xFolio

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xFOLIO Dan Manian, CEO Shawn Chen, CMO Kevin
Robinson, CTO Sanjee Singla, CFO MSE 273
Technology Venture Formation Gate 1
Presentation Saturday, 13 October 2007
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(No Transcript)
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• Pain Points
• Cannot find the right information at the right
  time
• Have too much disorganized paper
• Dont have the latest information

• Users
• Executives in large enterprises who require large
  amounts of information to support their decisions

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The Graveyard
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How we are going to do it better

• Desirability focus on critical user features
• Specific use cases
• High usability with almost no learning curve
• UI designed around devices input methods (touch
  screen and stylus input)
• No content problem because users can load their
  own documents
• Synchronization is a core feature of this device
• Present documents in a format people are familiar
  with (8.5x11)
• Take advantage of wireless networks already in
  place
• Faster access times with instant-on capabilities
  and sufficient processing power

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How we are going to do it better

• Desirability focus on critical user features
• Specific use cases
• High usability with almost no learning curve
• UI designed around devices input methods (touch
  screen and stylus input)
• No content problem because users can load their
  own documents
• Synchronization is a core feature of this device
• Present documents in a format people are familiar
  with (8.5x11)
• Take advantage of wireless networks already in
  place
• Faster access times with instant-on capabilities
  and sufficient processing power

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(No Transcript)
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User Feedback

• What I like about the xFolio is that it allows
  you to have all the information for a meeting
  but be able to easily access the one piece of
  information you want at the time you want to
  discuss it. Patty Stonesifer, CEO, Bill and
  Melinda Gates Foundation and former Vice
  President of Microsofts Consumer Division
• Ive wanted this for years. - Michael
  Kinsley, Founding Editor of online journal Slate
• To have all of that information on the
  device instead of on all of my handwritten notes
  and folders would be very useful. - Prof.
  Siegfried Hecker, former director Los Alamos
  National Laboratory
• If this was available, this is what I would have
  tried to buy. Professor Thomas Kenny, DARPA
  Program Manager, ME Design Division, Stanford
  University

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How big is the problem for users?

• 60 of recent interviewees would use it
• Most desirable functions
• Give me an organization tool for documents and
  notes (40)
• Replace my notepad (40)
• Replace my paper documents with a highly readable
  display device (30)
• Give me real-time data on my enterprise (30)

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Opportunity Matrix
Dashboard
Notebook
Communication
Archive
Document
Usage Scenario
Meeting Desk On-the-go Home
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• Fortune 500 approx. 8.5 M employees
• 38 M Americans working for SMEs with 20-500
  employees
• 46.5 million available users

• Assume F500 is initial user base
• 45 of large enterprises deploying or evaluating
  mobile apps
• Based on interviews, 60 of businesspeople would
  use an xFolio
• 8.5 million users x 0.45 x 0.6
• 2.3 million users

Served Available Market
TotalAvailableMarket
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Assuming 1,000 price point in years 1, 2, 3
TAM 46.5 billion
SAM 2.3 billion
Initially target upper-level managers in
F500 50,000 users Target Market size 50
million
TotalAvailableMarket
ServedAvailableMarket
Target Market
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Who are the real customers (in the beginning)?

• Enterprise Software Vendors
• SAP, Oracle, Salesforce.com, Epicor
• Customer Pain Points
• Under appreciation by executives of enterprise
  software is a strategic risk (software tax)
• Need to expand license base to increase revenues
• Need to gain competitive edge in tough market
• ? These pain points are significantly more acute
  than user pain points, thus ERP vendors are
  willing to pay more to solve them.

