delft climate kic 070212 part 1
TRANSCRIPT
- 1. How to Fail Less Business Models andCustomer Development Steve Blankwww.steveblank.com@sgblank
- 2. Agenda Day One 9:00 - 11:00 Introduction to Customer Development 11:00 - 11:30break 11:30 - 13:00value proposition customer segments 13:00 14:30lunch working sessionStudents prepare first version of business model canvas 14:30 16:00Student presentation of business model canvas 16:00 16:15break 16:15 17:00distribution channelsHomework:1) update your canvas2)develop a customer discovery action plan
- 3. Agenda Day One 9:00 - 11:00 Introduction to Customer Development 11:00 - 11:30break 11:30 - 13:30value proposition customer segments 12:30 13:30lunch working sessionStudents prepare first version of business model canvas 13:30 15:00Student presentation of business model canvas 15:00 15:15break 15:30 16:30distribution channelsHomework:1) update your canvas2)develop a customer discovery action plan
- 4. Agenda Day Two 9:00 - 10:30 Student presentations on customer discovery action plan 10:30 - 11:30customer relationships (get/keep/grow) 11:30 12:00break 12:00 - 13:00revenue streams 13:00 14:00lunch working sessionStudents present 13:30 14:15partners 14:15 - 15:00resources, activities, costs 15:00 15:15break 15:30 16:30Customer Development Manifesto
- 5. What We Used to BelieveSearch Versus Execution
- 6. Startups are Smaller Versions of Large Companies
- 7. What We Now KnowSearch Versus Execution
- 8. Startups SearchLarge Companies Execute
- 9. What We Used to BelieveStrategy
- 10. All I Need to Do is Execute the Plan
- 11. Actual Photo of What Happens WhenPlan Meets First Contact With Customers
- 12. All I Need is the 5- Year Forecast
- 13. Previous5-Year Plans
- 14. All I Need to Do is Make the Forecast
- 15. What We Now Know Strategy
- 16. Planning comes before the plan
- 17. Business Models
- 18. Business Models
- 19. SearchExecution Business Model Operating Plan +StrategyHypothesesFinancial Model
- 20. What We Used to BelieveProcess
- 21. We Built Startups byManaging ProcessesProduct Management+Waterfall Engineering
- 22. Product Introduction Model Concept/Product Alpha/Beta Launch/Seed RoundDev.Test1st Ship
- 23. Tradition Hire Marketing Concept/Product Alpha/Beta Launch/Seed RoundDev.Test1st Ship - Create Marcom- Hire PR Agency - Create DemandMarketingMaterials- Early Buzz - Launch Event - Create Positioning- Branding
- 24. Tradition Hire Sales Concept/ Product Alpha/BetaLaunch/Seed Round Dev.Test 1st Ship- Create Marcom- Hire PR Agency - Create DemandMarketing Materials- Early Buzz - Launch Event- Create Positioning- Branding Hire Sales VP Build SalesSales Hire 1st Sales StaffOrganization
- 25. Tradition Hire Bus DevelopmentConcept Product Alpha/Beta Launch/ Dev.Test1st Ship- Create Marcom- Hire PR Agency - Create Demand MarketingMaterials- Early Buzz - Launch Event- Create Positioning- Branding Hire Sales VP Build Sales Channel /Sales Pick distribution DistributionChannel Business Hire First Do deals for FCSDevelopmentBus Dev
