explosives detection final nsf i-corps presentation
TRANSCRIPT
Explosive DetectionNSF / I-Corps Program
• Technology: Identifies buried explosives
• For: Landmine mapping
• Realistic Market Size: $500M
• Customers: Over 40
$500M$18B
$9B
Team Members
Yu Lei (PI)
Mike Wisniewski (Mentor)
Associate Professor at UConn
BS Chem. Eng., Sichuan U, China
MS Chem. Eng., Sichuan U., China
PhD Chem. & Env. Eng., UCRS
Research concentrates on the development of novel, simple, and universal sensors for real application
Manager, Springboard Program, UConn
Bachelor, Law and Society, UConn
MBA, Venture Consulting, UConn
Business consultant assisting in commercializing innovations across campus, and helping faculty start their own businesses
Ying Wang (Lead) BS Chem. Eng., Xiamen U., China
MS Biochem. Eng., Xiamen U., China
PhD Chem. Eng., UConn (Candidate)
PhD research in developing sensory materials for toxic gases and explosive vapors
NSF / I-Corps Video
Considering
Proposing:
Landmine mapping
Demo for Buried Explosives
Sensing Films
60 ~ 70 million landmines ~ 70 countries 26 000 incidents / year, ~ 40% are children
$500M$18B
$9B
Cheap Demo
IP
Manufacture of machine
Production Sensing materials
Direct sales
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Business Canvas #1
What We Did
(Met With/Talked To)
United Nations
- Mr. Justin Brady (Acting Director) United Nations Mine Action Service (UNMAS)
- All budget have been gone through mine action program
Major organizations who may use our tech
- Flir (Fido): Mr. Mark Fisher (Senior Research Scientist)
- CEIA (a metal detector company in Italy)
- UXB International, Inc.: Mr. Karin Clark (Director) Marketing & PR
- The Development Initiative Ltd: Mr. Steve Saffin (Operations Manager) in Sudan and Zimbabwe
What We Found
Through primary research:
As a result, we:
- Government entities have a long cycle time
- Included too many variables (environmental, deployment)
- Pivoted: Explosive detection for transportation hubs
- Be fast, agile, and opportunistic: we formulated a new model
Customer DiscoveryCustomer Discovery
Customer ValidationCustomer Validation
Pivot
Airports
Cheap Demo
Partner’s distribution channels
IP
Manufacture of machine
Production Sensing materials
Wider spectrumDirect sales
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Existing companies: Smiths Detection
23/4/18
Business Canvas #2
What We Did
(Met With/Talked To)
• Security in train stations and bus terminals:
• A DHS officer in CT: Douglas J. Pesce (Protective Security Advisor of the New Haven District)
• Surveyed over 13 high profiled officers (TSA, US custom, Homeland Security…)
- They do not have such need
- Only airports may have interest for explosive detection, however:
• Solid range of explosives detected
• Real time detection (immediate results)
• Zero false alarm
What We Found
Not practical for application in airports:
Landmine mapping is still a better idea:
- TSA approval is necessary
- Explosive detection in airport already has too many techniques (this market is very competitive / flooded)
- Zero-tolerance for missing the target
- Profit demining companies showed high interests in our tech
- The decision cycles of non-profit demining companies may be as quick as profit companies
Airports
Cheap Demo
Partner’s distribution channels
IP
Manufacture of machine
Production Sensing materials
Wider spectrum
Direct sales
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Existing companies: Smiths Detection
Field Test
Profit explosives detection/cleanuporganizations
Non-profitorganizations
Flir
Development Initiative Limited
23/4/18
Business Canvas #3
Profit explosives detection/cleanuporganizations
Non-profitorganizations
- Hugh Morris, Operations Director of “The Development Initiative Limited (TDI)”
- The HALO Trust:
Business Canvas #3
Airports
UN
Other Gov.
US Army
23/4/18
Cheap Demo
Partner’s distribution channelsWider spectrum
Direct sales
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Field Test
- Metal detector: Price ~ $3,000 /unit; speed 30 m2/worker/day
- Trained dogs: Price ~$12,000 / 6 yrs (feeding cost not included); speed 1000 m2/dog/day
- MEDDS: Price ~$200/km road; speed 14 km/team/day
Value Proposition:−Potential customers show high interests in our value proposition
Substitutes:
- Necessary
- Dale Spencer, Manager, New Business Tech. Kaman Precision Products
Business Canvas #3
23/4/18
Manufacture of machine
Existing companies: Smiths Detection
Flir
Development Initiative Limited
• Electrosprayer companies (Graco, Wagner)
• Suppliers of raw materials (Fishersci)
• Explosive detector manufactures (Flir Systems, Smiths Detection)
- Quality raw chemicals
- Bulk rate
- Reputation
- Existing customers
- Mature field experience
- Mass-production line
- Custom-made for field application
- Take the responsibility for machine maintenance and repairing
Business Canvas #3
1 Primary Research Techniques
Technology Landscape
Agency Cycle Times
Funding/Budget Sources
Business Model Awareness
Competitive Edge
23456
SCENEHere’s Where We Ended Up
We think this is a viable business and want to continue to pursue it
What We Are Doing NextWhat We Are Doing Next
Follow up with customers & partners
Field test in Sudan, Africa
Work on NDAs
Foresight: 3rd party tech eval. underway
Start the company & looking for additional support like SBIR
Follow up with customers & partners
Field test in Sudan, Africa
Work on NDAs
Foresight: 3rd party tech eval. underway
Start the company & looking for additional support like SBIR
Business Canvas #1
Cheap Demo
IP
Manufacture of machine
Production Sensing materials
Direct sales.
