(SET) Catalog

Transcription

(SET) Catalog

S ET
social.environmental.technologies
JUNE 2005
Number 1
The United Nations
Millennium Development Goals
www.set-info.com
THE INFORMATION IN THE SET CATALOG AND ON THE SET WEBSITE IS PROVIDED “AS-IS,” “AS AVAILABLE,” AND
ALL WARRANTIES, EXPRESS OR IMPLIED, ARE DISCLAIMED. THE INFORMATION AND ORGANIZATIONS DESCRIBED
MAY CONTAIN ERRORS, PROBLEMS OR OTHER LIMITATIONS. WE AND OUR AFFILIATED PARTIES HAVE NO LIABILITY
WHATSOEVER FOR YOUR USE OF ANY INFORMATION OR ADVICE, WHETHER ORAL OR WRITTEN, NOR ARE WE
RESPONSIBLE FOR ANY DAMAGES THAT RESULT FOR ANY REASON. THIS DOCUMENT, THE SET WEBSITE, AND THE
INFORMATION IN THEM WOULD NOT BE PROVIDED WITHOUT SUCH LIMITATIONS.
The SET Catalog and website, and the information contained herein, do not constitute an offer or a solicitation
of an offer for sale of any securities. None of the information contained herein is intended to be, and shall not
be deemed to be, incorporated into any securities-related filings or documents.
The SET Catalog includes statements about organizations, ventures, companies, or other entities concerning their
operations, prospects, strategies, financial condition, future economic performance and demand for products or
services, as well as their intentions, plans and objectives, that are forward-looking statements. These statements
are based upon a number of assumptions and estimates which are subject to significant uncertainties beyond
our control, and in many cases beyond the control of the organizations described.
The SET Catalog and SET website contain links to other websites. Inclusion of any linked website does not imply
approval or endorsement of the linked site by us. If you decide to access these third-party sites, you do so at
your own risk.
All legal proceedings arising out of or in connection with this Agreement shall be brought solely in San Francisco,
California, USA.
The SET Catalog
Number 1, June 2005
Copyright © 2005 Social Venture Technology & Consulting, Inc. (SVT ) and Collective Intelligence (CI). All rights reserved.
www.set-info.com
June 2005
SET Catalog Number 1:
Millenium Development Goals
June 2005
Contents
Page
I. SET Introduction
4-7
The purpose and people behind SET.
II. How to use SET
8 - 13
Keys, maps and terms to help you get the most out of SET.
III. SET Briefs
14 - 25
One-page snapshots of the opportunities.
IV. SET Summaries
26 - 59
Executive summaries with a bit more detail.
V. SET Social Returns Analyses
60 - 69
Detailed examples of two startups’ systematic projections
of their social and environmental impacts.
Click on the page numbers to go directly to each brief.
www.set-info.com
June 2005
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I. Introduction
To identify ventures, SVT Consulting organized the SET Inventors Challenge, a competition that
ran from January to March 2005. The Challenge was made possible through the contribution of
over 300 volunteer hours of advice and outreach by these outstanding advisors, reviewers and
organizers, and by the Reuters Digital Vision Program at Stanford University (www.rdvp.org), which
has incubated four of the Catalog ventures.
Intuitively you might think this would actually be easier than raising money for a venture that
disregards people and the planet. But in the past ten years I’ve both been one of these entrepreneurs,
and gotten to know some of them pretty well, and strangely it’s the opposite. In a case that’s all
too common, one of the first startups to win the Global Social Venture Competition, a competition
to help catalyze these kinds of investments that I helped start in 1999, got some advice from an
experienced venture capitalist judge that its technology was too early stage to get venture money.
The VC recommended the CEO focus his fundraising energy on finding R&D grants. But the CEO
had heard a lot of things from a lot of smart advisors, and his “blended value” proposition seemed
so compelling-- if he could just find the right socially responsible angel! He had a very promising
technology and superb team, and they spent the next nine months compiling and chasing down
angel and venture leads, only to find one dead end after another. Finally by late winter two of his
key officers had to go find paying jobs. He understood too late that he really should have started
applying for government R&D money the spring before, but now his wonderful team was ebbing
away and with it what might have been his best shot at realizing his dream.
Blended value is another word for social as in social venture, sustainable, triple bottom line or
double bottom line. It means that a firm combines profit with social and environmental value
creation.
It’s tough that this CEO learned the hard way back then, when this whole “social venture” arena was
new. But the fact is that hundreds more—maybe even thousands more-- are still learning the same
lesson the hard way, over and over again.
SET aims to change that.
My company, Social Venture Technology & Consulting (SVT), creates and promotes adoption of tools
that help businesses and investors measure and value the extra-financial impact of their operations.
We believe if there is more perfect information about the range of value companies create (or
diminish), market forces will result in businesses that create truly sustainable value for everyone.
We started Social and Environmental Technologies (“SET”) last fall both to help bring technologies
with major social or environmental impact to market, and to reach a new audience with our
“social returns analysis” methods. Originally, SET was a business plan competition for technology
commercialization plans, but we quickly realized there are plenty of competitions and incubators
for blended value ventures, but they’re still having a heck of a time finding the resources they need.
We realized it would be more valuable to create a portfolio of these ventures and showcase them,
including systematic information about their social returns potential.
Enter Collective Intelligence. This spring I bumped into Kevin Jones, a serial entrepreneur I met a few
years ago when he started CI to figure out how to get more money, more easily, into organizations
that do good in the world. Kevin has built several successful companies, and more recently nonprofits,
SET Introduction
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around providing business intelligence to emerging markets. He met Mary Cicalese when she was
a high tech industry analyst at Jupiter Research, and this year they had started talking about how
there seems to be a shift in the market for blended value deals. More, bigger players are starting
to look around in this space and make investments. Maybe this market is actually emerging at last,
they thought! When we talked, we realized a Catalog of these social and environmental investment
opportunities would be the perfect vehicle around which to start organizing some market
intelligence.
This first Catalog contains summary plans for the commercialization of 11 technologies written
by the technologies’ champions. These plans were selected for the SET Catalog because they: 1)
are potentially commercially viable; and 2) could have a major social or environmental impact.
This Catalog focuses on technologies that address the UN Millennium Development Goals. The
opportunities described here are real, and they really are looking for partners, advisors, and
(accredited) investors.
By systematically presenting both financial and social returns information about each of the SET
opportunities, and then by listening to what the market says about which information is useful and
how, we hope to help ventures and investors understand and more effectively articulate their value
so they can more easily move money to good.
This Catalog is just a doorway into what will become a rich array of additional information, presented
in a range of ways, about these and more SET opportunities at www.set-info.com. We invite you to
come to the site and help us grow it though dialog about these opportunities and how you relate
to the information about them that their management teams, we, and if you like, even you, provide.
Become a part of this conversation, and together we will cultivate this experiment into knowledge
about what information different investors need to move their money to firms that create the full
spectrum of value. And one day, maybe soon, we will find that we’re helping the giant sums of
money in the world create sustainable equity for us all.
Sara Olsen
San Francisco, USA
The SET Catalog is a project of Social Venture Technology & Consulting, Inc. (SVT) and
Collective Intelligence (CI).
SVT specializes in due diligence, performance measurement and valuation of extra-financial impact
created by firms (that is, their social and environmental return on investment). SVT’s clients are
institutional and individual investors, foundations, companies and nonprofits. www.svtconsulting.com
Collective Intelligence (CI) is a market research and business intelligence firm dedicated to increasing
the flow of capital to blended value investment opportunities. www.collectiveintelligence.net
SET Introduction
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ACKNOWLEDGMENTS
To identify ventures, SVT Consulting organized the SET Inventors Challenge, a competition that ran from
January to March 2005. The Challenge was made possible through the contribution of over 300 volunteer hours
of advice and outreach by these outstanding advisors, reviewers and organizers. Individuals organizational
affiliations are listed for information purposes, but do not imply official endorsement of SET.
SET Inventors Challenge Advisors
Mitra Ardron
Louis Boorstin
Martin Charter
Robert Gruetzmacher, Ph.D.
William Kramer
Thomas Kintner, Esq.
Steven Leventhal
Evan Mills, Ph.D.
Mark Milstein, Ph.D.
Richard Newton, Ph.D.
Sandy Pentland, Ph.D.
Dawn Rittenhouse
Bill Unger
Al Rubinstein, Ph.D.
Peter Ward, Ph.D.
Founder, Natural Innovation, Australia
Manager, International Finance Corporation, USA
Director, The Centre for Sustainable Design, the Surrey Institute of Art &
Design, University College, UK
Director of Technology Commercialization, Dupont, USA
Fellow, World Resources Institute, USA
Attorney, Lafayette, California, USA
Director, External Relations, Fritz Institute, USA
Staff Scientist, Lawrence Berkeley National Laboratories, USA
Post-Doctoral Fellow, Cornell University and Business Research Director,
World Resources Institute, USA
Dean, College of Engineering
University of California, Berkeley, USA
Director, Human Dynamics Group, The Media Lab
Massachusetts Institute of Technology, USA
Director of Sustainable Development, DuPont, USA
Partner Emeritus, Mayfield, USA
Professor Emeritus, Northwestern University, USA
Adjunct Professor, University of British Columbia, Vancouver
For their critical feedback, referrals and moral support we also thank Aimee Angel, De Novo Ventures; David
Dornfeld, Ph.D., University of California, Berkeley; Jim Fruchterman, Benetech; Jim Koch, Ph.D., Santa Clara
University; Thomas Kalil, U.C. Berkeley; Jeff Hamaoui, Origo, Inc.; Andrew Isaacs, U.C. Berkeley; Arzhang Kalbali;
Peter Mui, Squid Labs; Amber Nystrom. Social Fusion; Tracey Pettengill, Approtec; Joel Segre, Project Impact;
James Sheats, Ph.D., Nanosolar; Moneet Singh, Excellare, Inc.; and Kevin Warnock, gOffice.
Plan Reviewers
Poonum Agrawal
Mitra Ardron
Claire Broido
Veronique Bugnion, Ph.D.
Mary Cicalese
Brian Ely, M.D.
Jon Guice
Jeff Keenan
Peter Madden, Ph.D.
Sara Olsen
Arjan Schutte
James Steeby, Ph.D.
Didier Thys
Program Manager/Engineer, Environmental Protection Angency
Founder, Natural Innovation
President, SunEdison
Research Analyst, Two Sigma Investments
Research and Technology Analyst, Collective Intelligence
Chief Medical Officer, Sutter Connect
Business Development Director, GreenMountain Engineering
Global Supply Chain Project Manager, Adobe Systems, Inc.
Post-doctoral Fellow, Harvard University
Founding Partner, SVT Consulting
Associate Director, Center for Financial Services Innovation, Shorebank
Advisory Services
Assistant Professor of Aquaculture, Mississippi State University
Independent
Note: Individual organizational affiliations are listed for information purposes and do not imply official endorsement of SET.
SET Introduction
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Outreach Ambassadors
These innovative organizations and individuals each support the creation and adoption of environmentally and
socially beneficial technologies. They helped reach out to potential Challenge entrants on six continents:
Benetech
Engineers Without Borders USA
Global Giving
Global Social Benefit Incubator at Santa Clara University
Global Social Venture Competition
Greenbiz.com
Investors’ Circle
Reuters Digital Vision Program at Stanford University
San Jose Tech Museum Awards
Technoserve
World Bank Strengthening Grassroots Business Initiative
World Resources Institute
Dae In Cha
Bharath Chandar
Tamara Hafner
Charles Hamilton
Sonali Joshi
Roberto Sada Kane
Justin De Koszmovszky
Matthew Rosenfield
Nirav Shah
Marty Silber
Priyanshu Singh
Sarah van der Ploeg
Krishna Venkatraman
Dave Youmans
Andrew Youn
Darden Graduate School of Business Administration, University of Virginia
Robert H. Smith School of Business, University of Maryland
Independent
SVT Consulting, Cornell University
Haas School of Business, University of California, Berkeley
Darden Graduate School of Business Administration, University of Virginia
Johnson School of Management, Cornell University
Robert H. Smith School of Business, University of Maryland
Northrup Grumman and Robert G. Merrick School of Business, University of
Baltimore
George Washington University School of Business
Indian Institute of Management Calcutta
Stanford University
Actuate Corporation
Engineers without Borders USA
University of Chicago Graduate School of Business
Special Thanks
Thanks to Stuart Gannes, director of the Reuters Digital Vision Program, for helping us make the connection
with the Reuters Fellows who are all outstanding examples of SET innovation
Finally, we thank Megan Watkins, Peter Madden and Veronique Bugnion, the bedrock of the SET volunteer
organization. It has been a great pleasure and honor to work with you!
SET Introduction
www.set-info.com
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II. How to Use SET
SET is a live, ongoing experiment into how information helps move money into
blended value investment opportunities. You are now part of this experiment, both
the experimenter and the subject.
Suggestions for use:
1.
Check out the introductory maps and charts to see how each opportunity
relates to the others and to your own interests.
2.
Read the 1-page summaries to get a feel for the opportunities.
3.
Read the detailed 3-page summaries for those opportunities you want to
know more about.
4.
Go to www.set-info.com for more details about any of the deals and to help
track how money moves around them.
5.
Contact the ventures directly if you want to know more or think you could
help them.
6.
Forward the Catalog to others you think might be interested in one of the
opportunities described.
7.
Contact us if you would like to apply the Catalog methodology to your
own goals!
How to Use SET
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Key to the content
Each SET opportunity has summarized traditional investment considerations about its opportunity, such as
size of the addressable market, nature and status of the technology the plan is based upon, revenue model,
team, and nature of funds sought; the quantifiable “social returns” its venture may create relative to the
investment required; in other words, what measurable chunk of the social issue in question could this venture
really solve if things go according to plan; which Millennium Development Goals its plan addresses; and what
technical assistance and partnerships the team is looking for right now.
Some opportunities in the Catalog seek
investment, but others are still in the R&D
phase, or are nonprofits running businesses;
as such, they need grants instead. Many SET
opportunities seek some kind of technical
assistance, such as business model coaching
or marketing expertise. Which resources each
venture seeks are noted in each summary as
shown at right:
Investment
Grant
Partnerships
Technical
Assistance
The Millennium Development Goals (http://millenniumindicators.un.org) are eight goals that all 191 United
Nations member states have agreed to try to achieve by the year 2015. In the Catalog, the MDGs are represented
using the following icons:
Goal 1. Eradicate extreme poverty and hunger
Goal 2. Achieve universal primary education
Goal 3. Promote gender equality and empower women
Goal 4. Reduce child mortality
Goal 5. Improve maternal health
Goal 6. Combat HIV/AIDS, malaria and other diseases
Goal 7. Ensure environmental sustainability
Goal 8. Develop a global partnership for development
Where a venture has an indirect impact on a goal, the icon is shown in gray.
How to Use SET
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Terms
Definitions given are the same as those provided in “A Framework for Approaches to SROI Analysis,” (2005).
Blended value
Combining profit-making with social and environmental value creation.
Some synonyms are “social” as in social venture,“sustainable,” and “double”
and “triple bottom line.”
Discount rate
The interest rate used to discount future costs and benefits to a
present value.
Environmental
Having to do with the natural environment, meaning living organisms
and natural resources. Often the term social is used to include
environmental considerations.
Financial
Having to do with the monetary transactions directly involved in the
running of the business or organization, such as cash investments,
purchases, dividends, etc.
Impact
The difference between the outcome for stakeholders exposed to an
enterprise’s activities and the outcome that would have occurred without
the enterprise’s existence. Outcomes are adjusted for the effects of what
would have happened anyway by defining a base case (in Europe this
is also known as “deadweight”) and the number of the same outcomes
that are displaced from other organizations. Impacts may be negative,
undesirable or unintended, as well as the converse.
Internal rate of return
(IRR) The interest rate that, when applied to a set of cash flows, yields a net
present value (NPV) of zero.
Monetized
Represented in terms of the equivalent value of currency.
Net present value
(NPV) The value in today’s dollars of future financial receipts and
expenditures less the investment required to provide those receipts.
Future cash flows are discounted by a stated interest rate, typically one
that accounts for the effects of inflation, growth and risk.
Outcome
The positive or negative changes that occur in conditions, people and
policies as a result of an organization’s or program’s inputs, activities
and outputs. Outcomes measure the effects on immediate customers,
individuals and groups who are affected both directly and indirectly, and
the wider community and environment. As such, outcomes may be direct
or indirect.
Output
A measurable unit of production created by a business’ or organization’s
activities. This can be a good or service delivered, for example the number
of people trained, or a by-product.
Social
Having to do with the social environment, meaning human beings and/
or the community. Often “social” is used to mean any or all non-financial
impacts including environmental and economic.
Social return on investment*
(SROI) A measure of social impact resulting from a capital investment.
Related concepts include benefit-cost analysis, economic rate of return,
public sector value measurement and extra-financial impact assessment.
SROI analysis
The process by which social return on investment is caluculated.
How to use SET
www.set-info.com
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The opportunities in the SET Catalog can be thought of in light of not only their financial value proposition,
but also their social and environmental value proposition.
Map 1. Financial and Social Returns: Conventional Paradigm
Source: Jed Emerson.
Map 2. Financial and Social Returns: SET Ventures
How to Use SET
www.set-info.com
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SET is testing a new hypothesis: that some deals appeal to people as pure investments, some as projects they
would make grants to and some fall in the middle, as deals that might return capital but, which they engage in
for principally philanthropic motives, or to make them what we are calling “leveraged givers.” We have put this
framework around the opportunities in the SET Catalog. Using the interactive, experimental SET Platform at
www.set-info.com, we plan to report back on which approach is more successful with which group of funders
for each deal in the portfolio.
Map 3. The SET Hypothesis of Funder/Investor Behavior
We are developing the potential of the SET Catalog as an online publishing and community platform that
will provide intelligence about what money is moving to deals that have both financial returns and social or
environmental benefits.
We invite you to get involved in this learning process! Check out our online community: www.set-info.com.
How to Use SET
www.set-info.com
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Map 4: SET Platform (www.set-info.com)
What is SET?
About SET
Our Worldview
Links
Home Page
The Catalog
Wiki
Blog
Wikipedia
Invitation for Proposals
SET Partners
Contact Info
The Ventures
Catalog Description
Filters
Millenium Development
Goals
Geographical
Industry
Social Return Analysis
Financial Return Analysis
The Investors
Your Focus:
Financial Return
Strategic Leverage
Social Mission
Your Feedback:
Add Value to Deals
Critique the Deals
Give Referrals
Sourcing Investment
SET
The
Ventures
Investors
Social Return vs Financial
Return?
Contact Info
How to Use SET
www.set-info.com
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III. SET Briefs
Bee Conservation Project
15
BookBox
16
DDMotion
17
Hawaii Environmental Biosolutions
18
iPillbox
19
Mobile Media
20
Oceanographic Institute of Dominica
21
Prestige Healthcare Technologies/Global Limb Assistance
22
Project Market Light
23
SolarAmp
24
Speak Shop
25
Click on the page numbers to go directly to each brief.
SET Briefs
www.set-info.com
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Bee Conservation
Project
For more detailed
information, go to
page 27.
Investment
Partnerships
Grants
Technical
Assistance
Lagos, Nigeria
Millennium Development Goals addressed:
#1 eradicate extreme poverty and hunger;
#3 promote gender equality and empower women;
Indirectly: #4 - 7
CONTACT: TUNDE FABUNMI
[email protected]
Bee Conservation Project will protect endangered honeybees as a resource base to empower the rural and urban poor via modern
beekeeping technology and apitherapy in Nigeria.
Investment sought/timeframe:
Year 1: $1,511,144 to buy honey production for 840
rural farmers and honey processing plant for the first
phase of the project.
Year 2: $1,822,888 to extend the project to another set
of 840 farmers.
Year 3: $2,391,980 for phase 3 of the project.
Partnerships sought:
Grant, investment and capacity building partners including:
Ford Foundation, USAID, CIDA, Shore Bank, UN
Foundation, Shell Foundation, Microsoft and
TechnoServe
Technical assistance sought:
•
Impact Area
•
ICT tools to enhance our beekeeping training
program, especially to demostrate in practical
terms the intricacies of bee management and
sustainable harvesting methods to the largely
illiterate rural people.
Woodworking eqipment for largescale production
of Langstroth hives and moulds to produce
standard honey jars locally.
www.beeconservation.org
Empowering the Poor with Bee Wealth
OPPORTUNITY BRIEF
Market: About 40% of the Nigerian population living in urban centers craves high-grade honey to promote health and healing and
as a beauty aid. BCP will initially target this vital segment of our population to market its honey, while it will also expect patronage
from hospitals, bakeries, hotels, beauty salons, and food service operators.
Revenue Model: Income from honey sales and equipment supplied to rural farmers to produce honey.
TECHNOLOGY BRIEF
BCP is promoting modern beekeeping technology, which is premised on the use of Langstroth hives that facilitate sustainable
honey production as well as conserving the honeybees to offer effective pollination services to crop production.
SOCIAL RETURNS BRIEF
Apart from preserving endangered honeybees as vital part of the natural environment, BCP will empower the rural and urban poor
through the perspectives of job and wealth creation, food production and healthcare. The general population will also benefit
indirectly because of honeybees’ vital contributions to agriculture, health and environmental protection, which have direct bearing
on the survival and well-being of man.
TEAM
Management:
Tunde Fabunmi, beekeeper and trainer from BCP
Dr Adewale Dipeolu, university teacher, director, UNAAB Consult
Justina Modupe, beekeeper and agric extension officer
Advisory Board: Prof. Israel Adu, Prof. Pat Utomi, Mr Stanley Egbochukwu, Bunmi Lawson and Ndidi Okankwo Nwuneli
SET Briefs
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June 2005
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BookBox, Inc.
For more detailed
information, go to
page 30.
Investment
Partnerships
California, USA
Pondicherry, India
#2 achieve universal primary education
#8 develop global partnership for development
CONTACT: BRIJ KOTHARI
[email protected]
BookBox is a web-based jukebox of digital books (‘anibooks’) in languages from around the world. It synchronizes the text, audio,
and visual media to create an edutaining language learning and reading experience for children and even adults who still have
a child in them! BookBox builds on the proven method of Same Language Subtitling (SLS) and its anibooks can be distributed as
internet downloads and on DVD/VCD/VHS and TV.
Year 1: Seed capital of $238,000
Year 2: $750,000
BookBox is looking for strategic partnerships with:
• Publishing companies for content.
• Content-distribution companies & TV networks
around the world.
• Large retail partners in the US and Europe for
distribution of DVD content.
http://www.bookbox.com
A “book” for every child in every language!
Impact Area
OPPORTUNITY BRIEF
Market: BookBox initially targets two markets: 1. US Digital Market. Reading and language development for 82% of the English
speaking population; 10% Spanish; and 7% Mandarin, French, and German speakers. There are 31 million immigrants nationwide. 2.
India Television Market. Programming in over 10 languages reaching 500 million viewers.
Revenue Model: Pay-per-download, DVD/VCD, audio-CD, TV programming, printed books through tie-ups with book publishers.
TECHNOLOGY BRIEF
BookBox’s Enhanced Multiple Subtitles (EMS) allows a user to dynamically switch the audio, translation, and transliteration languages
of its “books”. A provisional patent has been filed.