- 26. Tradition Hire EngineeringConcept Product Alpha/Beta Launch/ Dev.Test1st Ship- Create Marcom- Hire PR Agency - Create Demand MarketingMaterials- Early Buzz - Launch Event- Create Positioning- Branding Hire Sales VP Build Sales Channel /Sales Pick distribution DistributionChannel Business Hire First Do deals for FCSDevelopmentBus DevEngineering Write MRD Waterfall Q/A Tech Pubs
- 27. Product Introduction Model Concept/Product Alpha/Beta Launch/Seed RoundDev.Test1st Ship
- 28. Waterfall / Product ManagementExecution on Two Knowns Requirements Product Features: knownDesignImplementation Verification Customer Problem: known MaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
- 29. Waterfall / Product ManagementExecution on Two Knowns Requirements Product Features: knownDesignImplementation Verification Customer Problem: known MaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
- 30. What We Now Know Strategy
- 31. More startups fail froma lack of customers than from afailure of product development
- 32. Customer DevelopmentA Search Strategy
- 33. Search ExecutionStrategyBusiness Model Operating Plan +Hypotheses Financial ModelProcess Customer & Product Management & Agile Development Agile Development
- 34. What We Used to BelieveOrganization
- 35. Hire and Build aFunctional Organization
- 36. What We Now KnowOrganization
- 37. Founders run a Customer Development TeamNo sales, marketing and businessdevelopment
- 38. SearchExecution Strategy Business Model Operating Plan +Hypotheses Financial Model Customer Development,Product Management Process Agile Development Agile or Waterfall Development Customer Functional OrganizationOrganization Development Team,by Department Founder-driven
- 39. SearchStrategy Business Model HypothesesProcess Customer Development, Agile DevelopmentOrganizationCustomer Development Team, Founder-driven
- 40. SearchExecutionStrategy Business Model Operating Plan + Hypotheses Financial ModelProcessCustomer Development,Product Management Agile Development Agile or Waterfall DevelopmentOrganization Customer DevelopmentFunctional OrganizationTeam, Founder-driven by Department
- 41. Part 2 Business Models andCustomer Development
- 42. Whats A Startup?
- 43. A temporary organizationdesigned to searchfor a repeatable and scalable business model
- 44. A temporary organizationdesigned to searchfor a repeatable and scalable business model
- 45. A temporary organizationdesigned to searchfor a repeatable and scalable business model
- 46. A temporary organizationdesigned to searchfor a repeatable and scalable business model
- 47. A temporary organizationdesigned to searchfor a repeatable and scalablebusiness modelA Startup aims to become acompany
- 48. Whats a Business Model?
- 49. 2012 Steve Blank
- 50. Value PropositionWhat Are You Building and For Who?
- 51. 2012 Steve Blank
- 52. Customer SegmentsWho Are They?Why Would They Buy?
- 53. 2012 Steve Blank
- 54. ChannelsHow does your ProductGet to Customers?
- 55. 2012 Steve Blank
- 56. Customer RelationshipsHow do you Get, Keep and Grow Customers?
- 57. 2012 Steve Blank
- 58. Revenue StreamsHow do you Make Money?
- 59. 2012 Steve Blank
- 60. Key ResourcesWhat are your most important Assets?
- 61. 2012 Steve Blank
- 62. Key PartnersWho are your Partners and Suppliers?
- 63. 2012 Steve Blank
- 64. Key ActivitiesWhats Most Important for the Business?
