Empowering the next generation of builders Build-It-Yourself seeks partners who can help bring our unique online learning environment direct to kids and their parents at home. John Galinato

Empowering the next generation of builders What We Do … Inspire and guide kids to create, design, build and invent. Empowering the next generation of builders

The Product Mission: Inspire and guide kids to use technology constructively, collaboratively and creatively. What we offer: A unique, online laboratory for builders Parents pay a $30/mo. membership fee: -Access to project plans, modules -Four live, mentored Webcast lessons/mo. -Invention Universe online virtual community Empowering the next generation of builders ContentSpecialists Collaboration

Empowering the next generation of builders Product Differentiators 1)Multidisciplinary projects - Playful, socially conscious storylines - Combine art and technology - Attract broad range of kids 2) Build-It-Blocks (modular construction) - Build complex projects quickly 3) Collaboration with art and engineering students (live webcasts) - Build mentor relationships Empowering the next generation of builders

Value Proposition We provide consistent, high-quality, high value technology enrichment at a fraction of the cost of traditional instruction. We bring the university student TA (Teaching Assistant) concept, coupled with proven content and online collaboration tools, to kids online. Empowering the next generation of builders

Target Customers Boys and girls ages 8-13 interested in art or technology. Parents who want their kids to go to college and understand the need to be fluent in technology. Skills exercised in a BIY workshop series: 1) Problem solving skills 2) Presentation skills Empowering the next generation of builders

Growth Plan Validate that parents value the Build-It-Yourself vision. Empowering the next generation of builders Grow the team and infrastructure to serve 1,000+ members Partner with after school programs like Sylvan, Kaplan and Bright Horizons, publishers and retail outlets to grow quickly. Proof of Concept $600K+ revenue customers Thru 2012 Proof of Execution 1,000+ members 2013 Rollout $50M+ revenue 150,000+ members 2-4 years

Empowering the next generation of builders 1.3,000+ customers / 20+ schools 2.$200+ revenue per customer 3.$600,000+ revenue 4.6+ years in development 5.90% of business is recurring 6.15% of revenue is on-line. Empowering the next generation of builders Proof of Concept Phase – Validation (through 2012)

Empowering the next generation of builders Proof of Concept Phase - Validation Proven content and supporting platforms Empowering the next generation of builders 30 Projects 20 Lessons 100 Build-It-Blocks Record of attracting talent from the Cornell, MIT, Harvard and Mass Art communities.

Empowering the next generation of builders Strategy: 1.Hire an MBA business developer. 2.Evolve our content and supporting platforms. 3.Close corporate distribution partnerships. Assets (2012): 1.Repeat customer base. (500 kids/yr. at $200/kid) 2.Well-tested content and supporting platforms. 3.Access to network of developers and Webcast specialists from Cornell, Mass Art and MIT communities. Empowering the next generation of builders Proof of Execution Phase Raise our valuation

Empowering the next generation of builders How big is our market? College bound Kids: Every kid who goes to college should be technology fluent and therefore is a potential customer. 300K Members: We need 2% of target US market to build a $72M business. (300K x $240/yr including supplies and embedded advertising) Empowering the next generation of builders 30 million kids ages million target market. Half will go to college. 62% have broadband access at home.

Empowering the next generation of builders Growth Plan Validate that parents value the Build-It-Yourself vision. Empowering the next generation of builders Grow the team and infrastructure to serve 3,000 members Partner with after school programs like Sylvan, Kaplan and Bright Horizons, publishers and retail outlets to grow quickly to 300,000 members. Proof of Concept $100K revenue 500 customers 2011 Proof of Execution $540K revenue 3,000 members 2013 Rollout $72M revenue 300,000 members 2017

Empowering the next generation of builders 1.3,000+ customers / 20+ schools 2.$200+ revenue per customer 3.$750,000+ revenue 4.6+ years in development 5.80%+ of business is recurring 6.25%+ of revenue is on-line. Empowering the next generation of builders Proof of Concept Phase Validation

Empowering the next generation of builders Proof of Execution Phase - Serve 3,000 members Viral Marketing Program: 12 interns 10 developers 15+ schools 500 students / year Network of specialists Corporate Partnerships: Close a corporate distribution partnership that has the potential to generate 3,000 members in a year. (300K $240/year in 3-5 years)

Empowering the next generation of builders The Team: We need to recruit, train and manage a network of 30 Webcast specialists. We need to recruit an MBA deal maker. Infrastructure: We need to automate and expand our infrastructure. Proof of Execution Phase - Serve 3,000 members

