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Empowering the next generation of builders

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Title: Empowering the next generation of builders


1
Build-It-Yourself seeks partners who can help
bring our unique online learning environment
direct to kids and their parents at home.
John Galinato 617-875-1960 john_at_build-it-yourself.
com www.build-it-yourself.com
Empowering the next generation of builders
2
Inspire and guide kids to create, design, build
and invent.
Empowering the next generation of builders
3
The Product
  • Mission
  • Inspire and guide kids to use technology
    constructively, collaboratively and creatively.
  • What we offer
  • A unique, online laboratory for builders
  • Parents pay a 30/mo. membership fee
  • Access to project plans, modules
  • Four live, mentored Webcast lessons/mo.
  • Invention Universe online virtual community

Empowering the next generation of builders
4
Product Differentiators
  • Multidisciplinary projects
  • - Playful, socially conscious storylines
  • - Combine art and technology
  • - Attract broad range of kids
  • 2) Build-It-Blocks (modular construction)
  • - Build complex projects quickly
  • 3) Collaboration with art and engineering
    students (live webcasts)
  • - Build mentor relationships

Empowering the next generation of builders
5
Value Proposition
We provide consistent, high-quality, high value
technology enrichment at a fraction of the cost
of traditional instruction. We bring the
university student TA (Teaching Assistant)
concept, coupled with proven content and online
collaboration tools, to kids online.
Empowering the next generation of builders
6
Target Customers
Boys and girls ages 8-13 interested in art or
technology. Parents who want their kids to go to
college and understand the need to be fluent in
technology. Skills exercised in a BIY workshop
series 1) Problem solving skills 2) Presentation
skills
Empowering the next generation of builders
7
Growth Plan
Partner with after school programs like Sylvan,
Kaplan and Bright Horizons, publishers and retail
outlets to grow quickly.
Grow the team and infrastructure to serve 1,000
members
Validate that parents value the Build-It-Yourself
vision.
Empowering the next generation of builders
8
Proof of Concept Phase Validation (through
2012)
  1. 3,000 customers / 20 schools
  2. 200 revenue per customer
  3. 600,000 revenue
  4. 6 years in development
  5. 90 of business is recurring
  6. 15 of revenue is on-line.

Empowering the next generation of builders
9
Proof of Concept Phase - Validation
Proven content and supporting platforms
30 Projects
20 Lessons
100 Build-It-Blocks
Record of attracting talent from the Cornell,
MIT, Harvard and Mass Art communities.
Empowering the next generation of builders
10
Proof of Execution Phase - 2013 Raise our
valuation
  • Strategy
  • Hire an MBA business developer.
  • Evolve our content and supporting platforms.
  • 3. Close corporate distribution partnerships.
  • Assets (2012)
  • Repeat customer base. (500 kids/yr. at 200/kid)
  • Well-tested content and supporting platforms.
  • Access to network of developers and Webcast
    specialists from Cornell, Mass Art and MIT
    communities.

Empowering the next generation of builders
11
How big is our market?
College bound Kids Every kid who goes to college
should be technology fluent and therefore is a
potential customer. 300K Members We need 2 of
target US market to build a 72M business.
(300K x 240/yr including supplies and embedded
advertising)
30 million kids ages 8 - 13
15 million target market. Half will go to
college. 62 have broadband access at home.
Empowering the next generation of builders
12
Growth Plan
Partner with after school programs like Sylvan,
Kaplan and Bright Horizons, publishers and retail
outlets to grow quickly to 300,000 members.
Grow the team and infrastructure to serve 3,000
members
Validate that parents value the Build-It-Yourself
vision.
Empowering the next generation of builders
13
Proof of Concept Phase Validation
  1. 3,000 customers / 20 schools
  2. 200 revenue per customer
  3. 750,000 revenue
  4. 6 years in development
  5. 80 of business is recurring
  6. 25 of revenue is on-line.

