PROJECT REPORT

INTELLITEST 2015

CONTENTProject Introduction

Market Overview

Market Analysis

Customers Characteristics

Business Idea

Product Features

Unique Selling Point

Market Penetration

Market Competitions

Price Strategy

Financial Perspective

Conclusion

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EVERYONE WILL LOVE INTELLITEST, EXCEPT CHEATERS

In recent years, online education has emerged as a new learning method with unique advantages compared to traditional “brick-and-mortal” schools: lower cost, faster

delivery, more effective learning and lower environment impact. Aware of this new revolution, many educational institutions have partly or entirely switched from offering traditional face-to-face class to online courses. Apart from that, there are also a large number of new established or-ganizations operate solely on providing online eduational services. As a proof, the global market of eLearning indus-try has experienced significant growth in the last decade. According to the report by Global Industry Analysts, this market is expected to reach $107 billion by 2015 (Global Industry Analysts, Inc. 2012). The global self-paced eLearn-ing market reached $32.1 billion in revenue in 2010 (Ad-kins 2011), with a five year compound annual growth rate of approximately 9.2%, This means that the self-paced eLearning market should see estimated revenues of $49.9 billion in 2015 (Adkins 2011).

Nonetheless, this trend also leads to latent problems, which can not be solved quickly, for example: technology dependent, material incompatibility or cheating. Since the growth of the industry is faster than ever, more attentions are neeeded to find out ways to solve these challenges.

One of the most challenging impediment for the online course providers is online certificates are normally consid-ered less valuable than formal training. As a result, edu-cational institutions are putting more and more efforts to improve the value of their certificates. Besides improving the quality of curriculum, proctoring is a valuable tactic to help educational organizations to protect the integrity of their online offerings, and to provide students with a de-gree they can be proud of. Today, 95% of online exams are taken by the honor code (without any control method

applied) and cheating is a big problem, regardless of the type of institution (Hartley 2013). The difficulties in moni-toring students behaviour during remote examination is the motivation for the advent of a new industry: RemoTe Proctoring Service.

Understand the need of improvements in this industry, we proposed a new approach to this business opportunity. At Intellitest, we provide a new proctoring service, which is not only based on the advance in underlying technology, high integrability but also have a different customer seg-ments compared to competitors.

Intellitest team

PROJECT INTRODUCTION

4 5Intellitest

4000Higher Education Institutions in Eu-

rope offering a wide range of courses at different levels

more than

about

over

MARKET OVERVIEW

Remote Prcotoring Service become more and more im-portant mostly because of the dramatic growth of eL-earning market. Online courses are gaining more atten-

tion. As of 2013, there were already 6.7 million took online course in US alone (Seaman 2013), and this number is es-pecially high among higher eduaction students: one third of them take at least one course online, and 90% of academic leaders believe that this will exceed 50% within the next five years (Cairneagle Associates 2014). In the context of rapid growth in online education, examination become a vital part since it validate the knowledge of students and verify the qual-ity of the education itself.

Growth dynamics related to remote proctoring are very posi-tive. Not only online enrollments are expected to continue growing in the future, but past growth in online enrollments was not supported by remote proctoring technologies – the absence of corollary growth of remote proctoring suggests that there will be some “catch-up” ball to play. A better pro-toring service will encourage institutions to open more online courses, which opens up new customer segments for them: adults, international students, and the military are examples.

Presently, in the US, there are several companies provide re-mote proctoring services since the last decade, but the mar-ket in Europe is still very primitive. Educational institutions, certification organizations and other companies in North America has widely used remote proctoring service to deliver various kind of tests remotely. However, in Europe, the are no dominant providers yet. Most of providers in Europe now are only startup, and still using low-technology solutions such as real protors monitoring a group of students through Internet, just like making a Skype call.

Currently, there are more than 4000 Higher Education Insti-tutions in Europe offering a wide range of courses at differ-ent levels, which is a strong indication for a highly potential market. Providing services for the need of universities in this market is our key activities in the first phase. In the next stages of the business, we will reach for more customer groups such as: K-12 examination providers, Certification Organization and Healthcare Industry.

