Developing Entrepreneurial Opportunities
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) ProsSimple fun learning experience for children/young at heart to make and play with technologyEasy to program computer using hardware and software kitShort and catchy name will bring inquisitivenessComputer anyone can makeFounding team good complimentary background – Alex Bell Co-Founder and Chief Product Officer) computer artist whose work appeared in Newsweek and others and writer (can design product and write instructions). Masters in politics can help connections with government investment?? Looks at ways to turn an invention into an entrepreneurial idea e.g. Raspberry Pi affordable single-board computer. Joe Costa (Co-founder and CEO) – degree relating to entrepreneurial ship. Worked in marketing/manufacturing of plastic consumer goods and sales to over 90 countries worldwide which is related to this project. Sam Smith veteran entrepreneur and investor and Co-founder – founder of successful DotCom startups and was involved as angel investor and large VC fund – led investments in many early stage internet companies. Sam no stranger to hardware-based start ups – he led no of hardware based portfolio companies eg Roli a startup piano keyboard covered by layer of ‘smart’ soft silicon called Seaboard Grand enables musicians to produce unparalleled sound effects using pressure-sensitive surface (q00s of hardware components many are Intellectual property 9resarch into silicone.
Ed-Tech (effective use of technological tools in learning) getting popular and good for students, teachers, educational institutions. Augment classroom learning with social networks/online learning and poised to disrupt traditional classroom experience.Investment activity in ED-Tech on the rise since 2010 from less than 40 deals per quarter in 2010 to over 100 deals per quarter in 2014. Funding increased from less than 100m to over 500m in same period and by quarter.Niche – Ed-Tech meets Maker movement – hardware based solutions Hardware Ed-tech companies are all over world.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 computerHardware suppliers in china No overheads – flat used for storage and assemblyKits to deprived London areas – so limited scope even though all 200 batch of first kits sold out on only word of mouth in London schools and some big companies. Enthusiastic reviews from children, parents, educators and computer visionaries. Early signs of market traction – first growth spurt8 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 softwareSold $100-150, cost $50.48Physical distance not an issueEducation and technological awareness is strong Potential to disrupt existing markets ??? not likely Source: Outside-Impacts Approach adapted from Professor Steven N. Kaplan, GSB Chicago  (I) What is the idea / industry? Explain clearly and succinctly.Mission: 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 – 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? Target market is potentially large around the world – children and young at heart and parents, educators including schools and some big companies Children under pressure to obtain learning and creative skills and parent and school consciousness is very highChildren develop to a technological frame of mind from an early age.Kids to deprived London areas – so limited scope even though all 200 batch of first kits sold out on only word of mouth in London schools and some big companies. Enthusiastic reviews from children, parents, educators and computer visionaries. Limited scope only in education circles only but not in school curriculum. Controlling Robots more fun for children and kids already start to use computer from early age so technology is not big. 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 and give them free trials and have connections with government to promote. Masters in politics can help connections with government investment. Scope is for education institutions worldwide initially but will need buy in and support from government.