Project Wily Coyote The Roadrunner System Team Wily Amer Bukhari, Bosco Lau, Kelvin Chiu, Candy Tang, Derek Leung, Sumi Ch...
Introduction <ul><li>The story starts… </li></ul><ul><li>One of group mates needed to arrange renewal of the third party i...
Market Observations <ul><li>Third Party Liability Insurance...compulsory for licensed vehicles </li></ul><ul><li>Average p...
Market Observations * Transport Dept, HKSAR - Road Traffic Accident Statistics 2008 Risk assessment criteria How relevance...
Fill the Gap <ul><li>New Product Development </li></ul><ul><ul><li>The Roadrunner System </li></ul></ul>✔ ✔
Adverse Selection Effect <ul><ul><li>Solve asymmetric information with objective verification </li></ul></ul><ul><ul><li>R...
Market Need List / Features <ul><li>Privacy vs high accuracy tracking – a configurable system </li></ul>Party Needs Priori...
Scope of Project Scope of Project - Roadrunner Product Description <ul><li>A low cost, configurable device to collect vehi...
Product Concepts - Data Collection & Storage <ul><li>Data Collection </li></ul><ul><ul><li>Raw data </li></ul></ul><ul><ul...
Product Concepts - Communication Process <ul><li>2 way communication </li></ul><ul><li>BlackBox    Server </li></ul><ul><...
Design Overview
Product Concepts Geo-location vs Privacy Issue – A Solution <ul><li>What is the objective? </li></ul><ul><ul><li>Insurers ...
Product Concepts - BlackBox <ul><li>Technology </li></ul><ul><ul><li>Convenient data collection </li></ul></ul><ul><ul><ul...
Product Concepts - Central Server <ul><li>Hardware </li></ul><ul><ul><li>Intel based server </li></ul></ul><ul><li>Capabil...
Cost breakdown – iPhone Benchmark Source: http://www.isuppli.com/Pages/Home.aspx  CPU /Memory Communications Others
Product Cost Analysis <ul><li>Component of the blackbox is similar to a smart phone. Major investment cost includes the so...
Product cost analysis <ul><li>Pricing structure </li></ul><ul><ul><li>35% margin over cost </li></ul></ul><ul><ul><li>Mobi...
Marketing – Wily Coyote <ul><li>Planning </li></ul><ul><ul><li>Articulation of Market Opportunity </li></ul></ul><ul><ul><...
Marketing – Wily Coyote  (Cont’d) <ul><li>Detail Design </li></ul><ul><ul><li>Marketing Plan </li></ul></ul><ul><li>Testin...
Target Marketing Market 1 - Driving pattern information driven:
Target Marketing Market 2 - Geo-location information driven:
Target Marketing Market 3 - Distance information driven:
Target Marketing Market 4- Speed information driven:
Q & A
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Wily Coyote - Roadrunner

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Wily Coyote - Roadrunner

  1. 1. Project Wily Coyote The Roadrunner System Team Wily Amer Bukhari, Bosco Lau, Kelvin Chiu, Candy Tang, Derek Leung, Sumi Cheung
  2. 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. 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. 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. 5. Fill the Gap <ul><li>New Product Development </li></ul><ul><ul><li>The Roadrunner System </li></ul></ul>✔ ✔
  6. 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. 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. 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. 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. 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. 11. Design Overview
  12. 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. 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. 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. 15. Cost breakdown – iPhone Benchmark Source: http://www.isuppli.com/Pages/Home.aspx CPU /Memory Communications Others
  16. 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. 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. 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. 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. 20. Target Marketing Market 1 - Driving pattern information driven:
  21. 21. Target Marketing Market 2 - Geo-location information driven:
  22. 22. Target Marketing Market 3 - Distance information driven:
  23. 23. Target Marketing Market 4- Speed information driven:
  24. 24. Q & A

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