Smart Windows Columbia

Customer DiscoveryTotal interviews to date: 62 Since last class: 11# Green residential developers with energy saving features: 6# Commercial developers to attract green tenants: 12# Architects, construction managers: 9# Engineering materials researchers: 13# End users: 16# Competitors: 6

More than a window controlling the light, it builds an energy-saving lifestyle.

Team MembersFen Zhang – TechnologyYalan Hu - Marketing

Jixiang Liu – Financial AnalysisJin Fan - Real Estate Professional

Team 2, Cohort 1

Lean Launch Pad 2016.01.11

Key Partners Value PropositionKey Activities Customer Relationships

Customer Segments

ChannelsKey Resources

Revenue StreamsCost Structure

• Real estate developers

• Construction material vendors

• Building architects• Interior designers• Construction

contractors

• Design, produce, supply chain management

• Marketing to end users and owners

• Differentiate from traditional glass market

• Creative ongoing customer feedback

• Product optimization

• Advertisement• Social medias• Trade shows• Industry conferences• Public relations• Professional associations• Customer services• Referrals

End users• Full-time professionals

need multi-function office environments

• Seniors require convenient lifestyles

• Healthcare buildings with high hygiene requirements

• Commercial buildings with large HVAC energy consumption

• Residents need intelligent lifestyles and auto control

Direct sale & dealership• Regional• Global

Professional alliance• Designers alliance• Contractors alliance• Real Estate alliance

• Design• Technology• Community creation• Platform

• Fixed Operational costs for product development and maintenance• Fixed Operational Overhead costs (rent, utilities, etc.)• Variable costs associated with product design, R&D and marketing• Variable costs associated with customer acquisition & demand

creation

• Product selling (charged to owner)• Ongoing maintenance service ( Charged to owner or tenants)• Dynamic pricing

Owners• Technology companies• Finance industry• Real estate developers• Building material retailers• Facility management

company• Cost Sensitive, but want

intelligent lifestyles

• An energy‐effective way to control sunlight without shades or blinds

• Manage glare and heat while maintaining a connection to the outdoors

• Increase the living standards and move towards the intelligent household

• One in all solutions for different scenarios and requirements for residents

• Saves Time / Convenience

• Adaptable• Cheaper life cycle cost• Customized design• Intelligent lifestyles

Day 1 Canvas


Customers End users

Developers

Residential Commercial Corporate

Build and sold

Budget constraint

Feature by green residential

High end office buildings

Mid-market

Not sensitive to green

Small to middle sizeSmall-market

Fortune 500 with CSR

What we thought

What we land



Customer Segments






contractors








need multi-functional office environments









creation


Owners• Technology companies• Finance industry• Real estate developers• Building material retailers• Facility management

company• Cost Sensitive, but want

intelligent lifestyles

Day 2 Canvas

End users• An energy‐effective way to

control sunlight without shades or blinds


• Increase the living standards and move towards the intelligent lifestyles

• Customized design and compatible with various styles

Owners• Reduced life cycle cost• Reduced energy

consumption fee• Value add for building

tech features and brand• Increase corporate social

responsibility• Increase tenants

satisfaction

++

+

++


What we thought: Customer Segments

Hypothesis Experiments

1 2

• Interviews• Energy

modeling analysis

• Financial analysis

• Developers/Owners are willing to pay for incremental cost to save building operation cost

• Architects want to try and recommend this window in the planning stage

Results

3

• To provide developers about the energy saving and reduced operation cost

• Provide case study and energy modeling analysis to developers

• Pilot project onsite visit

Pivot

4

• Developers are willing to pay if the saving could save more operation cost

• Architects like to try based on pilot project and energy modeling analysis

Pivot


What we learned: Customer segments

Green residential developers with energy saving features

Manufactory companies with corporate social responsibility

Commercial developers to attract green tenants

The user may not be the decision maker, figuring out who we should approach to is essential.



Customer Segments






contractors

















creation


Owners• Fortune 500 companies

with corporate social responsibilities

• Commercial real estate developers to attract high profile tenants

• Residential real estate developers with energy saving and intelligent lifestyle strategies

Day 3 Canvas










satisfaction

++

+

++

+

+

+


What we thought: Value Proposition


1 2

• Interviews• Energy

modeling analysis

• Financial analysis

• Reduced life cycle cost

• Reduced energy consumption fee

• Value add for building tech features and brand

• Increase corporate social responsibility

• Increase tenants satisfaction

Results

3

• Increase the energy saving performance

• Reduce the production cost

• Market this product to meet EPA standards or LEED standards

• Sponsor target company CSR programs

Iterate

4

• Clients acknowledge energy saving in special regulation or evaluation system

• Cost reduction and life cycle saving are critical to clients

• Large manufacturer companies buy-in Corporate Social Responsibility(CSR)