Empowering the next generation of builders
14
Proof of Execution Phase - Serve 3,000 members
Viral Marketing Program 12 interns 10
developers 15 schools 500 students /
year Network of specialists Corporate
Partnerships Close a corporate distribution
partnership that has the potential to generate
3,000 members in a year. (300K members _at_
240/year in 3-5 years)
15
Proof of Execution Phase - Serve 3,000 members
The Team We need to recruit, train and manage a
network of 30 Webcast specialists. We need to
recruit an MBA deal
maker. Infrastructure We need to automate and
expand our infrastructure.
16
Proof of Execution Phase - Serve 3,000 members
540K annual revenue (3,000 members x 15/mo)
Investment of 105K is required to
  • grow the team
  • expand infrastructure
  • develop distribution partnerships

John Galinato www.build-it-yourself.com 617-875-19
60
Empowering the next generation of builders
17
Rollout Phase - Serve 300,000 members
Retail outlets promote Build-It-Yourself
memberships because they drive sales of their
products, encourage family shopping and monetize
their on-line presence. 5,000 to 300,000 Leverage
Strategic partners place highly valued content in
retail outlets such as Home Depot, Radio Shack,
Sylvan Learning Centers, Barnes Nobel. 4 to
5,000 Leverage
Build-It-Yourself sells content branding to
highly targeted strategic partners including
publishers, after school programs manufacturers
and distributors. 1 to 4 Leverage
18
Rollout Phase - Serve 300,000 members
72M annual revenue (300,000 members x 20/mo)
Investment of 1.5 million may be required to
  • grow the team
  • brand the product
  • evolve the product and infrastructure
  • develop distribution partnerships

John Galinato www.build-it-yourself.com 617-875-19
60
Empowering the next generation of builders
19
What We Do
Product Development
Market Segmentation
Value Net
Benchmarks
Financials
Team
Comps
Empowering the next generation of builders
20
Build-It-Yourself provides after-school and
at-home workshops that inspire and empower kids
to create, design, build and invent. We engage
boys and girls in playful approaches to design,
invention and scientific inquiry. We train kids
to apply technology to solve problems.
Empowering the next generation of builders
21
Key Statistics
Validation
  • More than 16 schools served
  • 85 are repeat customers
  • Include BBN, Concord Academy, Lawrence Academy
  • Growth via word-of-mouth
  • More than 2,500 kids served
  • More than 500K revenue generated
  • Clio was thrilled. She couldn't stop talking
    about what she did.
  • Parent
  • I never thought my son would give up soccer for
    anything.
  • Parent
  • Wow!
  • Program director sitting in on a webcast from
    China.

Empowering the next generation of builders
22
The Product Invention Universe
  • Database of Content Elements
  • Online database of
  • Playful storylines and associated challenges
  • Building tricks and lessons
  • Functional building blocks that enable kids to
    build complex projects quickly.

Content
Specialists
Collaboration Tools
Empowering the next generation of builders
23
The Product Invention Universe
Content
Specialists
Collaboration Tools
  • Seth Mastin BA Computer Science, MIT
  • Rebekah Gendron MEd, Rhode Island Univ
  • Max Seidman Sophomore BBN
  • Valeria Roman Science Journalist, Argentina
  • Naseem Makiya Junior Harvard
  • Michael Hsu Sophomore, Choate
  • Liu Huan Senior, Shanghai High School
  • Joan Tarud MS Mechanical Engineering, MIT

Network of Specialists Graduates and students
from the Cornell/Harvard/MIT community who
inspire and guide kids.
Empowering the next generation of builders
24
The Product Invention Universe
Effective Collaboration Tools 2-way audio/video
webcast platform enables kids to collaborate
with peers and specialists in a global
laboratory. Wiki project management Invention
Universe
Content
Specialists
Collaboration Tools
Empowering the next generation of builders
25
Product Differentiators
1) Multidiscipline - Attract broad range of
kids 2) Build-It-Blocks (modular construction)
- Build complex projects quickly 3)
Collaboration with art and engineering students
- Build mentor relationships 4) Focus on the
presentation of ideas - Kids get positive
feedback when their projects look cool.
Empowering the next generation of builders
26
Value Proposition
High-quality technology instruction at a fraction
of the cost of traditional instruction.
  • Large and growing demand for technology training
    and constructive, after-school activities.
  • Collaboration with MIT.
  • Proven and acclaimed content.
  • Unique workshop delivery model.
  • Access to Cornell/MIT student specialists.
  • Project has attracted talented developers.

