1:Hour Innovator Business Plan

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BUSINESS PLAN June 9 th , 2014 OWNERS Enterprise Development Group 930 Roble Ridge Road Palo Alto, CA 94036 408.873.9282 [email protected] www.enterprisedevelop.com

description

The 1: Hour Innovator provides a powerful and practical learning experience that can be delivered to employees anywhere in the world. All that is required is an internet connection, a passionate innovator with the beginnings of a bold idea, and a commitment to 60 minutes worth of instruction. For my senior project, I teamed up the Enterprise Development Group and Zooka Creative to create a business plan for this innovation management tool, which will be released in September of 2014.

Transcript of 1:Hour Innovator Business Plan

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BUSINESS PLAN

June 9th, 2014

OWNERS

Enterprise Development Group

930 Roble Ridge Road

Palo Alto, CA 94036

408.873.9282

[email protected]

www.enterprisedevelop.com

Zooka Creative

135 Nicholson Lane

San Jose, CA 95134

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408.428.9665

[email protected]

www.zookacreative.com

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I. Table of Contents

I. Table of Contents....................................................................................2

II. Executive Summary................................................................................3

III. Team ......................................................................................................4

IV. Product Description................................................................................5

V. Marketing Plan........................................................................................6

VII. Appendices............................................................................................18

VIII. Sources.................................................................................................21

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II. Executive Summary

Innovation is a discipline. Embracing the mindset and learning the skills has become a requirement for success in our rapidly changing world. Workers across all industries and occupations have begun to recognize that the development of innovation capabilities is the key to professional and organizational growth. Harnessing the wisdom of your employees, customers and suppliers allows companies to find the best ideas, improve upon them, and bring them to market.

The Enterprise Development Group and Zooka Creative have joined forces to create the 1:Hour Innovator, a powerful online innovation platform that makes innovation easy and users successful. Whether it is an entrepreneur with a brilliant idea for a start-up, or a lower-level employee who discovers a business opportunity, the 1:Hour Innovator is an appropriate solution for innovators with all levels of experience. Embedded with innovation expertise, tips, and videos, the 1:Hour Innovator provides an easy-to-learn discipline for idea development and value creation, and instruction on how to prepare and pitch a winning business proposal.

The market for innovation management software is young, but growing steadily and gaining traction with industry leading solutions utilized by some of the world’s largest organizations and most recognizable brands. At the enterprise level, these innovation platforms facilitate collaboration throughout the innovation process, connecting innovators with experts and knowledge like never before. EDG and Zooka Creative plan to leverage this growth trend and use idea management vendors as the primary channel partner for delivering the 1:Hour Innovator to hundreds of companies and thousands of employees around the world.

We believe you make your own luck. Identify and pursue enough good opportunities and you will be rewarded. With each idea you champion, you will get better and better at developing winners. The complexity and ambition of your idea will determine how long it takes to conceive, quantify, test, iterate, and deliver a winning proposal. With just 60 minutes of instruction, the 1:Hour Innovator will cut your development time in half and double your chance of success. As is often the case, faster is better!

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“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will

be sufficient for tomorrow.” – William Pollard

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III. Team

1:Hour Innovator PartnershipLaszlo Gyorffy and EDG bring the innovation expertise and content (CO-STAR and pitching) to the 1:Hour Innovator. Zooka will provide tool design, software development, and product marketing.

About the Enterprise Development Group (EDG)Headquartered in Silicon Valley, California, EDG is an international consulting and training firm specializing in business strategy, innovation best practices, and leadership development for organizations facing complex change. EDG consultants and trainers have been working since 1986 to enable leaders and their teams to look courageously into the future, and to build innovative responses to what they see into their products and organizations as quickly as possible. We have found that most people long to achieve something great. Our work is about proving that you can—when imagination and conviction meet bold strategy and disciplined implementation.

Laszlo Gyorffy is President of the Enterprise Development Group, and the project lead on the 1:Hour Innovator. For over 20 years, Laszlo has worked with organizations around the globe to expand the possible; helping them refocus, redesign, and reenergize their business strategies and innovation practices to succeed in an increasingly dynamic and demanding market place. Laszlo is an accomplished speaker and author of Creating Value with CO-STAR: An Innovation Tool for Perfecting and Pitching your Brilliant Idea as well as the Global Innovation Science Handbook. He is also a certified instructional designer and trainer, and has delivered transformational programs, such as the Innovation Advantage, to client organizations.

Partial List of ClientsBBC, Discovery Communications, Danish Broadcasting, EDF Energy, Egmont, GM, Homeland Security, Hewlett Packard, IBM, ITRI (Industrial Technology Research Institute - Taiwan), Johnson & Johnson, Kaiser Permanente, Lam Research, NTT, Panera Bread, Philips, Stanford University, Swisscom, Swiss Post, Travel Channel, Texas Health Resources, Toyota, Universal Music Group, and the US Air Force.

About Zooka CreativeFounded in 2006, and located in the heart of Silicon Valley, Zooka Creative is a tight-knit, nimble group of the most passionate and talented people you’ll ever meet. We offer a full service solution to our clients, focusing on design, digital, and shopper marketing.