Besides aiding reading and language development in the US mainstream, many schools do not have language resources for the
immigrant community, or even for second-language learning. BookBox can stock its “books” in schools and public libraries. On TV in
India, US $1 will give reading practice to 1000 children for an entire year.
TEAM
Founders:
Dr. Brij Kothari, innovated SLS for literacy and has pioneered it on TV and digital technologies since 1996; Ph.D., Cornell University
Mohammmed Abdoolcarim, product designer and mechanical engineer; Stanford
Lavina Tien, communication and marketing for BookBox; Stanford
Zi Shen Lim, electrical engineering; Stanford
Stuart Gannes, Director, Reuters Digital Vision Fellowship program; Stanford
SET Briefs
www.set-info.com
June 2005
16
DD Motion
For more detailed
information, go to
page 33.
Investment
Partnerships
Maryland, USA
#7 create environmental sustainability
CONTACT: CATE HAN
[email protected]
DDMotion has six patents for an Infinitely Variable Motion Control, a revolutionary platform technology which improves performance
and reduces energy use and emissions at a lower cost when applied as a transmission, a compressor, or an alternative generator.
DDMotion is seeking $2.2 million in initial funding to
take its patented technology to market. Funds will be
used to negotiate partnerships with market leaders
and drive innovation based on the Company’s platform
technology; secure international patents and develop
joint ventures with sales and marketing partners, manufacturers and industry leaders in non-core markets.
DDMotion seeks partnerships with industry leaders
to retrofit existing transmissions, compressors, or
alternative generators to establish its platform
technology for future innovation by market leaders.
Partnerships will render significant licensing contracts
as research projects move from concept to reality.
www.ddmotion.com
Improved performance & energy efficiency at a lower cost
Impact Area
OPPORTUNITY BRIEF
Market: The Company is focused on the $32B transmission market for commercial and consumer automotives and heavy equipment
and the $7B compressor market. Both industries face stricter EPA emissions standards, and though energy-efficient technologies
currently exist, they are expensive or contain inherent design limitations.
Revenue Model: Initially, DDMotion will license to Original Equipment Manufacturers and expects 3-5% royalty income per product
sold. Concurrently, DDMotion will pursue potential strategic partners interested in a joint venture to license to suppliers.
TECHNOLOGY BRIEF
DDMotion’s patented Infinitely Variable Transmission is compact and durable, increasing the life of both the engine and the
transmission and reducing warranty and ongoing maintenance costs. Because it is composed solely of gears and cams, it is highly
scaleable. DDMotion’s design is composed of commercially available parts and does not require electronic or hydraulic controls,
expensive high-tech materials or precision-manufacturing. It costs less to manufacture than an automatic transmission, but can
offer up to 30% increased fuel savings and thus 30% reduced emissions.
The primary social and environmental benefits are diminished CO2 emissions as a result of reduced gasoline usage and improved
energy efficiency, and improved human health. Associated benefits include drastically reduced asthma, fewer premature deaths,
increased visibility, less soot, and more diverse ecosystems since air pollutants increase acidity in waters and deplete the nutrients in
soil damaging forests and farm crops. In sum, the implementation of DDMotion’ technology into vehicles and compressors over the
next 10 years will result in an overall reduction of CO2 for a savings of approximately $110 million in social benefits.
TEAM
Management:
Key Han, Founder & CEO
Rich Wiklund, VP Business Development
Cate Han, Director Business Development
SET Inventors Challenge
Winner:
Best SROI Analysis
SET Briefs
www.set-info.com
June 2005
17
Hawaii Environmental
Biosolutions
For more detailed
information, go to
page 36.
Investment
Partnerships
Hawaii, USA
CONTACT: LIANGJIE DONG
[email protected]
HEB provides its innovative and cost-effective products Bionest reactor and the Biopottery-Windmill River/Pond Cleanup Systems to
help animal operations and rural communities manage their waste and wastewaters.
Year 1: $1 million equity investment as working capital.
Year 2: $1 M to create a major content delivery service
in China.
HEB seeks marketing partners in the U.S. as well as in
developing countries.
• Marketing partners in U.S. dairy industry
• Marketing partners in environmental industry in China
• Supplier of containers for water/wastewater treatment
HEB has demonstration plants with a “5 Cs” concept:
clean water, clean air, clean energy, cost effectiveness
and controllable runoff.
http://www.biohawaii.com
Impact Area
Cost-effective environmental solutions for farms
OPPORTUNITY BRIEF
Market: U.S. government agencies have issued a new rule that requires all large animal operations to apply for permits for discharging
wastewater by 2006. A wastewater treatment market of $326.0 million annually was created by this rule. Thousands of polluted
rivers, lakes and ponds in China also need cleanup, forming over a $1 billion market.
Revenue Model: Customers purchase treatment systems and continue to buy our assumable materials and service. Revenues will
be generated from products sales and post-sale services.
TECHNOLOGY BRIEF
Bionest reactor is the highest speed anaerobic reactor for treating lipid content wastewater with methane gas recovery. Biopottery
automatically selects and immobilizes microorganisms and provides in-situ treatment to rivers, lakes and ponds.
Most farms and rural communities use open ponds to treat animal wastewater and human wastewaters. These open ponds provide
low efficiency treatment and produce poor quality effluent that is discharged to rivers, lakes and ocean. In addition, leaching
pollutants from ponds also contaminates local groundwater supplies. HEB provides cost-effective and high efficiency wastewater
solutions worldwide to farmers and rural communities. HEB provides an in-situ remediation solution to thousands of polluted rivers,
lakes and ponds and helps communities achieve sustainable development.
TEAM
Management:
Liangjie Dong, technology inventor and product devloper
Jingbo Chang, 11 years management experience in the environmental field
Walt Atkins, 30 years experience in high-tech product development
Shu Liang, MBA, 7 years experience in Marketing
Xiang Yee, P.E. in wastewater treatment plant design
Advisory Board: Major names in Academia and Business
SET Briefs
Winner:
Best Plan
www.set-info.com
June 2005
18
iPillbox
For more detailed
information, go to
page 39.
Investment
Partnerships
Grants
Technical
Assistance
California, USA
CONTACT: YANN KWOK, FOUNDER
#6 combat HIV/AIDS, malaria and other diseases
[email protected]
GEOFFREY BUSH, DEVELOPMENT
[email protected]
Intelligent, networked pillbox that improves drug compliance to increase the lifespan of HIV/AIDS and tuberculosis (TB) patients.
iPillbox reminds the patient to take medication at the prescribed time using an audible and visual message. When the patient
removes the pill, a message is relayed via wireless phone network to the healthcare provider. This active monitoring enables escalation procedures when the patient is non-compliant. Improved compliance reduces costs/patient for health insurance companies,
and enables healthcare providers to build a picture of the patient’s medication habits and history.
Incubated by Reuters Digital Vision Program at Stanford.
$1M for 18 months to refine concept, conduct pilot
testing and commercialize to first key customer. Breakeven expected in year 3.
Healthcare management organizations and academic
institutions for help with pilot test (e.g.Kaiser Permanente
and Stanford University School of Medicine).
Team members experienced in DOTS process in developing
countries, and relationships with health authorities.
Impact Area
OPPORTUNITY BRIEF
Market: In the US, 30M people receive medications for chronic illness through retail pharmacies. In South Africa, complement the
WHO’s Direct Observation Treatment System (DOTS) to treat 3X as many patients on the same budget.
Revenue Model: Commercially available in the US through pharmacies on a revenue sharing basis. Revenue will be generated
through three channels, 1) sale of the device, 2) monthly service fees and 3) sale of disposable cartridges. The iPillbox solution will
be provided to South Africa operations on a cost recovery basis.
Scale of Addressable Social Issue: In South Africa over 5M people are infected with HIV/AIDS, resulting in over 300,000 deaths and
over a million children orphaned annually. TB affects 2/3 of them, making South Africa the world’s most heavily TB-infected country.
Less than 50% of those patients on treatment complete their medication treatment.
TECHNOLOGY BRIEF
The early iPillbox design was tested in South Africa to determine feasibility. The current design includes a microprocessor with
embedded apps and flash memory, and bi-directional SMS communication coupled to modular pill magazine and dispensing
mechanism. A provisional patent has been filed for the initial product concepts.
RISKS BRIEF
South African operation requires partnership with healthcare providers for HIV/AIDS and TB patients. This will require time to
implement and integrate with the government healthcare system. For the US market, there is a market risk that the product may not
appeal to the target customer group.
Cost savings allow more patients to be treated. For TB alone, treating just 20% of newly infected patients allows 159,000 more
patients to be treated per year. A 50% to 80% increase in compliance as shown in a pilot test will result in 47,700 additional lives
saved. Moreover, the financial savings will allow additional patients to be put on treatment. iPillbox also reduces the development of
multi-drug resistant TB and provides accurate data monitoring to the authorities.
TEAM
Yann Kwok, Founder
Geoffrey Bush, Start-up Development
Andrew Moon, Operations Manager
Sara Cantor, Sales & Marketing Manager
Judy Yeh-Kuan, Financial Manager
Steve Herbowy, Engineering
Dave Benaron, Spectros, serves as mentor
Carl Simpson, Versant Ventures, serves as advisor
Ayleen Ito Lee, J.D., Richey Fisher Whitman & Klein, legal advisor
SET Briefs
www.set-info.com
June 2005
19
MobileMedia
For more detailed
information, go to
page 42.
Partnerships
Grants
California, USA
CONTACT: MELANIE EDWARDS
[email protected]
#1 eradicate extreme poverty and hunger; #8 develop global partnership
Indirectly: #2 - 7
MobileMedia is a community-based, digital data collection service enabling governments, corporations, international organizations, NGOs and
foundations to better understand and more effectively service underserved communities in developing countries. Local residents are employed
and trained to collect information door-to-door about their community using handheld computers. Through a fast, accurate, secure and costefficient data collection process, clients can better understand the needs in these communities and thus serve them more effectively.
Stage 1: $3 million grant over 2 years
Stage 2: $3 million recoverable grant over 2 years
• International NGOs (broad network in health, education,
employment and/or computer training)
• Banks (micro-credit)
• Telecommunication companies (for internet & wireless access)
• PC, PDA, Memory Cards & Card Readers
Current partnerships:
Impact Area
IBM, PalmOne, PalmSource, CDI (regional NGO), Stanford University
OPPORTUNITY BRIEF
http://mobilemedia.stanford.edu
Market: Governments (federal, state and local), corporations, international organizations, NGOs and foundations lack critical demographic data on
the underserved people within the world’s 120 developing countries. Although these organizations pay billions as a whole, the projected and often
outdated information compromises the effective delivery of basic services, such as food, education, voting rights and healthcare. MobileMedia’s
unique community-based, digital data collection service leapfrogs traditional paper-based methods by providing faster, more accurate, secure and
economical data collection. We sell demographic information to governments, corporations, international organizations, NGOs and foundations, so
they can more effectively channel critical products, services and information.
Revenue Model: Clients (e.g.: Governments, corporations, international organizations, NGOs and foundations) contract MobileMedia services: data
collection, analysis, community mapping and/or consulting. MobileMedia acts as broker, linking community information to paying customers.
Scale of Addressable Social Issue: Worldwide there are over 700 million “invisible” people. Estimated Brazil market: 20 million “invisible” (12%
of population). Timely demographic data would not only enhance the delivery of basic products and services to millions of communities but also
accelerate regional and even national economic development.
TECHNOLOGY BRIEF
MobileMedia’s fully-integrated software suite allows efficient and accurate gathering of data, as well as effective viewing, management, and analysis.
Functionality includes PDA-based survey capability, data transfer to MobileMedia’s intermediate host and then to the client, and web-based database
software wherein the data can be viewed and analyzed online from anywhere in the world.
Milestones related to initial launch in Brazil are: January 2005: In-the-field community test (Rio de Janeiro, Brazil; complete); August 2005: Expansion
(Brazil); May 2006: International scaling.
RISKS BRIEF
Quality: Data quality is insured by three layers of quality control. Privacy: individuals’ privacy is protected under a strict privacy agreement and all data
is encrypted. Technology: the software is managed by in-house team; reputable partners, IBM, and PalmOne, service hardware while conducting field
work.
MobileMedia increases local employment, job skills, revenue flow to the community, community investment, awareness of critical products/services,
access to social services, access to technology and community morale.
TEAM
Management: Melanie Edwards, Chief Executive Officer
Mark Rollins, Chief Technology Officer
Junco Norton, Finance Manager
Daniella Pontes, Operations Manager – Brazil
Advisors: Pamela Hartigan, Managing Director, Schwab Foundation for Social Entrepreneurship; Cindy Lessa, Director of Programs-Brazil, The Synergos
Institute; Sara Olsen, SVT Consulting, Founding Partner; Jim Phills, Co-Director, Center for Social Innovation, Stanford Graduate School of Business; Joy
Weiss, CEO, Dust Networks; Marc Wernick, Partner, MHWCommunication Associates; Terry Winograd, Professor of Computer Science, Stanford University;
Technical Advisory Council, Google.
SET Briefs
www.set-info.com
June 2005
20
Oceanographic Institute
USA
of Dominica Nevada,
Commonwealth of Dominica
For more detailed
information, go to
page 45.
Investment
Partnerships
#1 eradicate extreme poverty and hunger
CONTACT: MICHAEL SCHACKER
[email protected]
Ocenographic Institute of Dominica (OID) is a for-profit c corporation with a patented approach to sustainable tilapia fish-farming
that it will license internationally and support via.online and in-person training. OID aims to capture a sizeable portion of world fish
market (over $80 Bn annually and growing) with its environmentally sound, zero-pollution product, and will simultaneously train
Caribbean farmers in new, sustainable ways to raise their incomes.
OID seeks $250,000 to $960,000 from qualified investors
to expand rapidly into the tilapia market and the global
consulting, licensing and training markets.
OID would like to connect with Community
Development Grant organizations and banks to finance
licensing to communities, businesses and low-income
fish farmers around the world.
Sustainable aquaculture from the Caribbean
Impact Area
OPPORTUNITY BRIEF
Market: Market opportunity: 132 million tons of seafood was produced in 2002, but due to declining sea catch and population
growth the UN sees a 50-million ton shortfall in seafood by 2010. Explosive growth in fish-farming (39 million tons in 2002) is
thus predicted. The Caribbean fish import market is $20 million/year. According to Jean-Francois Rischard, the World Bank’s VP for
Europe, “50% of the world’s fisheries are fully exploited, 20% over-exploited and most of the rest are unsustainable… 3 out of 4
major species, including cod and tuna, are being fished at or above their biological limit.” He gives 20 years to solve resulting food
and pollution problems for the 1 in 5 people for whom fish is the primary protein source.
Revenue Model: Wholesale fish sales and licensing of OID’s proprietary methodology, with an upfront fee of $50,000 and a harvest
share of 10%. This model differs from competitors’, wherein clients pay large upfront consulting and design fees (typically $300,000500,000) and receive little participation afterward.
Projected Revenues (2009): high and low-Intensive consulting & licensing (44%), tilapia sales (35%), and other sales, grant contracts
and training (21%).
TECHNOLOGY BRIEF
The OID proprietary high-intensive system handles hundreds of variables to raise the tilapia survival rate to 99%, giving OID strong
Intellectual Property rights. Dr. McMillin’s 1.7 acre high-intensive Sun City farm reached 450,000 pounds per acre annually.
Three times the amount of protein can be grown with the same amount of water by raising fish instead of grain. The composting in
OID’s unique fish-garden system can increase farmer garden yields 2-3X. OID’s plan through year 5 will increase 400 farm families’
incomes, and deliver benefits for the Dominican economy and other regions in food processing and distribution.
TEAM
John McMillin, Ph.D., Director, has led many tilapia operations around the world and more than 30 individual small enterprises in
developing nations. Michael Schacker, Development Director, is also CEO of e-Change, Inc., and has decades of experience as a
business consultant, e-learning developer and writer of training e-courses. Schacker and McMillin have both worked extensively
with The Rodale Institute, the leading organic agriculture researcher. Norm MacDonald, the primary investor of MATCO/OID, has
successfully built the OID coral business, and has contacts in Dominican fish marketing and the U.S. coral trade business. His business
career has focused on commercial real estate in the US.
SET Briefs
www.set-info.com
June 2005
21
Prestige Health Care Technologies, Ltd.
Kamloops, BC, Canada
Global Limb Assistance Program
For more detailed
information, go to
page 48.
Investment
Partnerships
Grants
Technical
Assistance
Fayetteville, NC, USA
#2 universal education; #3 gender equality
#4 child mortality; #7 environmental sustainability
CONTACT: RUTH J. CLARK
[email protected]
Socketless prosthetic technology provides durable, high functioning, inexpensive, prosthetic limbs that will not cause secondary
injury. The world’s first truly field deployable prosthetic system.
Year 1: Investment opportunity of $150K to commercialize
an award winning prosthetic technology. Also to establish
a manufacturing/fitting facility in Vietnam
Year 2: $100K for the global commercialization of
additional products currently developed by Prestige
Health Care Technologies.
Prestige/Global would like to connect with the
following partners:
• Groups concerned with children’s health
• Partners knowledgeable in durable medical
equipment
Impact Area
• General business mentoring
• International development mentors and partners
[email protected]
A helping hand for those in need
OPPORTUNITY BRIEF
Market: Limb deficiency results from many causes and is found in all countries, and crosses all socio/economic boundaries. It is
estimated that over 25 million of these people may never even have an opportunity to obtain a prosthetic limb. Even in North
America, a less expensive alternative is needed, as in a phone call just today from a truck driver from Georgia who lost a limb last
year and has no insurance. Limb change can be accommodated for up to 4 years with a growing child, the primary group injured
by land mines.
Revenue Model: Revenue from retail sales of our prosthetic hook in North America and Europe will provide sustaining funding for
the humanitarian prosthetic facility in Vietnam.
TECHNOLOGY BRIEF
Socketless Prosthetic Technology, made centrally, can be fit onto an amputee in remote areas. Made from modern materials, these
limbs can be made in a general workshop.
With only one functioning hand, children and adults alike are limited in the self care they can provide, which in turn affects their
emotional and psychological development. Many people loose the function of both hands, thereby requiring the time and energy
of a second person to look after their daily needs. The provision of our functional long lasting Socketless Prosthetics will have a
positive effect on all aspects of the individual’s and the community’s life.
TEAM
Management:
Ruth J. Clark, Project Manager, Designer
Rich Davis, Certified Orthotic / Prosthetic Instructor and practitioner
Rolf Tjomsaas, Mechanical Design / Prototypes
Advisory Panel: a number of amputees and health care professionals
SET Briefs
www.set-info.com
June 2005
22
Project Market
Light
California, USA
CONTACT: DAVID LEHR
For more detailed
information, go to
page 51.
Investment
Partnerships
Indirectly: #1 eradicate extreme poverty
and hunger
[email protected]
Project Market Light (PML) will deliver agriculture commodity price information to rural Indian farmers on-demand, directly to cell
phones, on a fee-for-service basis in partnership with major content providers and cell phone operators.
Year 1: Pre-commercialization investment opportunity
of $600K to investors with an interest in an innovative
telecom solution.
Year 2: $2.5M to create a major content delivery service
in India.
PML would like to connect with the following partners:
• India’s Wireless Operators
• Handset Manufacturers
• Content and Market Research Partners
http://www.marketlight.org
Impact Area
A brighter future for the world’s poorest farmers
OPPORTUNITY BRIEF
Market: Approximately 60% of the Indian population depends on agricultural revenues; there are about 130M landowning
growers in India. Our initial focus will be on these small farmers; as they become more ‘price savvy’ we expect increasing demand
for real-time information from professional middlemen, commission agents and wholesale sellers as they strive to keep an
information edge.
Revenue Model: Subscription based service, complimented with ad revenue. Content and analysis sold to governments, NGO’s and
the world’s financial institutions.
TECHNOLOGY BRIEF
Our innovative CompresSMS technology effectively triples the bandwidth of a traditional SMS message and enables the phonebased client to update a relatively large number of prices, weather information and basic news using a single SMS.
In addition to raising farmers’ incomes, the structural impact of making agricultural markets more efficient is likely to be positive for
the entire population. Not only will a competitive market be able to provide better quality product at a lower cost to consumers,
but it can also provide economic stability that will enable the landowning class to pay better salaries to the poorest laborers. Similar
efforts in Mali provided the average rice farmer with a 65% to 82% increase in the proportion of the sales price returned to the
farmer.
TEAM
Management:
David Lehr, handheld expert from Palm Source
Mans Olof-Ors, 10 years experience at Reuters
Vipul Arora, an Indian MBA specializing in process reengineering
Advisory Board: major names in Academia and Business
SET Briefs
www.set-info.com
June 2005
23
SolarAmp
For more detailed
information, go to
page 54.
Investment
Partnerships
Technical
Assistance
North Carolina, USA
CONTACT: WILLIAM CONKLIN, CEO
[email protected]
Leadership in 3rd generation nanotechnology photovoltaic (PV) solutions through low cost, highly efficient solar cells.
Commercialization round of $6 million based
on achievement of specific technical targets.
Precommercialization investment opportunity of $400K
to investors with an interest in sustainable businesses.
• Partners for development, manufacturing and
packaging of organic thin film solutions, including:
• Large oil/energy companies i.e. GE
• Companies comfortable with our process i.e. DOW,
Dupont, 3M, AVX
• Large solar companies i.e. Sharp & Kyocera
• Other, smaller companies i.e. Konarka
• Distribution contacts in key developing countries,
i.e. China, India, Indonesia, Brazil, South Africa
• Contacts who can help us grow name recognition
Impact Area
We need experience in both regulated and unregulated
energy sectors to help us size the target markets and
understand the industry issues.
OPPORTUNITY BRIEF
Market: Distributed energy generation for the 1.6 billion people currently without access to electricity. The initial target market is 50
million households by 2015. The secondary target market includes commercial buildings seeking LEED “Green Buildings” certification.
Revenue Model: Licensing, royalties and sale of the LARTEC material. Manufacturing and distribution partners would sell the PV
solution for approximately $100 for use in schools, clinics, villages, solar powered telephones and private uses.
Projected revenues: $24 million by 2010.
TECHNOLOGY BRIEF
The active material in the patented light absorbing rod technology (LARTEC) PV solution costs less than 5% of the cost of 1st
generation PV silicon wafers. It is a total organic solution and has no environmental impact at any point in its life-cycle. The LARTEC
solution can be built into flexible, portable modules for off-grid use or be integrated into building materials such as glass.
RISKS BRIEF
The technology is still in development, with a prototype planned for August 2005.
Environmental benefits associated with avoided emissions of fossil fuels. Social benefits associated with providing electricity, such as
improved quality of life, life expectancy, and education. Job opportunities associated with the sale and installation of the SolarAMP
licensed solution. 10-year monetized social returns in less developed countries based on energy cost savings, jobs created and
increased revenue opportunities from those jobs (with assumed 20% discount rate) are as follows:
NPV Social Benefits
$505,211,803
NPV Costs
$717,782,448
SROI
0.70
TEAM
The team’s experience is sufficient for the present; however, the next business/development stage will require additional expertise
especially with solar/energy industry experience. Current members include: William Conklin, CEO, who had a 30-year career with IBM
where he led and directed a $1 billion business unit with over 1,000 employees, and has managed a number of startup opportunities;
and Jonathan S. Lindsey, Ph.D., lead technical principal, a professor at North Carolina State University, recognized expert in synthetic
chemistry, and founder in Zetta-Core, Inc. a nanotechnology IT company.