Empowering the next generation of builders
27
Value Proposition
High-quality technology instruction at a fraction
of the cost of traditional instruction. Bring
the university student TA (Teaching Assistant)
concept coupled with proven content and online
collaboration tools to kids online.
Empowering the next generation of builders
28
Proof of Concept Phase Validation
"The goal is to highlight the 'powerful ideas' in
the modules -- that is, the ideas that help you
understand how the module works, and provide you
with a foundation for building other
things." Professor Mitchel Resnick, from the MIT
Media Lab, directing the collaboration between
MIT and Build-It-Yourself to develop a database
of construction modules "Build-It-Yourself is
a fascinating program that engages students in
creative projects to design and build robots.
Both of my children --ages 7 and 9-- have
participated in Build-It-Yourself workshops and
learned greatly from it. It's very interesting
pedagogy." Dr. Fernando Reimers, Associate
Professor and Director of HGSE's International
Education Policy program, describing the
Build-It-Yourself program to colleagues at the
Harvard Graduate School of Education "Thanks
for putting on one of the best Robotics workshops
that I have been to." Science teacher at the
Jamestown Middle School, RI commenting on a
Build-It-Yourself workshop for teachers
29
Proof of Concept Phase Validation
Collaborating on-line comes naturally to the next
generation!
Empowering the next generation of builders
30
Proof of Concept Phase Assets
Proven content and supporting platforms
30 Projects
20 Lessons
100 Build-It-Blocks
Record of attracting talent from the Cornell,
MIT, Harvard and Mass Art communities. (24
contractors)
Empowering the next generation of builders
31
Market Segments
  • Opportunity
  • Summer Camps
  • 7.3 Million Kids
  • 2. After-school Time
  • Organized by schools
  • 2.5 Million Kids
  • 3. After-school Time
  • Organized by families
  • 15 Million Kids

12,000 Camps 7.3M Kids
26,569 Schools 3M Kids
450K Kids (15)
71,270 Schools 20M Kids
2M kids (10)
5 largest for-profit organizations 160K Kids
Assume 65 of kids can afford a computer and
120/year 15M Kids
Sources American Camp Association Institute for
Educational Science, US Dept. of
Education Digest of Education Statistics 2005
32
The Value Net
Customers Summer Camps After-school
programs Parents
Complementors Publishers Manufacturers Retail
Outlets Schools
Competitors Teachers Local Museums Mad
Science Bright Horizons
Build-It-Yourself
Suppliers Marratech / Google Craft Stores Radio
Shack
33
The Demand Factors
Kids
Parents
Corporations
  • 1) Kids seek rich, online experiences.
  • 2) Two-thirds of U.S. families are now headed by
    either two working parents or a single working
    parent. These families need after-school
    programs.
  • 3) Many parents want to position kids to get into
    good schools.
  • 4) Corporations are demanding a labor pool that
    is better trained in engineering and technology.

Empowering the next generation of builders
34
Customer Profiles
Camp Directors Camp Directors seek popular
programs. 7.3 million kids attend 12,000 summer
camps.
After-School Program Directors After-school
Program Directors seek educational programs. 3
million kids are enrolled in after-school
enrichment programs.
Parents Parents seek engaging, constructive
activities for their kids when not in school.
Sources American Camp Association Institute for
Educational Science, US Dept. of
Education Digest of Education Statistics 2005
Empowering the next generation of builders
35
The Value Net
Customers Summer Camps After-school
programs Parents
Complementors Publishers Manufacturers Retail
Outlets Schools
Competitors Teachers Local Museums Mad
Science Bright Horizons
Build-It-Yourself
Suppliers Marratech / Google Craft Stores Radio
Shack
36
After-School Enrichment Competitors
Cost
25-50/hr
10-25/hr
5/hr
Consistent Quality (Control over content
instructor)
37
Technology Program Competitors
38
Competitive Web Sites
39
The Value Net
Customers Summer Camps After-school
programs Parents
Complementors Publishers Manufacturers Retail
Outlets Schools
Competitors Teachers Local Museums Mad
Science Bright Horizons
Build-It-Yourself
Suppliers Marratech / Google Craft Stores Radio
Shack
40
Potential Distribution Partners
After-school Programs
Retailers
Publishers
Manufacturers
iRobot
Build-A-Bear
Mad Science
Penquin Sunset
  • Add value to products.
  • Drive new product development.
  • Sell products.
  • Monetize web presence.
  • Expand curriculum.
  • Generate new revenue.
  • Monetize web presence.

41
Potential Distribution Corporate Partners
After School Service Providers Sylvan Kaplan Brigh
t Horizons Mad Science Build-A-Bear Publishers
McGraw Hill Houghton Mifflin Penguin Sunset Marve
l Comics Electronic Arts
Retailers Radio Shack Home Depot Walmart Manufact
urers Microsoft Xbox Nintendo Wii MidWest
Hobbies Futaba
Empowering the next generation of builders
42
Everyone Wins in the Build-It-Yourself Eco-system
Parents
- See their kids engaged and excited! -
Collaborate and work with their kids.
Kids
Corporate Partners
- Have fun! - Solve problems creatively. -
Integrate multiple disciplines. - Reinforce core
curricula. - Collaborate and share ideas. -
Develop important tech skills.
  • - Deliver high-quality programs.
  • Reach kids and parents at-home.
  • Develop new revenue streams.
  • Differentiate.
  • Develop future employees.
  • Affiliate with a do-good program.

