1. The Lean LaunchPad
Lecture 2: Value Proposition
Steve Blank
Jon Feiber
Ann Miura-Ko
John Burke
Jerry Engel
Jim Hornthal
Oren Jacob
2. Agenda
• Team Bus Model Presentations
• Value Proposition
– Product
– Service
– Ecosystem
3. VALUE PROPOSITIONS
what are you offering them? what is that getting
done for them? do they care?
images by JAM
4. Step 1. Spec. the Value Proposition
• Product(s)?
• Service(s)?
• Ecosystem?
• Is it a company or product?
5. Value Proposition – Common Mistake
• Is it just a feature of someone else‟s product
• Is it a “nice to have” product
• Is it a “got to have” product
• Can it scale to a company?
6. Value Proposition - Discovery
• Product
– Long term vision
– features
– Benefits
– Minimum Viable Product spec
• For a web/mobile app
– Low fidelity MVP live and running
• Understand Customer Problem and Solution
• Test Market Type
7. Product
• Problem Statement: What is the problem?
• Technology / Market Insight: Why is the problem so
hard to solve?
• Market Size: How big is this problem?
• Competition: What do customers do today?
• Product: How do you do it?
8. Step 2: What’s the Minimum Viable
Product – Physical
• First, test your understanding of the problem
• Next test your understanding of the solution
– Proves that it solves a core problem for customers
– The minimum set of features needed to learn from
earlyvangelists
- Interviews, demos, prototypes, etc
- Lots of eyeball contact
9. Step 2: What’s the Minimum Viable
Product – Web/Mobile
• NOW “low fidelity” web/app for customer feedback
– First, tests your understanding of the problem
• LATER, “high fidelity” web/app tests your understanding
of the solution
– Proves that it solves a core problem for customers
– The minimum set of features needed to learn from
earlyvangelists
- Avoid building products nobody wants
- Maximize the learning per time spent
10. Step 2: What’s the Testing the Minimum
Viable Product – Web/Mobile
• Smoke testing with landing pages using AdWords
• In-product split-testing
• Prototypes (particularly for hardware)
• Removing features
• Continued customer discovery and validation
• Surveys
• Interviews
11. Step 2: What’s the Testing the MVP–
Web/Mobile - Tactics
• Interview customers
– make sure they have a matching core problem
• Set up web site landing page to test for conversion
– What offers are required to get customers to use the product
(e.g. prizes, payment)
– Use problem definition as described by customers to identify key
word list – plug into Google search traffic estimator - high traffic
means there is problem awareness
• Drive traffic to site using Google search and see how
deep into a registration process customers are willing to
go through
12. Pivot Example
Robotic Weeding
Talked 75 Customers in 8 Weeks
14. 20 interviews, 6 site visits…
We got OUR Boots dirty
Weeding
Visited two farms in Salinas Valley to better understand problem
Interviewed:
• Bolthouse Farms, Large Agri-Industry in Bakersfield
• White Farms, Large Peanut farmer in Georgia
• REFCO Farms, large grower in Salinas Valley
• Rincon Farms, large grower in Salinas Valley
• Small Organic Corn/Soy grower in Nebraska
• Heirloom Organics, small owner/operator, Santa Cruz Mts
• Two small organic farmers at farmers market
• Ag Services of Salinas, Fertilizer applicator
Mowing
Interviewed:
• Golf: Stanford Golf course
• Parks: Stanford Grounds Supervisor, head of maintenance
and lead operator (has crew of 6)
• Toro dealer (large mower manufacturer)
• User of back-yard mowing system
• Maintenance Services for City of Los Altos
• Colony Landscaping (Mowing service for stadiums)
15. Autonomous Vehicles for Mowing & Weeding
- Innovation Dealers sell, installs Mowing
- Dealers (Mowing - Customer We reduce operating and supports - Owners of public
and Ag) Education cost customer or commercially
- Vehicle OEMs - Dealer training - Labor reduction used green spaces
(John Deere, Toro, - Better utilization of Co. trains dealers, (e.g. golf courses)
Jacobsen, etc) assets (mow or supports dealers - Landscaping
weed at nights) service provider
- Research labs - Improved
performance (less Weeding
Engineers on rework, food safety) - Mowing Dealers - Farmers with
Autonomous - Ag Dealers manual weeding
vehicles, GPS, operations
path-planning
Dealer discount Asset sale
COGS seek a 50-60% Gross Margin Our revenue stream derives from selling the equipment
Heavy R&D investment
16. Found weeding in organic crops is HUGE
problem; 50 - 75% of costs
Crews of 100s-1000
Back-breaking task
(Ilegal) labor harder to get
1-5 weedings per
year/field
$250-3,500 per acre and
increasing
Food contamination risk
17. Decision to make – mowing vs weeding
Application If ROI is < 1 yr Labor costs Autonomous TAM
they will buy significant? would solve
problem?
