Presentation examples for class 7 revenue models

Presentation examples used in Class 7 - Revenue Models

The Lean LaunchPad

07/02/12

Optical Equipment Revenue Model Example

Phi OpticsComponent vendors

University Business Services

Researcher Grant AgenciesIndustry Contracts

applies for grants/contracts

funds grant/contractrequest for equipment

QPI info & price

activity

payment

Academia Payment Flow

Buys QPI device

Phi OpticsComponent vendors

Purchasing Dept.Researcher CTO

VP for R&D

Justifies need for equipment

Includes equipment in the budget

QPI specs + price

activity

payment

Bio-Pharma Payment Flow

Buys QPI device

Phi OpticsEquipment suppliers

Accounting Dept.

Product Dev Engineers +

Business Dev ($) + Legal Dept (royalties)

CTOVP for R&D

Justifies QPI integration in OEM systemSuggests co-development deal

Allocates funds in the budget

QPI specs + price+ SOW

activity

payment

OEM Payment Flow

Funds SOWPays royalties/sub-licensing/other recurring fees

Nitrate SensorRevenue Model Example

OEM

Large farm

USDA/EPA

Small farm

Product

Money

Water Data only

OEM

Us

Large farm

USDA/EPA

Small farm

Product

Money

Nutrient Data

Product sales

OEM

Us

Large farm

USDA/EPA

Small farm

Product

Money

Nutrient Data

Licensing/sales

OEM

Us

Large farm

USDA/EPA

Small farm

Product

Money

Nutrient Data

Independent of licensing decision

Us

USDA/EPA

Small farm

400 acres, 4 soil types: 8 sensors

Install sensors

$1K/sensor less incentive = $4140

Using $1000 per sensor (2x cost) puts us ~$350 more expensive than current commercial nitrate sensors. We’re including pH, moisture, and conductivity, though.

Incentives: Best case scenario $45.89/acreWorst case: $9.65/acre or state dependent

25% cost coverage

$3860 for 400 acre nutrient management

Us

USDA/EPA

Small farm


Install sensors

$1K/sensor less incentive = $4140

Using $1000 per sensor (2x cost) puts us ~$350 more expensive than current commercial nitrate sensors. We’re including pH, moisture, and conductivity, though.

Incentives: Best case scenario $45.89/acreWorst case: $9.65/acre or state dependent

25% cost coverage


Average $10.40 in N-fertilizer lost to groundwater per acre: Repaid in 1 year

Bio-Based Chemical IntermediatesRevenue Model Example

Here’s what we hypothesized…

Distributor

Monomer manufacturer

Surfactant formulator

Surfactant user

Consumer facingcompany

Consumer Market Pull(Sustainability agenda)

Revenue model: Hypothesis

Biomass supplier Biomass 15 c/lbBiomass Range 5-20c/lb

Monomer ?Detergent alcohols 80c/lb

Formulation ?Formulated Surfactant

90c/lb

Surfactant 100 c/lbFormulated Detergent

100c/lb

Detergent 200 c/lb10% Surfactant in

Detergent

Product

Decision Makers

Here’s what we did…

Techno-commercial analysis expert

Revenue Model: Experiment 1

Life Cycle Assessment Expert Economic analysis expert

DirectorDirector

Production Economics Experts

Business Manager

Economic analysis expert

Financial metrics

Ethanol DMF Lactic Bi-functional fatty acid

Scale (T/day) 500,0001b/day

600,000 lb/day

300,000 lb/day

Feedstock 15 c/lb 19 c/lb 16 c/lb

Processing 2 c/lb 26 c/lb 25 c/lb

Capital 1 c/lb 2 c/lb 41 c/lb

Other 3 c/lb 15 c/lb 39 c/lb

MSP (c/lb) 21 c/lb 62 c/lb 120 c/lb

Revenue model: Result 1

Financial metrics



600,000 lb/day

300,000 lb/day







Financial metrics



600,000 lb/day

300,000 lb/day







Financial metrics



600,000 lb/day

300,000 lb/day

?

Feedstock 15 c/lb 19 c/lb 16 c/lb 15 c/lb

Processing 2 c/lb 26 c/lb 25 c/lb ?

Capital 1 c/lb 2 c/lb 41 c/lb ?

Other 3 c/lb 15 c/lb 39 c/lb ?

MSP (c/lb) 21 c/lb 62 c/lb 120 c/lb < 100 c/lb


Less than 100 c/lb is achievable when:1. Large reactor with 500,000 lb/day capacity2. Optimized fermentation and processing costs

Payment Flow

Distributor

Monomer manufacturer

Surfactant formulator

Surfactant user

Consumer facingcompany

Consumer Market Pull(Sustainability agenda)