- 65. 2012 Steve Blank
- 66. Cost StructureWhat are the Costs and Expenses
- 67. 2012 Steve Blank
- 68. But,Realize Theyre Hypotheses
- 69. 9 GuessesGuessGuessGuess GuessGuessGuess GuessGuessGuess
- 70. Customer DevelopmentTest the Problem, Then the Solution
- 71. Customer DevelopmentThe Minimum Viable Product
- 72. Customer Development The Pivot
- 73. Customer Development ishow you search for the model
- 74. How Does This Really Work?Lean LaunchPad Class8 Weeks, 100 Customer Calls
- 75. CBiRC, Iowa State University
- 76. CBiRC, Iowa State UniversityBio-basedsustainable chemical intermediates for polymer bio-surfactants, bio-lubricantsI-Corps Team ShivaniGarg Entrepreneurial Lead Graduate student, 3.5 yrs in biochemistryBio-based chemical Dr. Basil Nikolau Principal Investigator intermediates Professor, 30 yrs in biochemistry Dr. Peter Keeling I-Corps Mentor Entrepreneur, 30 yrs in biotechnologyindustry
- 77. Interviews conducted = 100 CBiRC, Iowa State University Bio-basedsustainable chemical intermediates forpolymer bio-surfactants, bio-lubricants I-Corps TeamShivaniGargEntrepreneurial LeadGraduate student, 3.5 yrs inbiochemistry Bio-based chemical Dr. Basil NikolauPrincipal Investigatorintermediates Professor, 30 yrs in biochemistryDr. Peter KeelingI-Corps MentorEntrepreneur, 30 yrs in biotechnology industry
- 78. Value propositionProblemSolutionFeatures of value proposition Non- Sustainable, bio-based Bi-functional molecules renewable, petroleum replacement Flexibility in chain length derived feedstock for Higher performance Flexibility in branching surfactant, lubricant Improved cold industry temperature tolerance ofdetergents, lubricants
- 79. Growing market opportunity Bio-based chemicals growing at 15% p.a.$1 trillionpetrochemical market$24 bnsurfactants
- 80. Position in Value ChainOmegaChem
- 81. Business Model Canvas 1.0Co-create Production, yi value proposition eld, quality Problem - Non- CustomerExisting Matchrenewable goodwill andmarket Polymer- Bio-mass customers feedstock fortrust manufacturers,suppliersproduct specs making polymer Customer BiotechSolution communities companies, - Contractual(Product) Bio- scale-up based and New market - sustainable Novel bio-plastic -Technology Manufacturing replacementcompanies? providers facilityFeatures - Bi-Physical IP functional and productMulti-sided-Utility providers Human customizable Indirect channel market? resources, capit Wholesaleal Sell bio-based monomers Fixed Capital Added value pricing based onValueVariable Manufacturing, prop. hypothesis: Bio-massBio-basedand sustainable customization of products Licensing?Customer segment hypothesis: Polymer manufacturers, new marketsTest:Talked to biochemical companies
- 82. Value Proposition, Customer Segments:ExperimentsTalked to potential customers Biochemical companies, Market research (15)Senior ScientistVice-President, Technology Development R&D DirectorSenior Scientist Senior Business Development ManagerResearch Scientist Market Research Analyst
- 83. Value Proposition, Customer Segments:ResultsSurfactants: new market ($24bn) MonomerMonomermanufacturerHave youmanufacturerconsideredsurfactantsPolymerspace? formulatorPolymer Surfactant- DSM formulator Formulator PolymerPolymerSurfactantuser user userConsumer facing Consumer facing company company Consumer Consumer
- 84. Value Proposition, Customer Segments: IterationBusiness Model Canvas 4.0 Problem - Non- renewableExisting marketfeedstockPolymerSolution Bio-manufacturers, Bi based, sustainableotech companies,replacementSurfactants, Features - Bi-Home & functional, Personal Care customizable sector Drop-in monomers New market -Diacids(chainNovel bio-plasticlength: C10-C16)companies? NewfunctionalitiesMulti-sided (cyanide, amine)market?Channel hypothesis: Indirect channel of wholesaleTest: Talked to chemical distributors
- 85. Channels: ExperimentsHeres what we didDistributors (9)Biochemical industry executives (3)
- 86. Channels: ResultsPivot: Entry barriers are key Monomermanufacturer DistributorHigh entry barriers PolymerSurfactant Low entry barriers formulatorformulator(Petro-based is (Market pull for greenhard to dislodge.) Distributorproducts) Polymer Surfactantuseruser Petro industry Consumer facing wishes that youcompanyguys did not exist! - Draths Consumer
- 87. Channels: IterationBusiness Model Canvas 5.0 Problem - Non- Existing markets renewable feedstockPolymer manufacturersSolution Bio-based, sustainableBiotech companies replacement Regional supply ofCustomer in valuesurfactant raw-chainmaterial Formulator Avoidance of single companies material sourcing (petro) GreenExisting market Physical product sectors Features - Bi- Indirect channelSurfactants functional, customizWholesaleable Distributors Home & Personal Drop-in monomersCare sectorCustomer Relationship Hypothesis: Co-create value propositionTests: Talked to surfactant/lubricant companies