Empowering the next generation of builders John Galinato Investment of $105K is required to: Empowering the next generation of builders Proof of Execution Phase - Serve 3,000 members grow the team expand infrastructure develop distribution partnerships $540K annual revenue (3,000 members x $15/mo)

Empowering the next generation of builders Retail outlets promote Build-It-Yourself memberships because they drive sales of their products, encourage family shopping and monetize their on-line presence. 5,000 to 300,000 Leverage Strategic partners place highly valued content in retail outlets such as Home Depot, Radio Shack, Sylvan Learning Centers, Barnes & Nobel. 4 to 5,000 Leverage Build-It-Yourself sells content branding to highly targeted strategic partners including publishers, after school programs manufacturers and distributors. 1 to 4 Leverage (Build-It-Yourself) (Partners) (Retail) Rollout Phase - Serve 300,000 members

Empowering the next generation of builders John Galinato Investment of $1.5+ million may be required to: Empowering the next generation of builders Rollout Phase - Serve 300,000 members grow the team brand the product evolve the product and infrastructure develop distribution partnerships $72M annual revenue (300,000 members x $20/mo)

Empowering the next generation of builders Business Plan Support Slides Empowering the next generation of builders Market Segmentation Value Net Benchmarks Financials Team Comps Product Development What We Do

Empowering the next generation of builders What We Do … Build-It-Yourself provides after- school and at-home workshops that inspire and empower kids to create, design, build and invent. We engage boys and girls in playful approaches to design, invention and scientific inquiry. We train kids to apply technology to solve problems. Empowering the next generation of builders

Our Workshops Are In Demand More than 16 schools served: –85% are repeat customers –Include BB&N, Concord Academy, Lawrence Academy –Growth via word-of-mouth More than 2,500 kids served More than $500K revenue generated “Clio was thrilled. She couldn't stop talking about what she did.” Parent “I never thought my son would give up soccer for anything.” Parent “Wow!” Program director sitting in on a webcast from China. Key StatisticsValidation Empowering the next generation of builders

The Product – Invention Universe Database of Content Elements: Online database of: Playful storylines and associated challenges Building tricks and lessons Functional building blocks that enable kids to build complex projects quickly. Empowering the next generation of builders Content Specialists Collaboration Tools

Empowering the next generation of builders Seth Mastin – BA Computer Science, MIT Rebekah Gendron – MEd, Rhode Island Univ Max Seidman – Sophomore BB&N Valeria Roman – Science Journalist, Argentina Naseem Makiya – Junior Harvard Michael Hsu – Sophomore, Choate Liu Huan – Senior, Shanghai High School Joan Tarud – MS Mechanical Engineering, MIT Network of Specialists: Graduates and students from the Cornell/Harvard/MIT community who inspire and guide kids. Empowering the next generation of builders Content Specialists Collaboration Tools The Product – Invention Universe

Empowering the next generation of builders Effective Collaboration Tools: 2-way audio/video webcast platform enables kids to collaborate with peers and specialists in a global laboratory. Wiki project management Invention Universe Empowering the next generation of builders Content Specialists Collaboration Tools The Product – Invention Universe

Empowering the next generation of builders Product Differentiators 1) Multidiscipline - Attract broad range of kids 2) Build-It-Blocks (modular construction) - Build complex projects quickly 3) Collaboration with art and engineering students - Build mentor relationships 4) Focus on the presentation of ideas - Kids get positive feedback when their projects look cool. Empowering the next generation of builders ContentSpecialists Collaboration

Empowering the next generation of builders Value Proposition Empowering the next generation of builders Large and growing demand for technology training and constructive, after-school activities. Collaboration with MIT. Proven and acclaimed content. Unique workshop delivery model. Access to Cornell/MIT student specialists. Project has attracted talented developers. High-quality technology instruction at a fraction of the cost of traditional instruction.