Mowing of Yes. Yes Yes Adjusted up to
Professionally xxx
large fields
run organizations
Weeding in Agri Industry: YES! for TAM increased
YES! organic Not necessarily to $2.6 B (Total
Agriculture
crops organic)
Large Growers: Key need is weed
Yes They are vs. crop Target Market
spending differentiation (organic
Small Growers: $500/ac! specialty)
No 162 M/yr
18%/yr growth
18. Autonomous vehiclesWEEDING
- Innovation Dealers sell, - Low density
- Ag Dealers - Customer We reduce installs and vegetable
- Ag Service Education operating cost supports growers
providers - Dealer training - Labor reduction customer - High density
(100 to 1) vegetable
- Research labs - Reduced risk of Co. trains growers
contamination dealers, supports - Thinning
- Mitigate labor dealers operations
Engineers on availability - Ag Dealers
- Conventional
Machine Vision concerns - Ag Service
vegetables
Two problems: providers
- Identification
- Elimination
Dealer discount Asset sale
COGS seek a 50-60% Gross Margin Our revenue stream derives from selling the
Heavy R&D investment equipment
20. CarrotBot
• Machine Vision data
collection platform
– Monochrome & Color
Cameras
– Laser-line sweep (depth
measurement)
– Encoders
CarrotBot 1.0
(position/velocity)
– Onboard data
acquisition & power
21. The Canvas Updated
•Technology •Farming
Design conventions.
•Marketing •Demo, demo,
•Demo and and demo!!
customer •Cost Reduction •Proximity is •Organic Farmers
•Research Labs feedback paramount •Weeding Service
•Remove labor
•Equipment Providers
force pains
Manufacturers •Conventional
•Eliminate bio-
•Distribution Farmers
waste hazards
Network
•Service •IP – Patents
Providers •Video Classifier •Dealers
Files •Direct Service
•Robust •Indirect Service
Technology • … then Dealers
•Asset Sale
Value-Driven •Direct Service with
equipment rental
•… then Asset Sale
22. Visit Highlights
Above: Organic Carrots, 7wks.
Top right: Conventional carrots
Bottom Right: Very weedy. Will require
multiple passes of hand weeding
23. Visit Highlights
Carrot vs. Weeds
Due to small root systems, carrots have no chance against weeds
26. Customer Hypothesis
Pre-Test
Large
Growers
Us Dealer
Industrial
Growers
Hypothesis Confirmed
• Growers interested in own
Industrial equipment
Growers • Industrial (10,000s of acres)
• Large (1,000s of acres)
Post-Test • Willing to pay $100k for one
Large
unit
Growers
Us Dealer • Smaller growers (100s of acres)
Service usually subcontract the labor services
Providers or rent equipment
Equipment • All purchases through local dealers
Rental • Customer service is essential
27. Customer Map #1 – Industrial Growers
Example: Bolthouse Farms – Large Industrial Carrot Producer
– 8K acres/yr
End User • Equipment Operator
Influencer • Local Farm Mgr
• Cliff Kirkpatrick, visited
Recommender • Director, Ag Equipment Operator
Technology
• Justin Grove, interviewed
Decision
Maker • VP, Growing
Operations
Approver • CFO, CEO (Jeff
Dunn)
Cliff, Farm Mgr
28. Customer Map #2 – Service Providers
Example: Ag Services – Service Provider, Salinas Valley
End User • Equipment Operator
Influencer • Grower
Recommender • Service Mgr
Me (left), Marty (middle, Service Mgr), Doug
(right, Grower)
Decision Maker • ?? (service mgr‟s
& Approver boss)
29. The Business Plan Canvas Updated
•Technology •Farming
Design conventions.
