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Lecture 2 value proposition


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Lecture 2 value proposition

  1. The Lean LaunchPadLecture 2: Value Proposition Steve Blank Jon Feiber Jon Burke
  2. Agenda• Team Bus Model Presentations• Value Proposition – Product – Service – Ecosystem
  3. VALUE PROPOSITIONSwhat 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 WeedingTalked 75 Customers in 8 Weeks
  13. Our initial plan
  14. 20 interviews, 6 site visits… We got OUR Boots dirtyWeedingVisited two farms in Salinas Valley to better understand problemInterviewed:• 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 applicatorMowingInterviewed:• 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 publicand Ag) Education cost customer or commercially- Vehicle OEMs - Dealer training - Labor reduction used green spaces(John Deere, Toro, - Better utilization of Co. trains (e.g. golf courses)Jacobsen, etc) assets (mow or dealers, supports - Landscaping weed at nights) dealers service provider- Research labs - Improved performance (less Weeding Engineers on rework, food safety) - Mowing Dealers - Farmers with Autonomous - Ag Dealers manual weeding vehicles, GPS, path operations -planningDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling the equipmentHeavy 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 weedingApplication 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 xxxlarge fields run organizationsWeeding in Agri Industry: YES! for TAM increased YES! organic Not necessarily to $2.6 B (TotalAgriculture 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 - Low density- Ag Dealers - Customer We reduce sell, installs and vegetable- Ag Service Education operating cost supports growersproviders - 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 - EliminationDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling theHeavy R&D investment equipment
  19. 1 Week – 1 CarrotBot Confidential
  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, a •Demo and nd demo!! customer •Cost Reduction •Proximity is •Organic Farmers•Research Labs feedback paramount •Weeding Service •Remove labor•Equipment Providers force painsManufacturers •Conventional •Eliminate bio-•Distribution Farmers waste hazardsNetwork•Service •IP – PatentsProviders •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 HighlightsAbove: Organic Carrots, 7wks.Top right: Conventional carrotsBottom Right: Very weedy. Will requiremultiple passes of hand weeding
  23. Visit Highlights Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds
  24. Visit HighlightsOrganic Broccoli, closely cultivated. Weedsclose to plants are hand-picked
  25. Visit HighlightsState of the Art in Weeding Technology for Organic Crops
  26. Customer HypothesisPre-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, visitedRecommender • 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 • GrowerRecommender • 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•EquipmentManufacturers force pains •Weeding Service •Eliminate bio- Providers•Distribution waste hazardsNetwork•Service •IP – Patents •Mid/LargeProviders •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, a •Mid/Large•Research Labs •Demo and nd demo!! Organic Farmers•Equipment customer •Cost •Proximity is •AgriculturalManufacturer feedback Reduction paramount corporations•Distribution •Remove labor •Weeding ServiceNetwork force pains Providers•Service •Eliminate bio-Providers •IP – Patents waste hazards •Mid/Large•2 or 3 Key •Video •Direct Service ConventionalFarms 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 growersproviders Education operating cost quality service at - High density - Dealer training - Labor reduction competitive price vegetable growers- Research (100 to 1) - ThinningInstitutes (eg UC - Reduced risk of operationsDavis, Laser contamination - ConventionalZentrum - Mitigate labor vegetablesHannover) availability Engineers on concerns Direct- 3-4 key farms Machine Vision - Alliance with Two problems: service providers - Identification - Eventually sell - Elimination through dealersCosts for service provision Service provisionCOGS seek a 50-60% Gross Margin - Charge by the acre with modifier according to weedHeavy R&D investment density - Eventually move to asset sale
  33. Market Type
  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 NewCustomers Known Possibly Known UnknownCustomer Performance Better fit TransformationalNeeds improvementCompetitor Many Many if wrong, Nones few if rightRisk Lack of branding, Market and Evangelism and sales and distribution product re- education cycle ecosystem definitionExamples 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
  40. Examples
  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 EstimationNumber 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 LightsHigh 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 1LED manufacturers System integration Higher Trade CommerciGovernment lumens in the Presence, publica alAgencies (DOE) Awareness same form tions, shows Customer Building factor - Indoor Reduced s Applications Suppliers Certifications number of Web based -Replacement LEDs demos, Lamps educationEnvironmental Experienced Increased Direct Salesconscious Groups manufacture reliability to r as a InstitutionsLuminaire partner LuminairesManufacturers Requires no IP Manufacturers infrastructure Systems changesASME, Professional Groups Design OEMS 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 FEEDBACK1) 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 FEEDBACK3) 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 FEEDBACK4) 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 FEEDBACK6. 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 2LED manufacturers System integration Higher TradeGovernmentAgencies (DOE) lumens in the Presence, publica Commerci Thermal same form tions, shows al modeling of LED factor Customer Suppliers cooling Awareness Lower Web based - Indoor s Building purchase demos, Applications Certifications education cost -ReplacementEnvironmental Lampsconscious Groups Experienced Increased Direct Sales (PAR38) manufacture reliability toLuminaire r as a InstitutionsManufacturers Reduced Luminaire partner weight Manufacturers IPASME, Requires noProfessional Systems Design infrastructureGroups 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 asapDisclaimer – The conclusions drawn here are based on a limiteddata 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 AssistancecGMP manufacturer SOPs for precursors (Image Atlas) RadiopharmaciesRadiopharmacies and drugs Accessibility (RCY) FDA regulatory supportNuclear Medicine and Recruit clinical sites Purity Equipment producersRadiology In vivo animal studies Develop regulatory Speeddepartments 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 facilityI-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 tracersI-Corps 10/12/11 72
  70. Impact on the ValueProposition 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 billionUS sales expected to grow to $6 billion by 2018Global 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 DiseasePrevalence: about 6000 US cases DatSCAN sales in Europe ~$100 Mabout 1000 new cases per year The worlds highest recordedSubjects receive 3-6 images/year prevalence of Parkinsons Diseaseto follow response to therapeutic of any region is in Nebraska, withprotocols 329.3 people per 100,000 populationWorld market at U.S. x 2 gives potentialof 40,000-70,000 scans/year US – 600,000 patients 1 scan per year @ $500 = $300 MDrug costs $500/per gives ~$20 - $35 M 76 I-Corps 10/11/11
  74. Target Customer Fast Market Expansion TreatedSevere 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 PositiveSevere 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 TreatmentSevere 686,000 Effective 60% OSA 412,000 40% Treatment8 Million Ineffective Untreated 274,000 7.4 Million
  77. Initial Target Customer Current treatment ineffective Treated TreatmentSevere 686,000 Effective 60% OSA 412,000 40% Treatment8 Million Ineffective Untreated 274,000 Target 7.4 Million Customer