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nickelring corp.OAP Final Submission

Team Data Insights20 May 2012

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Executive Summary

Background• nickelring is a firm committed to the vision of developing a meaningful data analytics solution for SME’s• A team of 11 motivated individuals (originally 14) from 7 countries have worked extensively over the last 3 weeks to

develop a compelling proposition that addresses a “real-need” of the target client

Initial hypothesis• There is a gap in the market – The data analytics needs of SME’s around the world are significantly underserved• There is a market in the gap – This represents a large enough market for a sustainable commercial venture

Key milestones achieved during the first three weeks• Market sizing – There is sufficient evidence that Data Analytics is a large, growing business and that our addressable

market (SME’s) is of significant size (this is not a niche play) that is currently under-served• Market testing – The feedback (through survey & interviews) validated our hypotheses that current systems are not “easy

to use”, with average satisfaction levels among users and highlighted interesting aspects that will need us to pivot• Competitor analysis – While there are a number of players in this space, there is a lack of a genuine focus on the needs of

the SME’s with products offering little differentiation and with low perceived value• Value proposition – At nickelring (www.nickelring.com) we intend to develop a unique product for the SME’s that will

differentiate on three aspects – The user experience (“Ease of use” to be specific), time to market (decision making & relevance) & market leading ROI (balancing the price-value equation)

We will pursue this initiative into the OEP phase

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Our process

Proposition Testing

Key tasks Team formation – Assignment of roles & responsibilities

Agree on communication tools Develop questionnaire & deploy Develop functional website Educate “diverse” team on

fundamentals of “Data Analytics” Conduct competitor analysis Develop high level market sizing

Finalise proposition – clearly articulate points of differentiation

Market test proposition through Survey & face-to-face interviews

Pivot and refine proposition Develop business model canvas Outline market level risks &

mitigation plan

Opportunity Execution Project

Develop prototype Develop service proposition Develop marketing strategy Develop distribution strategy Develop financial model Outline operational risks and

mitigation plan

Phases

Outcomes Initial feedback from potential customers

Market sizing

Finalised value proposition Results from market testing

Prototype Cost benefit analysis Execution plan

Proposition Development

Opportunity Analysis Project

12 May 19 May

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Why SME’s?

• Empirical research has highlighted that SME's currently have 4 critical technology needs

1. An accounting package

2. An email system

3. A website

4. A set of productivity tools (Excel, Word, etc.,)

• It is our hypothesis is that there is a fifth need and that is around the need to better understand their data -

predominantly financial and customer/sales data

• The systems that are currently on offer are

– Too technical to implement

– Reasonably expensive

– Difficult to change and are quite static

– Unable to handle multiple, unstructured data sources in an easy to use manner

– Not intuitive

• However, technology has now advanced such that cloud based solutions delivered in SaaS/PaaS format make

it affordable to develop a meaningful solution for SME's.

• Most software firms aim to service the large enterprise- there is a big gap in the SME space

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Selected survey results (N=25)

Extensive focus on sales &

forecasting – revenue

generation avenues

A startling response-set with 85% scoring

3 or below

Cost of tool is important, but

interviews confirm not necessarily

“cheap”

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Summary of interview feedback

• The team conducted 15 interviews in total with a range of firms in Singapore, USA, South Africa, India, Italy,

etc.,

• Sectors were varied (as our proposition is vertical agnostic) – Law firm, Chemical manufacturer, Supply Chain

management product developer, Government R&D, IT hardware solutions, etc.,

• Key learning:

– Ease of use is the single most important factor emerging as a client need

– Price is not the most important consideration: Customers are willing to pay for a good quality product,

i.e., this is not a commoditized market

– Data availability and accuracy is a major concern: While the overall concept was well received,

significant concerns were raised on this point and we were requested to try and develop something

that could potentially address this basic issue.

– Response time and security (data privacy) were raised as key concerns for cloud based solution

– Some respondents were unaware of appropriate BI tools and/or did not believe they needed one

– Excel is the primary substitute at most firms for data analysis

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Hypothesised market size*

Total number for firms in the world - ~ 500 million

Total number of SME’s in the world• ~90% of registered firms are SME’s• ~450 million SME’s globally

SME’s who are active & material - ~ 90 mil• There are ~20% are inactive SME’s and

40% are “mom & pop shops”

Target Market Analysis

• ~20% are sizeable firms with no critical need for Data Analytics (DA) / Business Intelligence (BI) tool

• ~25% are estimated to have an existing solution• Profile of target client

• Revenue p.a.: USD 1 mil +• Number of employees: 10 – 250

• Target market for nickelring – ~50 million firms

nickelring target

market

Tier 3

Tier 2

Tier 1

Our proposition is global in nature with a large target market!