33%

90%

of higher education students take at leat one course online

academic leaders believe that it will continue growing

6 7Intellitest

In this centrury, with the available of new technology, online education has became inevitable for many educa-

tional institutions. Firstly, cost is the big problem for institutions, who have to spend money on pricey investments in technology, teachers’ salaries and ad-ministrative costs. In American, the gov-ernment even concluded that if colleges don’t reduce the cost, mass bankruptcies will happen within two decades.

At the same time, a technological revo-lution is unsettling higher education’s business model. An explosion in online learning, much of it free, means that the knowledge has been released to anyone connected to the Internet. Education, which once have been consider costly and only available for a particular group in the society, now is open and free. How universities cope with this trend, while students can acquire similar knowledge (or even deeper and wider) freely on the Internet? Clayton Christensen of Har-vard Business School considers MOOCs – with low startup cost and powerful economies of scale - a potent “disruptive technology” that will kill off many ineffi-cient universities.

For years, universities has pointed out along list of obvious benefits if they can provide remote education:

Firstly, with the advantage of online plat-form, universities can reach an enor-mous number of students. With MOOC, universities and expect a market in a

much bigger scale: they will no longer fo-cus on youths form 18-22 years old but virtually everyone interested in develop-ing their skills and knowledge.

Universities can introduce online course as a complement of their traditional teaching method, which could save them a lot of time and time. It’s also bring many new values to the learning experiences of students.

By making lectures much more accessi-ble, it could be used as an effective tool to promote their quality of education and as a result, attract more tuition-fee paying students, or make it possible to offer 2 model of education: shallow, on-line free version and more in-depth paid version.

By providing MOOC courses, universities can capture massive amounts of data on learning patterns, motivations & talents of people around the global. These valu-able data can be used in many different ways to bring back values for educational institutions: massive amount of high quality content and projects generated by learners, early access to the talent pool globally.

But without a strong enough exam ser-vices – authenticating the identity of the test-taker and ensuring that person does not cheat — none of the other benefits can be attained.

| Online Education is inevitable

MARKET ANALYSIS

**** Renimaut aut unto corehen ditiate ad natuT omnianis pratur rehent volorra volo debitio.

The primary driver’ of the market for remote proctoring systems is the growth in online learning and

the subsequent increase in low-stakes online exams. Surprisingly, despite the growth in online education servies over the past 15 years, remote exam proc-toring systems have yet to enter the mainstream. The advent of this service will resolve 2 persistent problems in on-line examination: cheating and student authentication. Prevent students from cheating during a remote exam session is the most challenging tasks for all edu-cational institutions, and its even more complex in remote examination. Never-thereless, cheating is not the only issue, student authentication is even more im-portant. They can install all state-of-the-art techniques to prevent cheating, but its totally useless if they can’t verify the identity of the test taker.

Today, most remote exam proctoring services is accomplished by a combina-tion of webcam monitoring, keyboard lockdowns, and student authentication. New proctoring technologies that focus on physical characteristics like facial recognition and voice analysis are in various stages of development. These technologies can provide greater secu-rity and scalability than provided by the traditional proctors or testing centers commonly used in distance education, and now also used in online programs.

| Drivers of Remote Proctoring Market

Firstly, everyday there are many re-ports of cheating from worldwide institutions, as a proof for the se-

curity weaknesses of traditional proctor-ing. Surprisingly, many cheating cases are made by teachers or other school officials. On-site protors might know the test takers, or just because of proctoring a same test for many times, they can lead to some security problems. Standards (e.g., ISO’s 17024 standards for certifica-tion) that require proctors be independ-ent of the testing outcomes are often ignored in favor of cost savings, conveni-ence, and resource availability.

Additionally, normally on-site proctors are not professional proctors, they gen-erally are volunteers. These non-profes-sional person will lead to poor proctoring results.