SET Briefs
www.set-info.com
June 2005
24
Speak Shop
For more detailed
information, go to
page 57.
Investment
Partnerships
Grants
Oregon, USA
CONTACT: CINDY COOPER, CO-FOUNDER
[email protected]
Speak Shop uses online videoconferencing to provide realtime, one-one-one Spanish language tutoring. It reduces poverty by
enabling foreign language instructors in developing countries to participate in e-commerce as microentrepreneurs.
Year 1: $200,000 in start-up grants or in-kind contributions
for marketing, tutor training and curriculum development.
Year 2: Equity investment will be considered for
expansion into other countries/languages and to
accelerate marketing outreach.
Speak Shop would like to connect with:
• Travel agencies/programs
• Affiliate distributors
• Server, software and peripheral companies
• Development NGOs
http://www.speakshop.com
Learn Spanish for good
Impact Area
OPPORTUNITY BRIEF
Market: Tens of thousands of Spanish instructors in Latin America and potentially millions of foreign language teachers worldwide
could generate a sustainable living given access to a world supply of students. In the U.S. alone, more than 6 million K-12 and
postsecondary students study Spanish each year.
Revenue Model: Subscription-based service or pay-as-you go, complimented with optional for-credit/ specialized curriculum.
TECHNOLOGY BRIEF
Speak Shop makes it easy for tutors to launch their own online businesses and for customers to access high-quality, affordable Spanish
tutoring. The website includes Spanish and English interfaces, scheduling tools, teacher search and rating systems, discussion board,
text chat and a web-based videoconferencing platform that can currently host 50 simultaneous one-on-one tutoring sessions. Speak
Shop is built largely with Zope open source software.
Speak Shop helps people participate in a fair marketplace. Access to global markets can influence job-creation and help grow stable
middle classes. Participating teachers charge 2-3X times the local hourly wages while customers reap significant cost-savings over
alternatives. Speak Shop also increases access to foreign language education and cross-cultural exchange by making them available
to virtually anyone with Internet access.
TEAM
Management: Clay Cooper, MBA, 10 years managing web services in financial services industry; experienced online educator
Cindy Cooper, MBA, 10 years international marketing; expert in social entrepreneurship
Advisory Board: Rigoberto Zamora Charuc, Director PROBIGUA Spanish Academy; Brad Vollmer, Assistant Treasurer, Sun Microsystems;
Eric Olsen, Founder & Principal, MyStrategicPlan.com
Winner:
Best SROI Analysis
SET Briefs
www.set-info.com
June 2005
25
IV. SET Summaries
Bee Conservation Project
27
BookBox
30
DDMotion
33
Hawaii Environmental Biosolutions
36
iPillbox
39
Mobile Media
42
Oceanographic Institute of Dominica
45
Prestige Healthcare Technologies/Global Limb Assistance
48
51
SolarAmp
54
Speak Shop
57
Click on the page numbers to go directly to each summary.
SET Summaries
www.set-info.com
June 2005
26
Turn to page 15 for the
one-page summary.
Bee Conservation
Project
Lagos, Nigeria
Contact: Tunde Fabunmi, [email protected]
The mission of Bee Conservation Project (BCP) is to chart a new future for the rural system in Nigeria using modern
beekeeping technology and apitherapy as the pivot of sustainable human development. We promote modern
beekeeping technology to protect the honeybees in order to improve agriculture and produce honey and other bee
products for income, food and healthcare.
Millennium Development Goals: #1 eradicate extreme poverty and hunger; # 3 promote gender equality and empower
women; #4 reduce child mortality; #5 improve maternal health; #6 combat HIV/AIDS, malaria and other diseases; #7 ensure
environmental sustainability
Partners and technical assistance sought
BCP seeks partnership with groups including but not limited to: Ford Foundation, International Finance Corporation
(IFC), Shell Foundation, ShoreBank, Technoserve, Microsoft, Canadian International Development Agency CIDA, USAID,
and United Nations Foundation. Technical assistance needed includes ICT tools to enhance our training program,
woodworking equipment for hive production and moulds to produce standard honey jars locally.
Investment sought
BCP seeks loans and/or grants, and equity participation, of $5,726,012 over three years. Phase 1: $1,511,144; Phase 2:
$1,822,888; Phase 3: $2,391,980.
Context: Rural and Urban Nigeria
Unlike beekeeping practices in developed countries, in Nigeria, bee colonies in the wild are set on fire to access the
honeycombs. The few surviving bees are starved of food (honey). Bee hunting is done by poor rural people to generate
money. Crop farmers also destroy hives because they think bees are dangerous. Most poor rural people also engage in
massive tree felling to sell as firewood, timber or for charcoal, thus destroying the forests which provide natural habitat
and forage for these social insects.
Market opportunity
Millions of Nigerians crave honey as an alternative to refined sugar as a way to prevent diabetes and other diseases
linked to processed sugar, as well as to treat preventable eye problems, which often lead to blindness. Hospitals,
bakeries, hotels, beauty salons, food service operators and pharmaceutical companies also use high grade honey. At full
implementation 500 tons (500,000 kilograms) of honey will be produced per year. The market demand for high quality,
moderately priced honey sold to Nigeria’s 40 million urban consumers is six times that amount. This means the model
can be replicated across Nigeria.
This venture is limited to honey and other beehive products. At this time Nigerian farmers would not pay for pollination
services, which would be a beneficial byproduct to those that embrace beekeeping to generate additional income.
Scale of addressable social issues: According to the United Nations Development Program Human Development Report,
two-thirds of the 130 million Nigerian population, mostly rural dwellers, is acutely poor; 70% do not have a sustainable
livelihood. BCP’s current plan will directly impact about 5,000 of these people and their families over 5 years, or about
.03% of the 70%. Another several thousand will be indirectly impacted. Improving farm yields nationwide will also have
major systemic leverage.
Solution
Commercialization of modern beekeeping technology is a strategic solution to low crop yields, hunger and poverty.
Development of modern beekeeping technology and attendant pollination increases crop and livestock productivity.
SET Summaries
www.set-info.com
June 2005
27
Bee Conservation
Project
It will provide income and food for farmers while promoting more efficient land use and sustainable agriculture. Honey
is a living food, an excellent sweetener, a salutary drug, and a beauty aid. Contrary to general notions, African bees are
non-aggressive. They only use their stings as a self-defense mechanism when provoked. We have a video to practically
demonstrate that bees are very friendly. There cannot be over population of bees.
Technology description
Modern beekeeping technology has three main features: the use of bee space in the interior of Langstroth hives with
movable frames on which the bees can build combs; the use of beeswax foundation sheets to give the bees a head
start by supplying wax to build brood and honeycombs without exerting too much energy; and lastly, the development
of centrifugal force to ease the extraction of liquid honey from the combs and to return the combs to the hives. The
Langstroth hive and other modern beekeeping technologies are in the public domain, and the honeybee is a free
resource.
Revenue model
The five-year-old Bee Conservation Project (BCP) and its partners promote modern beekeeping technology and
apitherapy in Nigeria via: training; public education on the role of honeybees in agriculture, the environment, and health,
particularly for the poor who cannot afford conventional medical services. Training will be provided free by BCP. The
beekeeping equipment will be sold to trainee beekeepers, who will pay for it at not more than 10% interest in 3-5
installments out of their honey harvests. The balance of their honey will be purchased by the consortium at $2/kg. The
honey will be processed and sold by the consortium to stores and in retail outlets cultivated by the consortium.
Implementation plan
Honey will be produced through an “outgrower” approach. BCP and the other two members of the consortium will
perform training and buy honey, production equipment and accessories to supply to the rural beekeepers on credit.
Then the consortium will process, package and market the honey they produce. In year one the plan is to equip 840 rural
people (420 women and 420 men) spread across 50 communities with 5 hives and other basic beekeeping accessories
each. The project would be expanded at the same rate in the second and third years.
Marketing strategy and competition
BCP will stimulate consumer demand via an advertising campaign on radio, newspapers, tv and the internet to highlight
research studies on the healthful, nutritional and cosmetic values of honey. We will create honey shops in major cities
across Nigeria; channel the supply of packed honey to interested supermarkets and health shops; and direct marketing
through the “Honey Fair” and series of health seminars called the “Bee Alive Forum.”
Currently, there are four grades of honey on sale in Nigeria: imported stock; molasses (sugar cane syrup) hawked as
honey; low grade, poorly packaged honey from bee hunters; and honey locally produced with modern beekeeping
technology. Of the imported stock, the most popular brand is Forever Living Honey from the US, sold for $18.5 per 980
gram jar. Other brands come from Europe and are sold for $4-5 per 500 gram jar ($9-10 per kg). The average price of the
low-grade honey is $5 per kg. At $7 per kg our honey would be a huge savings for those buying imported honey. More
importantly, the higher organic content of our honey produced in pollution-free rural communities sold in packaging
comparable to imported brands would make it the first choice for both high-end and cost-conscious consumers.
Team
Tunde Fabunmi, Team Leader, is a conservationist, beekeeper, beekeeping trainer, apitherapist and the executive director
of BCP. He holds a Higher National Diploma (HND) in Mass Communications and a Diploma in Apitherapy, had 14 years
experience as a journalist on environmental issues before he initiated (BCP), is an Ashoka Fellow and one of the four
Nigerians recognized as Trendsetters by LEAP Africa / Schwab Foundation for Social Entrepreneurship. He is a member
of the American Apitherapy Society and German Apitherapy Society. Dr. Adewale Dipeolu is a university teacher and
Director of UNAAB Consult, a university arm charged with developing modern beekeeping technology and vocations to
SET Summaries
www.set-info.com
June 2005
28
Bee Conservation
Project
promote entrepreneurship and self reliance to fight rising youth unemployment. Justina Modupe Benson is a program
officer in the Diocesan Agricultural Development Program, which includes beekeeping development in Ijebu division
southwest, Nigeria. She is a graduate of Olabisi Onabanjo University with a Bachelors degree in Agric Extension as well
as a practicing beekeeper.
Consortium: UNAAB is one of the foremost universities in Nigeria with a mandate for research and development, teaching
and extension services to improve agricultural productivity, ensuring food security and empowering rural farmers. JDPC is
a Catholic-based NGO committed to promoting human rights, justice, peace and economic development in Nigeria.
Financial projections
Total Income
Expenditure
Out growing
Sales and Distribution
Overhead
Capital Expenditures
Total Expenditure
Net Income
Year 1
1,368,360
Year 2
2,736,720
Year 3
4,105,080
Year 4
3,912,720
823200
302634
145555
239755
1511144
-142784
1159200
518133
145555
0
1822888
913832
1495200
748447
148333
0
2391980
1713100
1008000
762775
196037
0
1966812
1945908
Year 5
3,720,360
1008000
777775
199482
0
1985257
1735103
Social returns analysis
Monetized social impacts
a. Honey producers’ earnings (US$)
b. “Multiplier effect” on local incomes
Present Value
Sum of PVs
Sum of PVs, PPP
SROI
SROI, PPP
Year 1
54012
40509
78768
1339916
3768515
23%
66%
Year 2
188412
141309
228973
Year 3
403200
302400
408333
Year 4
403200
302400
340278
discount rate
Total 5-yr investment
Year 5
403200
302400
283565
20%
$5,726,012
Notes:
1.
2.
3.
4.
Earnings of BCP employees and contractors are not included in this abbreviated SROI analysis.
Multiplier effect of .75 is based on Mellor (Abt Associates 2002).
Purchasing power parity factor in 2003 was 2.8125 (Canadian International Development Agency).
The 20% discount rate reflects the risk benefits may not accrue as assumed.
The benefits quantified above account for only ~3/5 of the direct economic benefits. Additional benefits are:
1. Economic benefits for 20,000+ family members.
2. Lives saved and quality of life improved due to better nutrition and lower incidence of disease.
3. ~10,000 people educated yearly on the uses of honey to stem diabetes and the increasing rate of blindness
in the country noted by the Rotary Club and the Ophthalmologist Society of Nigeria. (According to Dr Etomi
Etimi, cataract accounts for 60% of cases of blindness and other visual impairments. Honey to treat cataracts
is supported by US’ National Honey Board, “Honey-Health and Therapeutic Qualities,” pp.8; Mozherenkov, V.P.
(1991); and “The use of products from bees in ophthalmology and oto-rhino-laryngology,” in Med-sastra, Nov
50 (11), pp.47-51.) Given the acute shortage of specialists (1300 for 130M) and the poverty barrier, honey is a
viable treatment option.
Key indicators: The two key social performance indicators are the number of jobs generated and the number of poor
people to get improvement in their health and nutrition through the use of bee products. Note also that Nigerian
honey is free of botulinum spores, which make honey unsafe for infants under age 1 in Europe, Asia and America. Many
Nigerian women nurse their babies with breast milk, water and honey without any problem.
SET Summaries
www.set-info.com
June 2005
29
BookBox, Inc.
one-page summary.
California, USA
Pondicherry, India
Contact:Brij Kothari, [email protected]
BookBox is a digital “jukebox” of animated digital books, or anibooks, each available in multiple languages. BookBox
synchronizes the text, audio, and visual media so that a child can now read a story on his or her own, simply by listening to
the audio narration and following it word by word in the subtitles. Our anibooks are designed to reach children in languages
they already know as well as others they wish to learn, through electronic media already present in their homes and
environments. BookBox, Inc. was officially incorporated as a C-corporation in November, 2004, in the state of Delaware.
Millennium Development Goal addressed: #2 achieve universal primary education; #8 develop a partnership for global development
Our goal is to align with three types of partners: 1) Publishing companies for content (stories); 2) Content-distribution
companies & television networks around the world; 3) Large retail partners in the US and Europe for distribution of DVD
content. While we’re confident in our own technical capacity, we need more expertise in business development, strategy
& marketing.
Investment sought
We are seeking seed capital of $238,000 for the first year, which covers marketing, rent, communications, wages,
procurement of DVD raw material and production equipment, and initial distribution costs. We will need another cash
infusion of $750,000 at the end of the first year. This will cover operating expenses until the end of Year 2.
Context
Many language groups around the world such as Hindi and Tagalog do not have a rich supply of books, in terms of
both quality and quantity. Books are expensive, and the economics of print runs almost always favor languages for
which there is a large market. This makes it nearly impossible to create a steady supply of quality print books in diverse
languages for children around the world.
Market opportunity
BookBox creates digital anibooks for children that can be reproduced easily in any language, and at volumes that
defy the logic of print runs in the publishing industry. With our mix of approaches that takes advantage of traditional
electronic media and the latest information technologies, BookBox is able to introduce anibooks, hence reading, in the
homes of children all over the world. While BookBox caters to the early-literate in developing countries, it will secure
a financial footing among native and diasporic communities in North America and Europe where the benefit is not
only greater literacy, but also language and cultural learning. Based on this dual-benefit philosophy, BookBox initially
targets two parallel markets: 1. US Digital Market. The home, education, and immigrant foreign language markets in
the US are growing. English is the language spoken by over 82% of the population; 10% speak Spanish; and 8% speak
another language. Globalization and other factors incentivize more parents to teach their children multiple languages.
Additionally, there are about 31 million immigrants nationwide (11% of total U.S. population) and growing. Twothirds of immigrants have only the most basic English-reading skills (“early” literates), and a third lack a high school
education. With English proficiency as a fundamental advantage in the workplace, we expect our product to reach at
least 50% of US elementary educational institutions. 2. India Television Market. BookBox has already made contact with
Doordarshan National Network, India’s national television service devoted to public service broadcasting. It is one of the
largest terrestrial networks in the world, and 60% of a total 500 million viewers in India (300 million) have access only to
Doordarshan.
Scale of addressable social issues: Of India’s population of 858.2 million in 2001, an estimated 103 million may be very
literate, 312 million are “early” literates, and 444 million are complete non-literates. BookBox is especially designed to
improve skills among the 312 million early literates in India, and the 10+ million in the US.
SET Summaries
www.set-info.com
June 2005
30
BookBox, Inc.
Solution
A BookBox anibook takes the text and illustrations of a regular book and adds elements of animation, subtitles and
audio narration in multiple languages to create an engaging multimedia reading experience. Images are shown with
audio, with text stripping across the bottom in Same Language Subtitles (SLS), i.e., subtitles in the “same” language as
the audio. SLS change color, word for word, in perfect synchronization with the audio so that what one hears is exactly
what one reads. Our EMS technology (Enhanced Multiple Subtitles) further provides a modular approach where the
user can select audio, translation and transcription text, each from any language. For languages not using a Roman
script, one can simultaneously see the subtitles in the script of the audio-language and in Roman script (a useful tool for
script learning by association). Our website currently has ten original titles available and averages 500 free downloads
a day. Our SLS efforts on television are, at present, helping 200 million people read in India.
The heart of innovation at BookBox is its ability to allow users to experience reading and language learning with a
customized mix of audio, translation, and transliteration. BookBox’s Enhanced Multiple Subtitles (EMS) enables a user
to dynamically switch languages. The subtitles are synchronized with the audio to highlight the words as they are
sounded in the narration. BookBox is in the process of patenting its EMS approach.
Revenue model
BookBox will generate a sustainable revenue stream from a pay-per-product model for internet downloads and DVD
sales. To keep BBBs affordable and priced competitively, individual downloads will be priced internationally at $5
per download. Users will be able to pay via Paypal or credit card through a user-friendly, secure payments interface.
Institutional licenses will be priced competitively at $20,000 for one year. DVD/VCD/audio CD products will be priced at
retail market rates. In addition, we will earn per-program revenues for TV broadcast packages in India.
Implementation plan
BookBox has an established production process in India, including 1) Story review & selection; 2) Translation &
transliteration; 3) Audio recording; 4) Graphics & animation; 5) Software development, and 6) Copyright assignment.
BookBox’s legal contractual process and royalty-based fee structure incentivizes writers from all backgrounds to
contribute stories, which are then reviewed and produced by a team of editors, artists, animators and musicians. Thus far,
BookBox has produced 7 animation-books in up to 14 languages, with a production schedule of ~2 books/month. We
expect to have 50 titles in 6 languages in Year 1 (covering 94% of the US population and 60% of global internet users),
another 75 in Year 2 (expanding coverage to 96% of US and 95% of global internet users), and to stabilize at 100 in Year
3 and thereafter. In phase 1 we will target the US market for internet downloads and online purchases of other products
such as DVDs. In parallel, we will pursue the television programming market in India for mass distribution of our books
to child viewers. In phase 2 we will expand our market coverage by adding additional languages and exploring tie-ups
with local distributors to reach additional customer segments globally.
BookBox will tap: 1) the education and foreign-language market in the US through Internet downloads and DVDs; and 2)
the early literate population in India through television broadcasts. When BookBox has achieved financial profitability,
it will launch its next phase of global market penetration. US: Over 174 million Americans (55% households) have home
Internet access, so our primary channel will be downloads. In addition, DVD and audio CD versions of our books will
be distributed through online bookstores or large retail stores. 8 out of 10 Americans have access to a television, so the
VCD/DVD market is extremely ripe. India: 1. Television: Over 83 of every 1000 Indians own a TV; in rural villages many
communities share one set for communal use. Through its counterpart PlanetRead, BookBox already has access to state
national broadcasters, facilitating distribution of Bookbox programming through TV broadcast. 2. VCD: These discs cost
just $2-3 in India. Access will follow the same route as access to TV. 3. Internet Downloads: There are currently 7 million
Internet users and growing, allowing Bookbox anibooks to be distributed online for both private viewing and for local
cable operators to show our anibooks on local TV.
Competition: While there are currently many interactive child learning technologies in the market, competitors have
SET Summaries
www.set-info.com
June 2005
31
BookBox, Inc.
limited language offerings. BookBox derives its competitive edge from the multiple languages and scripts offered
through a combination of translation and transcription, with the user deciding the right mix for his/her learning needs.
Team
Brij Kothari holds a Ph.D. in Education and a Master’s in Development Communication. He is a co-founder and CEO of
BookBox Inc., founder of the nonprofit, PlanetRead, a Reuters Digital Vision Fellow at Stanford, and an adjunct professor
at the Indian Institute of Management. Mohammed Abdoolcarim received his degree in Product Design and Master’s
in Mechanical Engineering at Stanford. He currently leads the product development of BookBox. Lavina Tien majored
in Communication with a minor in East Asian Studies from Stanford. She is responsible for the marketing and external
communications for BookBox. Zi Shen Lim is an undergraduate majoring in Electrical Engineering at Stanford. He
contributes technical expertise. Stuart Gannes is Director of the Stanford Digital Vision Fellowship Program. His career
spans the disciplines of journalism, software publishing corporate research, and education.
Revenues
Downloads
VCD/DVD
Personalized stories
Schools/libraries
TV Programming
Total
Expenses
VCD/DVD raw materials and distribution
Wages (US and India)
New books (English only)
Additional langs: 5 first year + 4 following year
All other
Total
Profit (loss)
Quantity
30,000
25,000
5,000
5,000
1
25,000
17
50
250
Year 1
Revenue (Cost)
$60,000
$250,000
$25,000
$100,000
$100,000
$535,000
($125,000)
($248,000)
($100,000)
($50,000)
($206,700)
($729,700)
($194,700)
Year 4
Quantity
240,000
150,000
50,000
50,000
8
Revenue (Cost)
$720,000
$1,500,000
$250,000
$1,000,000
$800,000
$4,270,000
150,000
21
100
900
($750,000)
($408,000)
($200,000)
($180,000)
($595,992)
($2,133,992)
$2,136,008
In India, a cartoon on Doordashan National Network is regularly viewed by 100 million children nationwide. Annually,
a weekly 30-minute program with 52 episodes x 4 books per episode = 208 Bookbox books viewed annually. It thus
costs US $100,000 to air 208 BookBox books per year. This amounts to roughly US $1 to make 1000 children read for an
entire year!
Cost (per person per year)
Reach (millions of early literates)
BookBox on national TV
US $0.001
100
Traditional approach
US $3
46
In the US, many schools do not have language resources for the immigrant community, or even for second-language
learning. BookBox can stock its anibooks in school and public libraries.
SET Summaries
www.set-info.com
June 2005
32
DDMotion
one-page summary.
Maryland, USA
Winner:
Best SROI Analysis
Contact: Cate Han, Co-Founder, [email protected]
Founded in 2002, DDMotion has six patents for an Infinitely Variable Motion Control, a revolutionary platform technology
which improves performance and reduces energy use and emissions at a lower cost when applied as a transmission, a
compressor, or an alternative generator.
Millennium Development Goal addressed: #7 ensure environmental sustainability
DDMotion is seeking partnerships with industry leaders to retrofit existing transmissions, compressors, or alternative
generators to establish its platform technology for future innovation by market leaders. Partnerships will render
significant licensing contracts as research projects move from concept to reality.
Investment sought
DDMotion is seeking a first round of $1M to take its patented technology to market.