- 88. Customer Relationships: Experiments Heres what we did Surfactants (4)Lubricants (4) Business Marketing Leader Research ScientistTechnical DirectorSenior ScientistCatalyst Research Principal ScientistEngineer Director, R&D Tribology Section Leader Other bio-based companies (6) Biobased Chemicals Analyst President, Personal Care Program Manager Vice-President, R&DSenior Scientist, R&D Global Head, R&D
- 89. Customer Relationships: Results Heres what we foundMonomer manufacturerDistributorSurfactant users influenceSurfactant surfactant formulatorformulator decisions, so need to partner with surfactant usersSurfactant first! userDecisionGreen Panel Focus onMakersreducing petroleum basedConsumer facing products companyConsumerMarket Pull(Sustainability agenda)
- 90. Customer Relationships: IterationBusiness Model Canvas 6.0 Problem - Non-Co-create valuerenewable feedstock proposition Solution Bio- Customer goodwill Customer in valuebased, sustainableand trustchain replacement Customer FormulatorRegional supply ofcommunities companiessurfactant raw- Trade-shows, PR material Conferences, surve Avoidance of singleysExisting market material sourcing sectors(petro) Surfactants Green High-performance LubricantsFeatures - Bi-Home & Personalfunctional, Care sector customizable Drop-in monomersRevenue Model Hypothesis: Value-based pricing, licensing Tests: 1. Developed a product sheet2. Talked to 7 surfactant companies3. Talked to 6 production economics experts
- 91. Revenue model: HypothesisPayment Flow HypothesisBiomass Biomass15 c/lb*supplier Biomass Range 5-20c/lb Monomermanufacturer Monomer? Detergent alcohols 80c/lbDistributor SurfactantFormulation? formulatorFormulated Surfactant 90c/lb SurfactantSurfactant100 c/lb*Decisionuser Formulated Detergent 100c/lbMakersConsumer facingDetergent200 c/lb* company 10% Surfactant in Detergent ConsumerProduct*ICIS Market Intelligence, 201
- 92. Revenue model: Result 1Payment FlowBiomass Biomass15 c/lb*supplier Biomass Range 5-20c/lb Monomermanufacturer Monomer80 c/lb Detergent alcohols 80c/lbDistributor SurfactantFormulation90 c/lb formulatorFormulated Surfactant 90c/lb SurfactantSurfactant100 c/lbDecisionuser Formulated Detergent 100c/lbMakersConsumer facingDetergent200 c/lb company 10% Surfactant in Detergent ConsumerProduct*ICIS Market Intelligence, 201
- 93. Revenue model: Result 2 Scale up is the key Less than 100 c/lb is achievable Optimized scale up (~500,000 lb/day)You give us1kg, we can evaluate.Earlyvangelists
- 94. Revenue Model: IterationBusiness Model Canvas 7.0Production, yield, quality- Cheapest bio-mass Match customerssuppliersproduct specs Constant- Contractual scale- innovationup -Technology providers-Utility providers - Surfactant Users (P&G)Sell bio-based monomersPartners Hypothesis: Bio-mass suppliers, scale-up, technology Added value pricing based on customization ofproviders, utility providers, surfactant usersproductsCreate demand by partnering with SurfactantTests: Talked to potential partnersUsers and then sell to Formulators Licensing
- 95. Partners: HypothesisHeres what we hypothesizedMarketBiomass Research supplier PartnersMonomerStart-upmanufacturersIncubatorsDistributor Scale-up Surfactant providersformulatorSurfactantTechnologyDecision user partnersMakersConsumer facing companyConsumer
- 96. Partners: ExperimentsHeres what we did Market Start-upScale-upTechnology Research (3)Incubators (4) providers (4) partners (3)
- 97. Partners: Iterate Business Model Canvas 8.0 -Market Research Agencies- Start-up incubatorsCheapest bio-masssuppliers - Contractual scale- up-Technologyproviders-Utility providers - Surfactant Users (P&G)Whats next?State funding (i6 grant)Federal funding (SBIR)
- 98. First to Last Business Model Canvas
- 99. First CanvasBusiness Model Canvas 1.0Co-createProduction, yivalue propositioneld, quality Problem - Non- CustomerExistingMatchrenewablegoodwill andmarket Polymer - Bio-masscustomers feedstock for trust manufacturers, suppliers product specs making polymer Customer Biotech Solutioncommunities companies,- Contractual (Product) Bio-scale-upbased and New market -sustainableNovel bio-plastic-Technology Manufacturing replacement companies?providers facilityFeatures - Bi- PhysicalIP functional andproductMulti-sided -Utility providers Human customizableIndirect channel market?resources, capitWholesale al Sell bio-based monomersFixed Capital Added value pricing based onVariable Manufacturing, Bio-masscustomization of products Licensing?
