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@build-it-yourself.com
www.build-it-yourself.com
Empowering the next generation of builders
What We Do …
Inspire and guide kids to
create, design, build and invent.
Empowering the next generation of builders
The Product
Content
Specialists
Collaboration
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
Product Differentiators
1) 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
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
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
Growth Plan
2-4 years
Rollout
$50M+ revenue
150,000+ members
2013
Thru
2012
Proof of Execution
1,000+ members
Proof of Concept
$600K+ revenue
3000+ customers
Validate that
parents value the
Build-It-Yourself
vision.
Grow the team and
infrastructure to serve
1,000+ members
Partner with after school programs like
Sylvan, Kaplan and Bright Horizons,
publishers and retail outlets to grow
quickly.
Empowering the next generation of builders
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
Proof of Concept Phase - Validation
30
Projects
20
Lessons
Proven content and supporting
platforms
100
Build-It-Blocks
Record of attracting talent from the
Cornell, MIT, Harvard and Mass Art
communities.
Empowering the next generation of builders
Proof of Execution Phase - 2013
Raise our valuation
Strategy:
1. Hire an MBA business developer.
2. Evolve our content and supporting platforms.
3. Close corporate distribution partnerships.
Assets (2012):
1. Repeat customer base. (500 kids/yr. at $200/kid)
2. Well-tested content and supporting platforms.
3. Access to network of developers and Webcast specialists from
Cornell, Mass Art and MIT communities.
Empowering the next generation of builders
How big is our market?
College bound Kids:
Every kid who goes to college
should be technology fluent and
therefore is a potential customer.
30 million
kids
ages 8 - 13
15 million
target market.
Half will go
to college.
62% have
broadband
access at
home.
300K Members:
We need 2% of target US market to
build a $72M business.
(300K x $240/yr including supplies
and embedded advertising)
Empowering the next generation of builders
Growth Plan
2017
Rollout
$72M revenue
300,000 members
2013
2011
Proof of Execution
$540K revenue
3,000 members
Proof of Concept
$100K revenue
500 customers
Validate that
parents value the
Build-It-Yourself
vision.
Grow the team and
infrastructure to serve
3,000 members
Partner with after school programs like
Sylvan, Kaplan and Bright Horizons,
publishers and retail outlets to grow
quickly to 300,000 members.
Empowering the next generation of builders
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
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 @ $240/year in 3-5 years)
Empowering the next generation of builders
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.
Empowering the next generation of builders
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
617-875-1960
Empowering the next generation of builders
Rollout Phase - Serve 300,000 members
(Build-It-Yourself)
(Partners)
Build-It-Yourself sells content
branding to highly targeted strategic
partners including publishers, after
school programs manufacturers and
distributors.
Strategic partners place highly
valued content in retail outlets such
as Home Depot, Radio Shack,
Sylvan Learning Centers, Barnes &
Nobel.
1 to 4 Leverage
4 to 5,000 Leverage
(Retail)
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
Empowering the next generation of builders
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
617-875-1960
Empowering the next generation of builders
Business Plan Support Slides
What We Do
Product Development
Market Segmentation
Value Net
Benchmarks
Financials
Team
Comps
Empowering the next generation of builders
What We Do …
Build-It-Yourself provides afterschool 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
Our Workshops Are In Demand
Key Statistics
• More than 16 schools served:
– 85% are repeat customers
– Include BB&N, Concord
Academy, Lawrence
Academy
– Growth via word-of-mouth
• More than 2,500 kids served
• More than $500K revenue
generated
Validation
“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
The Product – Invention Universe
Content
Specialists
Collaboration
Tools
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.
Empowering the next generation of builders
The Product – Invention Universe
Content
Specialists
Collaboration
Tools
Network of Specialists:
Graduates and students from the
Cornell/Harvard/MIT community
who inspire and guide kids.
