1. Prof. Yechiam Yemini (YY) Computer Science Department Columbia University (c)Copyrights; Yechiam Yemini; 2004 Workshop 2: Business Planning Planning: From Innovation to Business Version: 1.01 3/9/04

2. (c)Copyrights; Yechiam Yemini; 20042 The Business Plan Plan to deliver value  Create a business model  Analyze & quantify the market  Define products/services  Define the competitive value  Plan marketing/sales strategy  Team: who will execute what  Finance: quantify value creation Innovation PlanExecutionBusiness Plan

3. (c)Copyrights; Yechiam Yemini; 20043 Developing A Business Model The following slides are based on presentation by Darlene Mann of ONSET Ventures http://haas.quimbik.com/files/DarleneMann.ppt Markets & Customers Products & Services Distribution Channels Financial Engine Net $ Architecture and operations to create and deliver value

4. (c)Copyrights; Yechiam Yemini; 20044 How To Create A Business Model? The following slides are based on presentation by Darlene Mann of ONSET Ventures http://haas.quimbik.com/files/DarleneMann.ppt Opportunity Value Proposition Distribution Strategy Financial Model Market Budget Buyer Problem $ $ Technology Product Company Business $ $ $ $ $ $

5. (c)Copyrights; Yechiam Yemini; 20045 Defining The Value Opportunity  Market: medical patients, health-care industry  Problem: organizing, accessing and using patient info  Technology: inexpensive, personal, mobile storage  Product: personal medical records (PMR) system Opportunity Value Proposition Technology Product Market Problem

6. (c)Copyrights; Yechiam Yemini; 20046 Maximizing Customer Creation  Drive plans from customer/revenues creation  Who/what/why/how/how-much 1.Who are our first customers? 2.What will they buy? 3.Why: what quantified value will it deliver? 4.How much will they pay? 5.How will we reach them? 6.How will we overcome barriers?

7. (c)Copyrights; Yechiam Yemini; 20047 Markets/Customers: Why/How Will They Buy?  Profile & Segmentation  Key Pain-points Quantify problem in $$’s Window of opportunity (immediacy)  Location of $$’s  Competition The following slides are based on presentation by Darlene Mann of ONSET Ventures http://haas.quimbik.com/files/DarleneMann.ppt Markets & Customers Products & Services Distribution Channels Financial Engine Net $

8. (c)Copyrights; Yechiam Yemini; 20048 Value-Based Segmentation  Products have different value to different segments  Who needs this pain-killer; how badly..  Quantify value: of key features to key segments…

9. (c)Copyrights; Yechiam Yemini; 20049 The Market Goal: identify & quantify the opportunity  Define the target users  Identify & quantify the “pain” you will cure  Identify the market segments  Size the market  Identify competition and analyze competitive factors  Establish statistical & anecdotal market validation

10. (c)Copyrights; Yechiam Yemini; 200410 Product/Services: What do you offer?  Whole product definition  Value & pricing  Cost to customer/company  Add-on/future products The following slides are based on presentation by Darlene Mann of ONSET Ventures http://haas.quimbik.com/files/DarleneMann.ppt Markets & Customers Products & Services Channels of Distribution Financial Engine Net $

11. (c)Copyrights; Yechiam Yemini; 200411 Whole Product Definition  The PMR PDA Goal: max revenue and market capture E.g., patient-based model: $50 per month all inclusive o PDA + SW + Storage module (iPOD-like) o Backup, universal access, security & privacy protections, information services…  PMR interface adapters: Goal: max deployment.. free to labs/hospitals/physicians... oIdeally: PC SW only solution  PMR backend services: Goal: max outsourcing and market support o Enable record mgmt, billing and other medical care info services… o Build market support by distributing products over the PMR platform

12. (c)Copyrights; Yechiam Yemini; 200412 Products & Technology Goal: identify the unique value you will create  Describe the product Focus on the unique painkiller edge What technology edge will you develop  What is the value proposition to your users? Develop an “elevator pitch”  How will you build & sustain competitive distinction?  Establish anecdotal validation of traction