Last but not least, technology-based al-

ternatives, such as online proctoring, are becoming more capable and are gain-ing attention. Indeed, there are online proctors who are better trained, may be on career paths, and are able to detect cheating at least as well as onsite proc-tors. Technology-based aides, such as computer/system lockdowns, keystroke monitoring, the ability to stop/start a test, and many other assistive proctor-ing processes have been relatively easy to integrate into the monitoring process.

| Traditional testing methods are prone to problems

8 9Intellitest

“Being responsible for digital testing and online proctoring at Delft University of Technology, I am very much interested in the development of automated online proctoring. At TU delft we are investing lot of money into online education and we are looking for effective and efficient ways to perform online proctoring.”

MRS. META KEIJZER-DE RUIJTERICT IN EDUCATION CONSULTANT AT DELFT UNIVER-SITY OF TECHNOLOGY

CUSTOMER CHARACTERISTICS

With our target customers are universities, there are some unique chracteristics of them, that we need to understand exten-

sively in order to build successful ful relationship.

They buy from people they trust: Universities tend to believe only on business that appear realiable to them. Moreover, they also put a great value on the advice of their peers, this makes strong referrences are utmost important.

They value honesty and candor instead of boldness and hype.

They respect patience and they appreciate support of their academic values: In any circumstances, we always give highest priorities on the interests of cus-tomers of our customers - in this case - students tak-ing courses online.

They require a long process of making deals done: In a long procedure of bidding and choosing the winners of contracts, we have to express our patience as a sig-nal of honest. With our uniqueness in technical ad-vantages and cost-saving solutions, we are confident when participating in bidding projects for universities.

TRUSTThey value trustful and reliable

providers, and references are extremly important

HONESTSincere and straighforward communication is appreciated

PATIENC EIt’s normally take a

long time .

1 2

3

PROF. FABIO CASATI PROFESSOR OF ENGINEERING AND COMPUTER INFORMATION, TRENTO UNIVERSITY

CURRENT OPTIONS

Most institutions opt for one of two approaches: Live web proctoring, which requires students to have a human proctor on the other end of their webcam at a specific time; or on-demand web proctoring, also utilizing a web-cam but requires no scheduling.

Live Proctorings On-demand Proctoring

General 1 proctor for every 4-10 students

Students agree to allow cameras to “watch” them while they take exams; if the cameras pick up any-thing out of the ordinary, The anomalous behavior

is flagged in the recording by multiple reviewers after the exam

Advantages Immediate correction Replicates traditional proctored setting

Convenience and Comfort Affordability (lower 30-40%)

Scalability Accountability: Record and Review Flexibility: cloud-based architecture

Disadvantages

Requires Scheduling Costly

Inexperience of proctors risk Accountability: No record of test session

“Judge and jury”

Not a cheating preventionbut instead responds to cheating afterward

Institutionals’ responsibility

Obviously, with undeniable advantages, on-demand proctoring is the best choice for both proctoring service providers and customers. Intellitest is even a step ahead when provide automated proctoring services, which is better than any current solution on the market.

“I think a system like Intellitest will really help me a lot. I spend all my time in the exam looking at students to see if they’re cheating or not. This system will make my life a lot easier.”

10 11Intellitest

Based on market research and customers interactions, we understand the needs and Intellitest will provide services that can bring great benefits to our customers. We real-

ize that online education will be the inevitable tendency of any educational institution, however, there are still limitations and differences of eLearning compared to traditional education. In-stitutions already have cutting-edge technologies to deliver their learning materials to learners far more effective, but they are having trouble in monitoring exams in online environment with the lack of face-to-face interaction.

Intellitest is developing remote proctoring services to help European universities resolve difficulties in au-thenticating students and prevent them from cheat-ing in online exams with a highly effective, cost sav-ing solutions.

