Presentation examples for class 7 revenue models

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  • ----- Meeting Notes (3/6/12 10:38) -----what the dentist makes for a perio procedure
  • Progression: larger and larger sensor networks deployed
  • Presentation examples for class 7 revenue models

    1. The Lean LaunchPadPresentation examplesused in Class 7 - Revenue Models 07/02/12
    2. Optical EquipmentRevenue Model Example
    3. Academia Payment Flow activity payment Component Phi Optics vendorsQPI info & price Buys QPI device funds grant/contract request for equipment University Grant Agencies Researcher Business Industry Contracts Services applies for grants/contracts
    4. Bio-Pharma Payment Flow activity payment Component Phi Optics vendors QPI specs + price Includes equipment in the budget Buys QPI device Purchasing CTO Researcher Dept. VP for R&D Justifies need for equipment
    5. OEM Payment Flow activity payment Equipment Phi Optics suppliersQPI specs + price+ SOW Allocates funds in the Funds SOW budget Pays royalties/sub- licensing/other recurring fees Product Dev Accounting CTO Engineers + VP for R&D Dept. Business Dev ($) + Legal Dept (royalties) Justifies QPI integration in OEM system Suggests co-development deal
    6. Nitrate SensorRevenue Model Example
    7. Product Money OEM Water Data only Large farm Small farmUSDA/EPA
    8. Product Money OEM Nutrient Data Large farmUs Small farm USDA/EPA Product sales
    9. Product Money OEM Nutrient Data Large farmUs Small farm USDA/EPA Licensing/sales
    10. Product Money OEM Nutrient Data Large farmUs Small farm USDA/EPA Independent of licensing decision
    11. Using $1000 per sensor (2x cost) puts us ~$350 more expensive than current commercialnitrate sensors. We’re including pH, moisture, and conductivity, though.Incentives: Best case scenario $45.89/acre Worst case: $9.65/acre or state dependent 25% costcoverage Install sensors 400 acres, 4 soil Us Small farm types: 8 sensors $1K/sensor less incentive = $4140 $3860 for 400 acre nutrient management USDA/EPA
    12. Using $1000 per sensor (2x cost) puts us ~$350 more expensive than current commercialnitrate sensors. We’re including pH, moisture, and conductivity, though.Incentives: Best case scenario $45.89/acre Worst case: $9.65/acre or state dependent 25% costcoverage Install sensors 400 acres, 4 soil Us Small farm types: 8 sensors $1K/sensor less incentive = $4140 Average $10.40 in N- $3860 for 400 acre fertilizer lost to groundwater nutrient management per acre: Repaid in 1 year USDA/EPA
    13. Bio-Based Chemical Intermediates Revenue Model Example
    14. Revenue model: Hypothesis Here’s what we hypothesized… Biomass supplier Biomass 15 c/lb Biomass Range 5-20c/lb Monomer manufacturer Monomer ? Detergent alcohols 80c/lbDistributor Surfactant Formulation ? formulator Formulated Surfactant 90c/lb Surfactant Surfactant 100 c/lbDecision user Formulated Detergent 100c/lbMakers Consumer facing Detergent 200 c/lb company 10% Surfactant in Detergent Consumer Market Pull Product (Sustainability agenda)
    15. Revenue Model: Experiment 1 Here’s what we did… Production Economics Experts Economic analysis expert Director Director Techno-commercial analysis expert Life Cycle Assessment Expert Economic analysis expert Business Manager