Investors
- Receive an attractive ROI. - Help solve a major
social problem.
Empowering the next generation of builders
43
Current Model
Going Forward Model
  • On-site
  • Fee per workshop
  • In-person specialists
  • Word-of-mouth distribution
  • New England area
  • On-line
  • Subscription based revenue
  • On-line specialists
  • Distribution partnerships
  • National and international

Empowering the next generation of builders
44
Growth Phases - Milestones
Proof of Concept Phase Proof of Execution Phase Roll Out Phase
Strategic 2,500 students paid 200 for BIY workshops. (10-20/hr) Secure 100K investment. Grow from 50 on-line customers to 3,000 online members _at_ 10/mo. Grow from 3,000 online members to 300,000 online members. Show profitability.
Infrastructure Content and supporting online platforms developed. Collaboration tools tested. Development team recruited. Develop Invention Universe to serve 3000 members. Develop program to recruit, train and manage webcasters in university communities. Expand content. Automate member support.
Distribution Strong testimonials and repeat customer relationships built. Initiate viral marketing program. Close corporate distribution partnership gt 50K Multiple distribution deals in place.
44
45
Proof of Execution Phase Strategy / Assets
  • Strategy
  • 1. Hire and MBA business developer to lead the
    company.
  • 2. Close a corporate distribution partnership
    that has the potential to generate 3,000 members
    in a year.
  • (300K members _at_ 240/year in 3-5 years)
  • Assets (2012)
  • Repeat customer base (500 kids/yr at 200/kid.)
  • Content and supporting platforms.
  • Access to network of developers and Webcast
    specialists from Cornell, Mass Art and MIT
    communities