Context
The transmission is the best understood motion control device. Changes in the U.S. transmission markets have evolved
slowly, but a number of stricter emissions laws in the U.S. are now due by 2007. While historical emissions standards
have forced the auto industry to make incremental improvements over the years—giving auto manufacturers leverage
to lobby against 2007 dead-lines—heavy truck and equipment manufacturers are in a significantly weaker position and
will likely be forced to comply with upcoming regulations. “The principal barrier preventing successful introduction of
a continuously variable transmission for the heavy truck industry has been the availability of suitable technology that
can withstand high torque loads over extended periods at a reasonable price.” Based on technologies available today,
analysts predict that end consumers will have to pay $5,000 to $10,000 more per heavy vehicle to meet upcoming
standards.
Program
Improvement Goal
Target Date
Corporate Average Fuel
Light trucks must reach 22.2 mpg
2007
Economy (CAFE) Standards
(from 20.7 mpg)
EPA Emission Standards for
Reduce air pollution from non2007
New Non-Road Engines
road engines by 60-90%
EPA Emission Standards for
Reduce smog-causing particulate
2007
Heavy Truck and Buses
matter from all new heavy trucks
and buses by 90% (from 2000 levels)
Market opportunity
The Company is focused on the $32B transmission market for commercial and consumer automotives and heavy
equipment and the $7B compressor market. Both industries face stricter EPA emissions standards, and though energyefficient technologies currently exist, they are expensive or contain inherent design limitations.
Scale of addressable social issues: In 2001, our world consumed 77.13 million barrels of petroleum a day and produced
approximately 6.5 billion metric tons of carbon emissions. CO2 is a global problem, but the countries that produce the
greatest amount per person are in North America, Europe and Australia. During 2003, 83% of total U.S. greenhouse
gas emissions consisted of carbon dioxide from the combustion of fossil fuels such as coal, petroleum, and natural gas.
According to the US Department of Energy Emissions of Greenhouse Gases in the United States, 1.6 billion metric tons
of carbon emissions were released in 2001 from fossil energy consumption in the residential, commercial, industrial and
transportation sectors. DDMotion aims to reduce carbon emissions by 20% through units applied across these sectors.
SET Summaries
www.set-info.com
June 2005
33
DDMotion
Solution
DDMotion’s IVT delivers fuel efficiency by mechanically providing the optimal gear ratio for all operating conditions. This
provides a continuous spectrum of output to precisely meet a system’s energy requirements using power input from
any constant, variable or intermittent source. Its unique Three Variable Control (TVC) makes DDMotion’s technology
the only purely mechanical device able to offer energy savings at a reasonable price while overcoming inherent design
limitations faced by competing technologies.
5-Speed Transmission
Energy Output
Amount of Energy Wasted
3
Infinitely Variable Transmission
5
4
Energy
Required
Energy Output
No Fuel Wasted!
Fewer Emissions!
2
1
DDMotion’s solution is a direct driver and thus does not have the same limitations as current IVTs. It does not require
expensive high-tech materials, precision manufacturing, or electronics, making it affordable when compared to
automatic transmissions and current IVT designs. It can easily be retrofitted to fit frames for existing transmissions,
minimizing changes to existing manufacturing processes.
DDMotion has six patents for Infinitely Variable Motion Control technology. Since 2002, the Company has focused on
patents and engineering working models. The TVC system is analogous to a transistor in electronics in that it has 3
variables: (1) the input, (2) the output, and (3) a control. Like a lighting dimmer switch, the control is able to deliver
an output of zero, the maximum rpm, or any rpm within this range… without changing or interrupting the input. The
output is independent of the input! For a variable input, the output can be zero, variable, or even constant. This control
has enabled DDMotion to build the only known transmission durable enough to handle the high torque loads of heavy
machinery for an extended period of time at a reasonable cost.
As seen in the engineering sample at right, the design is compact and durable. Because it is composed solely of gears
and cams, commercially available parts, it is scalable and does not require electronic or hydraulic controls, expensive
high-tech materials or precision manufacturing. It costs less to manufacture than an automatic transmission, but can
offer up to 30% increased fuel savings and thus 30% reduced emissions.
Revenue model
Initially, DDMotion will license to Original Equipment Manufacturers (OEMs) and expects 3-5% royalty income per product
sold. The benefits of licensing include low capital investment and manpower requirements, flexibility to capture a broad
market, lower risk and payout upfront. Concurrently, DDMotion will pursue potential strategic partners interested in a
joint venture to license to suppliers. The benefits of a strategic partner include shared capital and resources including
commercial expertise, an established sales force, and a faster rollout in global markets. DDMotion is currently in talks
with a major U.S. diversified manufacturer. Down the road, DDMotion may consider manufacturing and selling directly
to assemblers in order to reap the benefit of achieving a higher profit margin through more competitive pricing as well
as tighter control over both quality and the IP.
Implementation plan
Development: DDMotion will engage transmission manufacturers to build a prototype to fit customers’ equipment
SET Summaries
www.set-info.com
June 2005
34
DDMotion
and performance requirements. Upon approval, additional prototypes will be built and tested. Delivery: DDMotion will
negotiate contracts for delivery of its transmissions and compressors with OEMs and a “limited field of use” licensing
agreement with designated manufacturers.
DDMotion is now marketing its technology to industry leaders in the transmission and compressor markets to establish
its technology as a platform for future innovation. The company is responding to inquires from brand-name companies
whose needs range from $100 garden tractor transmissions to $100,000 industrial equipment transmissions as well
as leading power consumers in the compressor vertical. DDMotion’s patented technology is superior to that of Torvec
and Torotrak. Torvec specializes in automotive-related technology. It holds numerous patents for steering drive and
suspension systems for tracked vehicles, infinitely variable transmission, and other mechanical technologies. Torotrak is
a technology company in the UK offering design and development of traction-drive IVT systems.
Transmission
Fuel Efficient?
DD Motion IVT
Automatic
Manual
CVT
Torotrak IVT
John Deere IVT
Torvec IVT
Yes
No
Yes
Yes
Somewhat
No
Somewhat
Ease of
Operation
Friendly
Friendly
No
Friendly
Friendly
Friendly
Friendly
Price
Inexpensive
Expensive
Inexpensive
Inexpensive
Expensive
Expensive
Expensive
Torque
Capacity
High
High
High
Limited
Limited
High
High
Life Span
(Durability)
Long
Long
Limited
Limited
Limited
Long
Long
Size/Weight
Small/Light
Large/Heavy
Small/Light
Small/Light
Large/Heavy
Large/Heavy
Large/Heavy
Team
Founder and CEO Key Han is an award-winning mechanical engineer with over 30 years of innovation experience.
During his 17 years at General Electric, Han worked as an engineer and international purchasing manager. Han invented
several products which generate significant revenue for GE. Cate Han, Co-Founder and VP of Marketing, has established
industry relationships with potential clients and joint venture prospects and won numerous awards in business plan
competitions. Han earned a Chartered Financial Analyst designation in 2002 and an MBA from Columbia Business
School. Richard Wiklund, VP of Business Development, is an entrepreneur with over 15 years of expertise in business
development, sales and marketing for companies ranging from start-up to $400 million.
($ thousands)
Revenue
EBITDA
Employment
2005
2006
2007
2008
2009
160
-378
5
562
-898
8
2,055
-541
10
6,137
2,338
12
13,977
6,527
12
DDMotion’s primary social benefits are improved human health from diminished CO2 emissions resulting from improved
energy efficiency. Associated benefits include drastically reduced asthma, fewer premature deaths, less soot, and more
diverse ecosystems since air pollutants increase acidity in waters and deplete the nutrients in soil. The implementation
of DDMotion’ technology into vehicles and compressors over the next 10 years will result in CO2 reduction saving
approximately $110 million in social benefits. For every dollar invested in DDMotion, there will be an approximate return
of $1.41 in social benefits based on the present value of our projected expenses for the next ten years.
Monetized Social Benefits from CO2 Savings
2005
($ thousands)
Vehicles Equipped w/DDMotion’s IVT
10
Vehicles Equipped w/Existing Fuel Efficient Technologies 1
SET Summaries
2006
2007
2008
…
10-year
NPV
60
5
321
24
562
42
…
…
24,992
(1,874)
www.set-info.com
June 2005
35
one-page summary.
Winner:
Best SROI Analysis
Biosolutions, Inc.
Hawaii, USA
Contact: Liangjie Dong, [email protected]
Our mission is to improve water quality worldwide by providing environmentally sound and cost-effective wastewater
treatment solutions. HEB is an innovator and leader in the animal wastewater treatment and polluted rivers/lakes
remediation fields because our products are less expensive to install and operate and are more efficient than competing
technologies. As a result, dairy and animal farming can become more sustainable and environmentally responsible. HEB
products are also being used to make polluted rivers and lakes cleaner.
Millennium Development Goal addressed: #7 ensure environmental sustainability
HEB is seeking marketing partners in the U.S. as well as in developing countries.
Investment sought
HEB has $125,000 in seed capital from its founders. We seek $2 million equity investment for woring capital.
Context
For many years animal wastewater has been the number one pollutant of water supplies in the United States. It is difficult
and expensive to treat because of its high lipid (fat) content. Many farmers cannot afford to treat such wastewater
because of the cost. In addition, today ninety percent (90%) of wastewater discharged into the environment in China is
untreated. About seventy five percent (75%) of urban lakes and rivers are polluted. To combat this, the Chinese Central
Government has significantly increased spending on environmental protection.
Market opportunity
HEB has focused on two initial markets: United States Dairy Market: The United States Environmental Protection
Agency (EPA) and the United States Department of Agriculture (USDA) in 2002 jointly issued a new rule that requires
all Concentrated Animal Feeding Operations (CAFOs) to apply for permits for discharging wastewater into government
water bodies by 2006. A wastewater treatment market of $326.0 million annually was created by this new regulation
because farmers must aggressively treat their animal wastewater by-products to meet the standards required to
obtain the required permits. To help farmers comply with the regulations, the government authorized and funded the
Environmental Quality Incentives Program (EQIP). Projected funding increases from $200M/yr. in 2002 to $1.3Bn/yr. in
2007. China Wastewater Market: It is projected that China will spend 2% of its GDP annually ($85 billion) by 2010 on
environmental improvement projects. Of the $85 billion, $22 to $36 billion will be spent on wastewater treatment.Products
and Service: HEB develops, manufactures and sells two proprietary wastewater treatment products: the Anaerobic
Bionest Reactor and the Biopottery-Windmill River/Pond Cleanup System. The Bionest Reactor quickly and effectively
breaks down lipid content in animal and other high organic content wastewater. This provides affordable solutions
to farmers and will have applications in other waste disposal industries. The Biopottery media traps waste processing
bacteria and increases municipal wastewater processing efficiency thus reducing treatment plant construction cost by
30-40%. The Biopottery can also be installed in polluted lakes and river to treat pollutants in situ.
Scale of addressable social issues: In the United States, there are 1450 dairy farms and 11,000 other animal operations
that urgently need to manage the wastewater. In addition, there are hundreds of thousands rural communities that
need to update their open ponds to better treatment system. About 245 polluted rivers and urban lakes need in-situ
bioremediation in China.
Solution
HEB is a pioneering environmental waste treatment company that specializes in technology for processing high organic
content wastewater. We provide unique and innovative technologies for biological treatment of wastewater. HEB
designs and builds wastewater treatment plants and sells its flagship products, the Bionest reactor and the Biopottery-
SET Summaries
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June 2005
36
Biosolutions, Inc.
Windmill River/Pond Cleanup Systems. HEB also provides polluted water remediation and technical consulting services
to its customers worldwide.
Accomplishments to date
• Two demonstration plants have been successfully designed, developed, installed and operated in Hawaii. They are
available for visits by farmers and the public.
• Patent applications for both the Bionest and the Biopottery technologies have been filed by the University of Hawaii HEB
obtained exclusive licenses to both.
• We have four pre-committed customers in the US.
• A Chinese city’s river cleanup project (over $20 million in contract value) is in negotiations.
• We have developed a strong strategic partnership with suppliers who have distribution channels in U.S. dairy market.
• HEB won the 2004 University of Hawaii Technology Prize.
Anaerobic Bio-nest Reactor: High content in lipids (a particular fat) causes most conventional anaerobic bioreactors to
be unsuitable for treating dairy wastewater. Our Bio-nest reactor is the only high-speed anaerobic reactor (pollutant
loading rate more than 10 kg/m3/day) for this application. The bio-nest reactor holds highly activated bacteria that
convert pollutants into biogas. It operates over a wide temperature range of 18 - 400C. This product can be easily
integrated with existing farm lagoon systems and generates effluent that can meet the new government standard for
wastewater discharge.
Biopottery-Windmill Pond Clean-up System: The standard for wastewater reuse is higher than that for wastewater
discharge. The Biopottery-Windmill Pond Clean-up System is targeted for wastewater reuse. This system is an integration
of a special bio-media (Biopottery) device and aeration windmill. This system can be installed into ponds and produces
cleaner effluent that can meet the more stringent standard of wastewater reuse. Clients will benefit from this product
with both clean water and less energy consumption.
Revenue model
HEB sell it Bionest reactors and Biopottery system at an average price of $535,000 per unit. Our initial sales forecast is
based on reactor sales in the United States only.
Gross Sales
2005 2006 2007 2008 2009
Number of units
2
9
17
26
44
Total gross sales ($ mil)
1.1
4.8
9.6
14.4
23.6
Cost of goods sold ($ mil)
0.69
2.7
5.2
7.6
12.2
Gross Margin($ mil)
0.43
2.1
4.4
6.8
11.4
Gross profit margin %
39
43
46
47
48
Implementation plan
In the demonstration project, we have successfully developed a “5 Cs” concept: Clean water, Clean air (odors from
manure are oxygenized), Clean energy (wind energy is used and methane gas is produced and captured as fuel
source), Cost effectiveness (only 18% of the price of a traditional facility), and Controllable runoff (runoff from ponds
and other facilities are controlled). HEB will conduct showcases of our products for prospective customers. We will also
take advantage of marketing opportunities offered by out association with the UPA and USDA and their showcase and
promotion programs. We also planned demonstrations and presentations at waste treatment and agricultural industry
conferences. Marketing videos showing the advantages of our products will be sent to target customers in the farming
and wastewater treatment communities. Our web site will also be used as a key instrument for online showcase of our
capabilities.
HEB has three major competitors in the US: Gas Technology Institute, MCON BIO, Inc and Environomics Inc. They all use
conventional technologies which take much longer to treat dairy wastewater than HEB products. By analyzing past
projects of competing companies, we found that a representative 1,000 cow dairy farm waste water treatment system
SET Summaries
www.set-info.com
June 2005
37
Biosolutions, Inc.
has an average construction cost of $595,000 and a yearly operational and maintenance (O&M) cost of $118,000. HEB’s
solution has a construction cost of $535,000 and $46,000 in annual O&M cost.
Our competitors are much slower in treating wastewater and have higher O&M cost. Our additional advantages:
• Protected and proven technology: patent applications for the Bio-nest and Biopottery technologies were filed by the
Technology Transfer office of the University of Hawaii. HEB has the exclusive license to use this technology.
• Proven prototype of products: USDA and EPA funded the inventors of our BioNest and Biopottery with $730,000 in
development support to commercialize the technology. Two demonstration plants have been constructed and are in
operation in Hawaii.
• Well-developed distribution channel: HEB has partnered with Superior Windmill and Tanks Inc. This company is a
long established provider of water treatment products to farmers. It provides an extensive distribution channel for
HEB products.
Team
A major asset is our highly talented and experienced management team. The five key individuals compliment each other
well and combine expertise in a diverse group of important areas. Dr. Jingbo Chang, CEO, has extensive experience in
the environment industry and in government contracting. Liangjie Dong, vice president and the inventor of the Bio-nest
and Biopottery technology, brings expertise in wastewater biological treatment as well as six years business experience.
Dr. Walt Atkins, our director of business strategic development, brings his 39 years of business development and
management experiences and is responsible for strategic planning. Shu Liang (student), M.B.A., is director of marketing.
She had been the event director of an international conference “ChinaTech 2002”and was a marketing manager for
China Telecom for seven years. Xiang Yee, P.E., chief construction engineer, has extensive experience in wastewater
treatment plant design and construction.
We have exciting state-of-the-art technology and high market demand for our products. Based on conservative
projections, HEB will become profitable in the second fiscal year and net profit will undergo steep growth to nearly $5
million by the fifth fiscal year
Year
2005
2006
2007
2008
2009
Sales of Units
2
9
17
26
44
Yearly net income
($273,871)
$380,535
$1,458,758
$2,438,074
$4,924,068
Net changes in cash($) 95,130
129,535
216,758
642,074
185,068
Cash at end of year($) 95,130
224,665
441,422
1,083,496
1,268,564
HEB technologies and products can dramatically improve the quality of drinking water resources and surface water. A
major source of drinking water pollution in underdeveloped and some urban areas is human and animal waste. HEB
supports the Millennium Development Goal (MDG) of “ensure environmental sustainability” by providing cost-effective
and high efficiency wastewater solutions worldwide to farmers and rural communities. Our products are particularly
suited to less developed locations because of their low energy demands and low maintenance requirements.
Based on the investment of $2 million, HEB will create 20 jobs, help 98 dairy farms manage the wastewaters and return
many benefits to the environment.
Year
Sale Units
BOD Removal (kg)
Clean Water(m3)
Methane Gas(m3)
Air Protection km2
Created jobs
2005
2
2,544,696
646,272
1,244,074
12
4
Environmental benefits and jobs creation
2006
2007
2008
2009
9
17
26
44
11,451,132 21,629,916 33,081,048 55,983,312
2,908,224 5,493,312 8,401,536 14,217,984
5,598,331 10,574,626 16,172,957 27,369,619
54
102
156
264
5
5
4
2
SET Summaries
Total of five years
98
124,690,104
31,667,328
60,959,606
588
20
www.set-info.com
June 2005
Per $
62
16
30
38
iPillbox
one-page summary.
California, USA
Contact: Yann Kwok, Founder, [email protected],
Geoffrey Bush, [email protected]
iPillbox is an “intelligent pillbox” connected to the mobile phone network that reminds the patient to take their
medication at the prescribed time. By helping the patient to be compliant, iPillbox avoids the costly and sometimes fatal
complication of hospitalization as a result of non-compliance. In South Africa, iPillbox will increase by a factor of three
the efficiency and efficacy of drug compliance programs for HIV/AIDS and tuberculosis (TB), and will help prevent multidrug resistant TB from developing.
Millennium Development Goal: #6 combat HIV/AIDS, malaria and other diseases.
For help with pilot testing, healthcare management organizations like Kaiser Permanente and academic institutions
like Stanford University School of Medicine. For seed funding, social investors and engaged philanthropy funds such as
Acumen Fund, Gates Foundation, San Francisco Foundation, Robert Wood Johnson Foundation, California Endowment,
and Kaiser Family Foundation.
Investment sought
The project has been incubated at Stanford’s Reuters Digital Vision Program which provides fiscal sponsorship. An
initial grant of US$1M is sought to cover the operations for 18 months while we refine the prototype and conduct a six
month pilot test in the U.S. Subsequently we plan to seek venture capital to scale commercially.
Context
Over 5M people are infected with HIV/AIDS in South Africa – causing over 300,000 deaths annually and resulting in over a
million children orphaned. TB affects two thirds of them – making South Africa the world’s most heavily infected country.
The mining industry is key to the South African economy, and with over 40% of the miners in-fected the escalating
healthcare costs and economic impact are enormous.
Market opportunity
Taking the correct pills, in the right quantity and at the right time is called compliance. Roughly half of the world’s
patients are non-compliant. In the US alone, non-compliance results in over 225,000 lives lost annually and an estimated
$100 billion due to increased hospitalizations. In South Africa, the HIV/AIDS situation is so acute that there are not
enough healthcare givers to assist the patients (in some hospitals, over 50% of the beds are occupied by HIV patients).
iPillbox will have a significant social impact even in the US. The US population is aging rapidly and the population
segment over 65 takes the majority of the national healthcare budget, with the average American in that group taking
more than 8 pills a day. In the US, 30M people receive medications for chronic illness through retail pharmacies.
In South Africa, HIV/AIDS affects more people than any other country in the world. Complex ARV drug cocktails require
strict compliance to achieve the proper results, even after symptoms have disappeared. To make matters worse, TB
infects 2 out 3 of these HIV/AIDS patients. While TB is simple to cure, non-compliance not only results in the patient’s
death, but leads to multi-drug resistant strains of the disease. As a result, non-adherence to these drug regimens costs
the South African economy billions in lost productivity and hospitalization costs, while in-creasing mutant disease
strains. In an effort to mitigate its 50% non-compliance rate, South Africa uses the method recommended by the World
Health Organization to improve compliance: Direct Observation Treatment, Short Course, method (DOTS) i.e., directly
observing patients ingest the medication. South Africa spends an estimated $500 per patient per year on DOTS and can
treat only 15% of the target population because it is labor intensive. By leveraging technology, iPillbox makes it more
economical to treat HIV, allowing for more patients to be treated and monitored, promotes compliance and increases
the patients’ lifespan and prevents the development of multi-drug resistant TB strains.
Scale of addressable social issues: There are a total of 5M HIV/AIDS people in South Africa and 9M infected with TB. Our
estimated serviceable market is 790,000 HIV/AIDS patients and 532,650 TB patients.
SET Summaries
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June 2005
39
iPillbox
Solution
iPillbox is an “intelligent pillbox” connected to the mobile phone network and is suitable for patients with an active
lifestyle. iPillbox addresses patient behavior. It reminds the patient to take their medication at the prescribed time using
an audible and visual message. When the pill is removed, a message is relayed to the healthcare provider, confirming
that the patient has taken the medication. iPillbox motivates its user through three important, market-tested design
features: it is small, unobtrusive, and emotionally rewarding in that it can be programmed to provide sensory feedback
to reinforce adherence and internalize medication regimens in several ways (e.g. a message such as thanks for taking
your pill,’ a change in the glowing display from red to blue, a tone or music clip; or a vibration). The solution includes a
service that provides access to a central database that receives the transmissions from all of the client’s connected units.
This database allows healthcare providers to view each patient’s medication history in real-time and pharmacy clients to
view refill schedules and send reminders to patients whose prescriptions are ready for pick-up, and enables escalation
procedures when the patient remains non-compliant. South Africa, iPillbox would improve the efficiency and scope of
DOTS threefold.
The current design concept is a small form factor with a color display window. It includes a microprocessor with
embedded applications and flash memory. The SMS enabled device communicates with its server through the wireless
network. The modular pill magazine is coupled to a dispensing mechanism. A provisional patent has been filed for the
initial product concepts.
Revenue model
A key component of our revenue model is economies of scale: we estimate breakeven at about 10,000 patients in the
US. Our hybrid business model has commercial sales in the US and sales on a cost-recovery basis in South Africa. In the
US, our primary customers are patients reimbursed under a medication management code. We estimate the device to
cost $40 with a $15 monthly subscription fee paid by the health insurance companies. In South Africa, iPillbox will be
deployed by partnering with existing HIV initiatives and through South Africa Government grants. With iPillbox, the
government can treat 3 times more patients on the same budget.