    16. Revenue model: Result 1 Financial metrics Ethanol DMF Lactic Bi-functional fatty acid Scale (T/day) 500,0001b/da 600,000 300,000 y lb/day lb/dayFeedstock 15 c/lb 19 c/lb 16 c/lbProcessing 2 c/lb 26 c/lb 25 c/lbCapital 1 c/lb 2 c/lb 41 c/lbOther 3 c/lb 15 c/lb 39 c/lbMSP (c/lb) 21 c/lb 62 c/lb 120 c/lb
    17. Revenue model: Result 1 Financial metrics Ethanol DMF Lactic Bi-functional fatty acid Scale (T/day) 500,0001b/da 600,000 300,000 y lb/day lb/dayFeedstock 15 c/lb 19 c/lb 16 c/lbProcessing 2 c/lb 26 c/lb 25 c/lbCapital 1 c/lb 2 c/lb 41 c/lbOther 3 c/lb 15 c/lb 39 c/lbMSP (c/lb) 21 c/lb 62 c/lb 120 c/lb
    18. Revenue model: Result 1 Financial metrics Ethanol DMF Lactic Bi-functional fatty acid Scale (T/day) 500,0001b/da 600,000 300,000 y lb/day lb/dayFeedstock 15 c/lb 19 c/lb 16 c/lbProcessing 2 c/lb 26 c/lb 25 c/lbCapital 1 c/lb 2 c/lb 41 c/lbOther 3 c/lb 15 c/lb 39 c/lbMSP (c/lb) 21 c/lb 62 c/lb 120 c/lb
    19. Revenue model: Result 1 Financial metrics Ethanol DMF Lactic Bi-functional fatty acid Scale (T/day) 500,0001b/da 600,000 300,000 ? y lb/day lb/dayFeedstock 15 c/lb 19 c/lb 16 c/lb 15 c/lbProcessing 2 c/lb 26 c/lb 25 c/lb ?Capital 1 c/lb 2 c/lb 41 c/lb ?Other 3 c/lb 15 c/lb 39 c/lb ?MSP (c/lb) 21 c/lb 62 c/lb 120 c/lb < 100 c/lb Less than 100 c/lbis achievable when: 1. Large reactor with 500,000 lb/day capacity 2. Optimized fermentation and processing costs
    20. Revenue model: Result 2 Payment Flow Biomass supplier Biomass 15 c/lb Biomass Range 5-20c/lb Monomer manufacturer Monomer 80 c/lb Detergent alcohols 80c/lbDistributor Surfactant Formulation 90 c/lb formulator Formulated Surfactant 90c/lb Surfactant Surfactant 100 c/lbDecision user Formulated Detergent 100c/lbMakers Consumer facing Detergent 200 c/lb company 10% Surfactant in Detergent Consumer Market Pull Product (Sustainability agenda) Disposal Regulations Waste
    21. Payment Flows Example
    22. Payment Flows Clinical Diagnostic Services Pharmaceutical Products Private Sales/order Sales/order payer/MAC Payment Payment Service Service$$ Hospital / Clinic Pharmaceutical Company Pathologist/ Researchers Oncologist billing $$ Instr. / Kits $$ CanScan CanScan Services rendered Class 6 - Update 3.5.2012
    23. Medical DevicePricing Example
    24. GrapheneRevenue Model Example
    25. Payment flow Researchers Add value More workCurrent TEM Distributorsgrid provider Graphene Frontiers Material supplier
    26. Payment flow Electronic User DistributorsE-reader manufacturer Parts suppliers Flexible display Graphene Frontiers manufacturer Parts suppliers Material Research, cost supplier
    27. Direct Cost Estimates: Scale Matters• Cost per in2 – 1” Furnace = $.80• Cost per in2 – 2” Furnace = $.45• Cost per in2 – 4” Furnace = $.20If we can move to N (replacing Ar, key direct cost driver)• Cost per in2 – 1” Furnace = $.50• Cost per in2 – 2” Furnace = $.25• Cost per in2 – 4” Furnace = $.10“Holy Grail”: 4” or larger continuous production w/NitrogenCost per in2 – 4” Furnace, Batch/Continuous = … $.05
    28. SensorPricing Tactics Example
    29. Understand Economics of Plant + Sensors Industrial PlantsUnderstand Economics of Technology Supplier Plant #1 Plant #2 Plant #3 Technology SupplierWho does this?
