1. Intuitive Design Inc. New Product Development Progress March 25, 2006 Prepared for: Company Management Team Dave Leis

2. 1 Current product design shortcomings Poor Design/ FeaturesUnrealistic User Expectations  Our opportunity : To address current technology product shortcomings by focusing the design process on consumer needs and priorities: –Experience and interaction –Usability and flexibility Dave Leis

3. 2 Intuitive design Lack of User-Orientation in Product Design  Our Solution : To develop and design a set of compelling consumer technology products that make life easier, more enjoyable, and more comfortable through our application of “intuitive design” Dave Leis

4. 3 Too Little Prioritization/ Lack of Focus Capitalizing on the opportunity Too Little Creativity/ Lack of Ideation  Requirement for Success : Develop and pursue a disciplined process to: –generate a set of innovative consumer product ideas –prioritize opportunities –bring products to market that deliver significant value to customers and our business Dave Leis

5. 4 Our New Product Development (NPD) Process 1-2 Market & Technical Feasibility 2-3 Concept Sketching 5+ Opportunity Discovery 1 Market Launch 1 Testing & Fine-tuning 1 Design Concept Attractiveness Gate Concept Reasonability Gate 123 456 Concept Viability Gate Concept Resonance Gate Go-to- Market Gate Project Review Strategic Parameter Setting 0 Dave Leis

6. 5 Iterative and simultaneous NPD processes  Once we get the NPD process off the ground, we will work to have a number of simultaneous processes to fuel our product funnel 123 456 0 123 4 0 Iteration Time Recycled Ideas 12 0 Dave Leis

7. 6 Step 0: Strategy Design Strategy Design 0 Stage Objectives Refine strategy – Select priority market and/or customer segment to address Define relevant parameters and constraining factors from senior management team Select and recruit steering committee members and provocative thinkers to help drive concept development Key Principles Incorporate thoughts from multiple sources and provide the opportunity and time to contribute ideas Make decisions across all opportunities and try to maximize ROI but take risks to provide upside opportunity  While we will continue to refine and tailor our strategy, it is equally important for us to begin to live the NPD process Dave Leis

8. 7 Step 1: Opportunity Discovery Opportunity Discovery Key Activities Gather/ develop ideas – Review existing idea bank – Examine current and emerging consumer pain points – Examine industry disruptions – Examine of alternative future scenarios – Cross-pollination (to identify ideas) Innovative solution brainstorming and breakthrough idea development Tools & Approaches Idea stimulators – Idea bank – Mine mapping – Customer wish list – Brainstorming 5+ options 1 Dave Leis Criteria Must Meet: – Does the idea address a specific and compelling customer need? – Does the problem have sufficient size to generate an attractive business ($10M+ market)? Should Meet: – Does it provide a high growth opportunity (>10% growth rate for next 5 years)? Stage Objectives Capture as many creative ideas as possible Quickly narrow to a reasonable set of most attractive ideas

9. 8 Making products usable Dave Leis  It is critical to keep the user and usability in mind from the beginning of the process Non User-Centric Design

10. 9 Step 2: Concept Sketching Concept Sketching Key Activities Identify potential lead customers Outline customer benefits, target segments, and prevalence of issue Develop list of prototype ideas Examine existing innovative solutions in the market Cross-pollination (to find solutions to opportunities) Preliminary feasibility assessment – Technical – Legal – Regulatory Tools & Approaches Concept development – Product immersion – Quality function deployment – Preliminary solution sketches Initial prototyping and design catalyst introduction Preliminary secondary research Table lower priority ideas back to idea bank Concept Reasonability Gate 2 Dave Leis Criteria Must Meet: – Is a unique and attractive solution to the problem reasonable? Should Meet: – Is the solution likely technically achievable? – Is it aligned with the stated company strategy? Stage Objectives Identify and sketch reasonable options to pursue 2-3 options5+ options

11. 10 Step 3: Market & Technical Feasibility Market & Technical Feasibility Key Activities Business plan development – Target customer – Market sizing and growth rate assessment – Price point – Market share – Business model – Differentiation Technical options development – Major design concepts – Potential materials – Production viability Cross-functional coordination with sales, marketing, and production Tools & Approaches High-level Business Design Outlining Concept testing with potential customers Significant primary and secondary research on priority ideas Concept Viability Gate 3 Dave Leis Criteria Must Meet: – Is there a clear product and project definition? – Is solution feasible? – Will customers likely pay for the product? – Can we achieve 25% IRR? – Is potential revenue large enough relative to risk and other opportunities? Should Meet: – Is it practical to produce at an acceptable price point for the market? Stage Objectives Determine viability of producing a successful product to an attractive market 1-2 options2-3 options

12. 11 Step 4: Design Design Key Activities Development of marketable solution – Prototype iteration – Materials selection – International requirements Review concepts with lead customers Organizational preparation – Production launch – Marketing program development – Identify supplier options Tools & Approaches Industrial design User interface design Ergonomic design Lab testing Concept Resonance Gate 4 Dave Leis Criteria Must Meet: – Does the solution address the identified pain points? – Has the product passed lab tests? Should Meet: – Can the solution deliver 20%+ margins? Stage Objectives Develop a compelling product with differentiated features that is attractive to relevant market 1 product1-2 options

13. 12 Market testing Dave Leis  Fine-tuning the product with actual customers improves the likelihood of product success Resistance to Customer Input & Testing

14. 13 Step 5: Testing & Fine-tuning Testing & Fine-tuning Key Activities Customer beta test and manufacturing process tests Test willingness to purchase product at target price point Feature/ design optimization Tactics development – Marketing program tactics development – Select suppliers – Define production process Tools & Approaches Test and Learn Field trials Real-time customer feedback Trial sales Go-to-Market Gate 5 Dave Leis Criteria Must Meet: – Customer confirmation of effective solution? – Do customers indicate interest in purchasing the product? – Can we product the product profitably? – Do we have the right operational and organizational infrastructure in place to ensure success? Stage Objectives Ensure proper product feature & functionality as well as market positioning and business model final design 1 product

15. 14 Step 6: Market Launch Market Launch Key Activities Production start Launch and sale support – Final training – Market education – Marketing Tools & Approaches Performance management Project Review 6 Dave Leis Criteria Must Meet – Post mortem analysis – Incorporatio n of learnings Stage Objectives Complete final activities required to seamlessly get product into the customers hands Successful Product & Improved Future Process final design

16. 15 Wrap-up Questions?