BUSINESS IDEAOUR BUSINESS IDEA CONTAINS NOT ONLY TECH-NICAL INNOVATIONS BUT ALSO BUSINESS MOD-EL INNOVATION

CPS DIAGRAM

WE BRING THE NOVELTYTO THIS INDUSTRY

12 13Intellitest

1. All behaviors of students during the test are captured by various sensors and analyzed by our smart algorithm. This algorithm, backed up by machine learning techniques can automatical-ly detect abnormal data and give out some warnings to the students. In ad-dition, during the test, we will ask the test takers to do some random move-ment, in order to verify that the footage received from his/her computer is not a pre-recorded video.

2. After every test session, students are asked to cross check 5 – 10 other students. They can decide whether be-havior of other students are suspicious or not.

3. Only the cases need to be re-viewed by professional proctors will be checked by our highly trained proctors. This 3-level check minimizes the need for real proctors, while maximizing the ability to detect cheating in exams.

PRODUCT FEATURES

Automatic Algorithm Cross-checking Proctor’s Inspection

ANTI CHEATING

We integrate many state-of-the-art technologies in our products. Using latest tech-

nologies not only help us to bring greater values to customers but also save a significant amount of cost, that is one important competitive advantag-es of Intellitest.

Intellitest, for the first time, introduce peer-to-peer technology to this indus-try. In general, we will share part of the computational process to individ-ual computer of test takers. Therefore, students are not only taking a test, but their computer is also inspect data

gathered from other students.

One basic part in our product is the lockdown features: This is used to make sure we can take full control of test candidates computer during the exam. Detailed features to be listed:

Support: Windows, Mac OSX Browser: Prevent naviga-tion, browser control button, prevent simultaneous tests, OS-level control: prevent right-click, printing, function keys, important key combos, Hide Taskbar and Desktop, Hide menus and icons, Prevent min/

max windows, Prevent Copy/Paste, Prevent running of applications, Pre-vent launch of applications, Prevent communication tools.

At the center of our solutions, Intellitest focus on solving 2 major problems with all educational institution with online education: Student Authentication and Cheating Prevention. Our systems have been designed with many complex but effective techniques to help our cus-tomers get rid of these persistent ob-stacles.

Intellitest introduce a variety of different methods used for authentication purpose. During the course, students need to pro-vide some personal information such as: Username/Password, Government ID, some sample of keystrokes and voice. In the beginning of every test session, they will be asked to provide all above data again in order to verify the identity of them. Facial

regconition techniques will be used to compare the actual face of test taker and the stored data. These techniques together would minimize the probability of exam participant is not the actual student who took the course. Certainly in the future we will continue to develop and build more features for Intellitest.

STUDENTS AUTHENTICATION

Keystroke AnalyticsUsername/Password

Facial RegconitionVoice RegconitionChallenge Questions

Smartphone Sensors

14 15Intellitest

Although the number of companies operat-ing in this industry is still limited, but we will choose cautious approach to the market. Based on our insights of the market, we pro-pose the best plan to make the most of the advantages we have obtained, while over-coming the limitations compared to compet-itors. Besides, understand the opportunities and challenges that may occur, Intellitest is totally confident to participate in the market.

The biggest strength of us, is that we can avoid the fierce competition of companies that exist in the market, because most of them are concentrated in North America, while we aim to educational institutions in Europe. Therefore, we have a good oppor-tunity to observe the evolutions of North American market, in order to draw lessons for ourselves in the European market. Fur-thermore, with very good relationship with the leading universities in Europe, we have certain advantages compared with com-panies across the ocean in accessing cus-

tomers. Currently, we have started to have conversations with potential customers, who are the most prestigious university in the top 100 best universities in Europe.

However, as a startup company, we lack the resources in terms of capital, as well as hu-mans compared to the competitiors - they have accumulated their experiences during the past decade. Beside it, educationsl insti-tutions interested in working with reputable companies, so we will encounter difficulties as a new player in this market.

We hope that, with proper strategies, and extensive partner network, we will reap suc-cesses according to our development plan.

Cheaper Alternattives

Highly IntegrableProducts

Automated Solutions

Although the number of companies operating in this industry is still limited, but we will choose cautious approach to the market. Based on our insights of the market, we propose the best plan to make the most of the advantages obtained, while overcoming the limitations compared to competitors. Besides, understand the opportunities and challenges that may occur, Intellitest is totally confident to participate in the market.

