A Musical Keyboard Innovation Executive Summary. Executive Summary The Product: The Easy Transpose ® Synthesizer Keyboard A 2 octave, 4 tier segment of.

A Musical Keyboard Innovation

Executive Summary

Executive Summary

The Product: The Easy Transpose®

Synthesizer Keyboard A 2 octave, 4 tier segment of the Easy Transpose®

keyboard (eTrans® )

Executive Summary Markets and Sales Pitch Vocal accompanists (transposition)

Hotels, bars, conference rooms, rentals

Rock music Many new musicians, open to new technique

Jazz Potential for more complex, flashy parts Melodic, chord harmony more natural

Build to order, with customized cabinets (band logos, etc.) Benefits: Improvisatory Music and Accompaniment

Melodies may be remembered in terms of intervals, as on the bass or guitar

Chords will have the same hand position in any key Transposition up or down any of the 12 chromatic tones is

possible without any relearning of the music

Executive Summary The Business ModelCompetences and Assets Startup: Capitalization= $10 million (Venture Capital; cash in bank; no other assets) Products: 1

My improved, patented keyboard Name: eTrans, Inc (the Easy Transpose® keyboard , eTrans® ) Years in operation: none Employees: 10 (Annual Payroll: $150K)

Produce only the Keyboard and actuating mechanism Cabinets

Build on existing platform Suggest Kurzweil piano

Build to order Lowers inventory cost (a la Dell) Custom designed cabinets (band logos, etc.)

a la Harley-Davidson Our Major Competitors are Korg and Roland

Executive Summary Entrance Strategy

Importance: eTrans® versus Korg & Roland

eTrans®

Strong Mid Weak

Korg & Roland

Strong 1:Synths 2: 3:

Mid 4: 5: 6:

Weak7:Electric

Pianos 8: 9:Pianos

Executive Summary Entrance Strategy

Attractiveness: eTrans® versus Korg & Roland

eTrans®

Strong Mid Weak

Korg

Strong 1: 2:3:Electric Pianos

Mid 4:Synths 5: 6:

Weak 7: 8: 9:Pianos

Analysis

O p p o r tu n ityR eg is ter

In v en tio n s

Ide a

s

Com

mercial O

pportunities

Innova tion

C ore C om petences:A ssessm ent & Investm ent

M arket E ntrance &C om petitive S tra tegy

A dap tiveE xecution

The Invention

Opportunity Register of One

The Invention The Easy Transpose®

Synthesizer Keyboard

A 2 octave, 4 tier segment of the Easy Transpose® keyboard

The Challenge (Opportunity)

Quizzing: find new market opportunities

Attribute Mapping: determine necessary attributes

Consumption Chain Analysis: fine tune and focus on particular distribution channels, and particular attributes

Second round of Attribute Maps for highlighted Consumption Chain activities

Quizzing:

Piano design faults

The piano keyboard design dates back to before the discovery of equal temperament Is designed to simplify the execution of one scale (C major) in so doing, it complicates the other eleven Because of its physical configuration, the correct division of function between the

thumbs and the remaining fingers necessitates a high level of training to master

Problems of piano technique: Fingering. The problem of thumb undertuck (design problem) Memorization of chord and scale shapes in all twelve keys (design problem) Muscle training. Physical interface problems arising from weighting, relative keyboard

and hand dimensions, and responsiveness of the mechanism (design problem) Independence and co-ordination of hands (cognitive problem)

Quizzing:

Why the Fuss?Because Harmony is Complex

Quizzing:

Electric Bass as Role Model

Because people conceive and recognize a melody by its intervals the improviser's ideal would be

an instrument on which an interval looks the same regardless of its transposition

The bass adopts efficient single line improvising by "oriental" tuning in fourths,

e.g., E A D G…

Quizzing:

The Electric Bass FretboardPatterns of Harmony

Here are the C, F, F# Blues Scales

Quizzing:

Transpositionbefore and after

C, C# & F# major scales

Attribute Map:

What attributes do the consumers want from a piano?Basic Discriminator Energizer

Positive Non-negotiable Plays all existing

repertoire (classical, jazz, pop)

Tempered tuning

Differentiator Melodies and chords are easy to play Flashy technique is easy

Exciter

Attractive high-tech look Transposition up or down any of the

12 chromatic tones is possible without any relearning of the music

New music can be played, impossible to execute on the ordinary keyboard

Negative Tolerable n/a

Dissatisfier Need to learn new technique

Enrager Ugly high-tech look, odd

Neutral So what? Parallel

Consumption Chain Analysis:

At which steps are we different?