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Business Models
SAP
Enterprise Client
Product
Product
xFolio
(1)

Licenses
ERP Vendors (SAP, Oracle, Epicor)
Enterprise Client
xFolio
Product
Product
(2)
Licenses

xFolio
Enterprise Client
Product
(3)

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Customer Acquisition

• Our customer acquisition process is tricky
  because we must cater to both customer and
  end-user
• Interviews show that demos are key to end-user
  adoption

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Sales StrategyDirect Sales
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Viral Marketing
Execs
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Value is in the Software

• Form factor is important to the success of
  device, but real value is in software
• All the features of the device will meet three
  criteria
• Desirability - A task the user wants to do
• Usefulness - Doing the task on this device is an
  advantage
• Usability - The task is convenient to perform on
  this device
• Redefine the metaphor for interacting with a
  tablet-like device, increasing all three of the
  above criteria for the entire appliance
• For a year we have been working on an intuitive
  user interface based on touch and stylus input
• When you gave me actions to do, my first
  reaction was no sweat, theyre obvious. - Prof.
  Terry Winograd, CS HCI Group, Stanford University

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Why Hardware Too?

• The hardware makes the device more attractive to
  the user
• Build a brand for ourselves
• Make entire hardware/software package more
  appealing
• Current hardware solutions not our final vision
  for this device
• Conform to our software specifications
• Unnecessary expense to sell devices which are
  overpowered for the applications they run

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OEM Strategy and Important Specifications

• Initial device built on OEM hardware
• Decreases time to market and initial burn rate
• Likely pick current tablet PC lines from
  manufacturers such as Toshiba, HP, Fujitsu,
  Motion Computing
• Most important specifications are
• Screen size and readability
• Weight
• Thickness
• Battery life
• Connectivity (WiFi, Bluetooth, etc.)
• Flexible specifications are
• Processing power
• Additional hard buttons
• Expansion slots/ports

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Competitive Analysis

• Laptops / Tablets
• Smartphones
• eReaders
• UMPCs
• Paper
• Custom solutions from SAP, Oracle etc.

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Competitive Analysis
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Switching Costs

• Operations Support
• Upfront Training Costs
• Ongoing IT support
• Low remaining costs
• Supplementary device no major transfers
• Synchronize docs and schedule

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Dependencies

• Low technical software dependency
• No unproven elements to software purely new
  positioning and customization
• Low technical hardware dependency
• Use OEM/limited ODM components
• Dependency on few customers
• SAP, Oracle, SalesForce.com, Epicor
• Mitigation Relationships, Concurrent
  Negotiations, Target Fast Followers

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1st Proxy Research in Motion

• Why RIM?
• Enterprise Distribution
• Software Developer
• Hardware sold with software
• Biggest Differences
• RIM sells to a broader subset of enterprise
• We expect slower growth rates
• We aim to use Enterprise Software sales channels
• Lower distribution costs
• Use RIM for estimates of SGA

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2nd Proxy Palm

• Why Palm?
• Software Developer
• Hardware sold with software
• Made successful PDAs
• Biggest Differences
• Palm sells consumer products
• Completely different sales channels
• Use Palm to aid in manufacturing and RD metrics

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Metrics (from Proxies)

• RD (from Palm)
• 14 down to 10 over time
• Heavy investment maintains first-mover advantage
• SGA (from RIM)
• 24 to 28 over time
• Increases due to direct sales in Year 3
• COGS (from Palm)
• 54-68 reduces with time Economy of Scale

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Path to Profitability
All numbers in 000s (except Units Sold and s)
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Path to Profitability
All numbers in 000s (except Units Sold)
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Path to Profitability
All numbers in 000s (except Units Sold)
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Profit Projections, Q1-2008 to 4Q-2012
,000s
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Thank You Shawn Chen, Dan Manian, Kevin
Robinson, Sanjee Singla
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Appendices

• Fortune 500 companies ranged in size from 1,495
  to 204,250 employees (median, 16,730)
  (http//content.healthaffairs.org/cgi/content/full
  /20/3/181)

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Forrester, June 2006, Data Overview The State Of
Enterprise Telecom And Network Adoption
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(No Transcript)
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Xfolio vs. Laptops
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Advertising for Enterprise Sales

• US Senior Executives Whose Professional
  Purchasing is
• Influenced by Advertising (September 2005 -
  January 2006)

n 2272 Ipsos MORI (Market Opinion Research
Intl), May 2006
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Daily Internet-Related Work Routines of US
C-Level and Senior Management Executives
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xFolio The Concept