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Changing the World

Starting in Austin

Thesparkaustin.com 1

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Meanwhile…

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Key Idea: Showcasing

Showrooming means going into a store to look at a product but buying it online.

Showcasing means trying a product in an inventory-free “store” and ordering it for home delivery or downloading.

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At the

Same Time,

in Austin …

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In the headlines Dec. 8, 2015

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Austin residents spend $1 billion per year on Arts, Entertainment, and Recreation outside the home. Our 26 million visitors spend another $500 million. Yet a recent Austin Business Journal survey of almost 400 respondents rated Austin “D” or “F” for the quality of our museums.

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Austin’s Innovation Experience

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The solution:

The Spark

40,000 Square Foot Space in Austin Targeted Opening 2017 Targeted Attendance 400,000+/Year Targeted Ticket Price $15 3 Keys: Stories – Showcase – Events Supported by Café and Retail Shop Includes Robotics and Drone Arena Includes Auditorium with Stage

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Stories Showcase Events

Engaging, ever-changing stories replace traditional exhibits

Embedded in Stories and Events, sponsors and exhibitors strut their latest stuff

Almost continuous weekend and weeklong events around themes

Each focuses on now, new, and forthcoming innovations

Each focuses on now, new, and forthcoming innovations

Each focuses on now, new, and forthcoming innovations

Allow visitors to try, touch, play

Allow visitor to try, touch, play

Allow visitors to try, touch, play

Include historical perspective and look at more distant future

Sponsors and Exhibitors pay space rental and commissions

Ties to local schools with robotics competitions, job fairs, etc.

Focus on innovators, how & why, human stories

Our team selects the most exciting innovations to put on show

Weekend events for major local innovators: Dell, Samsung, UT, City, State

Stories are unified by themes, the dots are connected

Showcase is unified by themes, the dots are connected

Hackathons, Maker events, …

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Stories About People

(Innovators)

Top: Elon Musk, Hedy Lamarr, Sol Price Bottom: Fred Smith, Leonardo Da Vinci, Walt Disney 26

Stories: Innovation Across Society

Key Topics for Austin Location

Agriculture Electronics Music

Architecture/Construction Energy Photography/Video

Art Finance Printing

Astronomy/Space Food/Cooking/Nutrition Religion/Spirituality

Chemistry/Physics Innovation @ Home Retailing/Restaurants

Clothing/Textiles Innovation @ Office Social Media

Communications Journalism/Publishing Sports/Athletics

Cosmetics Games Toys

Crime/Law Enforcement Medicine/Biology/Health Transport/Mobility

Education Movies/Television War/Defense

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Connecting the Dots

Discovering Patterns

Who was the innovator? Gender, location, age, education, … Where did the idea come from? Research, accident, need, … What served this purpose before this innovation? Major Category of Innovation? Product, service, idea, method Type of Innovation? Additive, subtractive, transpositional, … How long did it take? Institutional setting? Corporate, startup, solo innovator, … How big/pervasive is/was the innovation? How was it distributed/disseminated/diffused? How was the innovation financed? Entrepreneurial strategy? Low cost, higher quality, good design

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Interactive, Family Friendly,

Visually Exciting, Surprising

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Traditional Museums Immersive Experiential Education /Storytelling

Close at 5 PM Open evenings when customers are free

Open 6 days a week Open 7 days a week

Donors and critics the priority Visitors the priority

Own building, using capital Lease building, flexibility

Static, permanent “exhibits” Ever-changing, fresh “stories”

Focus on objects and technologies

Focus on people and evolutionary processes

Passive, read and take it in Active, try, touch, experiment, play

Ideas are driven by curators from above

Ideas are driven by both staff and our visitors

Feels like an encyclopedia A magazine or movie

Weak on narrative, storytelling Storytellers

Gift shop and café tacked on Integrated visitor experience

One location Investment and expense savings from building a chain 30

Individualized Experiences:

Each Visitor has multiple options

Play our scavenger hunt, customized to your age and interests. Get course credit for passing a quiz at the end of your visit. Our automated tickets and apps allow you to see the things you are most interested in. Participate in various adventures and games. Be part of our “Guinea Pig” program to playtest games etc. Special events for your group.

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Companies, schools, universities, students, independent innovators, Kickstarter and Indiegogo ideas, and governments show off their innovations and tell their stories of innovators to the general public for periods short or long. New and future products, services, and features can also be tested on our hundreds of thousands of visitors.