• Seth Mastin – BA Computer Science, MIT
• Rebekah Gendron – MEd, Rhode Island Univ
• Max Seidman – Sophomore BB&N
• 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
Empowering the next generation of builders
The Product – Invention Universe
Content
Specialists
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
Collaboration
Tools
Empowering the next generation of builders
Product Differentiators
1) Multidiscipline
- Attract broad range of kids
2) Build-It-Blocks (modular construction)
- Build complex projects quickly
Content
Specialists
Collaboration
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
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
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
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 BuildIt-Yourself workshop for teachers
Empowering the next generation of builders
Proof of Concept Phase Validation
Collaborating on-line comes naturally to the next generation!
Empowering the next generation of builders
Proof of Concept Phase Assets
30
Projects
20
Lessons
Proven content and supporting
platforms
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
Market Segments
Opportunity:
Summer
Camps
Summer
Camps
Private School
Private After-school
23 Million
Kids
Grades 3 to 8
Public School
Public After-school
Commercial After-school
@ Home
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
1. 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
Assume 65% of
kids can afford a
computer and
$120/year
15M Kids
Empowering the next generation of builders
Sources:
American Camp Association
Institute for Educational Science,
US Dept. of Education
Digest of Education Statistics: 2005
The Value Net
Customers:
Summer Camps
After-school programs
Parents
Competitors:
Teachers
Local Museums
Mad Science
Bright Horizons
Build-It-Yourself
Complementors:
Publishers
Manufacturers
Retail Outlets
Schools
Suppliers:
Marratech / Google
Craft Stores
Radio Shack
Empowering the next generation of builders
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
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
The Value Net
Customers:
Summer Camps
After-school programs
Parents
Competitors:
Teachers
Local Museums
Mad Science
Bright Horizons
Build-It-Yourself
Complementors:
Publishers
Manufacturers
Retail Outlets
Schools
Suppliers:
Marratech / Google
Craft Stores
Radio Shack
Empowering the next generation of builders
After-School Enrichment Competitors
Cost
$25-$50/hr
Build-It-Yourself
Interns
$35/hr
Private Tutors
ID Tech Camps
$10-$25/hr
Local Museums
Sports Programs
Mad Science
Invent Now Kids
First LEGO
$5/hr
Build-It-Yourself
Members
$5/hr
Empowering the next generation of builders
Consistent Quality
(Control over
content + instructor)
Technology Program Competitors
# kids
served
Locations
Gross
revenue
$/hour per
student
Artistic /
Playful
Collaborate
online
Build-ItBlocks
Build-It-Yourself - Camp
Build-It-Yourself - Afterschool
Build-It-Yourself - @Home
440
170
1
1
$51K
$28K
$18.00
$9.17
Yes
Yes
Yes
Yes
Yes
Yes
300,000
1
$50M+
$2.50
Yes
Yes
First LEGO League G3-8
88,000
8,800
$3.5M
$5.00
No
US First K-12
First LEGO Camp
130,000
10,700
1
$15M
$8.33
MOS / Robotech
1
Focus on
presentation Notes
Concord Academy Summer Camp
Yes
Yes
Brookline, MA Public School partly
subsidized
Yes
Yes
5-year plan
No
No
Yes
No
No
No
No
No
No
Yes
No
Manchester, NH: Non-profit, 25,000
volunteer team leaders
International
$28.57
No
No
No
No
Boston,MA: Robotech 2D game course (1
day) Director of MOS in 2004 said afterschool w orkshops are losing money.
Manchester, NH: First School Camp
requires one chaperone per group of ten.
Mad Science (w/o facility)
600,000
166
$25M
$7.93
No
No
No
No
International, based in Montreal, Canada,
Price does not reflect added fees for
facility.
iD Tech Camps
30,000
73
$21M
$18.00
No
No
No
No
National, based in Campbell, CA. Held in 50
universities. Family business. Noah
Boskey took Flash course
32
$2M
$17.68
No
No
No
No
National, Graphic Design; Animation and
Digital Video Production; Video Game
Creation; Robotics. Jonathan Heckerman
took game course,
$16.00
No
No
No
No
Serves 200K kids in 600 elementary
schools. Offers content through school
partnerships.
Children's Tech Wkshp
Science Adventurers ….
KLC School Partnerships
200,000
600
Empowering the next generation of builders
Competitive Web Sites
Online Sites
Build?