•Marketing •Demo, demo, •Mid/Large
•Demo and and demo!! Organic Farmers
customer •Cost Reduction •Proximity is •Agricultural
•Research Labs feedback paramount
•Remove labor corporations
•Equipment
Manufacturers
force pains •Weeding Service
•Eliminate bio- Providers
•Distribution
waste hazards
Network
•Service •IP – Patents •Mid/Large
Providers •Video Classifier •Direct Service Conventional
Files •Indirect Service Farmers
•Robust • … then Dealers
Technology
•Direct Service with
equipment rental
Value-Driven •($1,500/d; 120d/yr )
•Low density: $1,500/d
•High density: $6,000/d
30. World Ag Expo interviews:
the need is real and wide spread
• 10+ interviews at show
– Everyone confirmed the need
– Robocrop, UK based, crude
competitor sells for $171 K
• Revenue Stream
– Mid to small growers prefer a
service
– Large growers prefer to buy,
but OK with service until
technology is proven
– Charging for labor cost saved
is OK, as we provide other
benefits (food safety, labor
availability)
31. The Business Canvas Updated
•Technology •Farming
Design conventions.
•Marketing •Demo, demo, •Mid/Large
•Research Labs •Demo and and demo!! Organic Farmers
•Equipment customer •Cost •Proximity is •Agricultural
Manufacturer feedback Reduction paramount corporations
•Distribution •Remove labor •Weeding Service
Network force pains Providers
•Service •Eliminate bio-
Providers
•IP – Patents
waste hazards •Mid/Large
•2 or 3 Key
•Video •Direct Service Conventional
Farms
Classifier Files •Indirect Service Farmers
•Robust • … then Dealers
Technology
Value-Driven •Direct Service with
• R&D equipment rental
• Bill of Materials •Low density: $1,500/d
• Training & Service •High density: $6,000/d
• Sales
32. Autonomous weeding - Final
- Innovation Direct - Low density
- Ag Service - Customer We reduce - Provide high vegetable growers
providers Education operating cost quality service at - High density
- Dealer training - Labor reduction competitive price vegetable growers
- Research (100 to 1) - Thinning
Institutes (eg UC - Reduced risk of operations
Davis, Laser contamination - Conventional
Zentrum - Mitigate labor vegetables
Hannover) availability
Engineers on concerns Direct
- 3-4 key farms Machine Vision - Alliance with
Two problems: service providers
- Identification - Eventually sell
- Elimination through dealers
Costs for service provision Service provision
COGS seek a 50-60% Gross Margin - Charge by the acre with modifier according to weed
Heavy R&D investment density
- Eventually move to asset sale
34. Definitions: Four Types of Markets
Clone Market Existing Market Resegmented New Market
Market
• Clone Market
– Copy of a U.S. business model
• Existing Market
– Faster/Better = High end
• Resegmented Market
– Niche = marketing/branding driven
– Cheaper = low end
• New Market
– Cheaper/good enough, creates a new class of product/customer
– Innovative/never existed before
35. Market Type
Existing Resegmented New
Customers Known Possibly Known Unknown
Customer Performance Better fit Transformational
Needs improvement
Competitor Many Many if wrong, None
s few if right
Risk Lack of branding, Market and Evangelism and
sales and distribution product re- education cycle
ecosystem definition
Examples Google Southwest Groupon
Market Type determines:
Rate of customer adoption
Sales and Marketing strategies
Cash requirements
36. Market Type - Existing
• Incumbents exist, customers can name the mkt
• Customers want/need better performance
• Usually technology driven
• Positioning driven by product and how much value
customers place on its features
• Risks:
– Incumbents will defend their turf
– Network effects of incumbent
– Continuing innovation
37. Market Type – Resementing Existing
• Low cost provider (Southwest)
• Unique niche via positioning (Whole Foods)
• What factors can:
– you eliminate that your industry has long competed on?