13. (c)Copyrights; Yechiam Yemini; 200413 R&D Plan: Scheduling Resources  Design release schedule per key components  E.g., Design XXXX API YYYY integrationtesting Release 0.1 Coding DesignCoding Release 0.1 Resources: 1 project leader + 2 developers Resources: 1 product mgr, 1 developer Market study

14. (c)Copyrights; Yechiam Yemini; 200414 Estimating Expenses  Payroll Mgmt R&D Marketing Sales Operations  G&A Rent/utilities/communications… Services: legal, accounting… Equipment… …  Operations costs …

15. (c)Copyrights; Yechiam Yemini; 200415 How To Create A Business Model? The following slides are based on presentation by Darlene Mann of ONSET Ventures http://haas.quimbik.com/files/DarleneMann.ppt Opportunity Value Proposition Distribution Strategy Financial Model Market Budget Buyer Problem $ $ Technology Product Company Business $ $ $ $ $ $

16. (c)Copyrights; Yechiam Yemini; 200416 Distribution: How Do You Reach Them?  Channel strategy: direct/indirect  Marketing strategy: Positioning & branding sales support Partnering  Implementation cycles The following slides are based on presentation by Darlene Mann of ONSET Ventures http://haas.quimbik.com/files/DarleneMann.ppt Markets & Customers Products & Services Channels of Distribution Financial Engine Net $

17. (c)Copyrights; Yechiam Yemini; 200417 Distribution: How Do You Reach Them?  Focus on key segment (s) then expand  Distributors: bootstrapping distribution… Medical information service providers Physicians, radiology labs… Mass market: PDA vendors…PALM, iPOD…. Interface adapters: through HW vendors & direct…  Marketing strategy: partner with competitors PMR as an attachment to extend medical info systems… PMR as a function-specific PDA …:)tax-deductible? MP3 music..  Team with hospitals/insurance/drug-companies…

18. (c)Copyrights; Yechiam Yemini; 200418 Sales & Marketing Goal: define sales & marketing strategy  How do you plan to distribute your products?  What is your pricing strategy?  How do you plan to support & grow sales?  What is your positioning strategy?  What marketing relationships will you develop?

19. (c)Copyrights; Yechiam Yemini; 200419 Financial Engine: How Do You Create Value?  Pricing & revenues model  Sales & implementation cycles  Cost structure and margins  Investment requirements Capital and time required Comparables & exit strategies The following slides are based on presentation by Darlene Mann of ONSET Ventures http://haas.quimbik.com/files/DarleneMann.ppt Markets & Customers Products & Services Channels of Distribution Financial Engine Net $

20. (c)Copyrights; Yechiam Yemini; 200420 The Financial Engine  Revenues: PMR units: #patients*[$600-$100] Patient record mgmt: #patients*$500 Insurance billing: bill-amount*4% …….  Costs: R&D: Data center: Marketing/sales: G&A:

21. (c)Copyrights; Yechiam Yemini; 200421 Financial Plan Goal: quantify costs/revenues and capital-needs (Controlling growth & time to reach break-even)  Start with a revenues model  Expense model  Capital needs Time “..breaking (even) is a hard to do..” $ TTM

22. (c)Copyrights; Yechiam Yemini; 200422 Validating: Traction is Key!!!!!  Learning costs grow exponentially fast…  Validate all hypotheses with market Patients; physicians; labs; hospitals; insurance companies; medical info vendors… Industry mavens…  Identify key assumptions; quantify; validate…

23. (c)Copyrights; Yechiam Yemini; 200423 Creating A Business Plan  Executive summary  Market environment  Products & technology  Management team  Sales & Marketing plan  Product R&D plan  (Manufacturing & operations)  Financial Plan

24. (c)Copyrights; Yechiam Yemini; 200424 The Five Questions (Mayfield)  Do you have a team that delivers?  Is your product/service a vitamin or a painkiller?  Do you know your users?  Who are your competitors?  How far will this money take you?

25. (c)Copyrights; Yechiam Yemini; 200425 The Business Plan Do’s (Ian Ritchie www.coppertop.co.uk )  There’s a great new growth market  We’ve got just the thing for it  Its the kind of thing that a small player can sell well  The growth potential is such that we can go public/be acquired  We’ve got/can get lots of technical/managerial/marketing experience  12 pages or less, and very easy to read