STEM CHALLENGE RULESHello STEM Challengers!Do you have an innovative idea and think it will work? Then launch it! The 2016-2017 STEM Challenge will introduce the innovative lean startup model 1 which is transforming how new ideas are being built and launched everyday. Your team objective should be to work collaboratively, try to launch a startup business successfully.

As a challenger, you will be tasked with creating a business model canvas 2 demonstrating how your ideas pivoted, produce a business plan document and present to potential investors and professionals to win this year’s competition. Prizes will range from $100 to $500 in awards.

This year’s competition will again incorporate six target industry sectors identified in the Borderplex Alliance Strategic Plan 2015-2020 3 as having the highest potential of economic opportunities for our Borderplex Region (El Paso /Cd. Juárez /Southern New Mexico). They are:

1. Defense and Aerospace2. Life Sciences3. Tourism

4. Advanced Manufacturing 5. Advanced Logistic6. Business Support Services

The Challenge: Teams must come up with one or two big challenges for an industry sector. Team solutions must meet a need in the region, or world. Teams will focus on customer discovery process and test their hypothesis around specific problems.

Before you begin the STEM Challenge, there three key resources to study. These resources will provide insight into becoming a successful entrepreneur now and in the future. We will also provide technical workshops from industry leading professionals to help guide your ideas from concept to development.

Resource one: Udacity.com An online university "by Silicon Valley" that teaches the skills that industry employers need, the credentials endorsed by employers and educates at a fraction of the cost of traditional schools. With industry giants—Google, AT&T, Facebook, Salesforce, Cloudera, etc.—Udacity offers Nanodegree programs and credentials, designed so professionals become Web Developers, Data Analysts, Mobile Developers, etc.

For STEM Challenge we will use Udacity for the FREE “How to Build a Startup,” online course. Click on “Start Free Course”. You will need to register at www.udacity.com/account/auth#!/signup . This is the model for the 2015 STEM Challenge competition. You will learn from Steve Blank 4

who is the innovator of the Lean Start Up Model.

Resource two: businessmodelgeneration.com The Business Model Canvas is your guide for startup development. You will make multiple pivots along the way. The objective of the canvas is to ensure you “Get Out of the Building” and talk to potential customers/companies who will start to shape your value proposition. The canvas has nine components: Value Proposition, Customer Segments, Customer Relationships, Key Partners, Key Activities, Channels, Key Resources, Cost Structure and Revenue Streams. We provide you with an Excel template file or you can go to businessmodelgeneration.com and download their canvas. Remember, you should have muliple canvases as you talk to companies and potential customers. This will help increase your odds of winning. We are asking for your final canvas in the executive summary component of your team business plan.

Resource three: The Borderplex Alliance Strategic Plan The report provides in detail the six industry sectors for our Borderplex region which have been identified as having the highest potential for economic opportunities. By understanding the report and its content, you will identify which industry area your start up product or service solutions will best align with, increasing your chances for sustainability. To read about industry sectors refer to pages 63-90 in the report.

Let the startups begin! Challengers here are your rules.

Team Requirements:• Teams must represent a high school or an Out-of-School Youth 15-18 in the

Borderplex Region• Teams must be comprised of four to six members and must be in 9th through 12th

grade • Team compositions must at least four of the six student comprised of:

o (1) Science Student o (1) Technology Student o (1) Engineer o (1) Mathematician o (1) Artist o (1) Business

• Teams must have at least one faculty, teacher or staff as team mentor

Team Registration:To become a competitor, fill out the registration form at http://www.borderplexjobs.com/programs-and-services/steamYou must fill out and have a faculty, teacher or staff mentor endorse your team. This will help with communications and guidance with your projects.

Business Idea Categories:Your idea must target at least one of the following industry sectors:

1. Defense and Aerospace (e.g. drones, apps, aviation, space, military)

2. Life Sciences (e.g. biomedical, health, medicine, devices)

3. Tourism (e.g. quality of life, social campaigns, customer data solutions, travel, sports)

4. Advanced Manufacturing (e.g. consumer products, renewable energy, 3D, automation, automobile)

5. Advanced Logistics (e.g. tracking, security, trucking, shipping, packaging, bi-modal services)

6. Business Support Services (e.g. language, accounting, data cloud management, education)

Document Requirements: Business plans must be single space and no more than 12 pages in length (not

including cover page, table of contents and appendices). Business plans must be printed on 8 ½ x 11” letter size paper and must cite all

sources in footnotes. Business model canvases should be included in your appendices of your business

plan. Your “final” business model canvas should be placed in the Executive Summary (page 1).