Implementation
We have explored concepts and developed various prototypes at Stanford. We are currently being mentored by medical
device entrepreneurs and venture capitalists in Silicon Valley to refine the concepts and review the market needs. The
critical success factors are to (a) identify the ideal market segment that will make the project financially sustainable (b)
prove in the pilot testing that the device improves compliance where the benefit clearly outweighs the cost (c) ensure
that we bring in the right mix of skills required to execute the project (d) reduce the technology risk by outsourcing the
manufacturing with an experienced contractor. We are also currently talking to healthcare insurance companies and
pharmacies to identify potential avenues for partnership.
In the US, the current medication reminders are sold directly to the mass consumer market, without focusing on a
particular market segment. These devices are sold online or by mail order and are not reimbursed by health insurance
companies. Because patients are paying out of pocket for those devices, sales are low and have not really taken off.
iPillbox plans to overcome this by focusing on: (a) patients who can be reimbursed by their health insurance companies
for medication management, and (b) a specific disease state where the effects of non-compliance can be clearly
demonstrated, e.g., TB patients, and patients with congestive heart failure where the prevalence of noncompliance is
42% and hospitalizations are common and costly.
In South Africa, the current strategy to combat TB is the DOTS method, but because of the low healthcare provider:TB
patient ratio, the DOTS system is overwhelmed. iPillbox will compliment the DOTS system. Therefore, iPillbox will be sold
to government sponsored healthcare clinics and the non-profit organizations working with these clinics.
Team
Geoffrey Bush, Project Development, Ph.D in Neuroscience from the University of Texas Medical Branch. Broad background
in research and bioengineering working for Lockheed Martin. Interested in social entrepreneur-ship applications in
the health sector. Sara Cantor, Marketing and Sales, Master’s degree in Design Planning from the Institute of Design at
SET Summaries
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June 2005
40
iPillbox
Illinois Institute of Technology (BS in Mechanical Engineering, Northwestern University). Steve Herbowy, Engineering
Technology, Masters candidate in Mechanical Engineering at Stanford University. His research includes projects in
medical devices, autonomous electromechanical design and an optical detection method for biosensors. Judy YehKuan, Financial Manager, MBA from UC, Davis and currently is Manager of Supplier Development Engineering & Process
Excellence at LifeScan Inc., a Johnson & Johnson Company with extensive experience in medical device development
and manufacturing. She is a certified Six Sigma Black Belt and Master Black Belt candidate. Yann Kwok, Founder, MBA and
Sloan Fellow from MIT (Bachelor of Commerce from the University of Cape Town), is currently a Reuters Digital Vision
Fellow at Stanford University. He founded two startups in the IT and Telecom industry and sold one to Rogers Telecom.
As a strategy consultant for the UN, he worked on various African-related missions. Andrew Moon, Operations Manager
is an economics major at Stanford University and has studied development economics at Oxford Univer-sity.
Revenue
No. of devices sold (less cancellations) at
Revenue from device sales
Recurring revenue from iPillbox services
Total Revenue
Cost of Sales
Gross Margin
Gross Margin (%)
Admin/overhead
R&D/Engineering
Total Costs
Net Profit
Cumulative Profit
Year 1
165,000
$6,600,000
180 $29,700,000
$36,300,000
($13,860,000)
$22,440,000
($3,630,000)
($3,630,000)
($21,120,000)
$1,320,000
$1,320,000
40
Year 2
Year 3
330,000
660,000
$13,200,000 $26,400,000
$59,400,000 $118,800,000
$72,600,000 $145,200,000
($27,720,000) ($55,440,000)
$44,880,000 $89,760,000
62%
62%
($7,260,000) ($14,520,000)
($7,260,000) ($14,520,000)
($42,240,000) ($84,480,000)
$2,640,000 $5,280,000
$3,960,000
$9,240,000
Year 4
1,320,000
$52,800,000
$237,600,000
$290,400,000
($110,880,000)
$179,520,000
62%
($29,040,000)
($29,040,000)
($168,960,000)
$10,560,000
$19,800,000
Year 5
2,640,000
$105,600,000
$475,200,000
$580,800,000
($221,760,000)
$359,040,000
62%
($58,080,000)
($58,080,000)
($337,920,000)
$21,120,000
$40,920,000
Assumptions: 1. iPillbox units sell for $40 each; 2. Monthly subscription fee $15; 3. Year 1 market penetration = 1% x 30M
target customers; 4. Annual market growth rate is 100%; 5. Cost of service includes revenue sharing with pharmacies/
research contractors; 6. Admin./overhead expenses = 10% revenues; 7. R&D/engineering expenses = 10% revenues.
Social return on investment analysis
Quantified Social Returns
South Africa
Serviceable HIV/AIDS cases
Serviceable TB cases
Total penetration rate
# HIV/AIDS lives prolonged
# TB lives saved
Year 1
Year 2
Year 3
Year 4
Year 5
795,000
532,650
0.01
7,950
5,327
874,500
585,915
0.2
17,490
11,718
961,950
644,506
0.03
28,859
19,335
1,058,145
708,957
0.04
42,326
28,358
1,163,960
779,852
0.05
58,198
38,993
At the estimated cost of $160 per patient per year, iPillbox allows three times more patients to be treated on the same
budget, while improving data. iPillbox will improve compliance rates from 50% to 80% for TB, resulting in an additional
44,700 patients surviving per year. We estimate a gradual penetration of the patient population; even so, immediate
implementation of iPillbox would save over 100,000 lives by year 5. As a result of fewer fatalities, fewer children will
be orphaned. We also know the impact of compliance will prevent the spread of TB drug resis-tance. While we are not
quantifying the health benefits in US patients, we expect these will be substantial as well.
Performance indicators: The average South African has a life expectancy of 43 years. The life expectancy of an HIV
patient is even less. An improvement in the life expectancy of patients treated with iPillbox will be a direct proof of the
technology’s effectiveness.
SET Summaries
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41
one-page summary.
MobileMedia
California, USA
Contact: Melanie Edwards, CEO, [email protected]
MobileMedia is a community-based, digital data collection service enabling governments, corporations, international
organizations, non-governmental organizations (NGOs), and foundations to better understand and more effectively
service underserved communities in developing countries. MobileMedia’s model is based upon employing and training
local residents to collect demographic information door-to-door about their community using handheld computers.
MobileMedia is a U.S. registered 501(c)3 nonprofit organization.
Millennium Development Goals Addressed: #1 eradicate extreme poverty and hunger; #8 develop a global partnership for
development; Indirectly #2 - #7
MobileMedia is seeking partnerships with micro-credit lenders, telecommunication, healthcare and pharmaceutical
companies interested in growing their markets; international health, education, employment and/or computer training
NGOs to expand the network of community-based data collectors (MobileAgents™); and contributions from PC, PDA,
memory card and card reader manufacturers, and internet and wireless access providers.
Investment sought
Stage 1: $1.5 million/year grant over 2 years to collect demographics on 600,000 families and extend client-base
from 1 to 6 clients in Brazil. Stage 2: $1.5 million/year recoverable grant over 2 years to survey 800,000 families across
3 countries for 10 clients.
Context
According to the United Nations Development Program (UNDP), three-fourths of the world’s six billion people live in
“developing” countries (approximately 5 billion). Ninety percent of these people live in poverty according to World
Bank standards (or over 4 billion people). Of these in poverty, nearly 1 billion are considered “invisible”, having no official
record of their existence. These “invisible” are the world’s most vulnerable, including millions of unregistered newborns,
adults without healthcare, property titles or voting rights.
Due to the lack of demographic information which leads to formal recognition, or “membership cards” to society, these
populations are neglected when important policy and budget decisions are made, so services for them are underfunded
or not funded at all. If little to nothing is known about these people’s realities, how can they be properly served?
Market opportunity
There are 120 developing countries in the world and their governments (federal, state and local), corporations,
international organizations, NGOs and foundations require data about the needs of their citizens/customers in order to
deliver their products/services/information most effectively. MobileMedia targets include:
Governments: Our first target country is Brazil, where the da Silva administration is accelerating a comprehensive
program to stimulate rapid growth and social progress. The Brazilian Ministry of Social Development has increased
social investment to $1.9 billion in 2004 and the World Bank (2004) projects total spending to of $11 billion for the
period from 2004-2007. The centerpiece effort is known as the Bolsa Familia, a ‘family grant’ based upon data collected
about underserved families. This program is projected to grow from 6.6 million families (January 2005) to 11.2 million
(44 million people) by year end 2006. Yet the World Bank notes that, “only a small percentage spent by the Brazilian
government on social protection reaches the poor, due partly to [inefficiency in targeted programs].” The Ministry
needs an infrastructure solution now, and MobileMedia has been endorsed and is currently being referred to municipal
governments tasked with local, community data collection. There are more than 5000 municipalities in Brazil.
SET Summaries
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42
MobileMedia
Corporations: Through customized needs-assessment research or purchasing existing MobileMedia data, corporations
that provide critical products and services to underserved communities can make better market-entry and distribution
decisions. These include microcredit banks, telecommunication, pharmaceutical and healthcare providers.
NGOs/Foundations: In the case of Brazil alone, approximately 350 NGO organizations ranging in size from $50,000 to
$50 million are serving or plan to serve MobileMedia’s target “invisible” populations in the areas of AIDS, education,
urban issues, health, work and income. Every developing country has hundreds of NGOs addressing similar social issues.
Given that MobileMedia is an independent third party, foundations may contract the data collection service to measure
the impact of program dollars. Payment for MobileMedia services will come directly from foundations or NGOs with
foundation needs-assessment or program evaluation grants.
Scale of addressable social issues: In the world, over 700 million people in 120 developing countries are “invisible.” In
Brazil alone, an estimated 20 million out of 39 million classified as poor are not registered into ‘the system’, or 12% of the
total population.
Solution
The MobileMedia solution is to train and employ local members of underserved communities to collect critical
community information on handheld devices (PDAs). MobileMedia selects “MobileAgents™” from the community’s
non-profits and computer-based training schools, and teaches them professionalism, survey techniques and PDA skills.
The MobileAgents™ conduct surveys and data collection in their own communities, around employment, healthcare,
education and income/expenses, using handheld devices loaded with custom survey software. Once collected, data
are aggregated in the MobileMedia server and made available to increase access to critical social benefits, such as food
allowances, healthcare, utilities subsidies and school scholarships. MobileMedia also provides analysis such as “mapping”
community needs so that government, corporate and NGO services are more effectively channeled.
MobileMedia’s fully-integrated software suite allows efficient and accurate gathering of data, as well as effective
viewing, management, and analysis. Functionality includes PDA-based survey capability, data transfer to MobileMedia’s
intermediate host and then to the client, and web-based database software wherein the data can be viewed and
analyzed online from anywhere in the world. PDA devices are chosen for their affordability, ease of use, durability,
battery life and reliability.
Revenue model
Data-Collection Network services will be billed on contract. Customers will pay an initial flat fee for the creation and
customization of Surveys, and follow-up survey fees. MobileMedia will charge a flat fee for Data Analysis performed
after completion of a survey, and will also produce and sell research reports based on generalized data analysis for use
by other customers. MobileMedia will also offer Consulting services for organizations seeking a better understanding
of the realities facing underserved communities.
Implementation plan
Initial roll-out is in Brazil, beginning 2005. International scaling will begin in early 2007. Global headquarters are in
the U.S. within country satellite offices developing in each region of expansion. Each project has an in-country
Project Manager, responsible for managing teams of MobileAgents™ developed through local NGO alliances. Each
MobileAgent™ team is composed of one Team Leader, responsible for managing the MobileAgents™ and quality control
of their work. MobileAgents™ are selected from a pool of local residents by prominent, community nonprofit leaders.
Rigorous selection criteria ensure that MobileAgents™ are reliable, trustworthy, capable and garner respect within the
community. Training on professionalism and use of the handheld devices is conducted by MobileMedia; survey training
is in conjunction with the client.
MobileMedia already has strong relationships with our first client, the Brazilian government. Our key competitive
advantage is in our strategic relationships with local partners, such as the regional NGO, the Committee for
SET Summaries
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MobileMedia
Democratization of Information Technology (CDI), and multinational technology partners. These alliances are critical
for international scaling.
MobileMedia has two categories of competitors: (1) Software providers (e.g. Hallogram Publishing: Pendragon Forms;
Data:Maxx Software System: Automated Data Collection; Pumatech: Satellite Forms; Global Bay: Access Point; others)
have packages that are sold as-is to end-users, while MobileMedia offers a complete solution to ensure optimal use
of the technology and is not prohibited to use software from such vendors if they prove to be better. Our solution is
usable on different platforms and our built-in enterprise security feature is a key benefit that our competitors’ software
packages lack. PDAs can also take photos of survey participants, providing additional fraud prevention measures. (2)
Data collection providers (e.g. Ciao AG, Market Research Services, Inc.) also exist but only MobileMedia integrates local
community members into our model, increasing local employment and technology awareness while improving data
quality. MobileMedia digitizes the survey process, making it faster, more accurate and more secure than current paperbased survey methods, and makes subsequent updates to the data much faster to complete.
Team
Melanie Edwards, President and CEO, worked in management for J.P. Morgan, International Data Group (IDG), launched
the Global Technology Corps that now operates from the U.S. Department of State, and co-created the U.N. Information
Technology Service (UNITeS). She is a lecturer at Stanford University, former Reuters Digital Vision Fellow at Stanford,
and received her B.A. from Washington University and M.A. from The Fletcher School, Tufts University. Mark Rollins, Chief
Technology Officer, has over 30 years of experience in software development. He led the development of projects for
Xerox, IBM, Intel, Microsoft, and Time, Inc. and received numerous awards for his work. He holds a Ph.D./A.B.D. from CUNY,
an M.F.A. and M.A. from Pratt Institute, a B.A. from NYU, and a B.S. from SUNY. Mark views his involvement in MobileMedia
as a fulfillment of his life’s intention. Junco Norton, Director of Finance, has worked in finance administration in higher
education for over 15 years. She is the Director of Finance and Administration for the Stanford Center for Innovations in
Learning (SCIL). A native of Brazil, she has an M.B.A. from Boston College. Daniella Pontes, Director of Operations - Brazil,
worked for the Brazilian telecommunication firm TELPE in technical planning and development of wireless systems and
for ArrayComm, Inc., a leader in adaptive signal processing and wireless systems technology. She served on the national
committee to select Wireless Local Loop systems for Brazil and was a Reuters Digital Vision Fellow at Stanford University.
A native of Northeastern Brazil, she holds an Electrical Engineering degree and a post-graduate degree from the Federal
University of Pernambuco (UFPE).
Advisors include: Pamela Hartigan, Schwab Foundation for Social Entrepreneurship; Cindy Lessa, Programs-Brazil,
The Synergos Institute; Sara Olsen, SVT Consulting; Jim Phills, Center for Social Innovation, Stanford Graduate School
of Business; Lynne Twist, Soul of Money Instititute and Pachamama Alliance; Terry Winograd, Stanford professor and
technical advisor to Google.
Local Employees (MobileAgents™)
Revenues (US$)
Total OpEx & Capital Costs (US$)
Net Profit (US$)
2005*
100
560,000
2,300,000
-1,740,000
2006
2007
400
500
2,240,000 2,800,000
3,450,000 4,900,000
-1,210,000 -2,100,000
2008
700
3,920,000
4,800,000
-880,000
2009
950
5,320,000
4,407,500
912,500
2005*
640,000
40,000
120,000
160,000
2006
2,560,000
160,000
480,000
640,000
2008
4,480,000
280,000
840,000
1,120,000
2009
6,080,000
380,000
1,140,000
1,520,000
People Registered / Made Visible
Retained in Schools (per family)
Access to Social Services (per family)
Increased local employee revenue (US$)
* Based-upon 6 months
2007
3,200,000
200,000
600,000
800,000
In addition, non-quantitative benefits associated with MobileMedia are identification of the areas of greatest social
need, improved efficiencies in delivering critical products, services and information and increased community morale.
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one-page summary.
of Dominica
Nevada, USA
Commonwealth of Dominica
Contact: Michael Schacker, [email protected]
MATCO Marketing, Inc., a for-profit Class C Nevada corporation, owns the Oceanographic Institute of Dominica (OID).
OID has a patented approach to sustainable tilapia fish-farming it will license internationally and support through.
online and in-person training. OID aims to capture a sizeable portion of world fish market ($80 billion annually in late
1990s) with its environmentally sound, zero-pollution product, and will simultaneously train Caribbean farmers in new,
sustainable ways to raise their incomes.
Millennium Development Goals: #1 eradicate extreme poverty and hunger; #7 ensure environmental stability
OID seeks to connect with Community Development Grant organizations and banks to finance licensing to communities,
businesses and low-income fish farmers around the world.
Investment sought
OID seeks $250,000 to $960,000 from qualified investors to expand as rapidly as possible into the tilapia market and the
global consulting, licensing and training markets.
Context: Dr. John McMillin, Dominica and Aquaculture
Dr. John McMillin, Ph.D. in Biological Systems and the Executive Director of the OID, is well-known for his regeneration
of large parts of the formerly drought-ridden Ansokia Valley in Ethiopia, where the great famine of the 1980s took place.
Dr. McMillin decided to visit and see if he could help, and was the first specialist in the area. A dust bowl, he knew from
maps that a huge aquifer lay dozens of feet below the parch earth and saw that—with composting—the soil could
be used. So he designed a whole regeneration plan for the valley, oversaw the planting of 9.7 million trees, built a
needed bridge and got pumps installed. He supervised the raising of a basket of profitable crops and animals, including
tilapia. Later, World Vision saw how he had transformed the lives of literally thousands, and hired Dr. McMillin as Vice
President of World Vision--in charge of all of Africa (see story of the Ansokia Regeneration: http://news.ninemsn.com.
au/worldvision/MediaPopup.aspx?MediaID=5124).
Today aquaculture, so necessary to the world’s future, needs reform—quickly. When farmed, carnivorous fish require
food: typically, smaller fish caught in the open sea. This depletes wild fish stocks at a faster rate than harvesting wild
fish. Furthermore, fish farming with typical practices creates diseases that spread not only among the fish, but also out
to sea populations.
Dominica has a 30% poverty rate and low nutrition, and has been devastated by hurricanes and WTO-imposed tariffs
starting in the 1990s, while the fish catch has also declined dramatically in recent years.
Market opportunity
Although 132 million tons of seafood was produced in 2002, due to the declining sea catch and the rise in population, the
UN sees a 50-million ton shortfall in seafood by 2010. Explosive growth in fish-farming (39 million tons in 2002) is thus
predicted. A $20 million Caribbean fish import market will easily consume all of OID’s $2.5 million annual production
of fresh tilapia.
Scale of addressable social issues: According to Jean-Francois Rischard’s High Noon: “50% of the world’s fisheries are
fully exploited, 20% over-exploited and most of the rest are unsustainable… 3 out of 4 major species, including cod and
SET Summaries
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of Dominica
tuna, are being fished at or above their biological limit.” Rischard gives 20 years to solve resulting food and pollution
problems for the 1 out of 5 people for whom fish is the primary source of protein.
Solution
OID proposes to direct the explosive growth of fish farming into a sustainable direction by propagating a Zero-Pollution
Sustainable/Organic Aquaculture System for tilapia, eliminating the pollution and food contamination problems that
would otherwise arise from conventional fish farming. Tilapia (a freshwater Tilapia oreochromis has been chosen) is the
hardiest of commercial species. It is not carnivorous so more fish do not need to be caught to feed it, and grows relatively
quickly with a minimum of disease and problems. Our principal, Dr. John McMillin, has developed a proprietary method
that successfully handles the many variables involved in commercial tilapia production in a sustainable manner.
The OID proprietary high-intensive system handles hundreds of variables to raise the tilapia survival rate to 99%,
giving OID strong Intellectual Property rights. In the industry, levels of incremental feeding starts with “natural”, then
semi-intensive, intensive, high-intensive and super-intensive. OID will produce at a level between intensive and superintensive, initially at a high-intensive 250,000 pounds per acre annually—versus 1,000,000 pounds per acre per year in a
super-intensive system. Dr. McMillin’s 1.7 acre high-intensive Sun City farm reached 450,000 pounds per acre annually.
Revenue model
Besides wholesale fish sales, OID’s business model is based on licensing its proprietary methodology. OID will charge
an upfront fee of $50,000, and then become a partner with a harvest share or royalty of 10%. This model differs from
the typical model, where clients pay large upfront consulting and design fees to start up their own operations (typically
$300,000-500,000) and then receive little participation afterward. OID’s licensing structure is just as important for
success as are its innovations for feed, survival rates and taste. Key OID revenue sources in 2009 are projected to be High
and Low-Intensive consulting & licensing (44%), tilapia sales (35%), coral sales & grant contracts (14%), online & onsite
training (7%).
Implementation plan
The cultivation of seed stock, which has already begun, is complex and must be carefully monitored. In the first year,
OID will construct an initial set of 10 tanks. It will take 9 to 12 months to raise the first cycle of tilapia. OID’s proprietary
system will be positioned for licensing (like a franchise).
Community development loans will be a primary source of funding for clients, as will large commercial businesses in
China, Asia and Latin America. OID is seeking funding from the EU Banana Trust Fund, which funds retraining in other
industries and the commercialization and diversification of agriculture, to fund the “Food Strategies Project” which will
create 120 Low-Intensive farms in Dominica and improve a further 280 improved Banana/Garden operations. OID also
plans to ask the Caribbean Regional Fisheries Mechanism to arrange for Japanese funding of high-intensive licensed
operations on other islands. Development agencies (UNDP) and NGOs (AMMA, World Vision) involved in these projects
will need training for their aquaculture trainers and see OID’s McMillin as the best trainer.
The first target will be the local Dominican fish market, which imports $1.5 million worth of fish annually. Current
imports are often frozen and unfrozen and several days old. When that is filled, wholesalers will distribute to a regional
$20 million fish market. We can fulfill most island/regional consumption of fish with better quality and lower prices.
Organic certification, of tilapia is still to be determined in the U.S. and international realm and, though a core value, is not
as yet a key selling point in our plan. Before organic certification can be achieved, fish will be labeled as “Sustainable” or
“Natural” and will be much sought after by sustainable fish distributors such as Eco-Fish of New Hampshire. OID’s lowintensive tilapia system for small family farms and gardens could be certifiable first by Germany’s Naturland, the leading
aquaculture organic certifier in the world.
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of Dominica
There is currently no other intensive, high-density commercial fishery on Dominica or surrounding islands, giving OID
a wide open market to sell fresh seafood into. In global licensing there is one Israeli firm, APT, offering a far more
difficult super-intensive organic tilapia system, but APT requires all payments up front. AquaSol in Florida offers tilapia
consulting on a similar basis for various stocking densities. In international development training, some agencies and
NGOs offer free aquaculture training, but Dr. McMillin’s reputation dominates the training market, and OID anticipates a
steady stream of trainees, including from the huge UN Development Program.