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Airports
Cheap Demo
Partner’s distribution channels
IP
Manufacture of machine
Production Sensing materials
Wider spectrumDirect sales.
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Existing companies: Smiths Detection
Business Canvas #2
Airports
Cheap Demo
Partner’s distribution channels
IP
Manufacture of machine
Production Sensing materials
Wider spectrumDirect sales.
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Existing companies: Smiths Detection
Field Test
Profit explosives detection/cleanuporganizations
Non-profitorganizations
Flir
Development Initiative Limited
Business Canvas #3
Airports
Cheap Demo
Partner’s distribution channels
IP
Production Sensing materials
Wider spectrumDirect sales.
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Existing companies: Smiths Detection
Field Test
Profit explosives detection/cleanuporganizations
Non-profitorganizations
FlirDevelopment Initiative Limited
HALO
Smith Detection
Business Canvas #4
Manufacture of machine
Airports
Cheap Demo
Partner’s distribution channels
IP
Production Sensing materials
Wider spectrumDirect sales.
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Field Test
Profit explosives detection/cleanuporganizations
Non-profitorganizations
Flir
Smith Detection
Business Canvas #5
Manufacture of machine
Airports
Cheap Demo
Partner’s distribution channels
IP
Production Sensing materials
Wider spectrumDirect sales.
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Field Test
Profit explosives detection/cleanuporganizations
Non-profitorganizations
Flir
Smith Detection
Business Canvas #6
Manufacture of machine
Airports
Cheap Demo
Partner’s distribution channels
IP
Manufacture of machine
Production Sensing materials
Wider spectrumDirect sales.
Distribution
1 Machine sales
Production
UN
Other Gov.
US Army
Training
Dedicated personal assistance
Large scale
Reliable
Easy to use
Rapid
Distribution
Facilities
Chemicals
Field Test
Profit explosives detection/cleanuporganizations
Non-profitorganizations
Flir
Smith Detection
Business Canvas #7
Key suppliers: chemicals
Thank You!
Customer Lifetime Value (LTV) with High Efficiency
Acquisition Year Second Year Third Year
Customers 6 4 3
Retention Rate 65% 75% 80%
Orders / Year 1 2 2
Avg Order Size 1 sq km2 5 sq km2 10 sq km2
Total Revenue $ 24 M $ 160 M $ 240 M
Costs 70% 65% 65%
Cost of Sales $ 16.8 M $ 104 M $ 156 M
Acquisition / Person $ 5,000 $ 2,000 $ 2,000
Marketing Costs $ 30,000 $ 8,000 $ 8,000
Total Costs $ 16,830,000 $ 104,008,000 $ 156,008,000
Gross Profit $ 7,170,000 $ 55,992,000 $ 83,992,000
Cumulative Profit $ 7,170,000 $ 63,162,000 $ 147,154,000
Customer LTV $ 1.12 M $ 10 M $ 24 M
http://www.dbmarketing.com/articles/Art251a.htm
Payment Flow
Construction Companies
Mine Sniffer Oil/gas Companies
Field Test Based Proposal
Demand Creation
CUSTOMER
Successful field test
More reliable
Attract customers
United Nations
Commercial Landmine
Clearance Companies (NGOs)
Charitable Trust/ Foundations
New claims
More reliable
New costs
Lower price
New costs
• Target market– Commercial ~ 20 companies– NGOs ~ 30 organizations
• Package– Reusable wrist watch– Disposable sensors– Access to patients data
• Product development– 4 people in the beginning– $0.5 million– 1 year to develop
• Sales– Start with commercial landmine
companies end of year 1– Start with NGOs end of year 2
• Personnel – Average salary $80,000– Headcount from 4 to 50 in year 3
• Financing – UConn R&D: $50,000– Small Business Innovation Research
(SBIR)$70,000 – Looking for others
Key Assumptions
Price per unit: $ 4 /m2
Raw material ProfitFabrication and shipping
$ 0.7/m2 $3.3 /m2
Income Statement
Total Revenues
24,000,000
Expenses
1 Advertising
30,000
2 Cost of goods sold 16,800
3 Furniture and equipment
5,000
4 Insurance 20,000
5 Salaries and wages
320,000
6 Other
10,000
Total Expenses 401,800
Net Income Before Taxes
23,598,200
Income tax expense 9,439,280
Income from Continuing Operations
14,158,920