The biggest advantages for us, is we can avoid the fierce competition of companies that exist in the market, because most of them are concentrated in North America, while our target segments are educational institutions in Europe. Therefore, we have a good opportunity to observe the evolutions of North American market, in order to draw lessons for ourselves in the European market. Furthermore, with very good relationship with the leading universities in Europe, we have certain advantages compared with companies across the ocean in accessing customers. Currently, we have started to have conversations with potential customers, who are the most prestigious university in the top 100 best universities in Europe.

However, as a startup company, we lack the resources in terms of capital, as well as humans compared to the competitiors - they have accumulated their experiences during the past decade. Beside it, educationsl institutions interested in working with reputable companies, so we will encounter difficulties as a new player in this market.

We hope that, with proper strategies, and extensive partner network, we will reap successes according to our development plan.

New customer segments

WHY INTELLITEST?SIMPLY DIFFERENT

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Broad networks in Europe Advanced technologies

New market, without intense competitions

Lack of reputation Limited resources

Competitors may penetrate European market

In the correlation with other solutions, Intellitest is having huge advantages because we focus on a new market – Europe – which have the maturity of eLearning market comparable to US market, but

with only some small companies, we can avoid intense competition. Moreover, our product is newly developed with the flexibility and integrability in mind, therefore, Intellitest’s solutions can be blended seamlessly to most popular LMS current exist in many educational institutions. The advance in our technology is also expressed in the use of state-of-the-art peer-to-peer computation model, which make the uniqueness of our solution as a highly scalable, reliable and resources efficient offer.

WE HAVE UNIQUE ADVANTAGES

INTELLITEST IN THE MARKET

16 17Intellitest

0103

05

We understand that gaining trust from universities is the most challenging part in the

whole business, because of their ten-dency is to sign contracts only with trustworthy providers. As a startup providing services to one of the most difficult customer segments, we focus on trust-building strategies when ap-proach the market. We already have the advantages of our wide network in a open market, but we don’t have much reputation yet. So we start slow-ly but surely.

In the first 6 months, along with system development, we will widen our net-work by setup meetings with represen-tatives from European institutions and introduce our services. Moreover, we will also offer our products as a plugin for current most-used LMS systems. During this time, we focus on interabil-ity of the product and prepare suffi-cient resources for the pilot phase.

Our systems will be provided as a be-ta-version in the beginning of 2016. At that time, we could work with potential customers - who expressed interests in our company during system devel-opment stage – a free pilot. With the nature of the product is intended for educational enviroment, our first pilot program will last for one semester, and will be closed by summer 2016. We expect to have at least 10 leading uni-versities and 5 LMS providers partici-pate in our free pilot program. This is the key period for our business, since we could collect a vast amount of data

about students behaviors. It’s also a clear demonstration of features in our products and how it could bring values to customers.

During the pilot program, we will con-tinue to improve the systems with 2 most important goals: increase the accuracy of detection systems over 99% while reducing probability of false positive under 1% and reliability of the systems.

With all the data gathered during the beta stage, the second phase of prod-uct development will strengthen se-curity aspect in the services and the efficiency of computational resources. By Fall 2016, we will start selling our fully-developed services, ready for all European univesity to buy for the aca-demic years of 2016.

As mentioned before, our go-to mar-ket strategy will focus mostly on build-ing trust with our customers. For every university, we propose 2 appraoches, depends on their systems:

For universities maintain in-house IT infrastructure and services, we use direct channels to sale our products. With this type of customer, we can not guarantee 100% integrability of our proctoring services, so we will offer them a intermidiate services to have more control over online examination.

For universities outsourcing part of their IT infrastructure by using third-party Learning Management Sys-tems (LMS), we will work with the LMS

provider and together convince uni-versities staff to use our service as a in-tegrated part of their existing systems. We can indirectly take advantage of the trust already built between univer-sities and their LMS provider for years to promote our business.

