2. Powerblocks Business Model Outsourced: mfg, fulfillment Design Marketing Cust. Experience -Baby stops crying -Baby goes to sleep Design IP Brand -PR, blogs, WOM -New parents (baby <1 yr) -Influence: relatives, friends -Online retail Asset SaleValue-driven 2/15/11

3. Powerblocks Business Model Outsourced: mfg, fulfillment Design Marketing Cust. Experience -Baby stops crying -Baby goes to sleep -Save $$$ for solution Design IP Brand -Blogs -WOM = referrals -New parents (1 st baby, baby <1 yr) -Influence: friends, blogs -Online retail LeasingValue-driven 2/22/11

4. Revelation #1: sleep training Expert consensus: not good to have constant motion or noise while sleeping Best solution = let baby cry New mothers find it very hard to do this; experienced parents have success Target customer is new parents (new = with first child, and new = child < 1 year old)

5. Revelation #2: Second Hand Market Product is obsolete fast Users sell or give away to friends

6. PIVOT: Revenue Model Purchase Model One-time purchase Use for 3 months – Throw away – Keep for future children – Sell – Give away Rental Model Monthly revenue stream Use for 3 months – Return early if doesn’t work Return functioning product or purchase – Product redistributed to new user Rent again in future (problem recurs?) Recommend service to friends

7. Customer Decision Process

8. Meet: The Simpsons

9. Homer and Marge

10. 1 st Baby: Bart

11. The Pain: Can’t Sleep

12. Customer Interaction / Influence Map User: Baby Economic Buyer: Parents Saboteur : Traditionalist Influencer: Friends Recommender: Sisters / Friends Saboteur: Grandpa/ma Recommender: Salesperson + web reviews Recommender: Doctor Saboteur : other Doctors

13. Now: Sleep Time

14. IMPLICATION: Demand Creation Blogs – spread word online Refer-a-friend program Free trial for 1 week (if economic)

15. Powerblocks Business Model Outsourced: mfg, fulfillment Design Marketing Cust. Experience -Baby stops crying -Baby goes to sleep -Save $$$ Design IP Brand -Blogs -WOM = referrals -New parents (1 st baby, baby <1 yr) -Influence: friends, blogs -Online retail RentingValue-driven 2/22/11