- 100. Final Canvas Business Model Canvas 8.0Problem - Non-Co-create value renewable feedstock proposition -Market ResearchProduction, yielSolution Bio- Customer goodwill Agenciesd, qualityCustomer in value based, sustainableand trustMatch customers chainreplacement Customer- Start-up incubatorsproduct specsFormulator Regional supply ofcommunities Constantcompanies surfactant raw- Trade-shows, PRCheapest bio-mass innovationmaterial Conferences,suppliers Avoidance of single surveysExisting marketmaterial sourcing - Contractual scale- sectors (petro) up Surfactants Green Manufacturing High-performance-TechnologyfacilityPhysical productLubricantsprovidersIPIndirect channelFeatures - Bi- HumanWholesaleHome & Personal functional, customiz - Surfactant Users resources, capital Distributors Care sector able (P&G)IHS (Market Info) Drop-in monomersSell bio-based monomers Fixed Capital Create demand by partnering with Surfactant Variable Manufacturing, Bio-mass Users and then sell to Formulators Licensing
- 101. Evolution of Canvas
- 102. Business Model Canvas 1.0Co-createProduction, yivalue propositioneld, quality Problem - Non- CustomerExistingMatchrenewablegoodwill andmarket Polymer - Bio-masscustomers feedstock for trust manufacturers, suppliers product specs making polymer Customer Biotech Solutioncommunities companies,- Contractual (Product) Bio-scale-upbased and New market -sustainableNovel bio-plastic-Technology Manufacturing replacement companies?providers facilityFeatures - Bi- PhysicalIP functional andproductMulti-sided -Utility providers Human customizableIndirect channel market?resources, capitWholesale al Sell bio-based monomersFixed Capital Added value pricing based onVariable Manufacturing, Bio-masscustomization of products Licensing?
- 103. Business Model Canvas 2.0 Problem - Non- Co-createProduction, yivalue propositionExistingrenewableeld, quality Customer market Polymer feedstock forMatch goodwill andmanufacturers, - Bio-massmaking polymercustomers trust Biotech suppliers Solution Customer companies, product specs (Product) Bio- communities Surfactant- Contractual based and manufacturersscale-upsustainableManufacturing replacement New market --Technology facilityFeatures - Bi- Novel bio-plasticproviders IP functional and Physical companies? Human customizable product -Utility providers resources, capit Drop-inIndirect channel Multi-sided al monomersWholesale market? SRI (MarketDiacids Info) Sell bio-based monomersFixed Capital Added value pricing based onVariable Manufacturing, Bio-masscustomization of products Licensing?