Empowering the next generation of builders Value Proposition High-quality technology instruction at a fraction of the cost of traditional instruction. Bring the university student TA (Teaching Assistant) concept coupled with proven content and online collaboration tools to kids online. Empowering the next generation of builders

Proof of Concept Phase Validation "The goal is to highlight the 'powerful ideas' in the modules -- that is, the ideas that help you understand how the module works, and provide you with a foundation for building other things." Professor Mitchel Resnick, from the MIT Media Lab, directing the collaboration between MIT and Build-It-Yourself to develop a database of construction modules "Build-It-Yourself is a fascinating program that engages students in creative projects to design and build robots. Both of my children --ages 7 and 9-- have participated in Build-It-Yourself workshops and learned greatly from it. It's very interesting pedagogy." Dr. Fernando Reimers, Associate Professor and Director of HGSE's International Education Policy program, describing the Build-It-Yourself program to colleagues at the Harvard Graduate School of Education "Thanks for putting on one of the best Robotics workshops that I have been to." Science teacher at the Jamestown Middle School, RI commenting on a Build- It-Yourself workshop for teachers

Empowering the next generation of builders Collaborating on-line comes naturally to the next generation! Proof of Concept Phase Validation

Empowering the next generation of builders Proof of Concept Phase Assets Proven content and supporting platforms Empowering the next generation of builders 30 Projects 20 Lessons 100 Build-It-Blocks Record of attracting talent from the Cornell, MIT, Harvard and Mass Art communities. (24 contractors)

Empowering the next generation of builders Opportunity: 1.Summer Camps 7.3 Million Kids 2. After-school Time Organized by schools 2.5 Million Kids 3.After-school Time Organized by families 15 Million Kids Sources: American Camp Association Institute for Educational Science, US Dept. of Education Digest of Education Statistics: 2005 Assume 65% of kids can afford a computer and $120/year 15M Kids Market Segments 26,569 Schools 3M Kids 450K Kids (15%) 71,270 Schools 20M `Kids 5 largest for-profit organizations 160K Kids 2M kids (10%) 23 Million Kids Grades 3 to Home Public After-school Private School Commercial After-school Public School Private After-school Summer Camps 12,000 Camps 7.3M Kids

Empowering the next generation of builders The Value Net Suppliers: Marratech / Google Craft Stores Radio Shack Suppliers: Marratech / Google Craft Stores Radio Shack Customers: Summer Camps After-school programs Parents Customers: Summer Camps After-school programs Parents Complementors: Publishers Manufacturers Retail Outlets Schools Complementors: Publishers Manufacturers Retail Outlets Schools Competitors: Teachers Local Museums Mad Science Bright Horizons Competitors: Teachers Local Museums Mad Science Bright Horizons Build-It-Yourself

Empowering the next generation of builders The Demand Factors 1)Kids seek rich, online experiences. 2)Two-thirds of U.S. families are now headed by either two working parents or a single working parent. These families need after-school programs. 3)Many parents want to position kids to get into good schools. 4)Corporations are demanding a labor pool that is better trained in engineering and technology. KidsParentsCorporations Empowering the next generation of builders

Customer Profiles Parents Parents seek engaging, constructive activities for their kids when not in school. Empowering the next generation of builders Camp Directors Camp Directors seek popular programs. 7.3 million kids attend 12,000 summer camps. After-School Program Directors After-school Program Directors seek educational programs. 3 million kids are enrolled in after-school enrichment programs. Sources: American Camp Association Institute for Educational Science, US Dept. of Education Digest of Education Statistics: 2005

Empowering the next generation of builders The Value Net Suppliers: Marratech / Google Craft Stores Radio Shack Suppliers: Marratech / Google Craft Stores Radio Shack Customers: Summer Camps After-school programs Parents Customers: Summer Camps After-school programs Parents Complementors: Publishers Manufacturers Retail Outlets Schools Complementors: Publishers Manufacturers Retail Outlets Schools Competitors: Teachers Local Museums Mad Science Bright Horizons Competitors: Teachers Local Museums Mad Science Bright Horizons Build-It-Yourself

Empowering the next generation of builders Cost After-School Enrichment Competitors Consistent Quality (Control over content + instructor) $25-$50/hr $10-$25/hr $5/hr Mad ScienceFirst LEGOInvent Now KidsLocal MuseumsID Tech CampsPrivate TutorsSports Programs Build-It-Yourself Interns $35/hr Build-It-Yourself Members $5/hr

Empowering the next generation of builders Technology Program Competitors

Empowering the next generation of builders Competitive Web Sites

Empowering the next generation of builders The Value Net Suppliers: Marratech / Google Craft Stores Radio Shack Suppliers: Marratech / Google Craft Stores Radio Shack Complementors: Publishers Manufacturers Retail Outlets Schools Complementors: Publishers Manufacturers Retail Outlets Schools Competitors: Teachers Local Museums Mad Science Bright Horizons Competitors: Teachers Local Museums Mad Science Bright Horizons Build-It-Yourself Customers: Summer Camps After-school programs Parents Customers: Summer Camps After-school programs Parents

