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Ken Singer @ European Innovation Academy Summer Session 2013

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  • Water. It is the most essential component of life on earth. It is what we need to survive. But what if…what we need to live, killed us?
  • Unfortunately, this is the situation for over 1 billion people around the world. This is especially a problem in the developing world, where there are very limited sources of water. Water is primarily obtained in two ways in developing countries: Free water…from unreliable, and potentially dangerous rivers, lakes, or public supplies, or through EXPENSIVE bottled water or an in-home water system.   Our CUSTOMER is in the business of providing clean and safe drinking water to people who want something better than free, but who can ’t afford bottled water or a home treatment system. They sell water at volume and affordable prices through distributed water treatment units, which we call “water kiosks.”
  • This is a water kiosk operated by our first customer, Mexican non-profit Nuestra Agua. Nuestra Agua is undercutting the $13 billion Mexican bottled water market by providing bottled water at less than 1/3 the market price.   In order to sustainably sell water at such a low price point, water providers like Nuestra Agua need to streamline operations and keep their operating costs down. They have three primary problems:   -Travel costs –over 40%+ of OPERATIONS and MANAGEMENT for companies like Nuestra Agua are on traveling from site to site for checkups and repairs -Uncertainty: Without frequent updates, it ’s impossible to know when your system is functioning or broken. There’s no realtime monitoring. -Data about kiosk operations is unreliable –most companies in this space either don ’t keep records on when the system is on or how much water is actually sold. Without operational data, it’s difficult to measure impact and improve efficiency.
  • Flowbit is offering a hardware device that water providers integrate into their water systems. The hardware communicates with our servers wirelessly, and operators can monitor and control their systems remotely from an easy to use mobile interface wherever they have an internet connection.
  • Our combination of hardware and software allows three things to happen: real-time monitoring of sensors, wireless control over systems, and we open the door to big data collection over your entire water network.  Our Smart water systems will take rural water delivery from reactive to preventative management.
  • Take a second and step into the footsteps of our customer. What do you care about? You want to lower your operating costs so you can improve your margins and grow the business. And you want to use technology that adds value to your product: You want to know you ’re delivering safe water to customers. And with Flowbit, you can do all of that.
  • Our total addressable market is estimated to be $4.1B and our focus on Asia and Latin America gives us a segmented addressable market of $1.2B. Our initial target is the water kiosk market in India and Mexico, which we conservatively estimated at $2.6M.
  • We have a simple 2-tier revenue model. We charge $500 for the Flowbit hardware enclosure that our customer installs on their water systems and we provide the necessary software for free. We then charge $10 per system, per month, for data collection services.
  • Lets check out our competition. Sarvajal is our closest competitor because it uses a remote system to monitor and control its water dispensers in India. But their systems communicate primarily through SMS messaging, and you can only use their technology on Sarvajal water dispensers. Flowbit is not only a low cost solution for the rural water market, but also our innovative use of programmable hardware and a mobile interface allows us to offer a flexible and intuitive platform for water providers to use.
  • We have installed a working product on one of Nuestra Agua ’s water kiosks in Mexico. We will collect data about their operations, make it available to Nuestra Agua, and also conduct usability tests with their employees. We’re using this first customer as a chance to learn and improve our product and services, and we will use our initial traction here to talk to other companies in the water kiosk space. We’re also considering a grant funding and startup incubation offer at IIT Kharagpur in India --that’s our chance to enter into the Indian market. We also have a pre-order to fulfill with LoLo Utility, a water provider in India.
  • Nick- Here ’s how we interact with the customer. An engineer from a water provider describes his system to us. We ask him what kind of data he wants logged, and what controls he wants. We give him a quote, and he buys one system. We tailor our hardware and software to work with his collection of sensors and pumps. Once we know that it works, we ship it to him with instructions. We also open an account for him on our server. The customer installs it, loves it, and asks for more. From there, it ’s just a matter of shipping him more product.