Scoring Breakdown and Requirements: Scoring will be based on how well your team applies Science, Technology, Engineering, Math & Art principles within each pre-determined section in the business plan template. The will be a total of 110 points to score. Here is the scoring breakdown:

Science - Market Research/Discovery (30 points)

Technology - Marketing Applications (20 points)

Engineering -Commercialization & Operations (20 points)

Math – Financial Strategy (20 points) Innovation –Business Model Canvas (10

points) Art - Prototype/Concept Design (10 bonus

points)

Important Dates: Saturday, January 14, 2017 – STEAM Rally at Chapin High School from 9:00am-

12:00pm (register teams, provide Q&A and to provide information on the lean startup model)

Monday, February 13, 2017 - Team Registration Deadline Monday, March 31, 2017 - Business plan and Canvas deadline Friday, April 7, 2017 - Presentation Competition and Awards Ceremony

Business Plan and Canvas Submission:Completed business plans must be submitted by Monday, March 31, 2017 either email, fax or mail to:

Email: joseph.sapien@borderplexjobs.comFax: 915.351.2790 Attention: STEM CHALLENGE 8

Mail: Workforce Solutions Borderplex 300 East Main, Suite 800El Paso, TX 79901

Business Plan Template

Company Name and Logo

School NameAddress

City, State Zip

Team Member Names1st Member Name2nd Member Name3rd Member Name4th Member Name5th Member Name6th Member Name

Teacher Sponsor NameSponsor Phone Number

Sponsor E-mailDate Revised

Table of Contents

I. Business Model Canvas – Innovation 10 points (No more than 1 page)

1.Value Proposition2.Customer Segments3.Customer Relationships4.Key Partners5.Key Activities6.Channels7.Key Resources8.Cost Structure 9.Revenue Streams

II. Market Research – Science 30 points (No more than 3 pages)1. Industry, Yesterday, Today and Tomorrow2. Competitive Analysis

III. Marketing Applications– Technology 20 points (No more than 2 pages)

1. Products/Services2. Sales Strategy 3. Customer Relations4. Launch Plan Strategy5. Differentiation (Competitive Advantage)

IV. Commercialization & Operations Plan – Engineering 20 points (No more than 3 pages)1. Location2. Operation3. Organization Structure4. Critical Suppliers5. Equipment6. Intellectual Property7. Design, Technical Merit and Solution/Address to Issue

V.Financial Strategy – Math 20 points (No more than 3 pages)1. Cost Structure2. Revenue Streams3. Cash Flow Projection

VI. Prototype/Concept Design – Art 10 bonus points

I. Business Model Canvas

Key Partners

Key Activities

Value Propositions

Customer Relationship

sCustomer Segments

Key Resources Channels

Cost Structure Revenue Streams

II.Market Research Determines access to the market by studying the industry, competitors and customer demographics (so you can choose a target market).

1.Industry, Yesterday, Today and Tomorrow

i. What industry does your product/service fall under? What has this industry done in the last several years, what is it doing today, and what do industry analysts (trade organizations) predict for the future?

ii.

Conduct a thorough study of the demographics of the market your business will become part of. Then, decide what type of person (target market) will buy your product. Does the population demographic in your area match? Is there enough of this type of client (target market) in your area to have a successful business?

iii.Customer Archetype (examples can include): i. Age ii. Gender

Factors Your Start Up Competitor 1 Competitor 2

1. Minimal Viable Product or Service

2. Cost Structure

3. Customer Segments

4. Product/Service Maintenance Plan

5. Customer Support Availability

6. Key Partners

7. Location

8. Product Specs (dimensions)

9. Customer Channels

10. Revenue Streams

iii. Income iv. Education Level v. Occupation vi. Location (region, neighborhoods) vii. Lifestyle (psychographics, hobbies)viii. Business Organization (size, industry)

iv. Are there barriers to entry? High entry cost? High risk and cost to get in, but limits the number of competitors. Low entry cost? Low risk and cost to get in, but likely to have many competitors. Are there permits or regulatory approvals required?

v. Are there other competencies you need to develop? Are they easily achieved?

2. Competitive Analysis

Who is the competition? If there are many it will be easy to enter the market, but hard to get significant share- If there are few, it might be harder to enter, but you could gain significant share.

III. Marketing Applications Build strategy from core competencies (quality, speed, service, product, price, convenience, location, etc.) your strategy should tell customers what you will do better than the competition; customer must be able to clearly experience value.

1.Products/Servicesi. Give a detailed description of your minimal viable product or

service. Including photos, creates a more powerful presentation.

2.Sales Strategy

i. How will you get your product/service to the market? Direct sales? Through what channel (distributor, manufacturer’s representative, retailer, internet)?