In addition to our design and digital departments, our shopper marketing team of industrial designers, printers, and production managers have an entire warehouse with printing and fabrication capabilities on site and can work hand in hand with graphic and web designers to keep your messaging consistent across multiple

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channels. In short, we are the only agency with a design team, web/mobile developers, printing presses, copy writers, fabrication equipment, and a fork lift…all in the same building.

We pride ourselves on innovative thinking, compelling creativity, and a strategic approach that keeps clients singing our praises. Zooka has won countless awards recognizing our accomplishments, but it’s the relationships we make, and the brands we help elevate that we value most.

Partial List of ClientsDial, Eye-Fi, Henkel, Jamba Juice, Logic Devices, Oberto, Purex, Slingbox, Symantec, Vonage, and Yahoo!

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IV. Product Description

The 1: Hour Innovator provides a powerful and practical learning experience that can be delivered to employees anywhere in the world. All that is required is an internet connection, a passionate innovator with the beginnings of a bold idea, and a commitment to 60 minutes worth of instruction. 

The 1:Hour Innovator is a online innovation tool that: • Provides an easy-to-use discipline for idea development and value creation• Establishes the critical components of a business plan from the very

beginning• Allows for quick and focused evaluation and exchange of helpful opinions• Shapes a winning pitch for funders, or sources of approval and resources

The proven practices embedded in the 1:Hour Innovator will harness your creative energy and guide you along the path to success. Five steps provide a straightforward framework to the innovation process, and will assist you in developing the most valuable idea possible while teaching you the communication techniques necessary to make it happen. Each step builds on the previous one, offering helpful tips and techniques along the way.

1. Capture Essence: Begin by quickly documenting the essentials of your idea2. Clarify Value: Transform your raw idea into a viable value proposition3. Optimize Idea: Research and refine your idea to minimize risk and

maximize potential4. Spark Interest: Pitch your idea in a clear, concise, and compelling manner 5. Secure Support: Prepare and present a fundable business proposal

With instructional content built in and readily accessible, the 1:Hour Innovator simultaneously serves as both an E-Learning tool and innovation management platform. Use the 1:Hour Innovator to keep track of your ideas and store your intellectual assets. The project library allows you to save and retrieve ideas, monitor your progress, and work at your convenience. The 1:Hour Innovator is simple, user-friendly, and has a visually stimulating interface to engage and meet the needs of innovators with all levels of experience. This makes it a perfect solution for broad, lower-level consumption, because training is not a prerequisite for effective utilization of the software. The 1:Hour Innovator is centered around the CO-STAR Value Proposition, which is the core of an innovation discipline that can be learned with ease. The CO-STAR template allows you to quickly identify the key components of your value proposition, craft a compelling business proposal, and iterate it effectively with others until it may become a new market-worthy venture.

Several factors distinguish the 1:Hour Innovator from innovation management solutions in the market. While most enterprise-level idea management platforms try to keep users and collaboration online, the 1:Hour Innovator focuses on independent innovation and preparing you to present an

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optimized value proposition in person. In Silicon Valley the oft-repeated refrain is not: “Do you have a cool idea?” Rather, it is: “Can you pitch me the value proposition of your idea?” More important than the idea itself are questions such as: Will the idea be relevant to a customer? Will there be a market for it? How is it taking advantage of an emerging trend or a new technology? Is it better than other available alternatives? What kind of returns can be expected? The bottom line is businesses do not want ideas – they want outcomes and results. The 1:Hour Innovator concentrates your efforts on the development of an idea, which is where real value is identified and realized in the innovation process. It is naïve to believe you can get it right on the first time, and this concept is largely ignored by competitor offerings.

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V. Marketing Plan

Economics1:Hour Innovator simultaneously competes in two large, emerging

industries: E-Learning Tools and Innovation Management Software.

A Glance at the e-Learning Tools Industry:In 2014, the E-Learning industry is carrying some serious momentum, and

there seems to be universal agreement that the worldwide E-Learning market will show fast and significant growth over the next three years. The global market for Self-Paced E-Learning reached $35.6 billion in 2011, and the five-year compound annual growth rate, 7.6%, indicates revenues should reach some $51.5 billion by 2016. According to regional studies, several world regions appear to have significantly higher growth rates: Asia (17.3%), Eastern Europe (16.9%), Africa (15.2%), and Latin America (14.6%).

The U.S. and Western Europe markets are the most mature. In 2013, revenues for North America totaled $23.8 billion, with the U.S. spending more on self-paced learning than anywhere else in the world. The rate of growth, 4.4%, may seem low, but the revenues generated in this market are extremely high. In mature markets, such as the U.S., large companies are making the most impact despite a long buying cycle. In 2010, direct training expenditure per employee, the key metric to measure the corporate training sector, in the U.S. market, was for companies with:

Fewer than 500 employees: $1,605 500 to 9,999 employees: $1,102 More than 10,000 employees: $825

Industry experts have also observed that the North American market is shifting towards E-Learning tools with video content, because of its more personal nature.