Biomass supplier Biomass 15 c/lbBiomass Range 5-20c/lb

Monomer 80 c/lbDetergent alcohols 80c/lb

Formulation 90 c/lbFormulated Surfactant

90c/lb

Surfactant 100 c/lbFormulated Detergent

100c/lb

Detergent 200 c/lb10% Surfactant in

Detergent

Product

Decision Makers

Disposal WasteRegulations

Payment Flows Example

CanScan Payment Flows

Class 6 - Update 3.5.2012

CanScan

Hospital / Clinic

Oncologist

Private payer/MAC

Pathologist/ billing

Sales/orderPaymentService

Services rendered

$$

$$

Clinical Diagnostic Services

CanScan

Pharmaceutical Company

Researchers

Sales/orderPaymentService

$$

Pharmaceutical Products

Instr. /Kits

Medical DevicePricing Example

MammOpticsPricing Strategy

Equipment Lease model

Per-use model

Consumable

Cost of the device

Service per year

Per-use fee

Consumable

$50,000

$3,000

0

0

$5,000

$10,000

0

0

$5,000

0

$50

0

$25,000

0

0

$20

MammOpticsPricing Strategy

Equipment Lease model

Per-use model

Consumable

Cost of the device

Service per year

Per-use fee

Consumable

$50,000

$3,000

0

0

$5,000

$10,000

0

0

$5,000

0

$50

0

$25,000

0

0

$20

Approved by

customers and

investors

GrapheneRevenue Model Example

Distributors

Researchers

Graphene Frontiers

Current TEM grid provider

More workAdd value

Material supplier

Payment flow

Distributors

Graphene Frontiers

Material supplier

Flexible display manufacturer

Electronic User

Research, cost

E-reader manufacturer Parts suppliers

Parts suppliers

Payment flow

Direct Cost Estimates: Scale Matters• Cost per in2 – 1” Furnace = $.80

• Cost per in2 – 2” Furnace = $.45


If we can move to N (replacing Ar, key direct cost driver)




“Holy Grail”: 4” or larger continuous production w/Nitrogen

Cost per in2 – 4” Furnace, Batch/Continuous = … $.05

SensorPricing Tactics Example

Technology Supplier

Industrial Plants

Plant #1

Plant #2

Plant #3

Understand Economics of Plant + Sensors

Understand Economics of Technology Supplier

Value pricingWho does this?

32Diaphragm Membrane

$240/MT Cl2

Cost of damages + downtime per incident per year

Operational conditions Capital cost per incident Downtime per incident # of cells protected Time between incidents Number of cells, US and worldwide

Diaphragm Membrane Membrane Header

$2,500 $270 $10,600

Value per unit per year

33

Soft product launch projected for Q1-Q2 2012General launch projected for Q4 2012

Year Type % Revenue [/year]1 Innovators (US) 2.5 $271,500

Operating costs for 1st year projected to be $350,000

2 Early Adopters 16 $15,040,000

3 Early Majority 50 $47,000,000

4 Late Majority 84 $78,960,000

Full Penetration 100 $94,000,000

Diaphragm Membrane Membrane Header

$2,500 $270 $10,600

Medical DeviceRevenue Model Example

What we make

DentistDentalOptics

~$2000

Device cost (one time)

~$2.50 per patient

Disposables

What the dentist normally makes

Dentist Patient

Insurance

Co-pay

Membership

$250

$250

Equipment / Variable Costs

Note: Assumes 50/50 copay-insurance split

What we’d add for the dentist

Dentist PatientDentalOptics

Insurance

Co-pay

Membership

~$2000

$250

Device cost (one time)

$250

~$2.50 per patient

Disposables

Equipment / Variable Costs

Device creates

additional periodontal procedures

Note: Assumes 50/50 copay-insurance split

Farm Nitrate SensorRevenue Model Example

Us

USDA/EPA

Small farm


Install sensors, provide service

$1K/sensor less incentive = $4140 to recover in contract

Incentives: Best case scenario $45.89/acreWorst case: $9.65/acre or state dependent 25% cost coverage


Average $10.40 in N-fertilizer lost to groundwater per acre

Pay for 2-3 year contract service monthly

Economics of TSP Operation

Us

USDA/EPA

Small farm


Install sensors, provide service

$1K/sensor less incentive = $4140 to recover in contract

Incentives: Best case scenario $45.89/acreWorst case: $9.65/acre or state dependent 25% cost coverage


Onion Case Study (44K acres): Cost: DAP - $700/ton + $25/aRate: 280lb/a for 400a farm

= $39K

30% Improvement: $13K savedCharge: $6K/season

= $660K/yr contract revenue

Pay for 2-3 year contract service monthly

Economics of TSP Operation

Biofactories for TherapeuticsRevenue Model Example

Revenue Model

= money= information

= relationship

Large Pharma

INFLUENCER

Hospital/Clinic

Physicians

Patient

Employer

Government

Taxpayer

Government Payor

Private Payor

Pulmonary Function Lab

Wholesalers

= AAT

Optics Design CompanyRevenue Model Example

Quantity purchase of components for prototype &

mass production .

Revenue Model & Payment Flows

44

LighTip™ Advanced Illumination Engineering

™

Reflector

Desired target

Light source

Customer:LED company

Key Partner:Optical Manufacturer

Customer’s final product

Our deliverabl

ePrototype & High Volume Production (0.25%-8% commission)

Engineering contract ($150-300/hour)

5/23/2012

Complex Sensor NetworksRevenue Model Example

Revenue Model and Customer Acquisition

Year 1:(3 Customers)

1K nodes


30K nodes


200K nodes

SET’s price $400

$400K $12M $80M


400K nodes

$160M

Middleware and Reusable Software

Subsystems

SET Sensor Node Product

OEM HW components ($100 COGS)


5K nodes

$2M

First target customers

Leverage our partners’ existing customers

Healthcare SoftwareRevenue Model Example

Revenue Model

Healthcare Providers

Health Information Exchanges

Patient

Patient Data

Patient Data

Portal $$$Tailored Messagingfor + Patient Outcomes

Patient Analytics $$$

Health Insights

Resources/Tools Patient Profile

Presentation examples for class 7 revenue models

Education

clbother3 clb

clb surfactantsurfactant

clbcapital1 clb2 clb

clbmsp clb21 clb

revenue models

acreworst case

best case scenario

soilus small farmtypes