Empowering the next generation of builders Publishers After-school Programs Retailers Manufacturers Monetize web presence. Expand curriculum. Generate new revenue. Add value to products. Drive new product development. Sell products. Build-A-Bear iRobot Monetize web presence. Penquin Sunset Mad Science Potential Distribution Partners

Empowering the next generation of builders Potential Distribution Corporate Partners After School Service Providers Sylvan Kaplan Bright Horizons Mad Science Build-A-Bear Publishers McGraw Hill Houghton Mifflin Penguin Sunset Marvel Comics Electronic Arts Retailers Radio Shack Home Depot Walmart Manufacturers Microsoft Xbox Nintendo Wii MidWest Hobbies Futaba

Empowering the next generation of builders Everyone Wins in the Build-It-Yourself Eco-system Kids Parents Corporate Partners - Have fun! - Solve problems creatively. - Integrate multiple disciplines. - Reinforce core curricula. - Collaborate and share ideas. - Develop important tech skills. - Deliver high-quality programs. - Reach kids and parents at-home. - Develop new revenue streams. - Differentiate. - Develop future employees. - Affiliate with a “do-good” program. - See their kids engaged and excited! - Collaborate and work with their kids. Investors - Receive an attractive ROI. - Help solve a major social problem. Empowering the next generation of builders

Scaling to a Global Market On-site Fee per workshop In-person specialists Word-of-mouth distribution New England area On-line Subscription based revenue On-line specialists Distribution partnerships National and international Current ModelGoing Forward Model Empowering the next generation of builders

Proof of Concept Phase Proof of Execution Phase Roll Out Phase Strategic 2,500+ students paid $200+ for BIY workshops. ($10-$20/hr) Secure $100K investment. Grow from 50 on-line customers to 3,000 online $10/mo. Grow from 3,000 online members to 300,000 online members. Show profitability. Infrastructure Content and supporting online platforms developed. Collaboration tools tested. Development team recruited. Develop Invention Universe to serve 3000 members. Develop program to recruit, train and manage webcasters in university communities. Expand content. Automate member support. Distribution Strong testimonials and repeat customer relationships built. Initiate viral marketing program. Close corporate distribution partnership > $50K Multiple distribution deals in place. 44 Growth Phases - Milestones

Empowering the next generation of builders Proof of Execution Phase Strategy / Assets Strategy: 1.Hire and MBA business developer to lead the company. 2.Close a corporate distribution partnership that has the potential to generate 3,000 members in a year. (300K $240/year in 3-5 years) Assets (2012): 1.Repeat customer base (500 kids/yr at $200/kid.) 2.Content and supporting platforms. 3.Access to network of developers and Webcast specialists from Cornell, Mass Art and MIT communities Empowering the next generation of builders

Proof of Execution Phase - Serve 3,000 members

Empowering the next generation of builders Proof of Execution Phase - Serve 3,000 members Empowering the next generation of builders $91K - Worst case cash flow

Empowering the next generation of builders Revenue$156K - Online rev$84K - Onsite rev$72K Expense:$239K -Fixed cost$204K -Webcast cost$ 35K Worst case cash flow:($91K) Break even:Month 10 Capital Required$105K To grow from $15K => $360K annualized online revenue. Proof of Execution Phase - Serve 3,000 members

Empowering the next generation of builders Rollout Phase - Financials 5-year Target: 300,000 customers => $79M revenue

Empowering the next generation of builders Rollout Phase - Financial Assumptions 1) Sales: There are 6 revenue streams: 1. Online memberships are the largest revenue stream. 2. Printed pieces in POS displays drive online memberships. 3. Workshops in after school programs drive online memberships. 4. Ecommerce results from projects that require parts, tools and supplies. 5. Advertising revenue results from website traffic. 1/2 of members are repeat customers or from a % conversion from printed pieces that are placed in schools, store counters and book stores. ($0 acquisition cost) 1/2 of members will come from effective, leveraged, distribution strategies. 2) Membership fee: The membership fee is equivalent to popular multiplayer game subscriptions. 10M WOW gamers pay $13-$15/mo; Guitar Master - $29/mo Members get access to project plans, Webcast lessons and feedback, online exhibits and project portfolios, Ecommerce discounts, and master builder certifications. For a membership fee of $240/yr, typically a member would spend 166 hours in groups of 8 members at a cost of $1.44/hr