Source: Based on nickelring research and estimates

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Industry analysis highlights that this is an attractive market

Supplier power

• Technology is continually maturing & hence there is a need to constantly adapt

• Recruiting resources (especially for startup) is a challenge

• Funding will be a constraint, but not a show-stopper for unique proposition

• Strength of threat: Medium

Supplier power

• Technology is continually maturing & hence there is a need to constantly adapt

• Recruiting resources (especially for startup) is a challenge

• Funding will be a constraint, but not a show-stopper for unique proposition

• Strength of threat: Medium

Industry rivalry

• A fragmented market with – large global players & niche / boutique firms

• Large players dominate big corporates space but are weak in SME’s

• Niche firms lack scale & differentiation

• SME market under-served

• Strength of threat: Low

Industry rivalry

• A fragmented market with – large global players & niche / boutique firms

• Large players dominate big corporates space but are weak in SME’s

• Niche firms lack scale & differentiation

• SME market under-served

• Strength of threat: Low

Buyer power

• Typical SME management team will have limited technology and/or analytical resources

• SME’s will appreciate simple product with good service at affordable price point

• Strength of threat: Low

Buyer power

• Typical SME management team will have limited technology and/or analytical resources

• SME’s will appreciate simple product with good service at affordable price point

• Strength of threat: Low

Threat of new entrants

• This is a very lucrative market globally with strong growth forecast (>15% pa over the next 5 years) & will attract a number of new entrants

• However, effective execution and access to distribution channels is a challenge

• Strength of threat: High

Threat of new entrants

• This is a very lucrative market globally with strong growth forecast (>15% pa over the next 5 years) & will attract a number of new entrants

• However, effective execution and access to distribution channels is a challenge

• Strength of threat: High

Substitutes

• Limited substitutes to BI/DA tools for an organisation to glean insights

• Excel is perhaps the most popular tool, especially in the SME space

• Strength of threat: Low

Substitutes

• Limited substitutes to BI/DA tools for an organisation to glean insights

• Excel is perhaps the most popular tool, especially in the SME space

• Strength of threat: Low

Supplier power Industry rivalry Buyer power

Barriers to entry

Substitutes

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Competitor analysis

Source: 1)Source: Lowering the Cost of Business Intelligence With Open Source2) nickelring analysis based on competitor pricing information

2

Large players that service big enterprises; Leverage other products; Not suited for SME’s (despite promise)

Basically reporting / dashboard systems; Low level differentiation; highly fragmented

• Trad. Players represent the larger firms & “Open” represents smaller firms

• Analysis will enable nickelring pricing

Competitive landscape1

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nickelring – Value proposition

Concept: Blue Ocean Strategy

By providing advanced analytics and choice for efficient deployment, nickelring aims to democratize the use of analytics

Strategy Canvas*

Value Attributes

Capa

bilit

y

Low

High

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Risks and mitigations

Key Risks Mitigating activitiesIgnore customers • Deploying our survey to over 300 SME’s globally

• Conduct at least 25 face-to-face interviews with target customers• Build relationships with 5-10 clients to test proposition on an ongoing basis

No market need • Our research and credible market reports (by IDC, Gartner, IBM) clearly indicate that:– There is a need for data analytics globally and this is a growing market– SME market is significantly under-served– The market is large and profitable

Not the right team • We have a built a balanced team that consists of motivated individuals that are representative of key organisational functions (Product, Technology, Marketing, Finance, Operations, etc.,)

• During the first two weeks the team members have displayed an affinity to high performance and those who could not contribute found themselves self-selecting out of the team

Poor marketing • We are working on our marketing strategy in conjunction with product development• The emphasis of the message will be on key value attributes – Simple, Secure & Easy to use

Need business model • We have a good grasp of our business model (that is being fine tuned) – Both in terms of solution delivery and the economics of operations

• We will elaborate on this during the OEP presentation

Based on the analysis* of 32 startups that failed, the following were the top 5 risks that were identified for new ventures. Here is how we plan to mitigate the risk

Source: http://www.chubbybrain.com/blog/top-reasons-startups-fail-analyzing-startup-failure-post-mortem/Note: We excluded “Ran out of cash”, which was the 5th reason, as it is not yet applicable for us.