Two activities are important: Awareness / Search Usage

Aw ar en es so f n eed

S to r ag e an dtr as p o r t

In s ta lla t io na n d A s s e mb ly

R ec eip t

F in an c in g

P ay m en t

D eliv er y

O r d er an dp u r c h as e

S e lec tio nS ear c h

F in a l d is p o s a l

R ep air s an dR etu r n s

S er v ic e

Us e

Consumption Chain Analysis:

Awareness-Search Activities

Basic Discriminator Energizer

Positive Non-negotiable Plays all existing

repertoire (classical, jazz, pop)

Tempered tuning

Differentiator Melodies may be remembered in terms of

intervals, as on the bass or guitar ninths, elevenths and thirteenths can easily

be produced by reaching a finger to the keyboard above or below

Arpeggios through the whole compass of the keyboard can be executed with a sweep of the wrist

Exciter Transposition up or down any of the

12 chromatic tones is possible without any relearning of the music

Looks new and Technologically sophisticated

Ability to play ‘impossible’ music

Negative Tolerable n/a

Dissatisfier Odd appearance / bad industrial design It’s not a ‘real’ piano

Enrager New learning / difficulty of learning

Neutral So what? Parallel

Consumption Chain Analysis:

Usage ActivitiesBasic Discriminator Energizer

Positive Non-negotiable Differentiator Melodies may be remembered in terms of

intervals, as on the bass or guitar ninths, elevenths and thirteenths can easily

be produced by reaching a finger to the keyboard above or below

Arpeggios through the whole compass of the keyboard can be executed with a sweep of the wrist

Exciter Transposition up or down any of the 12

chromatic tones is possible without any relearning of the music

Chords will have the same hand position in any key

Negative Tolerable Odd appearance / bad

industrial design New learning / difficulty of

learning

Dissatisfier Enrager

Neutral So what? Parallel

Business Model and Competences

Business Model: Narrative and Numbers (key ratios) + ‘Key Ratios’ that your business needs to attain with respect to your

‘invention’

Competences: Employee skills, Asset investments, Intellectual Property that will be required to produce your ‘Invention’

Name one Competitor to your business, and state the values of these ‘Key Ratios’ for that competitor

List your Own Company’s Targets for these ‘Key Ratios’ assuming you are only selling this one ‘Invention’

Business Model

Markets Target markets:

Vocal accompanists (transposition) High schools and Universities, Hotels, bars, conference rooms, rentals

Rock music High schools and Universities, Many new musicians, open to new technique

Jazz Potential for more complex, flashy parts Melodic, chord harmony more natural

Experience curve: The greatest market challenge is that the new keyboard will need to be learned Thus units should quickly be sold (at discount) to high schools and universities And an instructor certification program created quickly

Build to order, with customized cabinets (band logos, etc.) Advertise

in music magazines Pay for ‘reviews’ Sell direct (build to order, with fashion logo customization for band logos, or other idiosyncrasies)

Focus on competitors Korg and Roland

Business Model

Key Metrics (Ratios) Learning curve:

Number of gigging musicians using the eTrans®

Number of CD releases using the eTrans®

Sales: Sales Growth

Hype-Vibe: Quality measured by epinions reviews of eTrans®

Quality of musicianship of lead-steer musicians playing the eTrans® measured by concert and CD reviews

Business Model

Competences and Assets

Produce only the Keyboard and actuating mechanism Cabinets

Build on existing platform Suggest Kurzweil piano

Build to order Lowers inventory cost (a la Dell) Custom designed cabinets (band logos, etc.)

a la Harley-Davidson

Business Model

eTrans®

Startup Company

Capitalization: $10 million (Venture Capital; cash in bank; no other assets)

Products: 1 My improved, patented keyboard

Years in operation: none Employees: 10 (Annual Payroll: $150K)

Business Model& Entrance Strategy

Companies in the Industry

Yamaha: Major player in all keyboards, bu are making more money in motors, and

may be moving away from audio-music business Casio:

consumer electronics, cameras, watches. Cheap keyboards are a small part of their business

Kurzweil (Young Chang piano): niche player; potential sourcing partner

Korg: Major player in electronic keyboards

Roland: Major player in electronic keyboards

Entrance Strategy

Substitute Products Acoustic Piano

musical instrument with a keyboard. Its sound is produced by strings stretched on a rigid frame. These vibrate when struck by felt-covered hammers, which are activated by the keyboard. They come in Grand and Upright form factors

Synthesizer Experiments with synthesized music started in the 1950s. Bob Moog built

successful monophonic synths throughout the 60s and 70s, but the first truly successful polyphonic synthesizer was Yamaha’s DX7 (pictured) which used FM synthesis, and was a staple of the 1980s sound. Digital sampling came to studios with the Fairlight CMI (1978), and evolved into our current digital synthesizers.