Pricing Strategy

i. How are going to price your product or service? Look at the competition’s price, what and compare to what you estimate your cost to be. Can you get the same price or a premium over the competition?

ii. Penetration pricing strategy 1. Price charged is set artificially low to gain market

share. Once achieved, price is increased. iii. Skimming pricing strategy

1. Charging a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply.

iv. Follow-the-leader pricing strategy 1. Set price based on competitors (leads to “price

wars”). v. Variable pricing strategy

1. Price fluctuates based on (changing) cost of production.

vi. Economy Pricing 1. No frills low price; the lowest possible regardless of

what other are doing. Cost of marketing and manufacture are kept at a minimum.

vii. Premium Pricing 1. High price is for a uniqueness about the product or

service. This approach is used where a substantial competitive advantage exists.

3.Customer Relationsi. How will you get customers archetypes (This goes back to

demographics and figuring out what types of person (customer archetype) will buy your product. So, what kind of advertisements does this person respond to the best?)

ii. How will you keep your current customersiii.How will you grow your customers

4.Launch Plan Strategyi. When do you plan to launch your minimal viable product or

serviceii. How will you promote your product/service to the customer?

Provide examples. iii.What marketing strategies will you implement in launching

strategy (web, media, grass roots, social media, partners)iv. How will you track progress of launch strategyv. What are your leading indicators and metrics by

month/quarter sales

5. Differentiation (Competitive Advantage) This brings your entire marketing strategy together.

i. Why will you succeed? What will you do different than the competitors? These are called your “core competencies”, what you do well that perhaps the competition does not.

List your core competencies. Examples would be superior service levels, exceptional quality, speed, better product or service, better location, etc.

ii. If there is enough differentiation, you can be successful. If there is little or no differentiation, then you will usually need to rely on price to get business; not the best option for a startup business.

IV. Commercialization & Operations PlanHow product is made and/or service fulfilled, and other core characteristics of your business:

1.Location

i. (Include complete address)

2.Operation

i. When business will operate ii. Hours iii.Seasonal or not

3.Organization Structure

i. Sole proprietor or LLC. ii. Team structure and responsibilitiesiii.How much product/service can you provide in a certain time

frame.

4.Critical Suppliers i. Manufacturesii. Resources required from partnersiii.Which activities do your partners perform

5. Equipment (Examples)

i. Computer Systemii. Tools iii.Fixtures iv. Displays v. Vehicles vi. List everything you need to conduct business!

6.Intellectual Property(Examples)

i. Permits ii. Licenses iii.Insuranceiv. Contractsv. Patents and Copyrights

7.Design, Technical Merit and Solution In this section judges will be evaluating the design of your idea (what materials are used, how does it perform, were new technical ideas introduced); production (efficiency, effectiveness); technology (is it new, is it adapted, can it be duplicated); technical merit (can your invention/idea be engineered) and solution (did your idea/invention address the intended issue).

i. Prototype designii. Materialsiii.Technology needsiv. Power requirements

V.Financial StrategyWhat’s your business model?How will you generate revenue?How much effort will it take, in time and money, to develop your product?How much cash flow will you need to start generating revenue?Will you need to spend on advertising (local, paid campaigns, pay per click, salespeople)?

1. Cost Structure (Product and Service Pricing) List all of your products and services and how they will be priced. Then, describe your product/service unit and how many you will sell each month for the first year. Add these totals to your cash flow projection.

1. Product and/or Service Price / Rate

2. Product and/or Service Price / Rate

3. Product and/or Service Price / Rate

1.2 Operating Costs to deliver the services - These costs are usually fixed in nature and are driven by the number of staff delivering or managing the Direct Services. What are the most important costs inherent to your business

model? Which key resources are most expensive?

Which key activities are most important? i. Personnelii. Equipment & Related Costsiii.Professional Servicesiv. Other Expenses

-Communication / Data Lines-Printing / Reproduction- Insurance

2.Revenue Streams(s)

Explain where you intend to obtain revenue streams and how much you will receive from each source.

For what value are your customers really willing to pay? For what do they currently pay? What is your revenue model? http://www.bmnow.com/revenue-

models-quick-guide/ What are the pricing tactics?

i. Entity

1. Amount ii. Entity

1. Amount iii. Entity

1. Amount

3.Cash Flow Projection Given the definition of the business plan financial budget (which may include operating costs and / or time-specific profile of the expected budget disbursements (or cash flow) is outlined. This facilitates assessing the scope, size, and timing of the financial commitments necessary for successful implementation of the business plan. Steps to create cash flow projection:

1. Enter your beginning balance2. Estimate cash coming in3. Estimate cash going out (expenses)4. Subtract outlays from income

VII. Prototype/Concept Design – Art

Appendix