The Western European region is the world’s second largest buying region of E-Learning products and services, but this is set to change in 2016 with the emergence of Asia. In 2013, revenues totaled $6.8 billion with an annual growth rate of 5.8%. For workplace learning, in 2013 there was an interesting shift in the market. Small and medium sized businesses have started to adopt sophisticated learning technologies, realizing there is a very low barrier to entry for them to have enterprise-grade capability in this area. Meanwhile, larger corporations have started to outsource the development of E-Learning content to professional agencies rather than building in-house.

Asia is expected to outspend Western Europe by 2016, reaching $11.5 billion. Asia has the world’s highest regional growth rate, and the key drivers for this market are:

Government initiatives to promote E-Learning Growing adoption of technology

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The shortage of quality education Convenience and affordability factors

Various surveys and analyses attribute the substantial growth in the E-Learning market to the emergence of cloud, or Software-as-a-Service (SaaS), solutions. According to Gartner, SaaS will continue to experience healthy growth through 2015 when worldwide revenue is projected to reach $22 billion. The rapid adoption of mobile technology is also going to play a major role in driving the E-Learning industry, and shaping the way the entire digital experience is valued and consumed. To date, the mobile ecosystem – devices, carriers, app markets, etc. – is the faster-growing industry ever recorded.

The corporate training market is also shifting to E-Learning platforms as an alternative to traditional training methods, as companies attempt to drastically reduce spending on facilities, salaries, and overhead. Within the training industry, the E-Learning sector has consistently grown in recent years and shows positive annual growth. The top drivers in the shift to tech-based learning, in order, are budget constraints, time constraints, and efforts to reduce travel costs. The 2012-2017 estimated compound growth rate for corporate E-Learning is 12%.

Here are some other notable statistics that serve as proof of the E-Learning industry’s strength, growth, and promise in the enterprise:

Over 40% of Fortune 500 companies are now using some form of educational technology.

According to report released by IBM, companies leveraging E-Learning tools and techniques have the potential to improve employee productivity by 50%. It is estimated every $1 spent on training results in up to $30 worth of productivity gains.

72% of companies state that E-Learning helps them to keep up-to-date in their industry

Companies are 17% more likely to become the market share leader if they have a robust E-Learning program.

82% of online learners are undergraduates and 81% of online learners are employed.

The current speed of change means that employees need to be trained continuously in order for companies to avoid the dangers of being out-thought and out-maneuvered by competitors. Thankfully, entrepreneurs, senior executives, and business managers recognize this.

A Glance at the Innovation Management Software Industry:As the rate of technological change accelerates, the need for innovation

grows. Innovation management platforms are designed to serve as a collection point for customer-driven improvements, provide structure to the innovation process, and speed up the time-to-value for promising ideas. Through innovation, companies can increase revenues, save costs, improve processes, achieve higher customer satisfaction, and increase employee engagement and morale. Despite these tangible benefits, the market for innovation management software is still immature and highly fragmented, reflecting shallow penetration of these tools in

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client organizations. Forrester, a global research and advisory firm, conducted a study of 14 of the largest vendors, and estimated total revenue for the group was approximately $70 million in 2012.

Forrester attributes the lack of traction in this marketplace to customers’ innovation immaturity, rather than the quality of vendor offerings. In other words, the tools are ready – most organizations are not. In a 2012 survey of IT and business decision-makers, only 45% of respondents reported that they have groups dedicated to innovation, and only 34% had centralized organizations and processes for innovation. As more organizations get serious about adding rigor to their innovation activities, industry experts expect market size to increase substantially.

An immature, fragmented product landscape is ripe for consolidation. Vendors must constantly enhance product offerings and capabilities, and acquisitions can be an attractive alternative to internal development. For example, industry leader Spigit acquired Crowdcast back in 2012 to introduce crowd-sourcing capabilities in its innovation platform. Clear differentiators among many of the vendors, such as geographic presence and innovation communities served, will allow them to combine with little or no redundancy in product, market, or services offered. Therefore, the trend of vendors looking externally to acquire and leverage resources is becoming an increasingly popular strategy to attack the market.

Barriers to entry for the tech industry have always been relatively low, as rapid and continuous innovation cycles typically self-correct entrenched market power. Furthermore, the web continues to level the playing field by:

Lowering customer switching costs: the cloud allows customers to easily switch software vendors without having to worry about a major hardware or complex IT implementation

Lowering capital requirements: the cloud lowers the upfront R&D costs for a start-up. Servers can be rented and product/market fit can be achieved faster than ever before

Equaling access to distribution channels: the web allows start-ups to efficiently reach consumers and business customers through search, social, and mobile channels. Success is no longer based on the size of a vendor’s sales force or investing in a large print ad campaign to build up a brand

All of this applies to the market for innovation management software, especially this early in its development. The only real substantial barrier to entry a vendor can build up is demand-side benefits of scale, often known as “network effects.” This occurs when buyers trust established companies over unproven entrants, and in this industry customers prefer to be in a large network with other buyers and users. Network effects on the frontend (i.e. the number of users) can accelerate traction, word of mouth, and real long-term growth. At the moment, the barriers to entry may be low, but as industry leaders expand their client base, it will be increasingly challenging to succeed.