Team
Besides the Ansokia Regeneration, OID Director Dr. John McMillin has led many tilapia operations around the world, and
more than 30 individual small enterprises in developing nations. Mr. Michael Schacker, OID Development Director and
CEO of e-Change, Inc., has decades of experience as a business consultant as well as an e-learning developer and writer
of training e-courses. Mr. Schacker and Dr. McMillin have both worked extensively with The Rodale Institute, the leading
organic agriculture researcher. Mr. Norm MacDonald, the primary investor of MATCO/OID, has successfully built the OID
coral business, and has contacts in Dominican fish marketing and the U.S. coral trade business. His business career prior
to OID focused on commercial real estate in the US.
To date $1.7 million has been invested in the OID coral operation. Sales of coral have now reached $20,000 per month
and OID just started breaking even on a monthly basis.
Revenue
Cost of Sales
Expenses
Net Profit
2003 act.
2004 est.
($664,306)
(600,000)
2005
2006
170,000
917,800
55,700
157,850
896,400
663,000
(782,100) 96,950
2007
2,995,750
317,442
510,000
2,168,308
2008
5,443,000
1,156,010
550,000
3,736,990
2009
7,743,000
1,822,000
590,000
5,331,000
Notes: Based on full $960,000 investment in 2005. Coral sales included. Licensing in 2009 is projected at 30 clients with
licensing sales starting in 2007. Sales are all conservatively based on prices for non-organic whole fish ($2.50/lb). Other
details are available upon request.
Three times the amount of protein can be grown with the same amount of water by raising fish instead of grain. The
composting in OID’s unique fish-garden system can increase farmer garden yields 2-3X. According to OID’s business plan
projections, 400 farmers and their families will see incomes increase, there will be indirect benefits for the Dominican
economy in food processing and distribution, and global licensing will generate social returns for other regions. The
analysis here quantifies direct economic benefits, and not reductions in undernourishment nor the benefits of training
of 450 international development workers to teach small fish-farmers around the world.
Monetized Social Benefits
Year 1
Year 2
Year 3
Year 4
# families of employees in High Intensity 990
990
990
990
Incr. Gross Income HI (USD)
2,184,000
7,944,000
13,944,000
16,548,000
# Families of employees in Low Intensity 217
417
417
417
Increased Gross Income LI (USD)
$188,400
$504,400
$824,400
$1,154,400
Sum
$2,372,400 $8,448,400 $14,768,400 $17,702,400
PV
$1,977,000 $5,866,944 $8,546,528 $8,537,037
Sum of PVs
$32,034,473
PV investment required
$1,698,000
Discount rate* 20%
SROI
18.87
*Based on business risk plus risk that benefits may not take place as assumed.
SET Summaries
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Year 5
990
16,200,000
417
$1,484,400
$17,684,400
$7,106,964
June 2005
47
one-page summary.
British Columbia, Canada
North Carolina, USA
Contact: Ruth Clark, [email protected]
Prestige Health Care Technologies, Ltd. is a private, for-profit company based in British Columbia that designs,
manufactures, sells and out sources the production of its Socketless Prosthetic Technology. Prestige works in tandem
with the Global Limb Assistance Program, a North Carolina nonprofit organization-in-formation. We are currently
planning collaboration with PeaceTrees Vietnam (PTVN) and other humanitarian agencies. Prestige provides technical
and consultative assistance to Global Limb at cost or pro bono, as they work together to provide artificial limbs to
children and adults in need in developing countries.
Millennium Development Goals: #1 eradicate extreme poverty and hunger; #2 achieve universal primary education; #3
promote gender equality and empower women; #4 reduce child mortality; #7 ensure environmental sustainability; #8
develop a global partnership for development.
We are seeking mentoring, project sharing or other ‘partnering’ opportunities with other agencies, including World
Institute on Disability, Global Reporting Initiative, Bill and Melinda Gates Foundation, Development Alternatives, Inc., Pan
American Health Organization, LEPRA.
Investment sought
Prestige seeks $150,000 in grants or loans for operations during 18 months while we develop our Terminal Device
prototype and ramp up operations. Equity and/or management positions can also be discussed.
Context
Limb deficiency results from a wide variety of causes, not only severely limiting the functionality of the individual, but
in many cases also requiring another person’s time to provide basic daily care. High functioning, long lasting prosthetic
limbs will enable these individuals to regain their position as productive members of their family and society.
Market opportunity
The core component in any Prosthetic limb provides an interface between the human body and the rest of the prosthetic
device. Traditionally, this has been in the form of a highly personalized socket that is a tight-fitting mould of the shape
and size of the residual limb (or stump) at that time in the amputee’s life. Various versions of the socket require costly,
energy intensive equipment, such as high heat ovens and vacuum chambers, to fabricate the socket. The socket for a
below-elbow (BE) amputee could take up to 12 patient contact hours to make. Minimal limb change will render the
socket useless and you must construct a complete new one; the lifespan for an upper extremity socket may be less than
4 months for a growing child. Also, conventional prosthetics can only assist individuals who are missing the full wrist
and hand and have no skin damage to the forearm.
It is estimated that there are up to 25,000,000 amputees worldwide who may never be given the option of a prosthetic
limb, mainly in post-conflict and developing countries.
Currently, a socket-based, body powered Below-Elbow prosthetic retails $5,000 - $8,000 USD. Our Socketless BelowElbow device, complete with hook, will retail for $1,000 - $1,300.
Solution
Our Socketless technology can be manufactured in a central location and shipped to the amputee. Fitting takes less
than 30 minutes and is currently being used as an assistive device by three groups of people:
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• Those missing the lower part of their arm and hand (amputees) (Prosthetic)
• Those with a part or all of their hand but limited or no hand function (stroke, arthritis, partial amputation, Leprosy,
burns, Carpel tunnel, etc.) (Orthotic)
• Those handling hazardous materials or situations, ie: land mine clearance (proposed Industrial use)
In developed economies, these devices will be distributed commercially on a wholesale or retail basis. In some areas,
such as the poor coal mining areas of Virginia, some degree of means testing may be applied. Throughout many of the
World’s poorer countries, the limbs will be distributed on a humanitarian basis.
The Terminal Devices (TD), or hooks, that attach at the end of the limb that are currently available are extremely
expensive, limited in function and do not have replaceable parts. Once in production, our hook, currently in prototype,
will be much less expensive, provide increased function and will last much longer. In addition to use with our Socketless
technology, these hooks will also interface with all North American and European socket-based prosthetic arms (body
powered), so many amputees will purchase our hook alone.
Socketless Prosthetic Technology was developed by the late Dr. Chaz Holder, himself a triple amputee. It has been
proven to be the world’s only high functioning, long wearing prosthetic technology that can be mass manufactured and
field deployed. This technology will also accommodate up to 3 years of growth in children. The Socketless Prosthetic
Technology received the 2000 Semi-Finalist in both the Christopher Columbus Fellowship Foundation Award and the
Discover Award and the Inaugural winner of the Knight Ridder Equality Award (2001) from the Tech Museum in San Jose.
Our Terminal Devices (TD) will provide active, three-dimensional grasp, replacing the industry standard that provides
2-D grasp.
Revenue model
The hook will be completed with an investment of only $40,000. Based on our anticipated manufacturing cost and our
proposed wholesale/retail price, we will be able to repay this investment after the commercial sale of only 133 hooks.
The profits generated from commercial sales of the prosthetic hook provide sustaining income for the Humanitarian
prosthetic clinic, expand the sewing workshop and possibly other community project such as schools, wells, etc. Fashion
Magic Apparel provides high quality office, professional, formal and leisure clothing for people who use wheelchairs
full time, including accountants, lawyers, congressmen, etc. Some revenues from these sales will also support the
humanitarian operation.
Implementation plan
The key to moving forward is the completion and manufacturing of our own multi-function hook. We will obtain
mentoring assistance to develop the business plan and flesh out the cooperative work of Global Limb Assistance
Program and Prestige Health Care Technologies, including its Fashion Magic Apparel division. Global Limb will own the
manufacturing rights to the hook, and therefore proceeds from sales, including to Prestige Health for North American
commercial sales. International Humanitarian work will be carried out by Global Limb while North American sales will
be made by Prestige Health, as in the following ‘Circle’:
• Identify a country of need, initially Vietnam, then possibly China, Cambodia and India
• Establish a prosthetic manufacturing, training & fitting clinic, with an emphasis on fitting children
• Identify 2 or 3 local women who can sew, preferably widowed mothers
• Source regional fabrics (ie silk) and identify appropriate Fashion Magic Apparel designs.
• Provide contract employment to make these garments
• Facilitate exporting the garments to North America for commercial sale
Promotional work done prior to and since Dr. Holder’s death has already created a global awareness of this technology.
Once our hook is completed, we will make full use of our web site and Internet marketing. Additional marketing will be
done through industry conferences, industry publications and general public publications. There is a long-established,
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substantial dissatisfaction with prosthetic components that are currently available. Lighter weight, less expensive,
longer lasting, higher functioning prosthetic components will be very well-received by the community Globally, across
all socio-economic boundaries. This will be the first multi-function device to be made available to people who still have
a partial or whole hand.
Team
Ruth Clark, Team Leader, met Dr. Chaz Holder, the inventor of socketless technology, in 1999 and worked closely with
him until his death in 2002. As the primary steward of his technology, she is now dedicated to bringing the opportunity
of Socketless technology to those in need through out the world. Ruth worked in public and academic libraries for
over 25 years. During 20 years at the University of British Columbia she worked with a wide range of students from
many of the world’s developing countries, and in disability services for 10 years. In 1992 she formalized a long held
desire to combine her interest in sewing with the need she had seen in the many disabled students she worked with by
designing and providing custom sewing for disabled individuals throughout Canada and the U.S. She has organized 5
fashion shows highlighting models in wheelchairs, in the US and Canada. Rich Davis, Prosthetist, was the provider for Dr.
Holder’s own socket type prosthetic limbs. He worked with Dr. Holder from the inception of the concept of Socketless
Prosthetics and was instrumental in the fabrication of the over 400 Socketless Below-Elbow Prosthetic Limbs that have
been distributed through out the world since September 1999. Rich currently runs our fabrication facility, making limbs
as orders are received. Rolf Tjomsaas, Mechanical Designer, is a heavy duty mechanic with extensive experience in
highly sophisticated, articulating logging and mining equipment. Through his own heavy duty repair contracting firm,
he often builds individually designed or customized components. He will assist Prestige to develop a highly functioning,
durable hook. Chuck Meadows is the Executive Director of PeaceTrees Vietnam (PTVN), an international non-profit
organization focusing on Humanitarian Mine Action activities. PTVN was the first US organization granted permission
by the Government of Vietnam to sponsor the removal of landmines and unexploded ordnance in Vietnam. Working
with The Women’s Union of Quang Tri Province, a national association that works to improve the health and welfare of
women and children throughout Vietnam, they are instrumental in mine awareness education projects, and will be key
outreach partners for Global Limb Assistance.
The initial project, the development of our own prosthetic hook, is estimated to cost $40,000. Once completed and fully
commercialized, we will target the sale of one hook per state/province each month, for a total of 720 hooks sold in the
first year. Projected revenues will be $234,000. We estimate these sales will increase by 15 – 20% each year over the next
5 years. These revenues will allow us to establish a Prosthetic manufacturing and fitting facility in Quang Tri Province,
Vietnam. It is estimated that this facility will cost just over $100,000 for the establishment year and slightly less than
that for subsequent years. As additional funds and expertise become available this facility will be replicated in at least 4
additional countries over the next 5 years.
Due to the formative stage of our implementation plans, a quantitative SROI analysis is not appropriate.
Our Socketless Upper Extremity devices will give dexterous hand function back to these individuals. This will enable:
• Children to fully participate in and benefit from formal education, including learning to write easily
• Children to learn life skills such as cooking, farming, woodworking, etc.
• Women to look after household and farming chores
• Men to farm, hunt and do other manual tasks
• Women to obtain work outside the home, such as sewing
• Men to obtain work outside the home, such as mechanics
The indicators Prestige could use to track performance toward these social benefits are the number of child amputees
entering and staying in school; the length of time a child will stay in the same device without replacement; the number of
adult amputees engaged in productive labor in the home and outside; and reduction of complications from secondary
skin injury caused by conventional sockets.
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(PML)
one-page summary.
California, USA
Contact: David Lehr, [email protected]
Project Market Light (PML) will deliver agriculture commodity price information to rural Indian farmers on-demand,
directly to cell phones, on a fee-for-service basis in partnership with major content providers and cell phone operators.
Millennium Development Goal: #1 eradicate extreme poverty and hunger
PML would like to connect with the following partners:
• India’s Wireless Operators. Senior level contacts needed to champion Project Market Light and assist in structuring a
business relationship. Reliance Infocomm and Bharti Televentures are both strong supporters of worldwide develop
ing nation initiatives and will be our initial focus.
• Handset Manufacturers. We would like to investigate partnership and cooperation opportunities. Motorola, who is
creating $40 handsets for the developing world, and Nokia are of most interest today.
• India’s Department of Agriculture & Cooperation. They implement national programs to achieve rapid agricultural
growth and already provide a wealth of information on agricultural markets in India.
• Content and Market Research Partners. We already have strong relationships with global content partners, but will
need in-country assistance to build our data collection abilities. We could benefit from better knowledge of rural cell
phone usage patterns, and of local literacy and income rates.
Investment sought
Year 1: $600,000 investment sought. $300K to finalize technology offerings. $200K needed to hire 4 person Indian data
collection team. $100K for purchasing currently available content.
Year 2: $2,500,000 investment sought. $300K for technology enhancement; $1.7M for content creation and acquisition;
$500K for marketing
Context
Market liberalizations and increasing global trade pressures require farmers to become profitable. The success of
GrameenPhone (Bangladesh) shows that once offerings that add value are within financial reach, penetration rates
grow rapidly. Cell phone usage is growing rapidly in India, creating a unique opportunity.
Market opportunity
The fierce competition for new cell phone subscribers in India and growing data capabilities are causing operators to
differentiate by providing value added services. Dropping prices (Motorola will ship a $40 handset this year) are rapidly
expanding the subscriber base. Pre-installing the PML application on handsets will enable the operator to market these
phones as ‘market data phones’. India has some of the cheapest voice rates in the world, and today has over 50M cell
phone subscribers, growing by almost 2M per month, with about 15% (7.5M) of these in rural areas. The total addressable
market is 350M, equivalent to all of Europe. As in Europe and North America, wireless data services here are growing
rapidly, expecting to account for 20 percent of cellular service revenue in India by the end of 2006.
Approximately 60% of the Indian population depends on agricultural revenues; there are about 130M landowning
growers in India. Our initial focus will be on these small farmers; as they become more ‘price savvy’ we expect increasing
demand for real-time information from professional middlemen, commission agents and wholesale sellers as they strive
to keep an information edge.
Scale of addressable social issues: Our primary target audience is not likely to be below the poverty line, as extreme
poverty is not usually found among the land owning population. However, the structural impact of PML is likely to be
positive for the entire population. Not only will a competitive market be able to provide better quality product at a
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Project Market Light (PML)
lower cost to consumers, but it can also provide economic stability that will enable the landowning class to pay better
salaries to the poorest laborers. Similar efforts in Mali provided the average rice farmer with a 65% to 82% increase in
the proportion of the sales price returned to the farmer.
Solution
PML will deliver agriculture commodity price information to rural Indian farmers on-demand, directly to cell phones, in
partnership with major content providers and cell phone operators. This approach will:
• provide customer feedback based on what customers are willing to pay for this data. Fee for services models do not
exist today and it is very unclear exactly what data customers value;
• make markets more efficient by decreasing the costs of ‘price discovery.’ This efficiency will enable farmers to deter
mine the optimum time and place to sell their products;
• impact crop growing decisions by offering farmers a better understanding of India, and worldwide market trends;
ultimately raising their incomes.
The PML technology is based on a dedicated client server model. The client software, called the Market Data Enabler
(MDE) is a java-based application that runs on the user’s mobile handset and is capable of sending and receiving SMS
data and generating charts. It is user configurable and allows for the user to receive market data at certain times
throughout the day, or upon demand. Our innovative CompresSMS technology effectively triples the bandwidth of a
traditional SMS message and enables MDE to update a relatively large number of prices, weather information and basic
news using a single SMS. We will also support an uncompressed feed of SMS content to older handsets that do not have
Java functionality.
The PML server is essentially a feed handler that receives, compresses and repackages an existing data feed, and then
passes that data via SMS back to the handset based on preferences stored in a database. The server will also track user
requests and usage patterns to allow for finer refinements of both the business model and the data we provide. We are
architecting the system to also allow for communication aggregation, whereby a provider of related services (whether
commercial or non-profit) could advertise to the subscriber base.
Revenue model
The initial service will be offered at $2.00 per month (discounted slightly for subscriptions and prepaid accounts) for
data delivered directly to the user’s mobile phone. This revenue will be shared with the operators (45%; 55% to PML). In
year 2 we will offer premium data services geared towards commodity traders and middlemen. For bigger export crops,
where the Indian market has a significant impact, such as soy, tea, and rice, institutional customers will also be targeted.
In year 2, we will also add advertising options to enable publicity and sale of agricultural products (i.e. fertilizer sales,
purchase requests, and public announcements). Entering into closely related markets, such as small-scale fishing and
production will be evaluated as the business grows.
Implementation plan
Our goal is to pre-install the MDE client on handsets and cooperate with India’s operators in order to get widespread
adoption. To get subscribers to try the service we will offer a free trial period that would include a daily SMS at market
close. If the user wants more frequent updates this would be done by either upgrading to an hourly feed or by a ‘pull’
request triggered by the user.
The data itself will come initially from existing content supplied by the world’s major financial exchanges and will include
Basic Commodities, Local Indian Futures and Spot Data, Weather, and News. Within the first six months, we will hire local
staff that will create local and regional spot prices and market reports. Long-term we intend to create an electronic
interface for placing buy and sell orders
During the first twelve months we expect to:
• commercialize the PML technology;
• establish contractual relationships with at least 2 major data providers;
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Project Market Light (PML)
• sign an agreement with one of India’s major wireless operators to offer the PML Service;
• open an office in India and hire a small data collection team.
There are non-profit services that collect and disseminate information on prices and quantities of agricultural products,
such as soy and rice. These providers rely on public or donor funding and can easily be forced to cease operations if
monies are not available, regardless of their value to users. Importantly, almost all the distribution methods used today
are one-way - from source to user - with no or little feedback from end users. This makes it hard to target specific users
and their particular needs, and there is no mechanism for understanding how valuable the data actually are. Only a
purely commercial model can address this issue.
• ITC’s E-chopal is a network of kiosks informing farmers of the price that ITC is paying for crops, mainly soy. Although
this system has been of some benefit to farmers it is mainly a procurement tool,
• The Kenya Agricultural Commodity Exchange (KACE) is a private firm in Kenya that has developed an SMS market
information service to deliver commodity prices and trading information.
Team
David Lehr has 10 years experience in strategic partnering in the software and mobile phone industry and manages
PalmSource’s relationships with wireless operators and phone manufacturers. Earlier, with Adobe Systems, David
managed international business development and strategic partnering and established their first office in China. David
speaks Chinese (Mandarin) and holds a Masters from UC San Diego. Mans Olof-Ors is currently a Digital Vision Fellow
at Stanford University. Mans joined Reuters Paris in 1996 and has since held content and product management roles
in Paris and London. Vipul Arora has created and executed complex process reengineering efforts for Corporations in
India, US and UK. An engineer and MBA, he has a keen interest in Sustainable Development. Vipul is currently based in
Bangalore, India.
Advisory Board: Stuart Hart, Samuel C. Johnson Professor of Sustainable Global, Cornell; Stuart Gannes, Director, Stanford
Digital Vision Program, Former Senior Executive at AT&T; Alfonso Gambardella, Professor of Economics and Management,
IEGI -”Luigi Bocconi”, Milano, Italy; Sham Bathija, Senior Official, UN Conference on Trade and Development; Moulaye Ely
Diarra, Director, Information Technology and Data Production, OMA, Bamako, Mali ; John Staatz, Professor of Agricultural
Economics, Michigan State
Year 1 will focus on technology, building content, and partnerships. Revenues will begin in Year 2.
INCOME PROJECTIONS (US Dollars)
Year 1
Year 2
Year 3
Year 4
TOTAL INCOME
555,000 5,040,000 8,140,000
COST OF SALES
600,000 3,180,000 6,050,000 6,150,000
PROFIT <LOSS>
<600,000> -2,625,000 -1,010,000 1,990,000
In addition to providing higher incomes, PML will help farmers understand trends and new opportunities such as
diversification to high-value crops, changes in food demand, and expanding trade in fresh food products. Non-financial
indicators reflecting PML’s impact include: adoption % of PML by farmers versus traders; changes in % of consumer price
that goes to the producer; reduction of price differentials between markets; and growth of other services for farmers
and traders that did not exist before. Since an efficient market will benefit all participants the positive impact will go far
beyond our direct customer base. Using the same basis as in the financial forecast we foresee a 10x multiplier, for each
PML customer 10 farmers will benefit by getting on average a 20% increase (100 USD).
Year 1
Year 2
Year 3
Year 4
NUMBER OF FARMERS BENEFITING
50,000
600,000
1,100,000
TOTAL SROI (US Dollars)
5,000,000 60,000,000 110,000,000
Research cited in The Economist (3/10/05), suggests that in a typical developing economy, an increase of 10 mobile
phones per 100 people boosts GDP growth by 0.6 percentage points. By providing a compelling business offering, PML
will contribute to this increase as well. We also expect PML to open up additional channels for financing, trading, and
access to other products (fertilizer, seed, machinery, training, etc.).
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SolarAmp
one-page summary.
North Carolina, USA
Contact: William Conklin, CEO, [email protected]
SolarAmp is an organic nanotechnology company with leading 3rd generation photovoltaic (PV) that is distinguished
from other 3rd generation PV techniques by the fact that it more closely emulates photosynthesis, the “holy grail” of
organic nanotechnology, through the engineering of totally organic molecules for use in solid state solutions. SolarAMP’s
vision is to be the “Intel inside” for this critical solar technology.
Millennium Development Goals: #7 create environmental sustainability; others indirectly
SolarAMP seeks energy industry expertise for our team. We seek partners for development, manufacturing and
packaging of organic thin film solutions; distribution contacts in key developing countries, i.e. China, India, Indonesia,
Brazil, South Africa; and contacts who can help us grow name recognition.
Investment sought
We seek “angel” investors with environmental interests to provide $400K, and first round venture capital of $6M.
Context
SolarAMP’s base technology has been exclusively licensed from North Carolina State University. NCSU is a leading
research university with a strong focus and successful track record of viable commercialization of university developed
technologies. Small Times Magazine has recently ranked North Carolina as 9th among US states in nanotechnology,
primarily based on leading research efforts. Nanotechnology is also a specific focus area of the Science and Technology
Board of the NC Department of Commerce as it looks to expand technology beyond the regional successes in IT and
biotech.
Market opportunity
The worldwide solar market in 2004 was $7.2 bn and has grown 25-30%/year since 1999. Solar growth is expected to
continue at about these rates. However, the $7.2 bn was less than 0.1% of the world’s energy demand and is limited by
costs and the physical characteristics of 1st generation crystalline silicon solar solutions. SolarAMP expects that its low
cost/high potential efficiency PV technology will be broadly competitive after 2010. In the interim, SolarAMP is targeting
large niche opportunities that optimize its solution values at a minimum of 10% efficiency. SolarAMP’s initial target
market is the 1.6B people (400M households) without access to electricity. If all 400M households installed a minimum
1KW system at an average of $5/W, this market would be $200B. SolarAMP believes it can realistically target 50M of
these households ($25 bn). The second target market is the close to 20% of US commercial construction targeting LEED
certification, so called Green Buildings. SolarAMP’s direct target customers are the potential commercialization partners
with channels and expertise in targeting these end user customers.