Empowering the next generation of builders
46
Proof of Execution Phase - Serve 3,000 members
47
Proof of Execution Phase - Serve 3,000 members
91K - Worst case cash flow
Empowering the next generation of builders
48
Proof of Execution Phase - Serve 3,000 members
Revenue 156K - Online rev 84K - Onsite
rev 72K Expense 239K -Fixed cost 204K
-Webcast cost 35K Worst case cash
flow (91K) Break even Month 10 Capital
Required 105K To grow from 15K gt 360K
annualized online revenue.
49
Rollout Phase - Financials
5-year Target 300,000 customers gt 79M revenue
50
Rollout Phase - Financial Assumptions
1) Sales There are 6 revenue streams 1. Online
memberships are the largest revenue stream. 2.
Printed pieces in POS displays drive online
memberships. 3. Workshops in after school
programs drive online memberships. 4. Ecommerce
results from projects that require parts, tools
and supplies. 5. Advertising revenue results
from website traffic. 1/2 of members are repeat
customers or from a conversion from printed
pieces that are placed in schools, store
counters and book stores. (0 acquisition
cost) 1/2 of members will come from effective,
leveraged, distribution strategies. 2)
Membership fee The membership fee is equivalent
to popular multiplayer game subscriptions. 10M
WOW gamers pay 13-15/mo Guitar Master -
29/mo http//www.icelan.com/everquest/part3/everq
uest_review_p3.htm Members get access to project
plans, Webcast lessons and feedback, online
exhibits and project portfolios, Ecommerce
discounts, and master builder certifications. For
a membership fee of 240/yr, typically a member
would spend 166 hours in groups of 8 members at a
cost of 1.44/hr
51
Rollout Phase - Financial Assumptions
3) Customer acquisition cost is a key
assumption Customer acquisition cost is zero for
printed pieces for 1/2 of customer base. The
customer acquisition cost for 1/2 of customer
base is 35/member 29 - Amazon.com 60 - Credit
Cards 34 - Various E-Commerce Sites
http//retailindustry.about.com/library/weekly/aa
122599a.htm 31 - Typical Retail
Customer http//www.acroterion.ca/Knowledge_Base_C
ustomer_Acquisition_Costs.html 4) Member /
Webcaster ratio is a key assumption Live
Webcasting is a differentiator. It's fundamental
to success. BIY is selling an opportunity for
kids to build relationships with Webcast 'tutors'
from university communities such as MIT and
Harvard. This plan assumes 80 members/tutor in
Yr1 to 100 members/tutor in Yr 3. In practice,
members will be online simultaneously with a
Webcast 'tutor' and other members in groups of 1
- 16. Assume each member is online an average of
4 hours per month or one 1-hr workshop/wk. Then a
webcaster would have to serve 400 member-webcast
hours per month. (100 members x 4 hours /
month). If we assume the average webcast room
size will be 10 members, then the webcaster
would have to serve 40 hours per month or 10
hours per week. Students at MIT are not allowed
to work more than 20 hours per week in a UROP
program. We are proposing a firm commitment for
10 hours per week. This is less than it would
take to participate on an athletic team.
52
Rollout Phase - Financial Assumptions
5) Potential (Can this be a 50M
business?) There are 20 million kids between the
ages of 8 - 12 in the US. 1.5 market
penetration would yield the following
results 78,625,000 Revenue 57,116,969
Expense 21,508,031 Earnings (before tax) 27
Earnings / Revenue Ratio (before tax) Bright
Horizons has a 5.4 Earnings / Revenue ration
(after tax) McGraw Hill Publishing has a 14.4
Earnings / Revenue ration (after tax) 6)
Productivity 4 college student Webcast
contractors _at_ 10hrs/wk 1 employee 4 college
student Webcast contractors _at_ 10/hr - 12/hr are
paid 20K/yr - 24K/yr Full time base salaries
are 60K - 110K/yr In Year 3, this plan
generates revenue of 101,378 per
employee Starbucks productivity is
55K/employee Microsoft productivity is
500K/employee
53
Rollout Phase - Financial Assumptions
7) Gross Profit Margins Gross Margin Gross
Profit/Sales 52 Build-It-Yourself (25/hr rev -
12/hr webcast fee)/25/hr Bright Horizons
(BFAM) an after school service program, has a
1.03B market valuation 22 gross margin (44 is
industry average) 13 EBITA (19 industry
average) 40K revenue / employee From Fidelity
(Dec 06) Microsoft (MSFT) has a 294B market
valuation 84 gross margin (74 is industry
average for software) 41 EBITA (27 is industry
average) 698K revenue / employee From Fidelity
(Dec 06) McGraw Hill Companies (MHP) has a 24B
market valuation 61 gross margin (31 is
iindustry average for publishers) 24 EBITA (12
is industry average) 314K revenue / employee 8)
Cost / Hr of Instruction BIY can deliver
consistent, high-qualtiy instruction at lt1/2
price of typical instruction. If member pays
10/mo and does a 1hr workshop each weekend,
that member is paying 2.50/hr for live
collaboration. In addition the member gets
access to on demand content and web space to
post projects. 10/hr - babysitter 10-20/hr -
camp or after school enrichment program 10/hr -
cost of public school (per GLTS inner city school
2006 budget) 50/hr - private tutor
54
The Build-It-Yourself team is experienced and
dedicated to bringing our highly valued programs
online.
Responsibilities
Team Members Background
Build-It-Yourself will recruit a business
development team John Galinato Content
Management MEE, Cornell University. More than
25 years of software project management
experience. Liu Huan Platform Management MIT
class of 2010, Computer Science and Electrical
Engineering Build-It-Yourself will recruit a
workshop delivery team of students from
prominent Universities. http//www.build-it-yours
elf.com/support/support-biy/biy-team.html
Manage business development Specify and manage
courseware. Specify and manage platform
development Manage network of workshop leaders
and specialists
55
Build-It-Yourself has a long history of
attracting talented, highly skilled contractors.
Responsibilities
Contractors Background
Pete Buletza Engineer BS in Computer Science,
Harvard University. 10 years experience with the
CIA, Intuit, and start-up companies developing
Internet based technology. Seth Mastin
Engineer BS in Computer Science, MIT 2005.
Rebekah Gendron Teacher Masters Degree in
Technology Education, University of Rhode Island.
Technology Coordinator in Rhode Island School of
the Future. Ann Butler Content Advisor MEd,
Harvard Graduate School of Education. 10 years
experience in training and teaching. Presently
writes for the Boston Globe.
Platform Architecture and Development. Platform
Architecture and Development. Content
development and webcasting Lesson plan
development
56
Comps
Empowering the next generation of builders
57
Build-It-Yourself seeks partners who can help
bring our unique online learning environment
direct to kids and their parents at home.
John Galinato 617-875-1960 john_at_build-it-yourself.
com www.build-it-yourself.com
Empowering the next generation of builders
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