Land mine final presentation

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



Wider spectrumDirect sales

Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals

Existing companies: Smiths Detection

23/4/12

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


IP



Wider spectrum

Direct sales

Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals


Field Test

Profit explosives detection/cleanuporganizations

Non-profitorganizations

Flir

Development Initiative Limited

23/4/12

Business Canvas #3



- Hugh Morris, Operations Director of “The Development Initiative Limited (TDI)”

- The HALO Trust:

Business Canvas #3

Airports

UN

Other Gov.

US Army

https://s3.amazonaws.com/leanlaunchlab-production/app/public/system/data/329/content/img_5420.jpg?1320278600

23/4/12

Cheap Demo

Partner’s distribution channelsWider spectrum

Direct sales

Training


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

23/4/12



Flir


• 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



Direct sales.

Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals

Airports

Cheap Demo


IP



Wider spectrumDirect sales.

Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals


Business Canvas #2

Airports

Cheap Demo


IP




Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals


Field Test



Flir


Business Canvas #3

Airports

Cheap Demo


IP



Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals


Field Test



FlirDevelopment Initiative Limited

HALO

Smith Detection

Business Canvas #4


Airports

Cheap Demo


IP



Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals

Field Test



Flir

Smith Detection

Business Canvas #5


Airports

Cheap Demo


IP



Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals

Field Test



Flir

Smith Detection

Business Canvas #6


Airports

Cheap Demo


IP




Distribution

1 Machine sales

Production

UN

Other Gov.

US Army

Training


Large scale

Reliable

Easy to use

Rapid

Distribution

Facilities

Chemicals

Field Test



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

Education

Land mine final presentation