Iteration


What we learned: Value Proposition1

Customer Archetype• Tenets/End Users

• Developers• Architect

2Key Resources &

Partners• Rent a batch in a glass

manufacturing factory

3

Developers

Users

Environment / Community

Value Propositions• For end users: clear

view, user friendly• For owners: cost and

energy efficiency

1



Customer Segments

Channels

Key Resources





contractors






• Advertisement• Social media• Trade shows• Industry conferences• Public relations• Professional associations• Customer services• Referrals






• Residents need intelligent lifestyles and auto controlDirect sale & dealership

• Regional• Global• Whole sellers(Existing

glass selling channels)• Sales man(Key account)




creation


Owners• Manufactory companies




Day 4 Canvas










satisfaction

++

+

++

+

+

+

++


What we thought: ChannelsHypothesis Experiments

1 2

• Interviews/Memo

• Show the MVP

• Pricing strategies

• Direct Selling—Selling representatives—Customized product and integration system

• Whole sellers—Having various products—Easy comparison

Results

3

• Figure out the potential margin percentage and cooperation methods with whole sellers

• Design the commission, supply chain, AR days and after sell service

Iterate

4

• Whole sellers are fine to sell our products once the margin and volume is large

• Direct selling will focus on key account clients

Iteration


What we learned: Smart Windows Channels

Manufacturer National Distributor Wholesaler Retailer Customer

Wholesale costsMarkup

Allowances

Payment guarantees

Payments

Bills Credit guarantees

Payment guarantees

Return rights

Credits

Formulations& Packaging

Raw MaterialsManufacturing

R&D &Regulation Product Sales & Distribution ----- Key Account


What we thought: Get Strategies


1 2

• Interviews with customers

• Customer Acquisition Cost (CAC)

• Analysis Lifetime Value (LTV)

• Analysis

Paid Demand Creations• Trade Shows• Public Relations• E-mails/Direct

Mails• SEMEarned Demand Creations• Conferences• Blogging/Guest

Articles

Results

3

Iterate

4

Based on the interviews so far, we found that the most common methods that our Smart Windows should adopt on:• Trade Shows• Public Relations

(Magazines on Glass Industry)

• BloggingsHowever, our current interviewees do not respond to the other methods

• To acquire a repeatable and scalable business model on the Get Strategies. We should interview more customers and ask them how do they know the glass products.

• After we acquire the detailed information, we can test whether CAC < LTV

Iteration


What we learned: Get Strategies

E-mail/Direct Mails

Search Engine Marketing (SEM)

Conferences

Blogging/Guest Articles

Trade Shows

Viral-loop

Awareness

Interest

Consideration

Purchase


What we thought: Revenue model


1 2

• Pricing analysis

• Interviews

• The product IP and smart functions pay for the profits

• End users has the motivation to pay ongoing maintenance fee

• The big data we collect could provide value add to third-part institutions

Results

3

• Reduce the raw material and production cost

• Scalable development

• Cooperate with large glass manufacturer

Iterate

4

• Customer could pay premium

• Customer need quantified analysis

• Customer need financial feasibility

Iteration


What we learned: COST / PROFIT ANALYSIS

Raw active ingredient

Manufacturing &Packaging Profit + R&D + License fee Distributor

$50/Sqm *$37.5%25 cut

$6 ~$17.5 ~$12.5

End

use

r

Our revenue List pricePer unit cost and profit estimation

Direct Sales Revenue Model

* Competition• SAGE ($55/sqm)• View Glass($52/sqm)• Econtrol (($56/sqm)• Viracon(($54/sqm)• Hartung Glass Industries(($53/sqm)

$14

%35 cut%28 cut%12 cut



Customer Segments

Channels

Key Resources





contractors• Architects






• Advertisement• Social media• Trade shows• Industry conferences• Public relations• Professional associations• Customer services• Referrals






• Residents need intelligent lifestyles and auto controlDirect sale & dealership

• Regional• Global• Whole sellers(Existing

glass selling channels)• Sales man(Key account)


• Design• Technology• Community creation• Platform• Souring• IP


creation


Owners• Manufactory companies




Day 5 Canvas










satisfaction

++

+

++

+

+

+

++


Day 1 – Interview Summary

6

15

End Users Professionals

Building Developers Architects Competitor

s




s

76

12

16





s

7 76 3

16





s

11 1010

4

16





s

16

1113

6

16





s

16

1113

6

16

Day 5




s

16

1113

6

16

Day 5Architects Anndy Ma Art Miccio

Professionals

Dr. WheelerDr. Fan YangDr. Carver

Glass Industry Competitor

Della JonesSebastian Sancheg ….

