1. 1 Market Research Drives Revenue … & revenue increases VC investment. Richard A. Langevin Langevin Management Advisors Tel: 508-650-3916 Email: RALangevin @aol.com Tel: 508-650-3916 Email: RALangevin @aol.com

2. 2 Langevin Management Advisors Develop business strategies and implement plans that assist companies to …produce fast and significant revenue results. Develop business strategies and implement plans that assist companies to …produce fast and significant revenue results.  In one year, increased sales from $0.5M to $14M for a five-year old, high tech company; five-year old, high tech company;  In one year, achieved profitability for failing software business. Within three years, increased revenues 50%; Within three years, increased revenues 50%;  In three months, developed the go-to-market strategy for a startup that resulted in a successful $30M IPO.

3. 3 How were these results achieved? Same products Same products Same employees Same employees Same market conditions Same market conditions Same competitors Same competitors Answer … MARKET RESEARCH

4. 4 Market Research - Case Study Evidian - enterprise, network management, & security Competition … IBM & CA Competition … IBM & CA Needed to create a new “sandbox” Needed to create a new “sandbox” Identified weaknesses in competitor’s offering, and strengths in our offering Identified weaknesses in competitor’s offering, and strengths in our offering Developed new entry point into the market Developed new entry point into the market Crafted new marketing & sales strategy Crafted new marketing & sales strategy Results were dramatic … Results were dramatic …

5. 5 Market Research - Results BEFORE AFTER BEFORE AFTER  Engineering:$3M $1.4M  Promoting/Selling:$2M$.1M  Market Research: $0.1M $1.5M  M/E Ratio: 0.03 1.1  Ave. Sale: $10K-$50K $500K-$1M  Sales: $0.5M $14M  Customers: noneMicrosoft American Express AGEdwards Ericsson Sprint

6. 6 What was done? Reduced Engineering & Promoting and Selling Reduced Engineering & Promoting and Selling Increased Market Research Increased Market Research Reviewed product & strategy with Industry Analysts Reviewed product & strategy with Industry Analysts Conducted focus-group sessions (one way glass) Conducted focus-group sessions (one way glass) Crafted new promoting & selling strategy Crafted new promoting & selling strategy Developed new collateral Developed new collateral Implemented new selling approach Implemented new selling approach

7. 7 Today’s Reality… In Q203, VC investing hit a five-year low. In Q203, VC investing hit a five-year low. Annual average VC fund posted an average Annual average VC fund posted an average 29.1% decline through March 31, 2003. In Q203, N.E. investments compared to Q202: In Q203, N.E. investments compared to Q202:  VC funding: - 29% IT funding: - 19%IT funding: - 19% Biotech funding: - 34%Biotech funding: - 34%

8. 8 November 2003… Battery Ventures reduced their $1 billion fund to $850 million. Matrix Partners plans a similar reduction. Battery Ventures reduced their $1 billion fund to $850 million. Matrix Partners plans a similar reduction. 28 other VC firms cut $5.24 billion from their funds in 2002. 28 other VC firms cut $5.24 billion from their funds in 2002. 10 more VC’s cut $922 million, in first nine months of 2003. 10 more VC’s cut $922 million, in first nine months of 2003. Polaris’ $1 billion fund, will invest in 17-18 companies. Polaris’ $1 billion fund, will invest in 17-18 companies. - Mass High Tech, Dec. 1-7, 2003 issue

9. 9 Translation … VC’s are seeking investments with a higher probability of success. VC’s are seeking investments with a higher probability of success. Demonstrated sales performance increases VC’s interest in a company. Demonstrated sales performance increases VC’s interest in a company.

10. 10 Know Your Audience VC’s don’t care how your airplane flies. VC’s don’t care how your airplane flies. Demonstrate that your Go-To-Market strategy works! You need to convince VC’s that their investment in your company … will achieve a ten-times ROI on their investment. You need to convince VC’s that their investment in your company … will achieve a ten-times ROI on their investment. Revenue Growth increases Investment Interest. Revenue Growth increases Investment Interest.

11. 11 How to Maximize Revenue Growth? Market Research --- Market Research ---  Know your product’s market  Know your audience  Explain your product in terms the customer understands … not what you want to tell them  Stay focused and persistent in sales effort

12. 12 Market Research – M/E Ratio The Market Research vs. Engineering ratio of a company has a direct correlation to the success of that company’s business performance. The Market Research vs. Engineering ratio of a company has a direct correlation to the success of that company’s business performance.

13. 13 Richard A. Langevin Langevin Management Advisors 1 Justin Road Natick, MA 01760-5565 tel: 508-650-3916 email: RALangevin@aol.com tel: 508-650-3916 email: RALangevin@aol.com