biz model for catchbox

Project presentation MT4002 Technology Management Strategy

Liisa Hakala Tuomas Hervonen Jarno Hilvenius Essi Puustinen Ekku Rytkönen

Agenda

1. Introduction to Catchbox

2. Value proposition

3. Customer selection

4. Value capture

5. Scope of activities

6. Strategic control

6th Nov 2012 2

INTRODUCTION

6th Nov 2012 3 INTRODUCTION

VALUE PROPOSITION

CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

(CatchBox web page, 2012)

The Company • Participated in the Finnish

“Summer of startups” program

• 10 weeks internship program of Aalto Entrepreneurship Society

• End result was their product: Catchbox

• Business plan is still in progress – Our goal was to design a

business plan for the company

– Everything from this slide onwards is created by our group

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

VALUE PROPOSITION

6th Nov 2012 5 INTRODUCTION

VALUE PROPOSITION

CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

(CatchBox web page, 2012)

Catchbox

• Throwable wireless microphone

– no-one has to run around with a traditional microphone

• Engages the audience

– Breaks the ice

– Sparks discussion

– Helps sharing ideas

– Increases interaction

• Fun to throw, easy to catch

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

“Best new device for crowd Q&A I’ve ever seen.”

Doug Richard, (Dragons den UK &) School for Startups, London

Value of Catchbox

• For lectures:

– Its hard to maintain the attention of the audience

– Catchbox keeps students on their toes and awake

• Enhanced discussion

• Better Q&A sessions

• Improved learning experience

– How would the curve look like when using Catchbox?

6th Nov 2012 7

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

(Mills, 1953)

class paying full attention %

time, min

Disadvantages

• Takes attention and focus to the wrong place

• Creates too big fuss when used for the first time

• Microphone flies to difficult place or a corner

• Someone does not know how to catch

– Could be embarrassing?

• What if Catchbox knocks off coffee or something else?

– Who is responsible?

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Technical Details

• Product includes – Wireless transmitter – Motion sensor – Microphone – Design-cube shaped cover

• Not easy to break • Easy to plug-in to a system • Microphone switched off when

Catchbox is in the air • Switched on when catching/landing

INTRODUCTION

VALUE PROPOSITION

CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Technical Assumptions

• A lot of strategic questions were left unanswered

• Resulting technical assumptions

– Cover can be changed

– Open from side when needed to switch on/off

– Can be sold with or without the transmitter

– Charging by changing battery

INTRODUCTION

VALUE PROPOSITION

CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

CUSTOMER SELECTION

6th Nov 2012 11 INTRODUCTION

VALUE PROPOSITION

CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

What is the customer like?

• Curious

• Innovative

• Interactive-freak

• Adventurous

• Not too serious

• Desires to improve

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Who would be the user?

• Universities

• Executive education organizations

• Comedians

• Magicians

• Firm events

• TV shows

• All kinds of speakers

• (Sponsor firms)

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

“This is the first time that a group has proposed a technology that might help me in my job! Good topic.”

Jeff Funk, MT4002, NUS

(NU

S w

eb p

age,

20

12

)

Segmentation

• Service Providers

– Companies that provide organizations with audio-visual systems in their facilities

– Turnkey style service includes all equipment, installation and later on maintenance

• Direct Buyers

– Companies or individuals that deliver speaches in a variety of situations

– Key issue is mobility

– For example guest lecturers, consultants, etc.

Two big segments:

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Segmentation

• Service Providers

+ Not price sensitive

+ Need to convince only the provider

+ Bulk buys

− Market penetration is hard

− Long delivery chain

• Direct Buyers

+ Greater volumes initially

+ Easier market penetration

+ Might start hype reaction

− Need of substantial marketing efforts

Pros and cons:

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Differences in needs

• Service Providers

– Professional quality

– Assembly is not a problem

– Stationary usage

• Direct Buyers

– Need easy connectivity

– Ready to use

– Mobile usage

Two big segments:

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

VALUE CAPTURE

6th Nov 2012 17 INTRODUCTION

VALUE PROPOSITION

CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Value capture methods

• Two main sources of revenue – Online sales (Direct buyers)

– Service Providers

• Online sales – The sales occurs through our websites

– Customer can pay with • Credit/debit

• PayPal Express Checkout

• Service Providers – Pay directly to us

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Cash flow in the value network

DIRECT BUYERS

PURCHASING THE PRODUCT FOR THEIR

OWN USE

SERVICE PROVIDERS

INDIRECT CUSTOMERS

PURCHASING A SYSTEM THAT THE PRODUCT IS A

PART OF

CATCHBOX

TECHNOLOGY ASSEMBLY COMPANY

COMPONENTS

SUPPLIER 1

SUPPLIER 2

SUPPLIER 3

TEXTILES & COMPONENT S

SUPPLIER 1

SUPPLIER 2

SUPPLIER 3

COVER MANUFACTURING

COMPANY

Payment service provider

Banks

PayPal

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Catchbox´s net profit margin is ~50%

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

Catchbox cost structure

Net profit

Costs

Inclusive of textiles, hardware system, logistics, inventory, payment service provider, labor

Sales price 300 €

(Houston chronicle web page, 2012)