- 104. Business Model Canvas 3.0 Problem - Non- renewableCo-createProduction, yi feedstockvalue propositionExistingeld, qualitySolution Bio- Customer market Polymer - Bio-mass Match based, sustainablegoodwill andmanufacturers, supplierscustomersreplacementtrust Biotech product specs Features - Bi- Customer companies,- Contractualfunctional, customi communities Surfactantscale-up zable manufacturersManufacturing Drop-in-Technology facility monomers New market -providers IP Diacids(chain Physical Novel bio-plastic Humanlength: C10-C16)productcompanies? -Utility providers resources, capit NewIndirect channel al functionalities WholesaleMulti-sided SRI (Market(cyanide, amine) market? Info) State funding, SBIR funding Sell bio-based monomersFixed Capital Added value pricing based onVariable Manufacturing, Bio-masscustomization of products Licensing
- 105. Business Model Canvas 4.0 Problem - Non- renewableCo-create Production,value proposition Existing marketfeedstock Customer Polymer yield, quality Solution Bio-Match goodwill andmanufacturers, Bi - Bio-massbased, sustainablecustomers trust otech companies, suppliersreplacement product specs Customer Surfactants, Features - Bi- communities Home &- Contractualfunctional, customiPersonal Carescale-up zablesectorManufacturing Drop-in-Technologyfacilitymonomers New market -providersIPDiacids(chain Physical Novel bio-plastic Human length: C10-C16)productcompanies? -Utility providers resources, capit NewIndirect channelalfunctionalities Wholesale Multi-sided SRI IHS(cyanide, amine) market? (Market Info) State funding, SBIR funding Sell bio-based monomersFixed Capital Added value pricing based onVariable Manufacturing, Bio-masscustomization of products Licensing
- 106. Business Model Canvas 4.3Problem - Non-Existing marketsrenewable feedstock Polymer Co-create value manufacturersProduction, yiel proposition Solution Bio-d, quality Customer based, sustainable Biotech companies Match customers goodwill and trust- Bio-mass suppliersreplacementproduct specs CustomerLocal supply ofCustomer in value communities- Contractual scale- surfactant raw- chainup materialFormulator Avoidance of singlecompanies -Technologymaterial sourcing providers (petro)Manufacturing GreenExisting market-Utility providersfacilityPhysical productsectorsIP Features - Bi- Indirect channel Surfactants Humanfunctional, Wholesale resources, capitalcustomizable DistributorsHome & Personal IHS (Market Info) Drop-in monomers Care sector Sell bio-based monomersFixed Capital Added value pricing based on customization ofVariable Manufacturing, Bio-massproducts Licensing
- 107. Business Model Canvas 5.0Problem - Non-Existing marketsrenewable feedstock Polymer Co-create value manufacturersProduction, yiel proposition Solution Bio-d, quality Customer based, sustainable Biotech companies Match customers goodwill and trust- Bio-mass suppliersreplacementproduct specs CustomerRegional supply of Customer in value communities- Contractual scale- surfactant raw- chainup materialFormulator Avoidance of singlecompanies -Technologymaterial sourcing providers(petro)Manufacturing Green Existing market-Utility providersfacilityPhysical productsectorsIP Features - Bi- Indirect channel Surfactants Humanfunctional, customizWholesale resources, capitalable DistributorsHome & Personal IHS (Market Info) Drop-in monomers Care sector Sell bio-based monomersFixed Capital Added value pricing based on customization ofVariable Manufacturing, Bio-massproducts Licensing