– Be reduced well below the industry‟s standard?
– should be raised well above the industry‟s standard?
– be created that the industry has never offered? (blue ocean)
38. Market Type – New
• Customers don‟t exist today
• How will they find out about you?
• How will they become aware of their need?
• How do you know the market size is compelling?
• Which factors should be created that the industry has
never offered? (blue ocean)
39. For Tomorrow’s Presentation
• What were your value proposition hypotheses?
• What did potential customers think about your
value proposition hypotheses?
– Get out of the building and begin to talk to customers
for Oct 12th
– Talk to 10-15 customers more by Oct 18th
– Follow-up with Survey Monkey (or similar service) to
get more data
• Submit interview notes, present results in class.
• Update your blog/wiki/journal with progress
customers and value prop
41. Group Privacy: Nan, Jim, Sundaresan
• Protect privacy for users of location-based services (LBS)
42. The Business Model Canvas: ver 0.0
Privacy Creating Increased educational
advocacy Privacy-
awareness privacy
groups trust concerned
customers
Building trust who use LBS
LBS App
Providers
Technology
Own website
Bundling with
LBS apps
Developing
App revenue (direct or shared)
costs
Marketing
costs
43. The Business Model Canvas: ver 0.1
Privacy Creating Increased educational
advocacy awareness Privacy-
privacy
groups trust concerned
customers
Building trust
LBS App No loss of who use LBS
Providers service
quality
Smart phone
users uneasy
about privacy
Technology
Own website
Bundling with
LBS apps
Developing
App revenue (direct or shared)
costs
Marketing
Subscription
costs
44. How to Test
Large number of privacy-
concerned LBS users Existing market research
Willing to pay for protecting Talk to customers
locations
Directly or indirectly
Able to reach them with low cost Bid on Google AdWords for location privacy
Able to ease their concerns (now no ads)
through
education
Talk to customers
endorsement by privacy watchdog Talk to privacy advocacy groups (e.g.,
groups 25,000 adults stalked by GPS)
LBS app developers are willing to
partner Talk to LBS app developers
Privacy groups are willing to Talk to privacy advocacy groups
endorse
45. Methodologies
• User interviews at Tresidder and I-Corps (11)
• LBS Domain Expert Interviews (1)
• Google AdWords (up and running)
• Online Survey (32 responses)
• Privacy Group Interviews (pending)
46. Hypothesis 1:
Large number of privacy-concerned LBS users
Most had low concern about location privacy
• User Interviews - Reasons • User Interviews – Reasons
for lack of concern for concern
– Trust the provider – Uncertainty how data
– Don‟t believe that data can used/misused
be used against them – General unease
– Never crossed their mind • Survey: 34% concerned
– Don‟t use LBS – 37% chose not to use a LBS
– Don‟t have smartphone because of privacy concerns
– Data already available to
carriers &government
• Survey: 66% not concerned
47. Hypothesis 2:
Willing to pay for protecting locations
Even some unconcerned customers are willing to pay!
• User Interviews – Unwilling to • User Interviews – Willing to
pay pay:
– Not interested in even a free – $15/month for total privacy
service protection, only a “few
– Not concerned enough to pay bucks/month” for location
– Not enough value add privacy
– $1/week
• Survey: 28% would not use it – $5 one time payment
even if it is free, 54% would
not pay • Survey: 46% willing to pay
– 9%: $1
– 19%: $10
– 9%: $1/month
– 9%: $5/month
48. Hypothesis 3:
Able to reach them with low cost
• Yes – at least at first
• Google Ad Words:
– Should be cheap at first - We are the only advertiser for
“location privacy” (and related)
– Location privacy is a popular search term
49. Hypothesis 4:
Able to raise awareness through education
• Yes
• User Interviews – education may prove effective to
some, as many did not think about or understand
that LBS providers would get their location data, and
indicated more concern
50. Hypothesis 5:
Able to ease concerns through endorsement
• Yes
• User interviews – endorsement from “famous
people” and “serious organizations” would help ease
concerns on the effectiveness of privacy protection.