Neo Pets
Member
fee
Free
Resume
builder
No
Portfolio
Virtual
Work w/
mentors
No
No
Social
Games
networking
Yes
Yes
Webkins
Club Penguin
Free
$7/mo
Simple
No
No
No
No
No
No
No
Yes
Yes
No
Yes
Guia
Free
No
No
No
Art
Yes
Yes
LEGO Bionicle
Free
Yes
No
No
No
Yes
Yes
Scratch
Free
Yes
No
No
Programs Yes
Yes
BIY Invention Universe
$10/mo
Yes
Yes
Yes
Projects
Yes
Yes
Comments
Embeded ads, keep
virtual pets
Buy stuffed toys
Disney, games,
socializing, secure
Avatars, games, bit
of everything
Stories, games,
build
MIT, galleries,
challenges
Empowering the next generation of builders
The Value Net
Customers:
Summer Camps
After-school programs
Parents
Competitors:
Teachers
Local Museums
Mad Science
Bright Horizons
Build-It-Yourself
Complementors:
Publishers
Manufacturers
Retail Outlets
Schools
Suppliers:
Marratech / Google
Craft Stores
Radio Shack
Empowering the next generation of builders
Potential Distribution Partners
Publishers
After-school
Programs
Retailers
Mad Science
Build-A-Bear
• Expand
curriculum.
• Generate new
revenue.
• Monetize web
presence.
Manufacturers
iRobot
Penquin
Sunset
• Monetize web
presence.
Empowering the next generation of builders
• Add value to
products.
• Drive new
product
development.
• Sell products.
Potential Distribution Corporate Partners
After School Service Providers
Retailers
Sylvan
Kaplan
Bright Horizons
Mad Science
Build-A-Bear
Radio Shack
Home Depot
Walmart
Publishers
McGraw Hill
Houghton Mifflin
Penguin
Sunset
Marvel Comics
Electronic Arts
Manufacturers
Microsoft Xbox
Nintendo Wii
MidWest Hobbies
Futaba
Empowering the next generation of builders
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
Scaling to a Global Market
Current Model
•
•
•
•
•
On-site
Fee per workshop
In-person specialists
Word-of-mouth distribution
New England area
Going Forward Model
•
•
•
•
•
On-line
Subscription based revenue
On-line specialists
Distribution partnerships
National and international
Empowering the next generation of builders
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 @ $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 >
$50K
Multiple distribution deals
in place.
Empowering the next generation of builders
44
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 @ $240/year in 3-5 years)
Assets (2012):
1. Repeat customer base (500 kids/yr at $200/kid.)
2. Content and supporting platforms.
3. Access to network of developers and Webcast specialists from
Cornell, Mass Art and MIT communities
Empowering the next generation of builders
Proof of Execution Phase - Serve 3,000 members
Revenue
# new members (Key
Assumption)
Total members
Mo 1
Mo 2
Mo 3
Mo 4
Mo 5
Mo 6
Mo 7
Mo 8
Mo 9
Mo 10
Mo 11
Mo 12
Total
-
-
20
30
50
80
120
200
350
500
700
950
-
-
20
50
100
180
300
500
850
1,350
2,050
3,000
10 $
10 $
10 $
10 $
10 $
10 $
3,000
Monthly fee
$
New revenue per month
$
$
200 $
500 $
1,000 $
1,800 $
3,000 $
5,000 $
8,500 $ 13,500
$ 20,500 $ 30,000 $
84,000
Existing on-site revenue
$
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
$
72,000
Total Revenue
$
6,000 $
6,000 $
6,200 $
6,500 $
7,000 $
7,800 $
9,000 $ 11,000 $ 14,500 $ 19,500
