Essay About Hardware Addons And Target Market

Developing Entrepreneurial Opportunities 2
You are asked to take an investor perspective. Please provide a detailed assessment of the viability of the venture described in the case study. Would you invest? (10 points) Q1 2013 flurry of activity towards developing first prototypeCredit card size motherboard Raspberry Pi like Intel’s Minnowboard max but cheaper $35 – computer to stream HD video and rich 3D games like minecraftSoftware to make Rasberry Pi accessible working with parents/eductors/children and Rasberry Pi and Codecademy30 off shelf components bundle with story book on how to build/code computer8 employees (software/hw engineers, artists and wizards).Created own Raspberry Pi opersting system, hardware addons and plug and play design $50.48Plastic bumpers designed for motherboard protection and invites users to experiment with further expansionsProduct orange box – accessible bundle of hardware and softwarePhysical distance not an issueEducation and technological awareness is strong  I will use the Outside-Impacts approach to assess the viability of the venture.[1](I) What is the idea / industry? Explain clearly and succinctlyMission: give children/young at heart a simple fun learning experience (like lego) to make and play with technologyTo take control of the world around themA hardware and software kit that can be assembled to create an easy to program computerONk (short catchy inquisitive name) – spirit of idea encouraging young people to turn on a computer and hit the keyboard, hence immediately starting to code(M) Is the target market large enough to support substantial growth / valuation? How large is the overall market? The segment you are targeting?  Potentially large target market – children/young at heart, parents, educators including schools and education market Parents, schools and children under pressure to obtain learning, technological and creative skills Kids to deprived London areas – so limited scope in educational circles Not in school curriculum. Controlling Robots more fun for childrenChildren already start to use computer from early age so technology is not a disruptive idea. Applications on ONk like streaming HD video and HD games already on all computers and devices. So, scope not large unless they can get buy in from schools/educational institutions e.g. by giving them free trialsConnections with government to promote – Masters in politics can help?(P) Why does the opportunity generate a positive present  value? What is unique? Why will you make money? How will you make money?  Price $100-150, cost $50.48, so sufficient margin. Early signs of market traction catapulted towards its first growth spurtAll 200 batch of first kits sold out on only word of mouth in London schools. Enthusiastic reviews from children, parents, educators and computer visionaries. Hardware suppliers in china and unique designNo overheads – flat used for storage and assembly but not possible as sales increaseCost to obtain customers minimal so company can scale rapidly with demand.For UK assuming age 8-14 population of 6m, potential market is 6m x ($100-50) say $300m. Capturing 10% of population will mean $30m and 1% of population is $3mNot unique idea but with say free trials to schools to promote awareness it could work and multiplyHigh user base and potentially niche market with educational institutions/companies can expand its services/products through economies of scale(A)cceptance: Will customers in that market accept / buy this new product / service? Who is the customer in the target segment? Why will they buy your product / service?  • What do they buy now? Why do they buy it                 Based on sale out of first 200 and enthusiastic review it shows first acceptance of product. Obtain customers by having connections to educational institutions, children and parental channels (including online social networks) and computer visionaries to build a brand base and give free trials to schools nationwide before reaching out globally. Will only buy if they want to learn on a physical hardware level rather than online.Will they switch?  Switching possible if other products on market or other ideas such as robots, but for making computers there seems to be limited competition so can provide an effective niche area. Kids may get bored and go for other products or go online for software products rather than hardware.        How will you get to the customers? How much will it cost?  Cost of acquisition of customers will be by networking contact and earned/social media (referrals, word of mouth, websites, search engine ads, public relations with schools and educational institutions/companies)Using collaborators such as educational institutions and schools and companies involved in education and learning is the best and cheapest way for acquire customers as well as using resources/leads of Codecademy and Raspberry Pi.Customers can be obtained by providing them free trials and to experiment with the product and learning. How will you keep customers and Salesforce?Working closely with schools, education institutions/companies they could keep up with customer demand/needs and adapt to provide products/services through economies of scope to retain the customers and keep ahead in the competition Increasing the brand, reputation and encouraging awareness through multi-channels (retail and online)C) Why wont the value be competed away? What will existing competitors do? What will other new entrants do? How will you respond?  Hardware Ed-tech companies are all over world and growing number of Ed-tech companies. A lot of VC raised 1.1bn in 2012 and 1.25bn following year.Growing niche area – Ed-Tech meets the Maker market – hardware based offering not online software.A few noteworthy companies include startups and hardware Ed-Tech companies can be found all over the world. Eg Microbric – Robot called Edison by LegoProduct is imitable and can be competed away but can differentiate by better service/product suitable to needs/demands of customers They are starting to do this by working with collaborators such as Raspberry Pi an Codecademy to improve technology like add-ons, creating own operating system and making a plug and play design.  Re-designing the package and provide opportunities to expand he product with unique design. This is all certainly possible with the background of the founders and their connections.((T) Why is this a good time to enter?  Ed-Tech getting popular among students, teachers, educational institutions. Augment classroom learning with social networks/online learning and poised to disrupt traditional classroom experience. Need for technical learning is increasing with competition amongst kids and society at large. VC investment activity in ED-Tech on the rise since 2010 from below 40 deals (100m) per quarter in 2010 to over 100 deals (500m) per quarter in 2014 Niche – Ed-Tech meets Maker movement – hardware based solutions Why hasnt the opportunity been taken already? Hardware Ed-tech hardware compete in controlling Robots which is more fun for childrenKids already start use computer and videos/games from early age so technology is not big mover. (S)peed? How quickly can this be implemented?  Based on quick sale of first batch and ability to source hardware from China and quick assembly very quickly it can help reach scalable heights swiftly. Not much to do operationally as it entails only assembly and testing. Technology can be enhanced quickly as well with the skills of its team and wizards – engineers as well as artists for product design.Distribution depends on connections/networking and marketing to customers. Venture will need more resources as it gets bigger.OUTSIDE (Detailed 2)Opportunity – Does it have IMPACTS? If the opportunity does not have IMPACTS, it should not be pursuedNo real competition in hardware computer assembly but at same time not innovative. Scalable only if can get buy-in from educational institutions e.g. by providing them free demonstrations/awareness and to enter it into curriculum. However not as interesting as Robots so investment may only be on a niche but significant scale. The learning will continually need to be updated and designed with hardware and software to keep ahead with technology and customer demands/needs and can expand through economies of scaleUncertainties: What are major uncertainties? How do the answers affect the opportunity? Market size, Customer acceptance, Customer approach,  Competition, Team, Potential real options?Buy-in from educational institutions and whether they can replicate all over UK and then globally and not just deprived areas? Level of demand and scalability – will children choose this over others in market e.g. robots they can build and control. How will they get customer to accept and will they grow?Will competition grow and compete it away?Will market and hardware Ed-tech space in hardware continue to grow?How will be cope with expansion and resources needed?How much technological advancement, hardware expansion and product design to keep ahead of competition?Interest from investors? Funding uncertainty. Can they get funding from government? Sam Smith succeeded with ‘Roli’ in this respect with UK’s Technology Standard Board.Which uncertainties can be managed so that outcome is favourable? E.g., choice of investors and initial customers?