Empowering the next generation of builders 3) Customer acquisition cost is a key assumption: Customer acquisition cost is zero for printed pieces for 1/2 of customer base. The customer acquisition cost for 1/2 of customer base is $35/member $29 - Amazon.com $60 - Credit Cards $34 - Various E-Commerce Sites $31 - Typical Retail Customer 4) Member / Webcaster ratio is a key assumption: Live Webcasting is a differentiator. It's fundamental to success. BIY is selling an opportunity for kids to build relationships with Webcast 'tutors' from university communities such as MIT and Harvard. This plan assumes 80 members/tutor in Yr1 to 100 members/tutor in Yr 3. In practice, members will be online simultaneously with a Webcast 'tutor' and other members in groups of Assume each member is online an average of 4 hours per month or one 1-hr workshop/wk. Then a webcaster would have to serve 400 member-webcast hours per month. (100 members x 4 hours / month). If we assume the average webcast room size will be 10 members, then the webcaster would have to serve 40 hours per month or 10 hours per week. Students at MIT are not allowed to work more than 20 hours per week in a UROP program. We are proposing a firm commitment for 10 hours per week. This is less than it would take to participate on an athletic team. Rollout Phase - Financial Assumptions

Empowering the next generation of builders 5) Potential: (Can this be a $50M business?) There are 20+ million kids between the ages of in the US. 1.5% market penetration would yield the following results: $78,625,000 Revenue $57,116,969 Expense $21,508,031 Earnings (before tax) 27% Earnings / Revenue Ratio (before tax) Bright Horizons has a 5.4% Earnings / Revenue ration (after tax) McGraw Hill Publishing has a 14.4% Earnings / Revenue ration (after tax) 6) Productivity: 4 college student Webcast 10hrs/wk = 1 employee 4 college student Webcast $10/hr - $12/hr are paid $20K/yr - $24K/yr Full time base salaries are $60K - $110K/yr In Year 3, this plan generates revenue of $101,378 per employee Starbucks productivity is $55K/employee Microsoft productivity is $500K/employee Rollout Phase - Financial Assumptions

Empowering the next generation of builders 7) Gross Profit Margins Gross Margin = Gross Profit/Sales 52% Build-It-Yourself ($25/hr rev - $12/hr webcast fee)/$25/hr Bright Horizons (BFAM) an after school service program, has a $1.03B market valuation 22% gross margin (44% is industry average) 13% EBITA (19% industry average) $40K revenue / employee From Fidelity (Dec 06) Microsoft (MSFT) has a $294B market valuation 84% gross margin (74% is industry average for software) 41% EBITA (27% is industry average) $698K revenue / employee From Fidelity (Dec 06) McGraw Hill Companies (MHP) has a $24B market valuation 61% gross margin (31% is iindustry average for publishers) 24% EBITA (12% is industry average) $314K revenue / employee 8) Cost / Hr of Instruction BIY can deliver consistent, high-qualtiy instruction at <1/2 price of typical instruction. If member pays $10/mo and does a 1hr workshop each weekend, that member is paying $2.50/hr for live collaboration. In addition the member gets access to on demand content and web space to post projects. $10/hr - babysitter $10-$20/hr - camp or after school enrichment program $10/hr - cost of public school (per GLTS inner city school 2006 budget) $50/hr - private tutor Rollout Phase - Financial Assumptions

Empowering the next generation of builders Manage business development Specify and manage courseware. Specify and manage platform development Manage network of workshop leaders and specialists Build-It-Yourself will recruit a business development team John Galinato – Content Management MEE, Cornell University. More than 25 years of software project management experience. Liu Huan – Platform Management MIT class of 2010, Computer Science and Electrical Engineering Build-It-Yourself will recruit a workshop delivery team of students from prominent Universities. Responsibilities The Build-It-Yourself team is experienced and dedicated to bringing our highly valued programs online. Team Members – Background

Empowering the next generation of builders Platform Architecture and Development. Content development and webcasting Lesson plan development Pete Buletza – Engineer BS in Computer Science, Harvard University. 10 years experience with the CIA, Intuit, and start-up companies developing Internet based technology. Seth Mastin – Engineer BS in Computer Science, MIT Rebekah Gendron – Teacher Masters Degree in Technology Education, University of Rhode Island. Technology Coordinator in Rhode Island School of the Future. Ann Butler – Content Advisor MEd, Harvard Graduate School of Education. 10 years experience in training and teaching. Presently writes for the Boston Globe. Responsibilities Build-It-Yourself has a long history of attracting talented, highly skilled contractors. Contractors – Background

Empowering the next generation of builders Comps

Empowering the next generation of builders Build-It-Yourself seeks partners who can help bring our unique online learning environment direct to kids and their parents at home. John Galinato