and community aesthetics. Also understand the bidding and approval process associated with getting a city to purchase a product like this. Understand what barriers exist to getting something with moving parts approved for residential streets. Ongoing relationship and continued communications with city council members to inform members about our product. Will provide unique retrofit wind turbine for street and highway lamps. This will allow cities to reduce costs and environmental impact with a green alternative that is more economical and more aesthetic than competitors. For lighting companies, add a visual green alternative to their lighting portfolio for less money than our competitors. For Utilities - reduce energy demand, provide green alternatives to fulfill Renewable Energy Portfolio standards and offer faster payback than other alternatives. Cities, Lighting Companies, Utilities The Utility currently handles maintenance on its lamp posts. They would continue to handle the maintenance on these retrofitted lamp posts after the first 5 years. For the first 5, we would handle any maintenance. After 5 year warranty, customer will need to call for service and be charged for additional service. Customer can purchases extended warranty option, which will cover maintenance package. Working with environmental groups will be important to push for regulations and publicity that favor installing wind turbines on street lamps. Bird and wildlife groups for similar reasons. City councils to establish regulations. Light manufacturers and installations to make successful bid on project. Installation/Maintenance workers, electricians for additional additional installing workforce Key resource is our intellectual property in having a cheaper manufacturing process. Need some $600K of capital to start manufacturing and distributing 500 turbines the first year (estimate $1000 per unit manufacturing costs + $1000 for customer acquisition). Year 2 will need approximately $500k for operations. Will need endorsements by environmental groups, public utilities, city council permitting department. Direct sales to the city or utility, and forming long term relationship for maintenance and replacements. Cost-driven model where we can provide inexpensive but quality product to customers. Cost will be dominated by manufacturing costs and customer acquisition costs. May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained. Revenue generated from selling the product and extended warranty or maintenance service to any of these customer segments

22. QUESTIONS ?