Internet Entrepreneurship Internet Entrepreneurship CourseCoursePresentation of Case StudyPresentation of Case Study

Joey Edelstein Amichai Nitsan Ron Oliver Michal RegevDalit Shalom Gilad ShadurDganit Shalom

Presentation Outline:

The Company The Competition

The Technology The Partners

The Products The Investors

Legal & IP Issues Human Resources

The Business Model SWOT

The Market Our Analysis

Dimionet, Webglide , RichFX was founded in 1997 bythree entrepreneurs:

Tal Kerret CEOTomer Ben-Kiki PresidentYair Mann CTO

Recently completed a fourth investment round of 33M$ from first class investors

Today employs ~130 workers in 3 locations: Tel Aviv, N.Y. and Atlanta

DEMO

RichFX - The Technology

Innovative and differentiated patent-pending

technology, providing a unique solution through:

1. Better Compression (smaller size)

2. Better Streaming (shorter waiting time)

RichFX compression algorithm enables the streaming of high quality Computer Generated Video over low band-width connections.

RichFX data size is 1%-5% of MPEG files.

RichFX - The Product

The RichFX product facilitates building, transmitting and showing 3D stores.

And there a few new features in the works.

Natural UserInterface

Single page store

Immersive Experience

RichFX - Patent Registration Process

A patent serves to protect the Intellectual Property (IP)

Stages at RichFX: 1. TA University research project.1. TA University research project.

2. Negotiation with Ramot.2. Negotiation with Ramot.

4. Company registration & patent purchase.

3. Negotiation with the Professor.

RichFX - The Company’s Strategy

Product Strategy Evolution:Stage I: Technology

Stage II: Chosen Application - Advertising

Stage III: Chosen Application - E-Commerce

Phase 1: Penetration through site construction & training

Phase 2: Server licensing

Expected Revenue Stream is hard to determine:

* RichFX plays its cards very close to the chest

* Analysts don’t seem to agree on market potential

RichFX - The Market Definition

In the short term:

Leading American high-end retailers of goods that require a “shopping experience”

In the longer term:

1. Diverse retailers?

2. “Catalog” products?3. Outside the US?

4. Other applications?

RichFX - The CustomersFirst big customer.

Blahnik shoe collection

Amazing results:

800% growth in sales!

The Competitors

Surrounding RichFX is a sea of fierce competition.

Among these competitors:

RichFX - The PartnersStrategic marketing,

distribution & development

alliance

Alliance to develop e-commerce

solutions

Familiarization with RichFX Encoder

through 3D Studio

RichFX - The Partnership With RealNetworks

First and only time RealNetworks invested in a partner.

Personal involvement of Real’s CEO in RichFX

Agreement signed for two years

Benefits:

For RichFX: Reputation, distribution.

For RealNetworks: Streaming of computer generated video

RichFX - The Investors

First Round (Seed) - Polaris, Veritas, Yossi Vardi, Giza, Poalim (2.5M$)

Second Round - Led by Coral Ventures (8M$)

Third Round - RealNetworks (9M$, Valuation 36M$ before the money)

Fourth Round - led by Morgan Stanley Dean Witter (33M$, Valuation 105M$ before the money)

19981998

19991999

20002000

RichFX - Acquisition of Blue Rock

Target: To build a strong sales

and marketing force

Means: Acquisition of Blue Rock, producer of

GiftMail

RichFX acquired Blue Rock for its people, not for its product.

Strengths Weaknesses

Opportunities Threats

Superior technology

Strong financial backing

Alliance with RealNetworks

Market presence

CEO

Narrow focus

Hard sale

Lack of management experience

GiftMail

Strong growth potential for 3D e-commerce

Many potential applications

Competition…Competition…

Unclear market for 3D e-commerce

“.com” crisis

Lessons learned

A good VC can make all the difference

Sell a product, not just a vision

Comprehensive solutions are hard to sell

You can open you own doors, but it’s easier to have someone do it for you

Shortcuts are dangerous