Expenses
Fixed Expenses
10 $
-
10 $
$
Mo 1
-
Mo 2
Mo 3
Mo 4
Mo 5
Mo 6
Mo 7
Mo 8
10 $
Mo 9
10
6,000
Mo 10
$
10 $
6,000 $
10
6,000 $
$ 26,500 $ 36,000 $ 156,000
Mo 11
Mo 12
Total
Rent, Utilities, ISP, Tax, Debt,
Supplies, Misc
Labor, John G, Liu Huan, Dev
$
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000 $
6,000
$
6,000 $
6,000 $
72,000
$
8,000 $
8,000 $
8,000 $
8,000 $
8,000 $
8,000 $
8,000 $
8,000 $
8,000 $
8,000
$
8,000 $
8,000 $
96,000
Business Developer
(Key Assumption)
Total
$
3,000 $
3,000 $
3,000 $
3,000 $
3,000 $
3,000 $
3,000 $
3,000 $
3,000 $
3,000
$
3,000 $
3,000 $
36,000
$ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000
$ 17,000 $ 17,000 $ 204,000
Variable Expense
Members / mentor
50
50
50
50
50
50
60
70
80
100
100
100
# mentors
0
0
0
1
2
4
5
7
11
14
21
30
# webcast hrs / member / mo
4
4
4
4
4
4
4
4
4
4
4
4
10
10
10
10
10
10
10
10
10
10
10
10
0
0
8
20
40
72
120
200
340
540
820
1200
10 $
10 $
10 $
10 $
10 $
10 $
10 $
10 $
10 $
10
$
80 $
200 $
400 $
720 $
1,200 $
2,000 $
3,400 $
5,400
$
10
10
10
10
10
10
# members / webcast
# classes / mo
# classes / mentor / mo
compensation / hr
$
Total mentor compensation
$
-
$
-
$
10 $
10
8,200 $ 12,000 $
33,600
Management
Mentors / Manager
# managers
# hrs / mo / mgr
compensation / hr
10
10
10
10
10
10
1
1
1
1
1
1
1
1
1
1
1
2
10
10
10
10
10
10
10
10
10
10
10
10
$14
$14
$14
$14
$14
$14
Mentor mgmt compensation
$14
$14
$14
$14
$14
$14
$140
$140
$140
$140
$140
$140
$140
$70
$100
$149
$189
$287 $
1,775
Total variable expense
$140
$140
$220
$340
$540
$860
$1,340
$2,070
$3,500
$5,549
$8,389
$12,287 $
35,375
Total fixed and variable expense
$ 17,140 $ 17,140 $ 17,220 $ 17,340 $ 17,540 $ 17,860 $ 18,340 $ 19,070 $ 20,500 $ 22,549
Monthly Cash Flow
$ (11,140) $ (11,140) $ (11,020) $ (10,840) $ (10,540) $ (10,060) $
Cum Cash Flow
$ (11,140) $ (22,280) $ (33,300) $ (44,140) $ (54,680) $ (64,740) $ (74,080) $ (82,150) $ (88,150) $ (91,199) $ (90,088) $ (83,375)
(9,340) $
(8,070) $
(6,000) $
Empowering the next generation of builders
$ 25,389 $ 29,287 $ 239,375
(3,049) $
1,111 $
6,713
Proof of Execution Phase - Serve 3,000 members
$40,000
$60,000
$35,000
$40,000
$30,000
$20,000
$25,000
$1
$20,000
2
3
4
5
6
7
8
9
10
$(20,000)
$15,000
$(40,000)
$10,000
$(60,000)
$5,000
$(80,000)
$1
2
3
4
5
6
7
8
9
10
11
Month After Investment
Revenue
Fixed Expense
Variable Expense
12
$(100,000)
Month after investment
Revenue
$91K - Worst case cash flow
Empowering the next generation of builders
Expense
Cash Flow
11
12
Proof of Execution Phase - Serve 3,000 members
Revenue
- Online rev
- Onsite rev
Expense:
-Fixed cost
-Webcast cost
$156K
$84K
$72K
$239K
$204K
$ 35K
Worst case cash flow:
($91K)
Break even:
Month 10
Capital Required
$105K
To grow from $15K => $360K annualized online revenue.
Empowering the next generation of builders
Rollout Phase - Financials
5-year Target: 300,000 customers => $79M revenue
Conclusions
Revenue
Expense
EBITDA
% Earnings / Revenue
Profile
# Online Members
Revenue / Member
# Employees
# Webcasters (tutors)
Revenue/Employee
Annualized #'s based on month 12 of each year.