  • Flowbit

    1. 1. le water data Flowbit
    2. 2. Over 1 Billion people lack access to clean drinking water
    3. 3. Customer Pain Operational uncertainty Data collection Travel costs
    4. 4. Technology Intuitive Software (Mobile Interface) Low-cost Hardware (Control Box) DEMO
    5. 5. Technology Wireless controls Big data collection Real-time monitoring
    6. 6. Our Value Safer water Reduced costs Growth potential
    7. 7. Market Analysis Smart Water Automation and Control TAM - $4.1 B $1.2B $2.9B TAM: $4.1B SAM: $1.2B TM: $2.6M
    8. 8. Revenue Model 1. Hardware 2. Software 3. Data $500 per system Free with purchase $10 per month fee
    9. 9. Competitors < $1000 ✓ ✓ Smart Phone ✓ Two-Way Communication ✓ Market Focus ✓ ✓ Flexible System ✓ FlowbitSarvajal ✓ ✓ ✓ Telo g APG CompetitionCompetition
    10. 10. Timeline 2012- 2013 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - First Installation - IIT Kharagpur Incubation - Customer acquisition - Industry partnerships - Improving product - Refining Product -Scale -Marketing -Public launch Phase I Seed Funding Series A - Working Prototype - Incorporation - Filed provisional - University grant finalists - Customers in Mexico/ India Phase II Phase III
    11. 11. Tea m Advisors Patrick Shandonay Hasra Technology Arnav Anand CET Resident Eric Maundu Kijani Grows Nick Lee Engineer Cole Murphy UI/UX Design Yasir Motiwala Business Cory Levy Business Hung Leong Engineer
    12. 12. eople water data Flowbit
    13. 13. 1. Background 2. Problem 3. Solution 4. Mobile Application 5. Technology 6. Market/ Revenue 7. Competitors 8. Value 9. Timeline Pitch Appendix 1. Risk & Defense 3. Financials 4. 5 Year Value Prop 10. Team 2. Cellular Coverage 4. 3 Year revenue
    14. 14. Risk Defense Human- centered design approachHuman- centered design approach Adoption of new technologyAdoption of new technology Internet connectionInternet connection Unknown CompanyUnknown Company IIT branding/ Flowbit IndiaIIT branding/ Flowbit India Rapidly growing cellular coverageRapidly growing cellular coverage High tech in developing economiesHigh tech in developing economies Demonstrable long term payoffDemonstrable long term payoff
    15. 15. -Developed mobile infrastructure: India has 930 million mobile phone subscribers. -Wide coverage: Vodaphone alone covers 79% of population with 2G, and it is rapidly deploying 3G towers. -Growing use of mobile data: Mobile data traffic on 2G increased by 47% from Dec 2011 to June 2012. Data traffic on 3G experienced a 78% increase over the same period. -Large sales to rural markets: In FY10, rural and semi-rural markets accounted for 65% of sales for most Indian handset manufacturers (Ernst and Young). -Mobile data use is estimated to double between June 2012 and June 2013. (Telecom Regulatory Agency of India) “The demand for mobile internet via smartphones is rapidly catching up in rural areas… rural people [in India] are having their first internet experience on mobile, as handsets are more accessible than cyber cafes in smaller towns.” –Praveen Rajpal, CEO of Handygo Technologies in India Mobile & Data Coverage
    16. 16. Financial s Profit and Loss Projection (3 Years) 2013 2014 2015 Sales $93,000.00 $1,562,000.00 $3,412,000.00 Cost of Goods Sold (COGS) $38,905.56 $630,222.04 $1,259,306.04 Gross Profit $54,094.44 $931,777.96 $2,152,693.96 Operating Expenses Salary $42,000.00 $234,000.00 $480,000.00 Equipment $1,000 $2,000 $2,000 Office Supplies $3,000.00 $5,000.00 $10,000.00 Copying & Printing $2,000.00 $1,000.00 $1,000.00 Repairs / Maintenance $2,700.00 $27,000.00 $270,000.00 Car, Delivery, and Travel $10,000.00 $10,000.00 $10,000.00 Accounting and Legal $6,000.00 $3,000.00 $3,000.00 Rent & Related Costs $15,000.00 $15,000.00 $15,000.00 Telephone and Internet $1,500.00 $1,500.00 $1,500.00 Other (Consulting Fees) $2,000.00 $2,000.00 $2,000.00 Other ( ) $- $- $- Total Expenses $85,200.00 $300,500.00 $794,500.00 Net Profit Before Taxes $(31,105.56) $631,277.96 $1,358,193.96 Income Taxes $- $189,383.39 $407,458.19 Net Operating Income $(31,105.56) $441,894.57 $950,735.77
    17. 17. 1.5 Year Value Prop Without FlowBit With FlowBit Hardware N/A 27,130 Data Collection N/A 4,878 Maintenanc e 72,000 36,000 Total 72,000 68,008 Savings Percentage 0% 5% Without FlowBit With FlowBit Hardware N/A 27,130 Data Collection N/A 16,260 Maintenanc e 240,000 120,000 Total 240,000 163,390 Savings Percentage 0% 68% 5 Year Value Prop
    18. 18. Revenue 3 Year Revenue Assumptions .03%, .5%, and 1% market share in Year 1, 2, and 3 respectively Cost/item = $250 Price/item = $500 $1000/month stipend for full-time employees & $500/month stipend for part-time employees 10% failure/repair rate per year 3 flights to India and 3 flights to Mexico per year 30% income taxes