51. Hypothesis 6:
LBS app developers are willing to partner
• No – so far
• Domain expert interview:
– LBS app developers will hate our service
– Increase LBS app’s operational cost
• User interviews
– Overwhelming issue – not lack of privacy protection
• But lack of perceived LBS value
– Secondary: LBS reputation and trust
52. Hypothesis 7:
Privacy groups are willing to endorse
• Unknown
53. Market Size Estimation
Number of Users Pricing
Entire market • Originally considered 1x
> 100m unique Google payment
Maps mobile
visitors/month • But customers naturally
Served available market assumed subscription
55% users concerned service
about sharing location • Possible to charge more?
information [Nielsen 2011]
– Reduced price --/-->
Target market
willingness to use
Open Question, but rapidly
growing market
54. Pivot Point?
• Not yet, but if user interview data trends against our
hypotheses…
• Two new models to consider
– Licensing
– Location based monitoring
• Privacy scorecard
• Hyperlocal news
55. ARKA Lights
High Performance Heat Dissipation Technology for LED Lighting
Hypotheses:
• Improved novel (integrated) thermal dissipation
technology can significantly improve LED lighting
performance and reduce cost
• Our technology allows direct replacement of commercial
high lumen but low efficiency incandescent bulbs with
LEDs without light quality/output compromises
• This can deliver a scalable business model
56. CANVAS FOR ARKA – Version 1
LED manufacturers
System integration Higher Trade Presence, Commerci
Government lumens in the publications, al
Agencies (DOE) Awareness same form shows Customer
Building factor - Indoor
Reduced s
Applications
Suppliers Certifications number of Web based
-Replacement
LEDs demos, Lamps
education
Environmental
Experienced Increased Direct Sales
conscious Groups
manufacture reliability to
r as a Institutions
Luminaire partner Luminaires
Manufacturers Requires no
IP Manufacturers
infrastructure
Systems changes
ASME,
Professional Design OEMS
Groups
Component
supplier costs Sale of
Products
Developments
Costs
Cost of Sales
57. GETTING OUT OF THE BUILDING
• We‟re talking to (some combination of):
– OEMS
– Architects (Rita Koltai – Koltai Lighting Design)
– Technical Experts/Consultants (Stanford
University), Prof. Robert Davis, (CMU)
– Lighting designers and manufacturers (Greenray
Lighting)
– Lighting Distributors (Stanford Lighting)
– Facility Managers (Sheraton Hotel)
– Retail Outlets (Pottery Barn)
58. CUSTOMER FEEDBACK
1) Prof. Robert Davis, Founder of CREE – a leading LED
company
- Heat transfer is a major issue. Not sure whether the internal
phonon reflectance may in fact be the leading thermal limit.
2) Prof. James Harris, EE Department, Stanford University
- Heat transfer issue – The phonon reflection increases
significantly with the doping of new materials. This reduces
thermal conductivity of the LED. Eventually it becomes the
limiting factor. Need to include reduction in the thermal
conductivity in the heat transfer modeling.
- Bought six PAR38 lights for his family room last week. Wants
them to last 20-30 years as changing them with a ladder was
a major hassle.
- Light intensity was lower than incandescent bulbs it
replaced. Not happy about that.
59. CUSTOMER FEEDBACK
3) Mr. Mo, Co-owner of Greenway Lighting, Santa Rosa, California
- T8 lighting (tube light replacement) is their main product. PAR38
replacement is needed, but not available today. They recommend
PAR30, a much lower intensity product. The available PAR38 do
not meet the lighting intensity and light quality demands for
replacing the current incandescent lights.
- Replacing light bulbs is a major hassle. Costs $400 to rent a
cherry picker to replace bulbs – makes very expensive. Need to
have longer life.