Scale of addressable social issues: SolarAMP technology converts sunlight to electricity with no negative environmental
impact during production or operation. The emissions of greenhouse gases avoided by using SolarAMP in lieu
of alternative means of producing electricity address a number of the Millennium Development Goals, notably the
environmental sustainability.Furthermore, there are significant impacts in the areas of health, education and development
which go along with the electrification of rural areas in developing countries, which may even overshadow the direct
environmental benefits.
Technological approach
Third generation organic nanotechnology solutions will offer very low costs and high potential efficiency (20-35%).
MIT’s technology magazine named nanotechnology solar one of the “10 Technologies That Will Change The World.”
SolarAMP’s LARTEC (Light Absorbing Rod Technology) PV material costs less that 5% of crystalline silicon material, has a
much simpler manufacturing process and will surpass silicon’s 15-17% efficiency. It will also surpass 2nd generation solar
target efficiencies of 10-15%. LARTEC’s single organic structure also has cost and efficiency advantages over competing
3rd generation photovoltaic companies.
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SolarAmp
LARTEC’s ability to be used on flexible as well as fixed substrate and its relative transparency provides further competitive
advantages. SolarAMP has two target product solutions:
• A flexible PV module using a polymer or mylar base. This would allow the module to be “rolled” for delivery and
would also allow nonpermanent installation.
• Integration of the active LARTEC PV material into building materials (roofs, windows or wall panels).
Most so-called 3rd generation PV technologies are either based on Graetzel technology (a single layer of organic
material on a complex semiconductor surface) or are blended polymer solutions. Graetzel based solutions although
more mature have significant efficiency limitations as well as the need for a very viscous hole transfer material. Blended
polymer solutions all require a mix of light absorbing and transfer materials. LARTEC’s single organic structure for both
light absorption and exciton/hole transfer most closely matches photosynthesis and has more directed and longer lived
excitions that give both cost and efficiency advantages over blended polymer and Graetzel solutions.
Revenue model
The revenue model is based on SolarAMP continuing our leadership R&D of the LARTEC solution as well manufacturing
the material for sale to our customers/business partners. End user products incorporating the LARTEC solution will be
jointly developed with business partners who will then manufacture, sell and distribute the resultant product. SolarAMP’s
revenue model therefore has three components: 1) SolarAMP sales of the LARTEC PV material to commercialization
partners; 2) Non-returnable expense (NRE) from commercialization partners to jointly develop products incorporating
LARTEC; 3) License fees and royalties from the sale of LARTEC based solar solutions.
Implementation plan
SolarAMP’s present implementation plan includes two primary activities: driving the LARTEC Solution toward the low
cost/high efficiency of photosynthesis, and packaging of the LARTEC solution into highly competitive solid state end
user solar solutions through commercialization partners. Completion of this plan involves three areas of focus.
• Base LARTEC PV Material
- 1st generation material for commercialization samples - Completed and Tested
- 2nd generation material for initial products - Completed
- 3rd generation material for “ultimate” efficiency - Designed
• Packaging of LARTEC PV Material Into Solid State Solutions
- Initial test of LARTEC rods in liquid solution - Completed
- Initial solid state commercial sample package - Ongoing, target 2H2005
• Commercial Partner Identification, Evaluation, Acquisition
- Teaming Agreement Signed With BP Solar April 2002
- Ongoing Joint Activities With Multiple Potential Partners
SolarAMP is one of about 10 companies worldwide actively pursuing 3rd generation nanotechnologies.
• ATI, Australia and Konarka, US are packaging “Graetzel” based solutions. Because of the known Graetzel efficiency
limitations, these companies are more likely potential partners than long term competitors.
• CDT Ltd, UK, Global Photonics, Nanosys and Nanosolar are pursuing blended polymer technologies. While these tech
nologies have higher potential efficiencies than Graetzel solutions, their need for both light absorbing and transfer
materials will make them more expensive to manufacture than the LARTEC solution and less efficient. Nanosys has
raised over $55M of venture capital and CDT is now public with a market capitalization of $300M.
Team
The founders and existing managers have significant experience in both the key necessary technologies and in
managing startup technology product businesses. SolarAMP’s team is sufficient for the present business and technical
focus. However, the next business/development stage will require additional expertise in sales/marketing, finance and
technical support, especially with solar/energy industry experience.
• William Conklin, CEO. A former development and sales executive with a 30-year career with IBM. He led and directed
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SolarAmp
a $1 billion business unit with over 1,000 employees and managed a number of startup opportunities.
• Dr. Jonathan S. Lindsey, Ph.D., lead technical principal. Glaxo Distinguished Professor of Chemistry, North Caroline
State University. A recognized expert in synthetic chemistry, he is also a founder in ZettaCore, Inc. a nanotechnology
IT company.
• Dr. David F. Bocian, Ph.D., Professor in the Department of Chemistry, University of California, Riverside.
• Dr. Dewey Holten, Ph.D., Professor of Chemistry, Washington University, St. Louis.
• Dr. Gerald J. Meyer, Ph.D., Professor of Chemistry, Johns Hopkins University.
• Dr. Gregory Parsons, Ph.D., Professor of Chemical Engineering, NC State University.
Development through 1H2005 has been through sponsored research funding managed by NC State University. This
funding supports both the base R&D and packaging activities to develop a prototype focused on integration with
building materials. Starting in 2H2005 with the closure of the venture capital round, SolarAMP will begin direct employee
support.
SolarAMP’s income model is that of a startup R&D company. This R&D will yield first products in conjunction with
commercial partnerships in 2007. The SolarAMP revenue associated with this product will be in the form of license fees
and royalties, sale of the LARTEC material and partnership support services (NRE). SolarAMP had a positive cash position
year-end 2004 with outstanding accounts receivables exceeding accounts payables so this is a reasonable projection
for the 6-year period.
Projected Income
2005
2006 2007 2008
2009 2010
Revenue Total ($K)
1,000 1,500 4,500 14,500 24,000
Cost of Sales ($K)
205
610
970 2,800
5,200 7,600
Gross Profit
(205)
390
530 1,700
9,300 16,400
Percent
39%
35%
38%
64%
68%
SG&A Total ($K)
795
1,390
1,930 2,300
2,800
4,400
Profit (Loss) ($K)
(1,000) (1,000) (1,400) (600) 6,500 12,000
Key assumptions are that the commercial protype will be completed in summer 2005 and that an institutional round
will fund SolarAMP’s piece of the commercial product development. Also, assumed is that expansion is possible in NC
State’s Centennial Campus incubator and that required personnel are available. In addition, SolarAMP must close with
its commercial partner on a plan to deliver product incorporating the LARTEC solution in 2007. If so, SolarAMP should
break even in 2009.
Targets: Provide within the first year of operations at least 10,000 households previously without access to electricity
with at least 100 watts/capita energy source. Track the value to these households in reduction of sickness and premature
deaths, savings in air emissions and infrastructure costs of not using fossil fuels, increased level of women education and
gender equality, and improved job and income opportunities.
Social Benefits
Increase in installed capacity (MW)
Additional households with system
Savings/Household ($M)
Jobs Created
Increased revenue opportunities from jobs ($M)
Total Social Benefits ($M)
Discount Rate for social benefits
Total Costs
Discount Rate for costs
PV
NPV Costs
SROI
SET Summaries
10-Year Total
615
659871
2462
14954
4.88
2466
20%
505
1788
11.38%
718
$505,211,803
$717,782,448
0.70
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Speak Shop
one-page summary.
Winner:
Best SROI Analysis
Oregon, USA
Contact: Cindy Cooper, Co-Founder, [email protected]
Speak Shop reduces poverty by enabling foreign language tutors in developing countries to participate in e-commerce
as micro-entrepreneurs. Through www.SpeakShop.com, tutors teach one-on-one, face-to-face Spanish lessons to
students around the world using online videoconferencing. Speak Shop envisions a world where all people can access
economic opportunities and earn fair wages based on the quality of their work.
Millennium Development Goals: #1 eradicate extreme poverty; #9 develop a global partnership for development
Assistance is sought for technology and curriculum enhancements, customer out reach and tutor
development.
Categories
Proposed Target Partners Include:
Travel/study abroad
Amerispan, studyabroad.com
NGOs
Peace Corps, UN, USAID, World Bank, AVINA.net
Academic
UC Berkeley, Stanford, UT Austin, Duke, Monterey
Institute for Tech. & Education
Corporate
PayPal, eBay, Sun, Apple, Logitech, Macromedia
Investment sought
Speak Shop seeks start-up grants or in-kind contributions totaling $200,000 for marketing, tutor training and curriculum
development. Equity investment will be considered in 2006 for expansion into other countries and languages and to
accelerate marketing outreach.
Context
Rising from poverty can be impossible without economic opportunity, empowerment and security (World Bank, 200001). Because these key factors are lacking, Spanish-as-a-foreign-language teachers in Latin America frequently live in
poverty despite their hard work and education. They are subject to impoverishing cycles of boom and bust, treated as
expendable labor and unable to participate in administrative decision-making or organize to defend their labor rights.
The Internet and very recent Voice over Internet Protocol (VOIP) technology make global markets available to these
individuals for the first time. VOIP also opens up effective and convenient learning options for the millions of people
who want to study a foreign language.
Market opportunity
Spanish is spoken by about 400 million people worldwide and is one of the most in-demand foreign languages studied.
In a study of HR managers for multicultural companies, for example, 78.9% said their companies needed foreign language
fluency and 69.9% said Spanish was the most desirable language. Nearly 6,000,000 K-12 and postsecondary students
in the U.S. studied Spanish in 2002, and enrollments continue to rise. As Speak Shop offers other languages, the market
opportunity will number in the tens of millions.
Teaching through videoconferencing has only been possible in the last couple of years due to the recent convergence
of three factors: booming distance learning industry, increasing popularity of video messaging, and mainstreaming of
online marketplaces. Speak Shop, conceived of in 1998, capitalizes on this.
Priority target customers include secondary and postsecondary students and corporate employees. These customer
groups are motivated by tangible goals and are large enough to generate critical mass. They are also likely to be techsavvy and have access to high speed Internet. Speak Shop’s primary target market is the in-class language student
who will buy lessons to complement coursework. Corporate employees are a secondary target after a brand name
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Speak Shop
and quality reputation have been established. Speak Shop will also market its product to international development
professionals and to lifelong learners.
Scale of addressable social issues: Tens of thousands of Spanish instructors in Latin America and potentially millions of
foreign language teachers worldwide could generate a sustainable living given access to a world supply of students.
Access to global markets can also bring financial and social gains to teachers’ communities, influencing job-creation
and generating stable middle classes. The number of teachers that could use the system is limited only by their Internet
and banking access. At present, five women are teaching at Speak Shop and more teachers can quickly be trained to
meet growing customer demand. They are earning $5/hr, which is two to three times their typical salaried rate. Speak
Shop teachers are still paid employees of our partner school, which provides them with Internet access and payment
transfers.
Solution
Speak Shop brings together buyers and sellers in a scalable online marketplace and could galvanize a mass market
for online language tutoring. Clay Cooper was inspired to create Speak Shop after taking immersion Spanish classes
in Guatemala and realizing that the industry perpetuated tutor impoverishment. He also knew that most people
who wanted to study Spanish lacked access to high-quality tutoring. Clay used his technology and distance learning
experience to create a business that could benefit tutors and students on a global scale.
Interactive computer-based tutoring is more effective, cost-effective and efficient than classroom study (J. Capper
presentation, World Bank, 2000). Speak Shop makes it easy for people to study Spanish without leaving their desks.
Customers can choose tutors, schedule lessons and literally see and hear their private tutor. Like eBay, Speak Shop
creates a transparent market between customers and teachers. Tutors launch their own online service, setting their
hours and fees and openly compete for business based upon lesson fees, experience, feedback ratings, etc. Customers
pay lesson fees directly to tutors. Speak Shop’s customers have raved about the system, saying it is “awesome,”“fun” and
“one of the best uses of the web.”
Speak Shop’s website includes Spanish and English interfaces, scheduling tools, teacher search and rating systems,
discussion board, text chat and a web-based Macromedia videoconferencing platform that can currently host 50
simultaneous one-on-one tutoring sessions. Hosted on a dedicated Linux server and built largely with Zope open source
software, Speak Shop will remain flexible to new technologies.
Revenue model
Revenues are primarily from customer subscriptions or pay-as-you go scheduling fees, complimented with optional forcredit/specialized curriculum premium services. Just 175 customers are needed to break even. Tutors do not pay fees,
maximizing their ability to participate and generating loyalty.
Implementation plan
Speak Shop launched in 2005 and has been tested and praised by a variety of customers. In the short-term Speak Shop is
focusing on marketing research to further define target customers and their needs, curriculum development, enhanced
scheduling and customer management systems, expansion of the teacher network and partnership development.
Marketing tactics will include search engine ads and direct marketing through academic and corporate channels. By
August, Speak Shop will launch standardized tutor training guides for on-site and online delivery. Speak Shop is working
with tutors and university educators to launch both self- and tutor-directed curricula for customers of various interests
and skill levels in September 2005.
Speak Shop’s marketing and competitive strategies are based on: low-cost advantages, specialized pedagogy, customer
satisfaction and loyalty, tutor loyalty and beneficial network effects of early entry. Speak Shop holds a low-cost competitive
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Speak Shop
advantage over other tutoring services. Customers reap 50-90% savings over similar alternatives. Within the next year,
Speak Shop will capture additional advantages over in-person tutoring via specialized curricula and for credit courses.
Speak Shop holds an advantage over group classes, books and CDs because of its convenience, customization and costeffectiveness. Given similar costs, many customers are likely to favor high context, personalized tutoring services. Speak
Shop’s commitment to improving living standards and fostering cultural exchange also sets it apart from competitors.
Speak Shop’s brand identity, summarized in its tagline “Learn Spanish for Good,” reflects two customer objectives:
improving society and learning Spanish.
Competitive analysis Speak Shop’s current and potential competitors prove that there is a growing market for online
education through personal audio and video. With diffuse market shares and costly alternatives, the competitive arena
is open for Speak Shop’s unique combination of affordability and service offerings.
Team
Clay and Cindy Cooper are Speak Shop’s founders and managers. Both hold international MBAs from Thunderbird,
speak Spanish and have previously launched online consumer services. Clay is responsible for product and technology
development. He draws on 10 years of experience at the world’s leading online financial services firm, Charles Schwab
& Co., Inc., where he conceived of and managed dozens of technology and web initiatives. Clay has also consulted
on technology and strategic development to several early-stage ventures and taught courses online. Cindy oversees
marketing, business and capital development. She has spearheaded expansion for social ventures such as the Social
Entrepreneurship Incubator at the Women’s Technology Cluster and Net Impact, the world’s largest network of MBAs
committed to helping society through business. In two years, she helped triple Net Impact’s membership to nearly
10,000 by launching products and technology systems, improving customer experience and forging alliances with
organizations such as the World Bank, Skoll Foundation and UN.
Advisors and contractors: Rigoberto Zamora Charuc, Director, PROBIGUA Spanish Academy, Guatemala; Brad Vollmer,
Assistant Treasurer, Sun Microsystems; Erica Olsen, Principal, MyStrategicPlan.com; Tim Baker, CPA; Radix Technologies,
Zope programming; Air Interactive, Graphic design.
Speak Shop has developed the following projections based on a conservative growth model with $200,000 start-up
funding and without external equity investments. The founders believe such a scenario best illustrates Speak Shop’s
commercial viability and ROI. Using this model, Speak Shop will break even in March of Year 3 (2007). This is the value
of Speak Shop’s business over a 10-year timeframe:
Discount Rate = WACC
13.43%
Sum of PV of Cash Flows
$26,714,862
Speak Shop is primarily tracking social benefits incurred as a result of total increase in wages earned. Many other benefits
cannot be defined in monetary terms. Speak Shop will track several qualitative and quantitative social indicators through
website statistics, student and teacher surveys and interviews with Spanish immersion schools. This is the value of
Speak Shop’s social benefits over a 10-year timeframe:
Economic Discount Rate
Social return Beta
Social Return Discount Rate
Sum of PV of Cash Flows at 16% discount rate
SET Summaries
13.43%
2.57%
16.00%
$57,010,578
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V. SET Social Returns Analyses
Social returns are the impacts created by a venture per dollar invested, in addition to the financial returns
realized by stockholders. Social Returns Analysis is both the process of measuring and valuing these impacts,
and the results of such a systematic assessment. Other terms for this include extra-financial analysis and full
spectrum returns analysis.
Social Returns Analysis is an evolutionary step forward for capitalism. Unlike many discussions of community
and environmental benefits presented nowadays by corporations alongside their annual reports or by
nonprofits in their grant proposals—discussions which are usually limited to just a portion of a firm’s activities,
dissociated from the activities and inputs required to achieve the impacts, anecdotal, or all three-- Social Returns
Analysis strives to be rigorous and systematic; it strives to become a fundamentally necessary management
tool. It is analogous to a set of annotated financial statements in that it associates the venture’s operations and
income/expenditure with the measurable social and environmental impacts the venture creates. In addition,
Social Returns Analysis includes discussion of qualitative impacts and narrative to contextualize the reader’s
understanding of the impacts in question.
The two exemplary analyses we present here were written by the principals of DDMotion and Speak Shop,
who shared the 2005 SET Inventors Challenge prize for Best SROI Analysis. Their analyses are based on future
projections. More resources on how to do Social Returns Analysis can be found at www.svtconsulting.com/
resources.
Speak Shop Social Returns Analysis
Copyright SpeakShop 2005. www.speakshop.com. Used with permission.
Speak Shop’s Social performance analyses and SROI calculations were based on leading standards and
guidelines established by the Global Social Venture Competition (www.socialvc.net) and the Roberts Enterprise
Development Fund (www.redf.org).
SOCIAL IMPACT VALUE CHAIN
The following figure illustrates the social outcomes that result from Speak Shop’s activities:
Inputs
Activities
Websites with:
• Teacher outreach
• Audio/video/text
and training
distance education • Foster teacher
• Online open
clusters
market place
• Marketing and
• Payment systems
curriculum support
to language
learners
Outputs
• Business and internet
skills
• Higher yearly income
• Reduction of surplus
labor/increase in pool
• Improved self
perception, productivity
and civic engagement
• Access to affordable
tutoring
• Access to foreign language
and cultural knowledge
Outcomes
• Reduced poverty
• Increased access to
economic opportunity
• Increased empowerment
• Increased security
• Increased intercultural
understanding
KEY SOCIAL INDICATORS
Speak Shop will collect both qualitative and quantitative information and will track social indicators relevant
for our desired outcomes primarily via:
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• website statistics (automatically tracked)
• annual student and teacher surveys (conducted using free survey software and analyzed in-house)
• annual review of salaries paid to teachers in immersion schools (teachers will be asked to report this in
their yearly survey and www.guatemala365.com, which provides this data, will be consulted)
The usefulness of selected indicators relative to poverty reduction is supported by studies cited in the section
“Social Impact Opportunity,” which state that economic opportunity, empowerment and security are keys to
poverty reduction and that industry clusters can improve the economic health of a community.
Speak Shop has chosen one indicator, Increase in Earnings, as the most significant and trackable measure of
social returns. This indicator can be monetized and has been used as the input for SROI calculations.
1. Democratization of economic opportunity, empowerment and security.
a. Increase in earnings for teachers in developing countries due to higher wages and more hours
worked per year (SROI input)
b. Number of new, retained and total number of teachers (tracked via website)
c. Increase in number of language teachers entering labor pool (future SROI input; estimates will be
made based on the number of graduates from Guatemalan universities who are certified in
teaching Spanish language)
d. Increase in business and Internet skills (teacher survey)
e. Increase in teacher sense of self-efficacy, self-esteem and security (teacher survey)
f. Increase in teacher participation in civic community (teacher survey)
2. Increased access to foreign language and cultural education:
a. Number of new, retained and total number of students on a yearly basis (tracked via website)
b. Increase in the students’ ability to communicate in a foreign language and increased employ
ment opportunities/compensation (future SROI input once student baseline data are estalished
via student survey)
c. Ease of access for physically disabled and rurally-located students (student survey)
d. Ease of access to specialized curriculum for learning disabled students (student survey)
3. Increased international understanding and respect:
a. Number of languages taught and countries represented (tracked via website)
b. Increase in number of students that visit participating immersion schools (teacher survey)
c. Increased understanding of people from other cultures (student and teacher surveys)
Speak Shop has identified several other social indicators that will not be monetized or tracked at this time due
to limitations in resources/data and lack of counterfactual data, including:
• Improved health, productivity and access to education for teachers and their families
• Decrease in government spending on foreign language training
• Decreased government spending on equal access for learning and physically disabled people
• Increased productivity for language learners who do not have to commute
• Opportunity cost of leaving home or other jobs to become a teacher (negative input)
• Increase in spending at Internet cafés and other auxiliary businesses
• Increase in competitive efficiency (cluster effect)
• Decreased need for aid to impoverished areas
Negative Outputs
Although Speak Shop recognizes potential negative outputs, we believe their impact will prove negligible
because the impact will be slow and mitigated by a net increase in consumer demand. For example, the
availability of cheaper online tutors from developing countries may result in decreased demand for tutors
who live in countries with higher costs of living, such as the U.S. However, Speak Shop believes there is latent
customer demand for an affordable and effective language instruction service. Speak Shop taps into this
demand. In addition, some customers will prefer and continue to pay for in person tutoring.
SUMMARY SROI RESULTS
The following table summarizes the monetized social benefits derived from Speak Shop’s best and most highimpact social indicator, total increase in wages earned (incremental wages earned + additional wages earned
from additional hours worked).
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Social Purpose Benefit Flow in Comparable US Dollars
Year 1
Year 2
# Hours Taught
926
11,123
Cumulative # Hours
926
12,048
Average # FTE tutors
1.45
5.79
Year 3
43,149
55,197
22.47
Monetized Social Impact
Tot. Increase in Earnings2
Social Costs and Subsidies
Social Purpose Benefit Flow
$1,243,172 $3,682,811 $8,002,574 $47,275,345
(10,855)
(20,192)
(24,107)
(172,761)
$1,232,317 $3,662,619 $7,978,467 $47,102,585
$26,323
(801)
$25,522
$320,450
(54,720)
$265,731
Year 4
127,827
183,024
66.58
Year 5
277,761
460,785
144.67
Year 10
1,640,880
5,602,758
854.62
1 Only September through December 2005
2 Includes incremental wage increase over counterfactual wages earned due to higher hourly pay rate and increase in
earnings due to additional hours worked over counterfactual
Total Increase in Earnings shows the growth in average total earnings during the 10-year timeframe. Wages
were first converted from the Guatemalan Quetzal into U.S. dollars at today’s exchange rates, and the dollars
have been adjusted using purchasing power parity to reflect the value these earnings would have in the U.S.