Yr 1
Yr 2
Yr3
Yr4
Yr5
$
739,500 $ 2,717,500 $ 7,502,000 $ 25,470,000 $ 78,625,000
$
959,790 $ 2,475,850 $ 6,621,408 $ 18,955,849 $ 51,593,173
$
(220,290) $ 241,650 $
880,592 $ 6,514,151 $ 27,031,827
-30%
9%
12%
26%
34%
$
$
Yr 1
3,000
247 $
6
10
87,000 $
Yr 2
10,000
272 $
14
32
123,523 $
Yr3
28,000
268 $
31
128
119,079 $
Empowering the next generation of builders
Yr 4
96,000
265 $
75
480
130,615 $
Yr 5
300,000
262
151
1,280
166,932
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/everquest_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
Empowering the next generation of builders
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/aa122599a.htm
$31 - Typical Retail Customer
http://www.acroterion.ca/Knowledge_Base_Customer_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.
Empowering the next generation of builders
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 @ 10hrs/wk = 1 employee
4 college student Webcast contractors @ $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
Empowering the next generation of builders
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 <1/2 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
Empowering the next generation of builders
The Build-It-Yourself team is experienced and dedicated
to bringing our highly valued programs online.
Team Members – Background
Responsibilities
Build-It-Yourself will recruit a business development team
Manage business development
John Galinato – Content Management
MEE, Cornell University. More than 25 years of software project
management experience.
Specify and manage courseware.
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-yourself.com/support/support-biy/biy-team.html
Specify and manage platform
development
Manage network of workshop
leaders and specialists
Empowering the next generation of builders
Build-It-Yourself has a long history of attracting
talented, highly skilled contractors.
Contractors – Background
Responsibilities
Pete Buletza – Engineer
BS in Computer Science, Harvard University. 10 years experience with
the CIA, Intuit, and start-up companies developing Internet based
technology.
Platform Architecture and
Development.
Seth Mastin – Engineer
BS in Computer Science, MIT 2005.
Platform Architecture and
Development.
Rebekah Gendron – Teacher
Masters Degree in Technology Education, University of Rhode Island.
Technology Coordinator in Rhode Island School of the Future.
Content development and
webcasting
Ann Butler – Content Advisor
MEd, Harvard Graduate School of Education. 10 years experience in
training and teaching. Presently writes for the Boston Globe.
Lesson plan development
Empowering the next generation of builders
Comps
In $K
BIY
Sales
Cost of Sales
Gross Operating Profit
Selling, General, Admin Exp
R&D
Operating Income (EBIT)
100
50
50
45
5
87
100
100
100
100
100
100
Market Cap
Annual Sales
Price / Earnings
Price / Sales
K-12, Inc.
50%
50%
45%
5%
13%
In $M
K-12 (Q1-11)
193
108
85
58
6
21
LRN
193
193
193
193
193
193
56%
44%
30%
3%
11%
$1,140M
$680M
1.7
Nov-11 Q1-2012
In $M
New Oriental Ed (FY11)EDU
558
558
206
558
37%
352
558
63%
238
558
43%
0
558
0%
114
558
20%
$3,990M
$558M
31.6
7.2
LRN
http://www.marketwatch.com/story/k12-inc-reports-first-quarter-fiscal-2012-results-2011-11-15
New Oriental Education 11-May EDU
http://www.thestreet.com/quote/EDU/details/company-profile.html
Gross Operating Profit
Airline Industry
5%
Software Industry
90%
Retail
15% - 50%
Publishing
50% - 60%
General Media (best of Pub)
80%
Build-It-Yourself Membership
Build-It-Yourself On-site
76% ($50/hr rev : 1 wkshp leader @$10/hr + mgmt exp)
71% ($125/hr rev : 2 wkshp leaders @$12 + mgmt + supplies @ $1/student exp)
Empowering the next generation of builders
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@build-it-yourself.com
www.build-it-yourself.com
Empowering the next generation of builders