For both of these types of custom-ers, we will offer them a trial period for free, which can last one semester. We believe that having customer test-ing our products by themselves is the most compelling marketing method, especially for hard-to-reach custom-er segments in education industry. Since we keep the flexibility in mind right from the beginning of the prod-uct development stage, we can easily deploy our services for new potential customers without many difficulities. Furthermore, we always ask for refer-ence from our customers, and these recommendation is extremly useful for acquiring new customers.

The first 3 years will be the premise for targeting new customer segments in our long term development plan.

MARKET PENETRATION

We start to work with higher education institutions, but the growth potetial is much more universal. Other than post-

secondary market, virtual high schools, online cor-porate, certification organizations are also facing the same issues. Moreover, our technology can also be used for many other purposes, such as attendance verification for employee training or compliance purposes, and others. More compli-cated technologies such as biometric authentica-tion will eventually become a vital part in this in-dustry.

But other than reaching for new customer seg-ments, remote proctoring still remains as our core business activities. Nowadays, there are 2 new learning models are emerging in higher educa-tion, namely adaptive learning and MOOCs (Mas-sive Online Open Course). Currently, although they are not a substitute form of traditional education yet, they are being finalized, both in terms of tech-nology and business models. Therefore, Intellitest believe in a potential for significant growth in the products we are developing. While MOOCs will be more focused on scale to bring the services to larger number of students, adaptive learning will be developed to provide constant assessment as an inseparable part of learning experiences. This means that in the next decade, our products and technologies still have many different orientation in development to suit the need of different cus-tomers. We can consider this as the third major phase of product development, which can be done only with a strong collaboration between Intellitest and our customers.

LONG TERMPLAN

JUN 2015

SYSTEM DEVELOPMENT

System test Machine Learning Build up networks Partnership with LMS provider

DEC 2015

SYSTEM PILOTING

6-month period (1 semester) At least 10 universities, each with 5 courses At least 5 LMS providers

JUL 2016

SYSTEM DEVELOPMENT

2nd phase development Increase the accuracy of detec-tion systems Reduce false positive rates

NOV 2016

FULL OPERATIONS

Fully tested, European-wide service ready to use

JUL 2017

SYSTEM DEVELOPMENT

3rd phase development Focus on intergrability with differ-ent LMS systems

18 19Intellitest

Learning Management Systems (LMS) are widely used by educational institutions for admin-istration, documentation, tracking, reporting and delivery of electronic education courses or training program. Administrators prefer to have an consolidated systems for simple manage-ment, therefore the ability to blend in the existing system is also considered as an important characteristic of a proctoring service. Although all of the solutions nowadays were designed as a stand-alone system, providers are trying to set up partnership with big LMS providers like Moodle, Blackboard, Sakai in order to deeper integate into these systems.

After the first introduction of on-line proctoring service by Kryte-rion in 2006, until now, the mar-

ket is still not mature yet, leave many rooms for new companies want to join the market. Less than a dozen of com-panies are competing in this market, they range from independently-owned companies like Kryterion, Software Se-cure, and ProctorU to larger compa-

nies like Tegrity, a division of McGraw Hill that offers remote proctoring ser-vices as part of a larger educational product offering. As demand contin-ues to drive new technology develop-ments, more options will become avail-able. More companies will move from offering higher stakes and higher mar-gin products to offering more scalable and affordable low-stakes solutions

designed specifically for today’s on-line postsecondary market. Vendors will differentiate themselves by adding new features or other improvements to their core product lines.

