3. Testing the Hypotheses
Building Blocks Testing
Customer Segments Oil-spill Remediation Companies
Value Propositions New Product in a Niche Market
Key Partnerships Dealers and Distributors
Key Resources IP protection/Know-How/R&D
Key Activities Pilot Scale Studies / Marketing
Customer Relationships Continuous / Expanding their Services
Channels Direct-Partner / Dealer/ Distributor
Cost Structure Manufacturing/Marketing/R&D
Revenue Streams Product Sales / IP licensing
4. Here’s What We Did
•Came up with different packaging options for our product
• Contacted 30 potential customers about our product
• Tried to Recruit Members for IAB
• Calculated the Cost of In-House Manufacturing
• Draw a Revenue Model for Our Company
Packaging options
•Rolls of fabric-like material
• Blankets
• Pads /mats
5. Here’s What We Found
Our Product* Estimated Cost Existing Product in
Market
Rolls of fabric-like material $10 U***
(Sold per square foot) Oil Absorbent
$ 20
Blankets (3x2 .5 feet) $50 P***Oil-Only Weighted
Absorbent Blanket
$ 112
Pads mat for small spill $30 B*** INDUSTRIES Buff Oil
(15" x 18“) Absorb Pads
$ 51
* Our product description:
• new nanotechnology that collects & decomposes oil in water, in-situ
• It can hold oil up to 20 times its weight, floats in water, and uses sunlight
to break down hydrocarbons into eco friendly products
6. Responses to Our Cost Survey
“I feel your purchase prices are too high for the mass of the
remediation market. For a massive spill of 100,000 gallons or
more, the cost would compare unfavorable with skimming and
transporting for reclamation. For small spills your product is in
competition with the cost of conventional absorbents plus landfill
disposal. In this case, your $10 per sq. foot compares with $10-16
per ton landfill disposal.”
Dan Gray, Hepaco Inc., Tucker, GA.
“I think that the pricing is right on, I think it shouldn’t be very
difficult to sell the fabric, especially since its eco-friendly.
Would these then, in theory, be able to be thrown in the trash
along with MSW?
Here on LI most of our garbage is burned, what type of off gasses
are produced when these are incinerated?
Also, would this product work on water/ocean/river spills?”
James Cressy, Project Manager, Impact Environmental
7. Revenue Chart
First year revenues:
20 SME of $100,000 sales/year= $2M
60
2 LC of $1M /year =$2M
first year revenues : $4M
50
Second year revenues:
75% retention of SME
15 SME of $150,000 sales/year= $2.25M
2 LC: $5M sales/year ( 40
second year revenues $7,25M $
Third year revenues: M 30
maintain the domestic levels with existing )
customers but expand international sales
to $3.5M
This will set us over $10M 20
Fourth year revenues:
Add new line of products for existing
market; expand into adjacent markets
10
(off-site remediation; water purification;
etc)
Revenues to reach $50M 0
Year 1 Year 2 Year 3 Year 4
8. Payment & Order Flow
Dealer
•Dealer invoices
Customer
customer and
delivers product
•Customer pays
•Dealer sends
the invoice
purchase order to •Direct Sale to
either directly to
the distributor for Customer
the company or
fulfillment •Sale to
to the
dealer/distributor Dealer/Distrib
utor
Distributor
•Distributor
packages the
order and ships it
to customer