It is also important to note that fluctuations in the economy will have a negligible effect on the industry. While the natural inclination of most companies is to cut R&D spending in a recession, lean times require innovation for growth. 

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Competition Ultimately, the 1:Hour Innovator competes with anyone who teaches

entrepreneurs or “intrapreneurs” how to develop and pitch their ideas. For example, innovation consultants and experts sell online courses and webinars on the subjects of innovation and pitching. While these services offer helpful tips, instruction, and guidance, the 1:Hour Innovator provides an interactive online experience that guides users through the development of a raw idea.

Corporate E-Learning tools focus on developing employees’ core skills, such as basic management, office productivity, math, and Excel. Very few specialize is innovation.

The largest competitors in the innovation management software industry compete on the enterprise level, offering more expensive solutions with large-scale implementations. Successful vendors typically share the following product features:

1. Idea Repositories: centralized area for all ideas to be uploaded and viewed by the community

2. Idea Commenting: members can comment and discuss posted ideas3. Crowdsourcing/Open Innovation: public and/or private platforms to facilitate

collaboration and connect innovators with experts and answers4. Voting/Scoring: users can vote to prioritize best ideas5. Social Features: customizable activity streams, tagging, profiles, and other

social media features

Mid-market solutions provide a nice balance between the feature set of enterprise-level tools and attractive prices of entry-level tools. Entry-level tools target smaller companies with affordable solutions. The emergence of free idea management tools threatens smaller vendors competing on price.

Vendor Profiles:

Spigit: As the biggest vendor in the market, with over 28% of global revenue, Spigit delivers innovation using advanced crowdsourcing and predictive analytics on top of a well-developed enterprise innovation platform. Spigit is integrated with collaboration tools, such as Jive, SharePoint, and Yammer, and includes strong Gamification functionality to improve employee engagement.

Founded: 2007 Employees: 125 Headquarters: Pleasanton, CA Geographic Presence: Americas, EMEA, and APAC Website: www.spigit.com Notable Customers: Cisco, Southwest, Walmart, Nike, Accenture, Coca Cola,

HBO, Sony, Allstate, Citibank

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Qmarkets: In terms of features, there is little holding this product back. Qmarkets covers all the advanced feature requirements very well and the company has a solid understanding of innovation processes. The solution can be deployed as SaaS or on-prem, and can be scaled depending on client organization size. The unique live innovation workshop module allows teams to meet virtually and assess needs or issues within a defined time period. Qmarkets also offers research tools, such as idea markets and predictive algorithms, that can be utilized for forecasting.

Founded: 2005 Employees: 38 Headquarters: Tel Aviv, Isreal Geographic Presence: Americas, EMEA, and APAC Website: www.qmarkets.net Notable Customers: KPMG, Lockheed Martin, BBC, Intel, Hyundai,

Universal

Hype Innovation: One of the oldest vendors, Hype couples a highly customizable platform with strong consulting services to establish the people, process, and technology to foster a culture of innovation. Hype provides on- and off-site support, which gives them the unique ability to assess a customer’s innovation culture prior to rolling out the software. Idea campaigns can be linked to defined strategic innovation areas to clearly structure innovation activities, and Hype’s idea search and explorer view make it particularly useful for innovation portals that administrators anticipate will generate thousands of ideas.

Founded: 2001 Employees: 90+ Headquarters: Bonn, Germany Geographic Presence: Americas, EMEA, and APAC Website: www.hypeinnovation.com Notable Customers: Siemens, P&G, Hershey’s, Bosch, Areva

Imaginatik: Also augments a fully functional platform with expert consulting services that focus on institutionalizing innovation within the enterprise. Their platform tackles innovation through powerful workflow, idea collaboration, and reporting engines, going beyond the ideation value chain with Project Portfolio Management (PPM) tools for actually executing ideas. Imaginatik has one of the longest track records in the innovation management space.

Founded: 1996 Employees: 35 Headquarters: London, UK and Boston, MA Geographic Presence: Americas and EMEA Website: www.imaginatik.com Notable Customers: Allianz, Boeing, Bombardier, CSC, Goodyear, Pfizer,

Xerox

Brightidea: With 15 years in the industry, Brightidea has 300+ customers and good enterprise traction. The Brightidea Innovation Suite is optimized for mid-large sized organizations, and includes three different applications: WebStorm,

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Switchboard, and Pipeline. The end-to-end solution has strong out-of-the-box integration with many project management tools, and robust workflow features help identify and execute the best ideas by assigning and tracking tasks. Ideas are graduated through number of votes, comments, and customizable scorecard systems, with results summarized in comprehensive reporting dashboards. Related ideas can be linked or merged, which creates cleaner idea streams for end-users. The Innovation Suite is one of the most expensive platforms, and Brightidea does not provide an on-prem deployment option.