    30. 32 Diaphragm Membrane $240/MT Cl2 Operational conditions Capital cost per incident Downtime per incident # of cells protected Cost of damages + downtime per incident per year Time between incidents Number of cells, US and worldwide Value per unit per year Diaphragm Membrane Membrane Header $2,500 $270 $10,600
    31. Soft product launch projected for Q1-Q2 2012 General launch projected for Q4 2012Diaphragm Membrane Membrane Header $2,500 $270 $10,600 Year Type % Revenue [/year] 1 Innovators (US) 2.5 $271,500 Operating costs for 1st year projected to be $350,000 2 Early Adopters 16 $15,040,000 3 Early Majority 50 $47,000,000 4 Late Majority 84 $78,960,000 Full Penetration 100 $94,000,000 33
    32. Medical DeviceRevenue Model Example
    33. What we make Device cost (one time) ~$2000Dental DentistOptics Disposables ~$2.50 per patient
    34. What the dentist normally makes $250 Insurance Membership $250 Co-pay Dentist Patient Equipment / Variable CostsNote: Assumes 50/50 copay-insurance split
    35. What we’d add for the dentist Device creates $250 additional Insurance periodontal procedures Device cost (one time) Membership ~$2000 $250 Co-pay Dental Dentist Patient Optics Disposables ~$2.50 per patient Equipment / Variable CostsNote: Assumes 50/50 copay-insurance split
    36. Farm Nitrate SensorRevenue Model Example
    37. Economics of TSP OperationIncentives: Best case scenario $45.89/acre Worst case: $9.65/acre or state dependent 25% cost coverage Install sensors, provide service 400 acres, 4 soil Us Pay for 2-3 year contract service monthly types: 8 sensors Small farm $3860 for 400 acre Average $10.40 in N- nutrient management fertilizer lost to groundwater per acre $1K/sensor less incentive = $4140 to USDA/EPA recover in contract
    38. Economics of TSP OperationIncentives: Best case scenario $45.89/acre Worst case: $9.65/acre or state dependent 25% cost coverage Install sensors, provide service 400 acres, 4 soil Us Pay for 2-3 year contract service monthly types: 8 sensors Small farm Onion Case Study (44K acres): $3860 for 400 acre Cost: DAP - $700/ton + $25/a nutrient management Rate: 280lb/a for 400a farm $1K/sensor less = $39K incentive = $4140 to USDA/EPA recover in contract 30% Improvement: $13K saved Charge: $6K/season = $660K/yr contract revenue
    39. Biofactories for Therapeutics Revenue Model Example
    40. Revenue Model = money = relationship = information = AAT Patient Large Pharma Private Payor Employer Government PayorWholesalers Hospital/Clinic Government Physicians Taxpayer Pulmonary Function Lab INFLUENCER
    41. Optics Design CompanyRevenue Model Example
    42. ™ Revenue Model & Payment Flows Customer: LED company LighTip™ Engineering contract ($150-300/hour) Light source Advanced Quantity purchase of Illumination components for prototype & Engineering Reflector mass production . Desired target Key Partner: Our Optical Manufacturer deliverable Prototype & High Volume Production (0.25%-8% Customer’s final product commission)5/23/2012 44
    43. Complex Sensor Networks Revenue Model Example
    44. Revenue Model and CustomerSET Sensor Node Product Acquisition Middleware and Reusable Software OEM HW components Subsystems ($100 COGS)SET’s price $400 Year 1: Year 2: Year 3: Year 4: Year 5: (3 Customers) (10 Customers) (30 Customers) (100 Customers) (200 Customers) 1K nodes 5K nodes 30K nodes 200K nodes 400K nodes $400K $2M $12M $80M $160M First target customers Leverage our partners’ existing customers
    45. Healthcare SoftwareRevenue Model Example
    46. Revenue Model Health Healthcare Patient Data Information Providers ExchangesTailored Messaging Portal $$$for + Patient Outcomes Patient Data Patient Analytics $$$ Resources/To Health ols Patient Profile Insights Patient

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