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Next steps

• Commence work on OEP

– Finalise proposition including product features

– Develop technical architecture

– Develop product prototype

– Engage alpha & beta testing clients

– Develop marketing strategy

– Evaluate and build distribution partnerships

– Develop financial business case

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Appendix

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Team composition

Name Location Work experience Core competence Education

Alessandro Dublin 2 Years Software Engineering (C++, VHDL) BSc, MSc

Arnaud Tahiti, French Polynesia

13 Years Marketing & Business development BSc, MSc

Bharath Singapore 2 Years Software Engineering, Database Administration

BSc Eng.

Deepak Singapore 8 Years Software Engineering, Machine Learning Techniques

BSc, MSc, MTec

Filip Antwerp Area, Belgium

10 Years Business Consultancy BSc Eng.

Matej Slovenia, EU 10 Years Software Engineering, System Administrator BSc. Math

Munir NC, USA 15 Years PLM, Business Analytics (Data Mining) BSc. Eng , MBA

Patrick CA, USA 1 Year Software Engineering Reading BSc. Eng

Romil New Delhi, India

10 Years Internet Marketing & Branding, E-commerce and Web development

BSc (HM), MTM

Sajith Singapore 5 years Software Engineering, Data Mining, Semantics

BSc (Hons) Eng.

Sandeep Singapore 14 years Strategy ConsultingBusiness case development

Engineer & MBA

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About nickelring

Why nickelring?

• Nickel is a chemical element with the chemical symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge (Source: Wikipedia).

What does that have to do with Data Analytics for SME, you ask?

• The answer lies in the underlying characteristic of Nickel. We all know that Nickel is an easily available metal that was widely used in manufacturing… well a nickel (US currency). However, did you know that Nickel is also a key component of superalloys that are used in the aerospace, industrial gas turbine and marine turbine industry? Today, over 60% of the global Nickel production is consumed in making nickel-steels used as part of high-strength infrastructure. Moreover, under appropriate treatment Nickel can obtain the luster of silver.

• One simple metal – multiple benefits!

• Similarly, we are committed to developing a simple solution that will provide you and your organization with multiple benefits. We intend to indulge in a virtuous cycle of listening to you and taking your feedback onboard to develop insanely great products.

And hence the name – nickelring!

You can visit us at www.nickelring.com

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Supporting data points – Data Analytics is a booming market (1/2)

More data required to support decisions – McKinsey 2011 Survey*

• Executives say their companies still rely upon a mix of data and experience in decision making, although

they are increasingly looking to analytics tools for support

• Despite the promise of big data to reshape strategy and decision making, more than 75 percent of

respondents to this survey report that their organizations’ greatest benefits from data use flow from clear

and timely reporting of financial and performance metrics

– Only about half say they seek to use data to provide new business insights or develop new

information-based products and services

• Respondents highlight three barriers to more effective use of data and analytics :

– A cultural preference for experience over data;

– A lack of skills in synthesizing and translating the analytics and data for decision makers and

– Concerns that the data quality is poor

Source: McKinsey & Co online survey conducted from October 4 to October 14, 2011, and generated responses from 927 executives.

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Supporting data points – Data Analytics is a booming market (2/2)

• Analytics is the application of computer technology, operational research, and statistics to solve problems in

business and industry*

• Analytics is a rapidly growing industry with a lot of existing and emerging players. According to IDC analytics

market will be $33.9 Billion in 2012 – growing at 8+% since 2011.

• Most of the advanced analytics market is currently owned by big players such as IBM, Oracle, SAS,

Microsoft, SAP, Microstrategy, etc.

• Most consumers of advanced analytics capabilities are medium-large size enterprises as these solutions are

resource-intensive in terms of hardware, software and licensing costs.

Excel still the predominant solution in finance – WesierMazars study of Global Insurance related firms 2011

• The WeiserMazars study found that 87% of the CFOs they surveyed relied heavily on Excel spreadsheets in

their financial close and also in their FP&A activities, as well as for budgeting and reporting.

Source: Wikipedia