Founded: 1999 Employees: 100 Headquarters: San Francisco, CA Geographic Presence: Americas and EMEA Website: www.brightidea.com Notable Customers: Adobe, American Express, Philips, Emerson

Inova Software: Provides an extensive Open Innovation platform for external crowdsourcing that is easy to deploy. Employees can post ideas with supporting documents where colleagues can move the thinking and testing forward to PPM type workflows for execution. The “Technology Scouting” application enables employees to identify technological opportunities and threats, which is particularly useful in the high-tech, pharmaceutical, and manufacturing sectors. Inova’s solution is a very expensive solution, making it less accessible to small and mid-sized organizations that can find a similar product at a more competitive price.

Founded: 2001 Employees: 60 Headquarters: Lyon, France Geographic Presence: Americas, EMEA, and APAC Website: www.inova-software.com Notable Customers: Bayer, Johnson & Johnson (over 10% of Fortune Global

500, and 30% of top 50 pharmaceutical companies)

IdeaScale: Targets small to mid-sized businesses (less than 500 employees) with a relatively lightweight innovation tool designed to lower the barriers to participation in innovation challenges. IdeaScale’s lower price point is very attractive compared to some of the other vendors, especially for small to mid-sized organizations. Badges are awarded based on user activity as a way to incentivize user engagement and identify key influencers. Service channels are extensive and handled in-house, with a more manual movement of projects along a pipeline. The solution is mobile optimized for iOS, Android, Windows, and Blackberry, and integrates with customer-facing social media platforms like Twitter and Facebook.

Founded: 2009 Employees: 17 Headquarters: Berkeley, CA Geographic Presence: Americas, EMEA, and APAC Website: www.ideascale.com Notable Customers: Alaska Airlines, Marriott, NBC, Adobe, Xerox, US

Federal Agencies, NASA

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BrainBank: Solution adequately covers all advanced features, and is attractive to large organizations due to its unique pricing model – a set fee with an unlimited user base. BrainBank was one of the first vendors in the innovation management market, and focuses on collaboration and Open Innovation. The application is a clean, user-friendly platform designed for administrators to be non-IT users, so the look, feel, and customizability are very intuitive.

Founded: 1999 Employees: 29 Headquarters: Montreal, Canada Geographic Presence: Americas, EMEA, and APAC Website: www.brainbankinc.com Notable Customers: Northwestern Mutual, City of San Jose, FedEx, Hertz,

Olympic Committee, Verizon, KPMG, Campbell’s, GM, Tesco

Teepin: Has a flexible costing model with no contracts and a free trial option, making it really attractive for smaller organizations looking for a simple innovation platform, or mid to large-sized companies looking to pilot an innovation platform. Cloud-based solution focuses on collaboration and ideation with a workflow engine that allows users to assign tasks and ownership of projects to ensure the most appropriate people are working on different aspects of an idea. Teepin is not suited as a permanent tool for mid to large-sized companies as you get what you pay for when it comes to customer service channels: which is not very much.

Founded: 2009 Employees: 10+ Headquarters: Sao Praceta Geographic EMEA Website: www.teepin.com Notable Customers: Undisclosed for customer privacy

Kindling: Prioritizes platform management and user experience with user-friendly software that focuses on ease of use across all roles in the innovation process – from idea submitters to commenters to evaluators. The platform is designed for teams to discuss ideas, solve problems, and pursue opportunities with an emphasis on simplicity. The platform is free for start-ups, and an affordable scaled pricing model makes it attractive for small to mid-sized businesses.

Founded: 2008 Employees: 10+ Headquarters: New York, NY Geographic Presence: Americas Website: www.kindlingapp.com Notable Customers: US Department of Veteran Affairs, Deloitte

CogniStreamer: CogniStreamer is rising in Europe and North America markets, and provides cutting edge technology with a high degree of user-friendliness and excellent graphic qualities. The focus is on customer involvement with crowdsourcing capabilities, which include idea campaigns and personalized and configurable dashboards for each user. User profiles, which act as a simple “about

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me” page, are especially advantageous in large corporate environments where stakeholders may not have the opportunity to meet or interact in person. CogniStreamer offers a full-grown set of capabilities as an innovation management platform with three individual modules: CogniStreamer Innovation Portal, Patent Flow, and Deal Flow. The Innovation Portal allows users to contact experts in and outside organizatios, provides PPM tools, and is unique in its emphasis on SWOT analysis. Patent Flow is also a unique module that facilitates the research and process of getting a patent. CogniStreamer offers dedicated technical and consulting services, comprehensive support before and after implementation, and training to help customers succeed with innovation programs.

Founded: 2004 Headquarters: Kortrijk, Belgium Geographic Presence: Americas and EMEA Website: www.cognistreamer.com Notable Customers: Case New Holland (CNH), Cytec, Phillip Morris

International

Inno360: As a leader in enterprise-level Open Innovation, inno360 offers clients a first-of-a-kind private cloud-based solution that provides an extensive expert and knowledge network, with a secure research engine and environment. Inno360 enables clients to dynamically define new networks of knowledge and best fit talent, and rapidly build their own proprietary innovation ecosystems. The platform includes access to millions of global innovators and leading-edge web cloud and collaboration technology. The solution navigates IP databases and academic research to provide real-time analysis of the landscape around each defined innovation opportunities.