This adjustment is necessary for comparing the real value of the social benefit, since all other dollar figures
(e.g., social costs, all financials) are based on the U.S. economy and cost of living.
Present Value of Social Benefits in Comparable US Dollars – 10 Years
Speak Shop has calculated the sum of the present value of social benefit flows for Years 1-10 as follows:
Economic Discount Rate
Social Return Beta
Sum of PV of Cash Flows at 16% discount rate
13.43%
2.57%
16.00%
$57,010,578
Sensitivity Analysis for Social Purpose Benefit Flows in Comparable US Dollars
Present Value at 3%
Present Value at 10%
Present Value at WACC
13.43%
Year 1
$25,522
25,522
25,522
25,522
5,522
Year 2
$257,991
241,573
229,078
214,299
234,262
Year 3
$1,161,577
1,018,444
915,812
801,455
957,731
Year 4
$3,351,815
2,751,780
2,346,485
1,920,997
2,509,421
Year 5
$7,088,765
5,449,400
4,406,436
3,374,681
4,819,054
Year 10
$36,100,209
19,976,094
12,385,765
6,795,941
15,149,210
Present Value of Social Benefits in Comparable US Dollars – Terminal Value
Speak Shop has also calculated the terminal value of the social benefits using social benefits flow after costs
and used its social return discount rate of 16.00%. The terminal value estimates the value of the social benefits
into perpetuity based on projections for given years.
Terminal Value
Sum of PV of Social Impact Cash Flows
Present Value of Social Impact (Terminal)
$66,733,648
$57,010,578
$123,744,226
Blended Value – 10 Years
Speak Shop estimates the blended value of its business and social returns over a 10-year timeframe below.
NPV of Business
NPV of Social Benefits
Blended Value
$26,714,862
$57,010,578
$83,725,440
Assumptions
1. Total increase in wages earned and purchasing power parity.
a. SROI evaluates monetized social gains against monetary costs. It would grossly underestimate
social value to calculate wages based on cost of living in Guatemala and compare these against
costs/investments incurred based on the U.S. cost of living. Therefore, salary figures were adjust-
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ed using purchasing power parity to reflect the equivalent U.S. earning levels.
b. Counterfactual comparison basis are average earnings and hours worked for teachers currently
working in Spanish immersion schools.
c. Impact is measured for Guatemala based on availability of data. There are sufficient teachers
in Guatemala to ensure impact size is possible. Speak Shop will expand to other countries and
will be able to gather appropriate data at that time.
2. Discount Rate and Social Return Beta. Speak Shop believes the discount rate for evaluating its social impact should be based on a discount rate appropriate to its financial risks and returns, since the social
benefit is linked directly to the success of the business. Given a WACC of 13.43%, Speak Shop adds a so
cial return beta of 2.57% associated with inherent risks of working with a diverse, international supply of
tutors, to reach its chosen social discount rate (16%). The 16% discount rate falls between the rate accept
able to social investors (10%) and that which is expected by venture capitalists (24%). Given that assump
tions have been conservative throughout the analyses, Speak Shop believes the discount rate and social
beta to be appropriate for its business. Although this selection represents Speak Shop’s best estimate, a
sensitivity analysis is included to represent the range of possibilities.
3. Social Costs and Subsidies. Speak Shop allocates the $50,000 anticipated grant funding as a social cost.
Speak Shop’s cost of training tutors is considered 25% subsidy because of cultural barriers and other
costs of serving its tutor population and 75% as a normal cost of doing business due to the innovative
nature of the company. An additional social subsidy cost was included to reflect a short-term reliance
on partnerships with nonprofit organizations that offer additional training, computer/Internet access,
facilitation of payment transfers, etc. Speak Shop expects this cost to diminish over the years with changes
in free trade agreements, global banking and digital divide barriers. The cost is calculated as a percent
age of wages earned, with Year 1 (.10%) being based on experience to date. The percentage diminishes
each year reaching 0 in Year 6.
DDMotion Social Returns Analysis
Copyright DDMotion 2004-2005. www.ddmotion.com. Used with permission.
OVERVIEW
In 2001, our world consumed 77.13 million barrels of petroleum a day and produced approximately 6.5 billion
metric tons of carbon emissions. As illustrated below, carbon dioxide is a global problem, but the countries that
produce the greatest amount per person are in North America, Europe and Australia. If Carbon reductions are to
be made, the lead has to be taken by people living in these countries. During 2003, 83% of total U.S. greenhouse
gas emissions consisted of carbon dioxide from the combustion of fossil fuels such as coal, petroleum, and
natural gas. Because our society is dependent on fuel, we have tolerated the resultant greenhouse gas
emissions and their negative ramifications: depletion of the ozone layer, haze, serious health issues, chemical
changes to the composition of soil and water, erosion, etc. Now advanced technologies are available to reduce
emissions from vehicles, but manufacturing companies aren’t necessarily taking advantage of them because
of the high start-up cost to implement the manufacturing changes. In the words of George David, chairman
of United Technologies, “We can be efficient, much more efficient in both our energy production and the
operation of equipment consuming that energy. Greenhouse gases are a problem, and it’s time for the usual
and effective American solution” - the intelligent use of highly productive technologies. Through its offering
of breakthrough IVCM technology, we are confident that DDMotion can play a role in this solution.
The primary benefits of reducing air pollutants include drastically reduced asthma, fewer premature deaths,
increased visibility, less soot, and more diverse ecosystems since air pollutants increase acidity in waters and
deplete the nutrients in soil damaging forests and farm crops. The purpose of the Social Return on Investment
analysis is to quantify the benefits of reduced emissions and resultant health and environmental benefits. This
methodology will then be use to estimate the social benefits derived from implementation of DDMotion’s
fuel-efficient transmission in automotives and equipment.
In sum, the implementation of DDMotion’s technology into non-road vehicles and compressors over the next
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10 years will result in an overall reduction of CO2 for a savings of approximately $110 million in social benefits.
For every dollar invested in DDMotion, there will be an approximate return of $1.41 in social benefits based
on the present value of our projected expenses for the next ten years. Moreover, these social benefits give
rise to a return of approximately $47 for every initial dollar of invested capital required, a figure that is acutely
relevant for potential investors.
SOCIAL VALUE PROPOSITION
DDMotion is a for-profit enterprise; however, the company has an equally important social value proposition
driven by our theory of change:
If transmission and compressor manufacturers use DDMotion’s technology, greenhouse emissions will be
reduced and air quality will improve, which will result in people living longer and healthier lives.
The primary social and environmental benefits of DDMotion technology are diminished CO2 emissions as a
result of reduced gasoline usage and improved energy efficiency, and improved human health.
KEY ASSUMPTIONS OF OUR THEORY OF CHANGE
For the environment to be better off as a result of agricultural and industrial manufacturers adopting
DDMotion’s IVT transmission the following must be true:
• The new technology must prove more efficient than existing technology in manufacturer trials and pilots.
• The technology must have a better cost/benefit ratio than other approaches to improving transmission
efficiency.
• The technology must be at least as easy, if not better, for customers to use than the current transmission
technology.
• The technology will improve fuel efficiency and reduce emissions into the environment.
• The technology will be priced at a level that is cost effective for our target customers.
Each of the primary benefits and these corresponding key assumptions of our theory of change are discussed
below in our detailed analysis of Differential Dynamic’s social return on investment.
IMPACT VALUE CHAIN
DDMotion directly creates a cleaner environment by the following process.
Inputs
Activities
• Technology patents • Promote technology through
• Engineers
sales and marketing
• Adapt the technology to products
• Build prototypes and test
• License technology
Outputs
• % of market equipped
with technology
• Reduced gasoline usage
• Reduced CO2 emissions
Outcomes
• Less incidents of asthma
& fewer premature deaths
• Better air quality
• Less acidic lakes and
streams
• Less haze
• More nutrients in soil
• Less damage to forests
and farm crops
• More diverse ecosystems
• Slower rate of global
warming
When taking these outcomes into consideration in our SROI calculation, it is important to note that we only
took credit for the incremental monetized value of the social benefits. To the extent that certain outcomes
would have occurred without our innovation, this benefit would not be included in social return on investment. Current progress in transmission efficiency and energy efficiency (based on historical data) has seen
an improvement of approximately 1.5% annually. Based on this figure, without DDMotion’s IVT technology,
the market would reduce CO2 emissions anyway per unit per year by 1.5% through transmission and energy
efficiency improvements. These improvements reduce the impact of our technology by approximately $4.3
million over the ten year horizon ($1.4 million and $2.9 million for transmissions and compressors respectively). The source of the 1.5% improvement figure is Technology Roadmap for the 21st Century Technology
Partnership, US Department of Energy (Dec 2000).
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One concern of our impact analysis was that manufacturers would only be concerned with meeting regulated
emission levels and would use our technology as a lower-cost displacement of other more fuel-efficient technologies, thus creating zero impact overall. Evidence, however, indicates otherwise. To the extent that manufacturers can improve their fuel efficiency, they will be able to reduce pressure from regulators and delay the
massive investments required to bring fuel cell technology to market. We do not see this as a bad thing as it
encourages action today over promises tomorrow. As Honda’s US spokesman Andy Boyd states:
“In the long-term, fuel cells are probably going to be the answer, but again, if we’re looking out about 30 to
40 years, do we want to wait that long to try and do something about fuel efficiency and reducing emissions?
Reducing fuel consumption is the greatest thing we can do to cut emissions. From ” Detroit: A Drive Toward
Fuel Efficiency?” Julie Halpert, Great Lakes Radio Consortium (March 2002).
Additional support comes from a fuel efficiency trial conducted in Europe, elucidating the immediate impact
potential of the IVT now:
“[IVT] does not require a major technological shift between what currently exists and what is proposed, i.e.
next generation engines will be evolutionary derivatives of current systems and the IVT contains much of
what is currently used. This contrasts with other technologies such as electric cars and fuel cells. In both cases
there are major changes requiring huge new production investments and infrastructure support. Also what
ever the cleanliness of the car, the power has still to be produced somewhere. From ” Demonstration Of Energy Saving In Vehicles By Integrating An Infinitely Variable Transmission With An Optimised Petrol Engine,”
European Commission Report (1998).
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534
12
6408
399.92
2,562,698
$2.01
2006
40,000
100,000
20,000
2007
60,000
200,000
20,000
2008
360,000
400,000
60,000
2009
480,000
900,000
160,000
2010
600,000
1,200,000
200,000
2011
900,000
1,500,000
240,000
2012
1,000,000
2,400,000
300,000
2013
1,150,000
2,800,000
720,000
2014
3
907,185
20%
$5
0.56
20,000
$10,000
$562,000 $1,647,000 $3,092,000 $4,016,000 $5,301,000 $7,430,000
$0.24
$0.24
$0.24
$0.24
$0.24
$0.24
CO2 Emissions (tons)
Conversion
Differential Dynamics Efficiency improvement
Cost of CO2 per ton
Per Year CO2 savings per vehicle
5,000
$321,000
$0.24
2005
2006
2007
$42,000
2008
$123,000
2009
$232,000
2010
2011
$398,000
2012
$557,000
2013
$703,000
2014
$23,118,111
($1,874,084)
$301,000
$9,378,000
$0.24
$60,000
$0.24
3%
3%
$800
$24,000
3
CO2 Emissions (tons)
Conversion
907,185
1.5%
Without Differential Dynamics Efficiency Improvement
Cost of CO2 per ton
$5
Per Year CO2 savings per vehicle
0.04
$24,992,196
$10,000
$0.24
2005
DDMOTION SOCIAL RETURN ON INVESTMENT CALCULATION
DD Motion’s Social Benefits
Social Benefits Per Vehicle
Hours in use/year per vehicle
Lifetimes (years)
Hours lifetimes
CO2 emissions per vehicle (grams/hp-hr*hp*load)
Lifetime Emmissions (grams)
NPS of Monetized Social Benefits for Each IVT Vehicle
# New Units Sold with Differential Dynamics’ IVT
Arrangement A
Arrangement B
Arranagement C
Monetized Social Benefits from CO2 savings for Vehicles
Equipped w/ DD Motion’s IVT
Growth Rate (Based on EPA Report: Nonroad Engine Growth Estiates NR-008b (2002))
Discount Rate (Based on the EPA’s Guidelines for Preapring Economic Analyses (November 2000)
534
12
6408
399.92
2,562,698
$0.15
NPV of Monetized Social Benefits for Vehicles Equipped w/ DD Motion’s IVT within 10 years
Social Benefits Per Vehicles
What Would Have Happened Anyhow
Hours in use/year per vehicle
Lifetime (years)
Hours lifetime
CO2 emissions per vehicle (grams/hp-hr*hp*load)
Lifetimes Emissions (grams)
NPV of Monetized Social Benefits for Each IVT Vechicle
Monetized Social Benefits from CO2 savings for Vehicles
Equipped w/ Existing Fuel-Efficient Technologies
$5,000
- NPV of Monetized Social Benefits for Vehicles Equipped w/ Existing Fuel-Efficient
= DD Motion’s Social Impact:
66
June 2005
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SET Return Analyses
TOP THREE INDICATORS OF SOCIAL VALUE
DDMotion’s top three indicators of social value include:
1. Percentage improvement in fuel efficiency
Data from prototypes, pilots and trials with clients will indicate the level of improvement in fuel efficiency. In
order to predict the expected improvement in fuel efficiency today, we used proxy data from IVT trials by the
UK company Torotrak and chose the conservative middle range of a 20% improvement in fuel efficiency. In
estimating the expected improved efficiency in compressors for reducing emissions, we used proxy data for
variable frequency drives provided in MRO Today of 50%, which is a conservative estimate of the efficiency
savings since our technology is superior in functionality to the VFD’s that we used as a proxy.
2. Royalties on sales of vehicles and units equipped with DDMotion IVT and IVC respectively
The Company receives royalties on its patented technologies and these per vehicle royalties can be used to
measure the number of vehicles in operation equipped with fuel saving IVT technology. These royalties will
be tracked as part of monthly financial statement overview.
3. Link between improved fuel and energy efficiency and reduction in CO2 emissions
Carbon dioxide emissions are directly proportional to fuel economy – each 1% increase (decrease) in fuel
consumption results in a corresponding 1% increase (decrease) in carbon dioxide emissions - U.S. EPA in its
research report Emission Facts: Average Annual Emissions and Fuel Consumption for Passenger Cars and Light
Trucks (April 2000). Similarly, an increase in energy efficiency will reduce the number of kilowatt hours (KWH)
used in producing energy. We used a conversion factor of .43 to convert KWH of electricity into kg of CO2,
which was obtained from the National Energy Foundation’s Energy to Carbon Dioxide Converter.
METHODOLOGY
Transmissions
To calculate the social benefits derived from the application of DDMotion’s technology to production vehicles,
we based our calculations on figures determined by the U.S. Environmental Protection Agency in its research
report Final Regulatory Support Document: Control of Emissions from Unregulated Nonroad Engines (2002).
We limited our study to a ten-year period and arrived at the total amount of CO2 emissions averted by
multiplying the estimated number of vehicles installed with the Company’s IVT in that time frame with an
incremental CO2 reduction.
Initially, we needed to estimate the number of vehicles equipped with the Company’s technology during the
ten-year horizon. Though the Company believes it will be able to capture a portion of the heavy road vehicle
market, we excluded this market from our study since the lengthy sales and development periods would
cast actual vehicle sales outside the ten-year horizon projected in our study. In non-road vehicles market, we
expect to enter one-to-two new product lines each year beginning in 2006.
The major social benefit derived from applying the Company’s technology is reduced greenhouse gas
emissions. In order to calculate the amount of CO2 emissions averted by installation of the Company’s IVT, we
determined the amount of air pollutants emitted over each vehicle’s lifetime for the population of vehicles
installed with the Company’s IVT over this ten-year time horizon. We calculated the total emissions using
emission rates from today’s transmissions and from the Company’s IVT. We calculated the amount of emissions
using average statistics for non-road vehicles:
1. The average non-road vehicle with a spark ignition gasoline engine is used 534 hours per year for 12 years.
2. Results in a lifetime value of approximately 2.6 million grams of CO2 emissions per vehicle. The CO2 emissions per vehicle take into account required improvements to fuel efficiency which will be in force by 2006,
the first year our IVT technology is included in new vehicle sales. The figures use the median level
of grams per horsepower rather than the zero level (initial state at time of vehicle sale) to take into
account degradation in performance over the life of the vehicle. Data is garnered from Final Regulatory
Support Document: Control of Emissions from Unregulated Nonroad Engines (2002).
3. Given a conversion rate of 907,185 grams per ton, each non-road vehicle emits 3 tons of CO2 emissions
throughout its life.
4. On average, the Company’s IVT increases engine fuel efficiency by an estimated 20%, reducing CO2 emissions by approximately 20%. Carbon dioxide emissions are directly proportional to fuel economy – each
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1% increase (decrease) in fuel consumption results in a corresponding 1% increase (decrease) in carbon
dioxide emissions as stated by the U.S. EPA in its research report Emission Facts: Average Annual Emissions and Fuel Consumption for Passenger Cars and Light Trucks, (April 2000). The 20% efficiency improvement uses the middle range of the Torotrak IVT trials as proxy data, a trial which includes highway
miles, unlikely for the heavy vehicles discussed here and therefore in all likelihood we underestimate the
benefits of our technology.
5. Using a marginal cost of $5 per CO2 emission ton, we calculated the amount of social benefit from installing the Company’s IVT in a non-road vehicle at $0.24 per vehicle per year. This marginal cost was determined by taking the average dollar amount per unit of CO2 as determined by Richard S.J. Tol in The
Marginal Costs of Carbon Dioxide Emissions: An Assessment of the Uncertainties (2003). To avoid double
counting the benefits of reduced carbon dioxide emissions, our $5 level marginal benefit includes both
population health benefits and direct environmental and global warming reduction benefits.
6. When a new vehicle is sold with the IVT technology we can be confident that social benefit will be realized without any further involvement from DDMotion. We book the value of the savings from CO2 emissions over the 12 year product lifecycle in the first year using a discount rate of 5% for this period which
yields a discounted $1.82 savings per vehicle over its lifetime.
7. We multiply this discounted lifetime value of savings by the number of new non-road vehicles sold in a
particular year equipped with DDMotion’s IVT technology to create the social benefit revenue stream for
a particular year. We then discounted this stream of future cash flows by 5%.
8. We used a 5 percent discount rate as cited by our key proxy data source the Final Regulatory Support
Document: Control of Emissions from Unregulated Nonroad Engines (2002). The 5% figure is based on the
range recommended by the Science Advisory Board’s Environmental Economics Advisory Committee for
use in EPA social benefit-cost analyses, a recommendation incorporated in EPA’s Guidelines for Preparing
Economic Analyses (November 2000).
9. The real cost of gasoline is significantly higher than what consumers pay at the pump. We have calcu lated a significant $0.61 subsidy on gasoline (not including health benefits to avoid double counting) which
would further increase the SROI. We have not included this in the SROI because we were not able to determine with certainty if the government would spend a portion of this in a socially responsible way. Perhaps as we begin to sell units, we can determine how the government will spend the savings and can
include it as a social return on investment.
Compressors
To calculate the social benefits derived from the application of DDMotion’s technology to the compressor
market, we based our calculations on figures determined by the Energy Information Administration in its
research report Emissions of Greenhouse Gases in the United States (2003). We limited our study to a ten-year
period and arrived at the total amount of CO2 emissions averted by multiplying the estimated number of
compressor units installed with the Company’s IVC in that time frame with an incremental CO2 reduction.
The major social benefit derived from applying the Company’s technology is reduced greenhouse gas
emissions. In order to calculate the amount of CO2 emissions averted by installation of the Company’s IVC, we
determined the amount of air pollutants emitted over the lifetime of each our target product (air conditioners
and refrigerators) for the population of units installed with the Company’s IVT over this ten-year time horizon.
We calculated the amount of emissions using average statistics for air conditioners and refrigerators and used
the following assumptions from the respective sources indicated below:
1. The average air conditioner uses wattage of 2,305 watts and is used an average of 1000 hours per year
for a total of 2,305 average KWH used/year. The average refrigerator uses approximately 3,319 watts and
operates an average of 3,319 hours per year. Note: Knowing that your refrigerator uses 3,319 watts when
the compressor is on doesn’t tell you how much energy it uses in a month, because the compressor is not
on 24 hours a day.
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2 . We used a conversion factor of .43 to convert KWH of electricity into kg of CO2, which was obtained
from the National Energy Foundation’s Energy to Carbon Dioxide Converter. Given a conversion rate
of 907,185 grams per ton, each air conditioner emits approximately 10.48 tons of CO2 emissions through
out its life and each refrigerator emits approximately 10.93 tons of CO2 emissions throughout its life.
3. On average, the Company’s IVC increases compressor efficiency by an estimated 50%, reducing CO2 emissions by approximately 50%. Carbon dioxide emissions are directly proportional to energy savings – each
1% increase (decrease) in fuel consumption results in a corresponding 1% increase (decrease) in carbon
dioxide emission as stated in the 2003 Energy Information Administration repot Emissions of Greenhouse
Gases in the United States 2003. As discussed earlier, the 50% efficiency improvement uses the middle
range of the VFD information as proxy data, a data set which underestimates the benefits of our technology since our technology is more cost effective and efficient.
4. Using a marginal cost of $5 per CO2 emission ton, we calculated the amount of social benefit from in
stalling the Company’s IVC for both air conditioners and refrigerators in units per year. This marginal cost
was determined by taking the average dollar amount per unit of CO2 as determined by Richard S.J. Tolin
The Marginal Costs of Carbon Dioxide Emissions: An Assessment of the Uncertainties (2003). To avoid
double counting the benefits of reduced carbon dioxide emissions, our $5 level marginal benefit includes
both population health benefits and direct environmental and global warming reduction benefits. In
fact, there are significant benefits in our technology’s ability to significantly reduce latent heat and condensation on air conditioners and refrigerators by allowing the compressor to stay on at a steady rate
rather than turning on and off inefficiently. This significantly reduces mold which is the main cause of
acute sinus infections, and thus has significant health benefits associated with this – we have not separately monetized this health benefit in order to avoid double counting since the $5 marginal benefit includes health benefits.
5. When a new compressor is sold with the IVC technology we can be confident that social benefit will be
realized without any further involvement from DDMotion. We book the value of the savings from CO2
emissions over the 12 year product lifecycle in the first year using a discount rate of 8%.
6. We multiply this discounted lifetime value of savings by the number of new air conditioners and refrigerators sold in a particular year equipped with DDMotion’s IVC technology to create the social benefit revenue stream for a particular year.
7. We used a 8% percent discount rate as cited by Market Trends in the U.S. ESCO Industry: Results from
NAESCO Database Project (May 2002). This report suggests using discount rates between 7% and 10%
to determine the NPV of the annual stream of economic benefits and costs of ESCO projects which is
more relevant for our energy conservation goal in the compressor business. We then ran sensitivity
analysis across a range of discount rates from 5% to 10% in order to determine the effect on our SROI.
SET Return Analyses
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For more information about these opportunities
and to become involved in the SET Platform
to track the flow of money to these deals
please visit
www.set-info.com.
www.set-info.com
June 2005

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