- 108. Business Model Canvas 6.0 Problem - Non-Co-create valuerenewable feedstock proposition Solution Bio- Customer goodwillProduction, yiel Customer in valuebased, sustainableand trustd, quality chain replacement Customer Match customers Formulator- Bio-mass suppliersRegional supply ofcommunitiesproduct specscompaniessurfactant raw- Trade-shows, PR- Contractual scale- material Conferences, surveup Avoidance of singleysExisting market material sourcing sectors -Technology(petro) Surfactants providers GreenManufacturing High-performancefacilityPhysical productLubricants-Utility providersIP Features - Bi- Indirect channel HumanWholesaleHome & Personalfunctional, customiz resources, capital Distributors Care sector able IHS (Market Info) Drop-in monomers Sell bio-based monomersFixed Capital Added value pricing based on customization ofVariable Manufacturing, Bio-massproducts Licensing
- 109. Business Model Canvas 7.0 Problem - Non-Co-create valuerenewable feedstock propositionProduction, yiel Solution Bio- Customer goodwilld, qualityCustomer in value- Cheapest bio-mass based, sustainableand trust Match customers chainsuppliersreplacement Customerproduct specsFormulatorRegional supply ofcommunities Constantcompanies- Contractual scale-surfactant raw- Trade-shows, PR innovationup material Conferences, Avoidance of single surveysExisting market -Technology material sourcing sectors providers(petro) Surfactants Green-Utility providersManufacturing High-performancefacilityPhysical productLubricants - Surfactant Users IP Features - Bi- Indirect channel HumanWholesaleHome & Personal (P&G)functional, customiz resources, capital Distributors Care sector able IHS (Market Info) Drop-in monomersSell bio-based monomers Added value pricing based on customization ofFixed Capital productsVariable Manufacturing, Bio-mass Create demand by partnering with Surfactant Users and then sell to Formulators Licensing
- 110. Business Model Canvas 8.0Problem - Non-Co-create value -Market Research renewable feedstock proposition AgenciesProduction, yielSolution Bio- Customer goodwill d, qualityCustomer in value based, sustainableand trust- Start-up incubators Match customers chainreplacement Customer product specsFormulator Regional supply ofcommunitiesCheapest bio-mass Constantcompanies surfactant raw- Trade-shows, PRsuppliers innovationmaterial Conferences, surve Avoidance of singleys - Contractual scale- Existing marketmaterial sourcing up sectors (petro)Surfactants Green-TechnologyManufacturing High-performanceprovidersfacilityPhysical productLubricants IP Features - Bi- Indirect channel-Utility providers HumanWholesaleHome & Personal functional, customizresources, capital Distributors Care sectorable - Surfactant Users IHS (Market Info) Drop-in monomers (P&G)Sell bio-based monomers Fixed Capital Create demand by partnering with Surfactant Variable Manufacturing, Bio-mass Users and then sell to Formulators Licensing
- 111. Total Contacts: 96Red Oxs Electrochemical Desalination Cell1. desalinates brine, a waste product from oil & gas and other industries2. generates electricity quietly and3. produces bulk inorganics that can be sold as commodities.Andr Taylor (PI)David Kohn (EL)Tom Livingston (IM) National Science Foundation Innovation Corps Program May 23, 2012
- 112. Problem:Saline brine.What is it?Water that is saltier than sea water.It is produced as a waste product of many industrialprocesses. 127
- 113. Why is it a problem?Saline brine is:1. Environmentally harmful2. Heavily regulated3. Costly to treat and dispose of.
- 114. What we thought1. Desalination2. Oil and gas productionPhoto 1: Kay Bailey Hutchison desalination plant Photo 2: a hydraulic fracturing site nearin El Paso Tx. Morgantown Pa. 129
- 115. What we did: 130
- 116. What we learned: 1. Desalination2. Oil and gas production Photo 1: Kay Bailey Hutchison desalination plant Photo 2: a hydraulic fracturing site near in El Paso Tx. Morgantown Pa.