Showcase

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Sponsor/Vendor

Revenue Streams

Space/table rental fees Contribution of exhibits, trade show displays Staffing and maintenance fees Commission and affiliate income Focus group and guinea pig fees Corporate events and parties General sponsorship and advertising Co-promotion (e.g., half price tickets at Tesla dealership drives more attendance)

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Events

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Booming MakerFaires attract

Over 1 million per year

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In Austin This Year:

MiniMakerFaire Two Days May 8,000+ Attendees @ $18/adult

Classic Game Fest Two Days July 5,000+ Attendees @ $10

SXSW Create and Game Expo Three Days March 79,000+ Attendees Free

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Types of Events

Open to public, organized by others (MakerFaire, SXSW) Open to public, organized by The Spark Corporate and private meetings and parties Performances and concerts Competitions and contests, including robotics and drones Classes and hackathons Meetups, club and community meetings

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Events

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Example Schedule

Date Event

4th Weekend September Fall Job Fair

1st Weekend October IBM Fest, innovations, IBM employee discount

2nd Weekend October AISD Innovation EXPO

3rd Weekend October GameEXPO (4/ year)

4th Weekend October UT McCombs Showcase

1st Weekend November Dell Fest

2nd Weekend November Fall Food & Fabric Fest (2/year)

3rd Weekend November Biotech and Medicine EXPO

4th Weekend November Robotics competition (2/year)

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Working with Schools

Robotics competitions Science Fairs Job and Placement Fairs Recruiting and admissions events Art, music, other competitions Events for each school district Special programs for class field trips Integrate our message with the school lessons Provide space for events and meetups

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Our Team: Founder Gary Hoover

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In the 1980’s, the average US chain bookstore had revenues of about $500,000. In 1982, Gary and colleagues founded BOOKSTOP,

whose first store in Austin did $1.8 million the first year.

7 years later, the company operated 26 stores from Miami to San Diego averaging almost

$3 million per store, and was bought by Barnes & Noble.

A History of Creating

Engaging Customer Experiences

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In the 1990’s, the average US travel agency sold $1 million worth of tickets,

and the top performers sold $3 million. Gary and colleagues founded TravelFest,

whose first store in Austin did over $9 million the first year.

Despite winning many awards, this concept failed when the

airlines stopped paying commissions.

A History of Creating

Engaging Customer Experiences

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When BOOKSTOP was sold for $41.5 MM and Hoover’s was sold for $117 MM,

the buyers kept the great teams we had assembled.

A History of Attracting the

Finest Talent in the Industry

So far, The Spark has assembled 17 Advisors with diverse, relevant talent.

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Name Expertise Name Expertise

John Arlotta Brand Experiences, Marketing, Retail

Lynne Perry Kincaid Marketing, Community Building

Glenn Astolfi Retail, Finance, Education

Bill Leake Technology, Social Media, Marketing

Zeke Brill Game/Interactive Design

Adam Lipman Biotech, Education, Technology, Operations

Alan Chai Retail, Finance Mary Maltbie Experience/Game Design, Project Mgt.

Amanda Dewoody Medicine/Health Robert Matney Technology, Theatre

Douglas Ferguson Technology, Music Dave Stanwick Social Media, History

Izzy Flores Robotics, Education, Music

Arnie Weissmann Storytelling, Tourism

Russell Foltz-Smith Technology, Education

Leslie Wolke Website, Museum & Wayfinding Design

Temp Keller Education, Finance And many are parents!

Advisors: Students of Innovation

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We are presently seeking the ideal building to lease. Our team includes commercial real estate experts

Don Cox and Chris Oddo, construction veteran Patrick Flynn of Flynn Construction, and

top architectural firm Barley/Pfeiffer.

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Business Model

$10 million capital required for startup and first location: $3.3 million story design and construction, technology $2.5 million café, store, arena, auditorium, theater $1.3 million shell remodel, specialties $2.0 million pre-opening HQ, consultants, marketing $0.9 million reserves

Third Full Year 2020 $11.2 MM revenue; Profit & Loss Statement: $7.2 MM admission revenue $4.0 MM café, retail, commissions, sponsors, events revenue $9.2 MM gross margin (82.5%) $3.7 MM store level payroll and benefits $3.8 MM stories, occupancy, marketing, all other expense $1.7 MM store level profit (EBITDA) $1.5 MM corporate overhead and new location development

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Business Model

Future locations should cost less by copying stories Store level per-store profit projected at over $3MM in year 7 Once we prove our ability to draw crowds, we hope to achieve “anchor” level rents in shopping and entertainment complexes We believe the US can hold 30 of these and maybe 2-3X that We may finance this first store using equity and/or non-equity crowdfunding

For complete details on our projections and financing, Or for information about investing, please email

garyhoov@msn.com

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Those Who Hear Not the Music Think the Dancers Mad

-- Chinese Proverb

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