Electric Piano Digital sampling synthesizers with dedicated piano samples

Entrance Strategy

Vision

Years 1 & 2: A single product will be built on top of existing Kurzweil synthesizer platform to minimize cost, maximize organizational learning Simultaneously, a second dedicated eTrans® Controller and cabinet designs will be

developed (using 3rd party electronics from Kurzweil) Years 3 to 6: A variety of eTrans® Controller and cabinet designs will be

developed to address up to 10 market niches identified in the first two years. Intellectual property will be marketed aggressively, and this will provide a second

revenue stream Years beyond 6: Once initial resistance and artist learning have been

overcome, we expect eTrans® Controllers to become the industry standard for unweighted keyboards (synths and organs) We will further refine ergonomics in order to better satisfy the piano community (using

weighted, and more complex actions) We presume that classical musicians will not adopt the eTrans® Controller because of

inherent conservatism of the field

Entrance StrategyFirst 3 Customers will be Lead Steer Customers

Customer group #1: Target ‘Educators’ who can get these units into high schools and universities

Customer group #2: Target musicians who want a new income stream, teaching the eTran method

Customer group #3: Target high profile musicians; e.g., Chose three from the following (whoever might work with you)

Jazz Dave Grusin,Brad Mehldau,Lyle Mayes,Joey

DeFrancesco,David Benoit,Joseph Zawinal

Rock Rick Wakeman ,Keith Emerson,Steve Winwood,Paul

Shaffer,Brian Eno

Easy Listening (yuch!) … Yanni

Classical… are you kidding?

Use these customers’ enthusiasm to: Test your assumptions about attribute maps and

consumption chains Use their success with your offering to sell others

Get these customers to endorse your product by providing: Free keyboard(s), as many as they want On-site setup and technical support; direct feedback on

product modifications Photographers to get ad copy

After assessing these endorsments Decide how aggressively to move And whether to raise more capital to gain

additional power, competence and capacity

Entrance Strategy

Competitor financials Average for five years prior to 2004

Yamaha Music Korg Roland Casio keyboards

Sales (mil)810

17% of total sales 200 620400

8% of total sales

Sales inc/dec -2% 15% 17% 30%

GM 37% 28% 26% 25%

EBIT 7% 8% 12% 19%

NI 4% 5% 9% 12%

Employees 4000 100 2350 1000

CA 37% 27% 13% 16%

FA 57% 38% 20% 31%

CL 23% 17% 16% 9%

LTD&OE 94% 43% 68% 63%

Entrance Strategy

Worldwide Sales, 2004

Sales $ millions

Acoustic Pianos, 2143, 23%

Guitars, 3728, 40%

Bass Guitars, 288, 3%

Electric Pianos & Synth, 3236, 34%

Volume (000 units)

Electric Pianos & Synth, 5787,

30%

Guitars, 11520, 61%

Acoustic Pianos, 572, 3%

Bass Guitars, 1152, 6%

Entrance Strategy

Market Volume

Entrance StrategyPosition of Top 3 Competitors in the Keyboard Industry

Acoustic Electronic Synthesizer Guitar / Bass

Yamaha 34% 17% 13% 11%

Roland 0% 28% 57% 0%

Korg 0% 19% 9% 0%

$ Share of World Market

Share of Largest Competitor Relative Share

Keyboards % of Firm Revenues

Attractiveness to Firm

Yamaha 23% 17% 135% 9% Low

Roland 17% 23% 74% 34% High

Korg 13% 23% 57% 53% High

Competitive Position

Market Share

Entrance Strategy (choose one competitor) Commitment to Keyboards

Commitment

High Low

Position

StrongBlank Checkbook: Korg, Roland, eTrans® --

MediumLine-item Approval: Yamaha --

Weak -- --

Entrance Strategy (choose one competitor) Likely Competitive Categories

Capacity

High Low

Motivation

HighCombatants:Korg, Roland

Skirmisher: eTrans®

LowSleeping dogs:

YamahaBystanders: Moog, Kurzweil

Entrance Strategy (choose one competitor) Competitive Positions

Competitors

Yamaha Roland Korg eTrans®

Products

Pianos Strong Weak Weak Weak

Electric Pianos Strong Strong Strong Weak

Synthesizers Mid Mid Strong Strong

Entrance Strategy (choose one competitor) Importance: eTrans® versus Korg

eTrans®

Strong Mid Weak

Korg

Strong 1:Synths 2: 3:

Mid 4: 5: 6:

Weak7:Electric

Pianos 8: 9:Pianos

Entrance Strategy (choose one competitor) Attractiveness: eTrans® versus Korg

eTrans®

Strong Mid Weak

Korg

Strong 1: 2:3:Electric Pianos

Mid 4:Synths 5: 6:

Weak 7: 8: 9:Pianos

Entrance Strategy

Strategic (quasi-military) options

Guerrilla warfare: Yes. This is new technology that allows you to ‘attack from below’ and disrupt the

rules of the game. Because it is radical, the technology will be ignored by the majors players they may even be willing to share technology as co-opetitors.

Which is why I list Kurzweil as a potential supplier Feints:

No. You could potentially introduce a traditional keyboard, but are unlikely to have credibility because you are a startup with no established market, nor the cash to create one.

Gambits: No. Not a chance (you don’t have anything to give up except your IP)

Onslaughts: No. Not a chance (you don’t have enough power or cash)

Has this been thought of before?

You will probably be asked this

(Here’s some history)

Some History Ergonomics

Some History The Paul Jankó keyboard

"If I were to begin my career anew it would be on this keyboard." - Arthur Rubinstein

"This invention will have replaced the present piano keyboard in fifty years' time!" - Franz Liszt