MARKET COMPETITIONS

Name Website Information

Kryterion Inc. www.kryteriononline.comLaunched in 1999; a Drake International company

(founder of Prometric in 1990)

Software Secure www.softwaresecure.com Long-term provider of services; known for inte-grated camera a fingerprint device

ProctorU www.proctoru.com Founded in 2008; associated with Andrew Jackson University

B Virtual www.bvirtualinc.comMember of B Wyze Group, a leader in remote

workplace innovation

Tegrity www.tegrity.comGrew out of Tegrity lecture capture technology; a

CTB-McGraw Hill company

ProctorCam www.proctorcam.comFounded in 2007 and based in Boston. Massachu-

setts

Respondus www.respondus.comAssessment applications for elearning market; entering the online proctoring market space

Loyalist Exam Services http://www.loyalistexams.com A division of Loyalist College in Ontario, Canada

COMPUTER LOCKDOWN

When the test takers computer is under control of proctoring providers, leaving limited control for the student during the exam. Lockdown technology is typically used in testing cent-ers and for high-stakes exams but can also be installed directly on students’ computers

ELECTRONIC SIGNATURE

Function in a manner similar to hand-writ-ten signatures except they are digitally ana-lyzed for conformity to the original in the interest of affirming identity

KEYSTROKE DYNAMICS

Recognize typing patterns based on rhythm (time spent in each key and be-tween keys), pressure and style.

VERIFY IDENTITY

Authenticate a stu-dent based on a prior data of some physical feature. They are used to verify that the same student who initially registered for the course was actu-ally the one who took the exam. Common-ly-known recognition technologies include facial, fingerprint, palm, and voice.

WEB CAMERA

One of the original technologies used in this industry. They vary in abili-ties depending on the type of camera used and can record videos or still images. Some companies like Kryterion sell their own webcam with additional features such as the ability to have a 360-degree footage.

CURRENT TECHNOLOGIES

LMS INTEGRABILITY

20 21Intellitest

COMPETITORS COMPARISON

Systems Requirements

Real Proctor • • • • •Continuous Internet • • • • •

Features

Live Interaction • • • • •Schedule 24/7/365 20/7/362 24/7/365 20/7/362 15/5/? 24/7/365

Review Later • • • • • • •Control during test • • •

Automated Proctoring • •Lockdown Features • • • • • •

LMS Compatible 5 1 3 3 2

Peer-to-peer •Authentication Technologies

Username/Password • • • • • • • • •Government ID • • • • • •

Keystroke Analytics • •Webcam • • • • • • • • •

Eletronic Signature •Biometric Authenticate •Smartphone Sensors •

Price (lowest) $2 $17 $15 $17.5 $15 $15 $6 $15 $15

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22 23Intellitest

They key cost-saving factor in our business is the advance in the underlying technology. With our solutions, the need for human interventions is minimized since nearly everything are automated. Every suspicious behavior of test candidates will be filtered through 2 steps before reviewed by real proctors: automated machine learning algorithm and cross-checking process by other students. This will significantly reduce the workload of real pro-tors. In addition, with the use of peer-to-peer architecture, 50 – 70% of computational load will be done in test takers computer. This is the key secrets that help us to reduce lots of investment on cloud infrastructure, while all other companies use their own servers with a centralized server farm. This current architecture not only limits the scalability but also requires a large amount of money to maintain the system. With peer-to-peer computation model, we process part of data captured on the computer of other students, so we don’t need to manage large-scale datacenters.

BETTER & CHEAPER

PRICING STRATEGY

As a new player in the market, our first strategy to acquire customers is to provide cheaper alternatives to universi-ties. This is an reasonable approach, because we have to overcome the weaknesses in the company’s reputation. As a small company with limited resources, if we make the price higher or equal to the competitors, it is impossible to compete in this marrket. Moreover, large companies with plentiful resources may quickly dominate the market, causing many difficulties for Intellitest.

Characterized by the service industry as customers will rarely change service providers, due to difficulties in trans-forming the infrastructure. This makes access to the cus-tomer is utmost important. Our strategy is to acquire as many customers as possible. Therefore, we offer to our customers a trial period in 6 months for free (equivalent to 1 semester), this will significantly increase the probabiliy of them to use our products.

On the other hand, with the economies of scale advan-tage, almost all of the costs lay in the development and improvement process of products, and the provision of services to new customers will not increase the cost. In ad-dition, with the flexibility and scalability of the system, we do not need to invest so much in infrastructure each time adding new customers. The more customers we have, the higher revenue/cost ratio is.