- 117. Key Partners Key ActivitiesValue Customer Customer -R & D PropositionsRelationships Segments-Manufacturers -Engineering-Turns waste cost -Service-Inland and coastal-Utilities customization into revenue-Customizationdesalination plants-Regulators-Decreased input-Link to value add-Industrial brine -Learn regulatory-Utility Commissions costs / volatilityin industrial producers landscape -Quiet electricityecosystem -Hydrofracking -Foster relationships -Inland and coastal on-site -Improve public operations with stakeholders desalination plants image -Hiring & retention -Industrial brine -Decreased liability-Chemical producersKey Resources-Better publicChannelsdistributors -Hydrofrackingimage -Chemical End Users-People operations-Decreased -B2B marketing -Chemical Producers-Intellectual permitting time-Serviceproperty-Chemical agreements -CO2 sequestration -Licensingdistributors-Brand -Utilities -Energy efficiency arrangements-Chemical Producers -Relationships with-Fuel Cell Mfgs stakeholders and -DOESNT CAUSE partners EARTHQUAKES Cost Structure Revenue Streams-People -Manufacture / Capital -Royalties from licenses -Chemical sales-R & D-Operation and -Service contracts -Electricity salesPrototypingmaintenance-Engineering consulting-REC sales-Legal fees -Sales and Marketing fees -Brine treatment(IP, Licensing, Regulatory)-Strategic Partnershipscontracts
- 118. Key Partners Key ActivitiesValue Customer Customer -R & D PropositionsRelationships Segments -Manufacturers-Engineering -Turns waste cost -Service -Water Treatment -Membrane Mfgscustomizationinto revenue-Customization for Hydrofracking -Utilities -Decreased-Link to value add (Especially-Know regulatory Produced Water) -Regulatorsdisposal costsin industriallandscape-Inlandand coastal -Engineering firms -Decreased inputecosystem-Foster relationshipsdesalination plants-Inland and coastal with stakeholders costs / volatility-Improve public-Quiet electricityimage-Industrial brinedesalination plants -Hiring & retentionon-siteproducers-Industrial brineproducersKey Resources -Decreased liabilityChannels - Electric Utilities (for-Hydrofracking -People -Better public-B2B marketing energy efficiencyoperations -Intellectual image FOR-Possiblyinvestments)-Chem. distributorspropertyCLIENTS -Decreased distributors/-Chemical Producers-Chemical permitting time ?conferences -Branddistributors-Service -Relationships with -Chemical End Users-Other frac water-DOESNT CAUSE agreements stakeholders and-Chemical Producerstreatment startups partnersEARTHQUAKES-Licensingarrangements Cost StructureRevenue Streams-People -Manufacture / Capital-Royalties from licenses -Chemical sales-R & D & Prototyping-Operation and-Service contracts -Electricity sales-Legal fees maintenance -Strategic Partnerships-REC sales(IP, Licensing, Regulatory) -Sales and Marketing -Brine treatment contracts
- 119. Traditional methods to dispose of saline brine include: Deep well injectionEvaporation Pits Photo 4: a small deep well injection rig Photo 5 : a typical wastewater evaporation pit
- 120. Thought: Problem in the MarcellusTexas:~50,000 Class II Disposal Wells (at least80% for enhanced recovery)Pennsylvania: 8 Class II Disposal Wells
- 121. Price for water treatment ~60x higher than wethought!
- 122. ServiceWell OwnerProviders (Fracking, O nsiterecycling) EngineeringFirmsRegulators (WaterRights, DisposPrimaryal, Permitting)Treatment FacilityTechnologyDevelopers / Vendors Secondary Treatment ContractorDisposal Companies
- 123. DisposalProducedDilution with WaterFreshwater Reuse to Frac Another WellPrimary How high can Treatment they go? This is where we Tertiaryfit in TreatmentCurrent state ofDischarge the art areevaporators and Must becrystallizersdrinking water quality
- 124. Drilling FlowbackProduced WaterWaterWaterWater from drilling First 30 days ofProduced overmuds used to drillproduction wells operating welllife (4-30 years) Medium TDSHigh TSSVery high TDS~5-20 % of injected(usually 100,000 Smallppm or higher) quantity, weird stuff in it~5-20 % of injected
- 125. Class II Wells Primary andTertiary TreatmentCost of0.50-1.5010.00-12.00 5.00-6.00Disposal ($/bbl) Transport4.00-16.002.00-4.00 1.00-4.00Cost ($/bbl) Total4.50-17.50 12.00-16.006.00-10.00($/bbl)
- 126. Moe! dont throw out that brine!
- 127. North AmericanProduced Water MarketTAM: $5 bn/yrSAM: $3 bnTarget: $0.5 bnOur projections:~ $21 million/year revenues from one10,000 barrel per day plant