Founded: 2008 Headquarters: Cincinnati, Ohio Geographic Presence: Americas, EMEA, and APAC Website: www.inno-360.com Notable Customers: Procter & Gamble, General Mills, and the U.S. Air Force

Research Laboratory

InnoCentive: With over 300,000 users from nearly 200 countries, InnoCentive is a global leader in crowdsourcing innovation problems. InnoCentive is well known for its large-scale, public-facing innovation campaigns, leveraging its global network of millions of problem solvers, proven challenge methodology, and cloud-based innovation management platform. For more than a decade, leading organizations have partnered with InnoCentive to rapidly generate innovative new ideas and solve problems faster, more cost effectively, and with less risk than ever before. Recently, InnoCentive introduced three new corporate solutions.

Founded: 2001 Headquarters: Waltham, MA (Worldwide HQ), London UK (EMEA HQ) Geographic Presence: Americas, EMEA, and APAC Website: www.innocentive.com Notable Customers: AARP Foundation, Air Force Research Labs, Booz Allen

Hamilton, EMC, NASA, Procter & Gamble, Scientific American, Syngenta, The Economist, and several government agencies in the U.S. and Europe

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InnovationCast: One of the few end-to-end innovation management solutions built on an enterprise-grade platform for social business collaboration, all with an award-winning user experience. InnovationCast excels in building communities and challenges, supporting communications, and supplying workflows, templates, and PPM capabilities. InnovationCast Ideation enables an organization’s team to strategically construct ideas for their enterprise and determine the best means for social engagement within internal structures. Next, the InnovationCast Suite takes what foundation has been laid in Ideation, and helps to build upon it with further projects and opportunities, fostering ideas into action. Both packages are equipped with analytics, rewards, and recognition.

Founded: 2007 Headquarters: Lisbon, Portugal Geographic Presence: Americas and EMEA Website: www.innovationcast.com Notable Customers: Siemens, Hospital Corporation of America, Delta

Nosco: Offers three services – Test & Drive, Idea Management Program, and Idea Workshops – all of which come with the guidance of a Nosco representative to help organizations work through a 3-month idea campaign, a full idea management cycle and a workshop/brainstorming session. The solution is a very simple, highly optimized web-based platform. Two of Nosco’s most useful features are its activity feed and split-screen design. The activity feed is user-specific and highlights in an easy-to-read feed any comments or actions made to ideas created by the users. The application’s split-screen design is highly useful in that it allows users to search and scroll through ideas or comments whilst reading their contents at the same times.

Founded: 2006 Employees: 12 Headquarters: Copenhagen, Denmark Geographic Presence: Americas and EMEA Website: www.nos.co Notable Customers: Pentax, Billabong, Microsoft, Volvo, Colgate, and

Volkswagen

Summary: Brightidea, CogniStreamer, Hype Innovation, Imaginatik, inno360,

InnoCentive, InnovationCast, Qmarkets, and Spigit lead the pack. Their innovation management platforms distinguish themselves with advanced features, such as integrations with project and life-cycle management tools, innovation portfolio management tools, and advanced analytics that help manage larger-scale innovation programs. These vendors have the ability to guide less mature organizations and handle the customized needs of more mature organizations.

BrainBank, IdeaScale, Teepin, Inova Software, Kindling, and Nosco are close behind with competitive innovation platforms. These vendors’ products and services are good choices for organizations looking for a quick-to-deploy, more

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focused tool to support their innovation program. These products are well-matched to organizations that want to start automating their innovation programs with limited resources to dedicate to the implementation and support of an innovation tool suite. See the appendix for detailed product ratings and industry maps, by the Forrester and Info-Tech research groups.

Stronger brand recognition and the advanced set of features of these vendors’ solutions give them a significant competitive advantage over the 1: Hour Innovator. Some of the largest vendors, such as Imaginatik, CogniStreamer, and Hype Innovation even provide their own innovation consulting services. The 1:Hour Innovator does not serve as a collection point for customer-driven improvements, provide access to external networks of experts, or include project management tools. However, these solutions are expensive, laborious to implement, and end-users often require some form of training to properly utilize the software. These advanced, multi-module innovation platforms do not align with the skills and needs of organizations with lower levels of innovation maturity, which is where the 1:Hour Innovator can create real value.

Niche: In the 2012 IT Organization, Innovation, and Governance Online Survey, 104

businesses and IT decision-makers were asked: “What are the biggest challenges your firm faces when implementing innovation programs and processes?” Resource (time and people) and budget constraints were cited as the two biggest challenges by a wide margin (79.8% and 73.1% respectively). These factors help explain why only 45% of respondents reported that they have groups dedicated to innovation, and only 34% had centralized organizations and processes for innovation. (Forrester, Exhibit 2).