- Offered a business proposition to do thermal design of his LED
lights on a consultation basis (Not an attractive business model
for us due to very low returns and limited scalability).
60. CUSTOMER FEEDBACK
4) Prof. George Tayo, ME Center for Design, Stanford
University
- LEDs are evolving very rapidly. Thermal issues are
similar to PCs – cooling will remain major issues as
performance and quality envelope will continue to
expand.
5) Mr. Bruno (maintenance supervisor) – Sheraton
Hotel, Palo Alto
- Use 100‟s of PAR38 in this hotel. Replace every 6
months or so. Would be happy with longer life
product
- Current weight of LEDs might prevent them from
being used in establishments with high ceiling.
(Heavy aluminum heat sink adds significantly to
weight).
61. CUSTOMER FEEDBACK
6. Pottery Barn Staff – Pottery Barn, Palo Alto
Title 24 has changed the procurement patterns of corporate
headquarters regarding light fixtures – no dimming or two-way
switches (Need to become familiar with local laws)
Use incandescent lights for all general illumination (counted 34
in front foyer alone) without dimming or daylight control.
Extensive use of CFLs in displays (not directional so less
suitable for task lighting).
7. Paul (salesperson) – Stanford Electricals -
• Advocate of LEDs; largely „self-educated‟
• Indicated that rising prices (~30% in last 6 mths) of fluorescents
(due to phosphor costs) and falling LED prices will boost LED
sales
• Indicated unwillingness of smaller retailers to experiment with
new suppliers products‟
• Highlighted form factor of LEDs and emphasized that products
need to be used without changing current infrastructure.
• Seeing significantly increased adoption of LEDs by customers
(particularly over last 5 mths)
62. CANVAS FOR LED – Version 2
LED manufacturers
System integration Higher Trade Presence,
Government
Agencies (DOE) lumens in the publications, Commerci
Thermal same form shows al
modeling of LED factor Customer
Suppliers cooling Awareness Lower Web based - Indoor
s
Building purchase demos, Applications
Certifications education
cost -Replacement
Environmental Lamps
conscious Groups Experienced Increased Direct Sales (PAR38)
manufacture reliability to
Luminaire
r as a Institutions
Manufacturers Reduced Luminaire
partner
weight Manufacturers
IP
ASME, Requires no
Professional Systems
Design infrastructure
Groups changes
Component
supplier costs Sale of
Products
Developments
and Certification
Costs
Cost of Sales
63. IMMEDIATE Next steps
• Conduct further interviews to asap validate value
proposition and channel hypotheses
– OEMS and Institutions
– Specifiers and Contractors
• Begin work on key activities including reduction
of technology to practice (prototyping)
64. Summary
• Contacted 8 diverse feedback nodes (experts,
customers, supply chain)
• Partially validated three components of the initial
canvas.
– Learned more about possible value proposition.
– Modified key activities to include thermal modeling
– Recognized need for engaging with OEMs asap
Disclaimer – The conclusions drawn here are based on a limited
data collected. Further validation will be conducted.
65. Ground Fluor Pharmaceuticals
Advanced Chemistry for
Pharmaceutical Progress
Team: Kiel Neumann (EL)
Stephen DiMagno (PI)
Allan Green (Mentor)
I-Corps 10/11/2011
66. PET is a non-invasive medical diagnostic
technique for cardiac, brain, and tumor imaging
GFP technology makes new (unknown) and
known (but clinically inaccessible) [18F]-labeled
radiotracers readily available
Fast, multiplatform, high efficiency synthesis of
these fleeting, precious agents.
Initial target indications: pediatric neuroblastoma,
Parkinson‟s disease.