General Contractor

Amy Zhen Marta Calderia……




s

16

1113

6

16

Day 5Developer Tao Williams

Renny Clark Jenny Martin HawkinsonAlic LianShihka Manuel ShvartzNabila PerezMatthew Lohry…


Commercial Building Developer

LEED Building Project Developer

Public/Municipal Building Developer

General ContractorSub ContractorArchitecture Office or

Building Planning Consultant

SMART WINDOWS (Supplier)

HireSign the contract

Hire and Manage

Cooperation

2. Marketing

1. Marketing and selling

Distributing

WHAT WE LEARNED:


Competitor Landscape

Fabrication Manufacturer

New Material Glass

Manufacturer

Auto Glass Manufacturer

Commercial Glass

Manufacturer

WHAT WE LEARNED:


Next Big Picture

Capital Intensive – Fundraising

Intellectual Property

LEED Approval

Strategic Partnership

Distribution Channel

Customer exploration


Next Step…• Revenue Model

• Validate feasible volume prices via commercial green building developers • Approach key players through the existing distribution channel• Maintenance fee, data sharing service

• Build MVPs• Physical prototype with basic functions (dynamic control, energy saving, outdoor

connection)• Animation video with additional features (Internet of things, big data collection)• Start LEED approval process

• Partnerships• Initiate conversations with major glass manufacturers

• Form strategic alliance with major LEED building project developers• Build up cost structure

• Quantify costs on raw materials, manufacturing process, equipment investment, marketing spending

• Initiate fundraising


MVP Demonstration



Appendix - Smart Glass Comparison

Electrochromic

Leading Electrochromic Smart Glass Suppliers:

• SAGE – acquired by the leading glass manufacturer Saint-Gobain in 2012

• View – raised $150M in 2015 Both have doubled their

pipelines in the past year Mostly direct sale with both

global and regional representatives

Pricing: 2-3 times of regular glass

Major building customers:• Commercial • Institutional• High-end residential

Energy-Efficient Smart Window


Hypotheses Experiments Pass/Fail Test

Channels• Direct Selling—Selling representatives—

Customized product and integration system• Whole sellers—Having various products—

Easy comparison

• Interviews/Memo• Show the MVP• Pricing strategies

• Retailers and wholesalers are willing to sign Memo, pass. OTW, fail.

• Majority(>70%) Professionals agree to use our products in pilot projects, pass. OTW, fail.

Customer Relationships - Get StrategiesPaid Demand Creations• Trade Shows• Public Relations• E-mails/Direct Mails• SEMEarned Demand Creations• Conferences• Blogging/Guest Articles

• Interviews with customers

• Customer Acquisition Cost Analysis (CAC)

• Lifetime Value Analysis (LTV)

• Interviews and investigations into the current similar market, those methods that they use more often and productive, then we adopt them, OTW, get rid of the methods.

• Calculate the CAC and LTV and compare them. If CAC < LTV, then the methods are passed.

Revenue model• The product IP and smart functions pay for

the profits• End users has the motivation to pay

ongoing maintenance fee• The big data we collect could provide value

add to third-part institutions

• Pricing analysis• Interviews

• Owners are willing to pay energy saving premium, pass. OTW, fail.

• End users are willing to purchase ongoing service, pass. OTW, fail.

• Third party reckon our data quality, pass. OTW, fail.


Smart WindowsMarket type

• Existing market• Re-segmented


Smart Windows Market Size Estimates

TotalAvailabl

eMarket

Target Market

ServedAvailabl

eMarket

Total Available Market: $61.5B(Total building glass industry demand)

Served Available Market (How many people

need/can use product?): $8.61B(Hypothesis: 10% of seg. 1, 2, 20% of seg. 3, 4, 5)

Target Market (first 3 years): $4.3B(5% of segment 1,2 and 10% of seg. 3,4,5)

Items Segment 1 Segment 2 Segment 3 Segment 4 Segment 4

Description Commercial Residential Hotels Hospitals PlantsSize * 30% 30% 15% 10% 15%

People/ Influences

Real Estate developers\Designers

Home owners Developers/Designers

Hospitals/Designers

Owners/Designers

* Estimated based on new construction projects world wild


Building Energy Simulation

Geometry Model for simulation

Comparison of various active design strategies


Financial payback

-

50. 0

100. 0

150. 0

200. 0

250. 0

2008年 2009年 2010年

单位

面积

年用

电量

（kW

h/(m

2·a)

） Annual Savings: 601,600 USD

Cost: 1,460,000 USD

Payback: 2.43 years

Electric Consumption 2016 2017 2018Total Elec.Consumption (kWh) 37577090 35524440 33525380

Common Area Elec. Consumption (kWh) 17406124 17074900 15951978

Office building total GFA: 173044 m2

2016 2017 2018


Appendix - Interview Questions & Notes

Education

Smart Windows Columbia