This evidence suggests there is a hole in the market – a hole that aligns with the 1:Hour Innovator niche. When paired with the appropriate organizational needs, top vendor solutions have produced tremendous results and shown great promise. However, the survey data indicates organizations smaller in size or new to the innovation space are either hesitant or unable to commit substantial time, money, and resources to implement sophisticated, long-term innovation management software. The 1:Hour Innovator is a fast and cost-effective innovation management solution with no strings attached. End-users do not need training, and implementation is immediate and free. This makes the 1:Hour Innovator an attractive alternative for smaller organizations looking to acquire a simple, affordable idea management tool, as well as mid to large-sized companies looking to pilot an innovation program for broad-lower level consumption. It has been duly noted that the maturity of the tools in this industry exceeds the average innovation maturity of large organizations, and the 1:Hour Innovator is the idea management tool capable of bridging this gap.

The success of enterprise-level idea management tools is heavily dependent upon the quality and frequency of online collaboration throughout the entire innovation process. To see a positive return on investment, organizations must dedicate substantial time and resources to innovation activities, and continuously promote employee participation across all levels. This is not the case with our idea

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management tool. The biggest difference between the 1:Hour Innovator and leading vendor offerings is its focus on independent innovation and pitching. Passionate innovators with the beginnings of a bold idea can use the 1:Hour Innovator to securely store intellectual assets and work at their convenience, so organizations do not have to allocate as much time to innovation activities.

CustomersThe 1:Hour Innovator has the potential to serve a wide variety of customers.

Once the product is launched, our primary customers will be small to large-sized enterprises, with end-users being intrapreneurs. While multilingual features are being developed, the target market will be North America and English-speaking customers in Europe. Target buyers will be business leaders, which can take the following forms:

Managers looking to increase innovation activities in their company or respective unit to improve the quality and frequency of idea generation

Chief Innovation Officers responsible for increasing innovation capabilities and success rates in their enterprise

Heads of HR looking to increase employee engagement, develop employee skills, contribute to the culture of innovation, and even the bottom line

The primary growth strategy is to sell through channel partners, or innovation platform providers interested in expanding their product offerings and innovation capabilities by acquiring new idea management tools. Large, established vendors that compete on the enterprise level offer product features that extend beyond the scope of the 1:Hour Innovator, such as social features (user profiles, voting, idea commenting, activity streams, etc.), crowdsourcing capabilities, open innovation campaigns, and project management tools (reporting dashboards, analytics, workflow management, task assignment, etc.). Ideal vendors possess a strong customer base and brand name, offer these advanced features, but lack content and an emphasis on the development of ideas in the innovation process. Here are several potential partners we’ve identified:

IdeaScale has a relatively lightweight innovation tool that lowers barriers to participation in innovation challenges. It is a relatively inexpensive platform, and targets small to mid-sized businesses. Users can submit ideas, and community voting ensures the most valuable ideas rise to the top. However, this is where the solution ends. The 1:Hour Innovator can accelerate the time-to-value for these promising ideas by helping owners transform them into optimized value propositions.

IdeaGlow has limited innovation capabilities for the same reasons as IdeaScale – it is essentially the “Facebook of Innovation.” User profiles and voting methods identify ideas with the most potential, but do not provide a platform or instruction on how to bring them to life.

Qmarkets is one of the biggest players in the industry, and already has a relationship with EDG. Qmarkets sells one of the premier platforms, with flexible idea submission and various innovation frameworks. The CO-

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STAR template could be a fantastic addition and diversify their employee-facing innovation frameworks.

Tieto is Finland’s largest financial group, and primarily serves the Northern European market. Recently Tieto entered the industry with Eureka! which lacks robust functionality across the Ideation Value Chain in comparison to other vendors. The tool does not have a workflow engine for initiating projects, which requires more manual work from managers. With the 1:Hour Innovator, EDG can provide innovation expertise, a proven framework for the innovation process, and resources to penetrate the North American market. Tieto is relatively new to the innovation space, but has incredible financial resources to make a serious play.

UserVoice and Get Satisfaction are emerging mid-market competitors and support customer-facing innovation. The 1:Hour Innovator could be a valuable addition for clients who would also like to provide their employees with innovation capabilities.

Brightidea and BrainBank solutions provide a “fill-in-the-blank” template for ideation, which is not as effective as our solution for idea development and value creation. Integrating 1:Hour Innovator tips and instructional content will add value for clients and end-users.

LinkedIn is a long shot, but could be the game changer. With one of the largest networks of business professionals, selling our platform to LinkedIn can put our solution on the hands of entrepreneurs like no one else. The pitching content may even be more enticing than the innovation framework.

The 1:Hour Innovator also has remarkable potential outside of the enterprise for independent entrepreneurs. Our innovation platform is most valuable to inexperienced innovators who need help and guidance developing their brilliant ideas and pitching an optimized business proposal to a venture capitalist.

Strategy

So, how do we get the 1:Hour Innovator into large enterprises? We could try to knock on their door, but this would prove to be very difficult. The answer – partner with industry leading innovation management platform providers.

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PromotionZooka Creative will lead the marketing effort, but promotion activities will

be limited. We will rely heavily on word of mouth and direct sales. To gather customer testimonials and reviews, we’ve developed a pilot program that will start in September 2014:

Free 1 year trial Up to 1,000 employees Unlimited use

The pilot will also provide us with feedback and inform us on how to refine the product and improve the customer experience for version 2.0. So far, Silicon Image has expressed interest in participating in this program.