I-Corps 10/11/11 68
67. The Business Model Canvas
Technical Assistance
cGMP manufacturer SOPs for precursors
(Image Atlas) Radiopharmacies
Radiopharmacies and drugs
Accessibility (RCY) FDA regulatory support
Nuclear Medicine and Recruit clinical sites
Purity Equipment producers
Radiology In vivo animal studies
Develop regulatory Speed
departments PET/SPECT Prescribing physicians
plan for pre IND
meeting Multiplatform Technical assistance
Sensitivity (nca) Radiologist who
ID cGMP CRO
Pharmaceutical Specific compounds perform studies
Fund-raising
development
companies
General
IP methodology for
PoP data adding fluorine to Direct sales of Drug developers
lead compounds of precursor
IP interest
PoP data R&D and clinical
studies presented in Radiologists
Regulatory plan
Understanding of journals and meetings
the regulatory
process
Sales of intermediates
Contract cGMP precursor manufacture
Salary, Rents
Technology license
Clinical trials
Product license (royalty)
68. Out of the Building
- Face to face with attending Radiologist at
Stanford University
- Face to face with radiopharmacist at UCSF
- Conference call with Nuclear Radiologist at
Memorial Sloan Kettering
- Conference call with president of medium
size drug company with PET product at the
FDA
- Telephone conference with cGMP facility
I-Corps 10/12/11 71
69. Out of the Building
- Immediate need for our product
- Currently used SPECT product for neuroblastomais limited
by absence of correlative CT data
- Our lead PET agent would provide more information
on existing imaging equipment base
- Two customers offered to participate in clinical trials
- Potential for further development of other tracers
identified in interviews
- Actual need for the general procedure
- Allow access to previously unknown tracers
I-Corps 10/12/11 72
70. Impact on the Value
Proposition Hypothesis
-Initially seeking to market method technology
-too diffuse, but many opportunities (i.e.
product-driven opportunities more than
general technology-driven)
-Need to identify specific imaging product
opportunities
-Validated hypothesis for immediate need of tracers
-Raised question on identity of lead compound
pipeline for Parkinson‟s disease
-Recruited two potential partners for clinical trials
73
71. Approximately 2.2 million procedures in the US.
Drug costs range from $700 (on-patent) to ~$150 (generic FDG)
US sales of radiopharmaceuticals for PET and SPECT $1.2 billion
US sales expected to grow to $6 billion by 2018
Global numbers approximately 2x
Source: Bio-Tech Systems Report #330; data for 2010.
I-Corps 10/11/11 74
72. • 2500 installed PET scanners
• PET radiopharmacies cover the entire US market
• Radiopharmacieshave an interest in proprietary agents as a basis
of competition in their market.
75 I-Corps 10/11/11
73. Neuroblastoma Parkinson’s Disease
Prevalence: about 6000 US cases DatSCAN sales in Europe ~$100 M
about 1000 new cases per year
The world's highest recorded
Subjects receive 3-6 images/year prevalence of Parkinson's Disease
to follow response to therapeutic of any region is in Nebraska, with
protocols 329.3 people per 100,000
population
World market at U.S. x 2 gives potential
of 40,000-70,000 scans/year US – 600,000 patients 1 scan per
year @ $500 = $300 M
Drug costs $500/per gives ~$20 - $35 M
76 I-Corps 10/11/11
74. Target Customer
Fast Market Expansion
Treated
Severe 686,000
OSA
Home Diagnosis Device Market
Growing at CAGR of 7%
8 Million Frost & Sullivan
Untreated
7.4 Million
75. Target Customer
Current treatment ineffective
Treated
Option #1: CPAP
Continuous Positive
Severe 686,000
Airway Pressure
OSA
Therapeutic treatment of OSA
growing at CAGR of 17%
8 Million Frost & Sullivan
Untreated
Option #2: Surgery
Uvulopalatopharyngoplasty
Maxillomandibular Advancement
7.4 Million Tonsillectomy
76. Initial Target Customer
Current treatment ineffective
Treated
Treatment
Severe 686,000 Effective
60%
OSA
412,000
40% Treatment
8 Million
Ineffective
Untreated
274,000
7.4 Million
77. Initial Target Customer
Current treatment ineffective
Treated
Treatment
Severe 686,000 Effective
60%
OSA
412,000
40% Treatment
8 Million
Ineffective
Untreated
274,000
Target
7.4 Million Customer