SCOPE OF ACTIVITIES

6th Nov 2012 21 INTRODUCTION

VALUE PROPOSITION

CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Setting up operations

• Catchbox is a startup

– Small company

– No/Fuzzy infrastructure at the moment

– Limited resources

• One product Narrow horizontal integration

• Outsource rather than do Low degree of vertical integration

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Activities to carry out

• Catchbox acts as the designer – Cover design and technical aspects of the product – Some logistics administration and inventory of

technology units and covers

• Manufacturing is outsourced – Cheap components and technology assembly (China?) – Finnish cover manufacturer Finnish quality

recognition and the brand value

• In the case of our business growing – Logistics company to manage logistics and inventory Catchbox holds only design functions

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Order information flow

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

SERVICE PROVIDERS

INDIRECT CUSTOMERS

PURCHASING A SYSTEM THAT THE PRODUCT IS A

PART OF

DIRECT BUYERS

CATCHBOX

TECHNOLOGY ASSEMBLY COMPANY

COMPONENTS

SUPPLIER 1

SUPPLIER 2

SUPPLIER 3

TEXTILES & COMPONENT S

SUPPLIER 1

SUPPLIER 2

SUPPLIER 3

FINNISH COVER MANUFACTURING

COMPANY

PURCHASING THE PRODUCT FOR THEIR

OWN USE

Material flow

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

SERVICE PROVIDERS

INDIRECT CUSTOMERS

PURCHASING A SYSTEM THAT THE PRODUCT IS A

PART OF

DIRECT BUYERS

CATCHBOX

TECHNOLOGY ASSEMBLY COMPANY

COMPONENTS

SUPPLIER 1

SUPPLIER 2

SUPPLIER 3

TEXTILES & COMPONENT S

SUPPLIER 1

SUPPLIER 2

SUPPLIER 3

FINNISH COVER MANUFACTURING

COMPANY

PURCHASING THE PRODUCT FOR THEIR

OWN USE

Activities to carry out

• Marketing and promotion – In the absense of resources marketing has to be

modern and clever – Marketing through social media such as Facebook and

Twitter – Participating in public events with media coverage – Promotion through the customers

• Direct buyers promote Catchbox by using it and getting the word out

• Service providers can promote the new product to their customers Added value to their offering by having a product their competition lacks

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Examples

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

• Promotion in events:

– Finnish Municipal Elections debate 2012 (YLE)

Examples

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

• Promotion by speakers:

– Linus Torvalds in Aalto University (EIT ICT Labs)

STRATEGIC CONTROL

6th Nov 2012 29 INTRODUCTION

VALUE PROPOSITION

CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Strategic Control

• Competitive advantages

– Nothing similar available

– Finnish design

– Professional buyers

• Trust quality products

– Niche product (Avainlippu web page, 2012)

Complementary Assets

• Needed technology already available

– design concept product

• Production can be easily outsourced

• Need to broaden supplier base

• Licensing contracts with cover providers and designers

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Protecting the product

• Patenting design

• Trademark

• Retaining high quality

– Demanded by professional buyers and users

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

Future possibilities

• Larger version for catching the atmosphere in larger events

– e.g. crowd surfing Catchbox in concerts

• Advertisements on the cover

• Company-tailored covers

• Catchbox with camera

INTRODUCTION VALUE

PROPOSITION CUSTOMER SELECTION

VALUE CAPTURE

SCOPE OF ACTIVITIES

STRATEGIC CONTROL

THANK YOU!

Next: 5 minutes for questions

Go!

(Rapgenius web page, 2012)

References • Cover slide background picture

– http://www.talouselama.fi/Kasvuyritykset/pehmea+mikrofonikuutio+lensi+yleison+sydamiin++startup+loi+valmiin+tuotteen+2+kuukaudessa/a2139106 , last used 17.10.2012

• Catchbox related pictures and Cite from Doug Dichard – www.thecatchbox.com, last used 17.10.2012 (First blue one original, other own mock-ups)

• Attention graph on slide 7 – Mills, H. R., Techniques of technical training, Cleaver-Hume Press, London, 1953.

• Photo of Jeff Funk on slide 13 – NUS Faculty of Engineering Staff profiles, http://www.eng.nus.edu.sg/etm/staff/Funk_JL.htm, last

used 17.10.2012.

• Estimated margins for Catchbox on slide 20 – http://smallbusiness.chron.com/average-profit-margin-small-business-23368.html, last cited

10.10.2012.

• Finnish Municipal Elections debate 2012 on slide 27 – screen capture: YLE broadcast, 21.10.2012

• Linus Torvalds public speech on slide 28 – screen capture: EIT ICT Labs live webcast, 23.10.2012

• “Design from Finland” figure on slide 30 – http://www.avainlippu.fi/liiton_merkit/design-finland, last used 15.10.2012

• Borat picture on slide 34 – http://s3.amazonaws.com/rapgenius/1291131680_two-thumbs-up.jpg, last used 17.10.2012.

Back up slide: Level of margins

• There are four types of wireless microphones: • headset microphone

• lavalier/lapel microphone

• handheld microphone

• The price ranges for each product type falls roughly into the following categories (source: myshopping.com.au):

• 7-80 €

• 80-240 €

• 240-480 € (Catchbox)

• 480-1600 €