We will offer 3 pricing plans with different features, but they are all the cheapest options available on the market. Moreover, all universities can join a free trial period last for 1 semester, with full features and have no limitation on the number of tests before making the purchase.

We will offer our products as flexible packages to meet diverse needs of each customer. In general, there are 3 pricing plans available, ranging from the most simple, economic soltutions to more complex features, suitable for high-stakes exams.

24 25Intellitest

600K

FINANCIAL PERSPECTIVE

Cash flow forecast 2015 2016 2017 2018

Cash balance at the start of the year 0 16,000 40,000 191,000

Revenue 0 110,000 450,000 650,000

Other source of cash flow 350,000 250,000 0 0

Total cash in 350,000 376,000 490,000 941,000

Marketing & Promotional 30,000 25,000 20,000 30,000

Research and development expenses 120,000 80,000 20,000 50,000

General administration expenses 10,000 10,000 10,000 10,000

Infrastructure maintenance 15,000 17,000 20,000 20,000

Employment expenses 120,000 150,000 200,000 200,000

Occupacy costs 24,000 24,000 24,000 24,000

Other expenses 5,000 5,000 5,000 5,000

Total cash out 324,000 311,000 299,000 339,000

Cash balance at the end of the year 16,000 65,000 191,000 602,000

Regarding the financial plan, we will spent a significant per-centage of total investment on R&D. In the first year, prod-uct development activities will cost approximately 50% of operating expenses, and declining in subsequent years.

Regarding product development, we have 3 stages: Initial development in 2015, Full development based on data collected through the pilot period in 2016, and Develop-ment of customized products for each customer in 2018, so the cost for R&D stays higher in these years.

Regarding the call for investment, we seek investors can support us total capital of 600 thousand euros. The use of this amount will be divided into two phases: Phase 1 for the financial year 2015 worth 350 thousand euro. After the first investment phase, we will have a full assessment

of market feasibility, and will decide to continue develop-ing in the same direction, or pivoting the business depend-ing on changes of the market .

The remaining 250 thousand euro will be used for the financial year 2016. The investment in second phase will shorten the breakeven period, and we can quickly acquire large numbers of customer before the major competitors entering the market. The investment splited into two phas-es will encourage us to use resources reasonably, and it also is a way for investors to minimize risks and feel con-fident to put their trust in us. For our valued investors, we guarantee 100% profit after 4 years, equivalent to the rate of 25% a year. This is an attractive, low-risk investment op-portunity should not be ignored.

In the first two years, Intellitest will focus on building relationships with prospective customers as well as establishing important partnerships with LMS system providers worldwide. We are optimistic about the fu-ture development of the company as well as the market in general. We expect to break-even after 3 years of operation and to keep growing 35% a year.

WE ARE FINDING

FOR 2-YEAR INVESTMENT

200%WE GUARANTEE

RETURN AFTER 4 YEARS

26 27Intellitest

Based on our extensive knowledge about the market, we have proposed a feasible business opportunity. Intellitest have obvious advantages compared to existing companies as well as new organizations about to enter the market. In relation with competiors, we target at new market, where we have better insights about customers. Moreover,

our products are developed with new mindset and latest technologies, which provide better service level and cheaper price range.

By following our plan, Intellitest will breakeven after 3 years of operation. During the first 5 years, Intellitest will keep the grow rate of at least 30% per year, which guaratee 100% interests rate for our investors.

At Intellitest, we have a unique combination of personal skills, market insights and cutting-edge technology. This is a per-fect foundation for us to believe in our plan, and motivate us to continue innovate in the coming years.

We are finding an investment in 2-phase basis, with the total amount is 600 thousand euro, and we guaratee 200% payback after 4 years, which equal to the rate of 25% every year for our investors. This is a great opportunity to join a company with unlimited growth potental adding more values to online education industry.

CONCLUSION

28 Intellitest

HAI DINH TUANhaidinhtuan@gmail.com +46 76 268 0877