Soon after development is completed, we will tap into the networks of Zooka Creative and EDG to gauge the interest of our customers. Having already seen the benefits of our innovation practices within their organization, EDG clients will be more inclined to purchase our solution.

To reach entrepreneurs, we will partner with business incubators that help emerging companies survive and grow during the start-up period when they are most vulnerable. Many business incubators, such as the National Business Incubator Association, sell their own products and services and the 1:Hour Innovator is a valuable tool for the very clients they serve.

The 1:Hour Innovator will be available for purchase on the EDG website, with a promotional video that demos our product. By showing off the visually stimulating user interface and straightforward innovation discipline, the 1:Hour Innovator will be portrayed as a practical and powerful innovation tool that makes innovation easy and users successful.

Creating partnerships with established IMS vendors is the best way to market the 1:Hour Innovator, and gain access to their vast client base, website, and sales force.

PricingWithout having tested the market, it is difficult to determine a pricing

strategy and forecast sales. Until we get a better feel for the market, our method for setting prices will be a process of trial and error. Our initial interactions with customers will give us a good assessment of willingness to pay.

Pricing will be tailored to the customer. For direct sales to enterprises, we will offer scalable pricing based on the number of users:

Less than 100 users – $5.00 per user per month Medium: 500 users – $2.00 Large: 1,000 users – $1.50 Over 1,000 users – custom

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With top vendor solutions costing thousands of dollars annually, this pricing scheme makes the 1:Hour Innovator one of the cheapest idea management tools in the industry without significantly compromising our profit margin. It provides affordable innovation capabilities for companies with low innovation immaturity, which is consistent with our niche. This strategy is appropriate for small to mid-sized organizations, where price is a significant competitive factor. At the enterprise-level, the quality and features of idea management software drive purchasing decisions, more so than price.

When engaging other idea management companies, we will negotiate an agreement with channel partners depending on how the 1:Hour Innovator fits with their solution. In our discussions with Qmarkets and IdeaScale, we’ve learned that most vendors will prefer to license and integrate the 1:Hour Innovator content into their own software, rather than sell the tool as an independent module. To stay competitive, vendors continuously roll out enhancements to improve their platform, and integrating 1:Hour Innovator allows them to implement software updates across their platform simultaneously. Owning the software also allows them to preserve the look and style of their innovation platform. Under this option, vendors will market our tool to all of their clients, and keep 75% of revenues from our module. Leading vendors with price ranges of $50,000-$100,000 will generate between $12,500 and $25,000 for Zooka and EDG annually.

Sales Forecast With limited expenditures, the 1:Hour Innovator has the potential to be

extremely profitable. Just a single client has the potential to cover all monthly variable costs.

Fixed cost: Product development: $50,000 One-time cost for basic server and database setup: $500

Variable cost: $500/month 2 x 2GB server operation and maintenance: $350 Server and tech support: $150

With Zooka covering product development costs, here’s how revenues will be shared:

Zooka: 70%, EDG: 30% - until Zooka makes back investment EDG: 80%, Zooka: 20% after reaching breakeven point

Breakeven Analysis:

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These are conservative estimates. We are confident we will find a channel partner and 5 clients within year 1, and achieve steady growth to reach 3 and 15 respectively, by year 3. Based on these estimates, here are the three-year total profit projections for each partner:

EDG = $203,150 Zooka = $36,000 ($86,000 before product development cost)

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VI. Appendices

Exhibit 1: 2011-2016 Growth Rates for the E-Learning Industry by Region (Ambient Insight)

Exhibit 2: 2012 IT Organization, Innovation, and Governance Online Survey – Forrester

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Exhibit 3: Info-Tech Innovation Management Vendor Landscape

Champions receive high scores for most evaluation criteria and offer excellent value. They have a strong market presence and are usually the trendsetters for the industry.

Market Pillars are established players with strong vendor credentials, but with more average product scores.

Innovators have demonstrated innovative product strengths that act as their competitive advantage in appealing to niche segments of the market.

Emerging Players are newer vendors who are starting to gain a foothold in the marketplace. They balance product and vendor attributes, though score lower relative to market Champions.

Exhibit 4: Info-Tech Vendor and Product Ratings – Criteria Scores (Harvey Balls)

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Exhibit 5: Forrester Wave – Innovation Management Software Industry Map

Exhibit 6: Forrester’s Vendor Ratings

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VII. Sources

1. Docebo: E-Learning Market Trends & Forecast 2014 – 2016 Report (March

2014)

Docebo is a disruptive, cloud E-Learning solutions provider with over

28,000 customers worldwide and an international partner network in

more than 26 countries

2. The Forrester Wave: Innovation Management Tools, Q3 2013 (July 11, 2013)

Forrester is one of the world’s most trusted and well-respected

independent market research companies, providing advice on existing

and potential impacts of technology to its clients and the public

3. Info-Tech Vendor Landscape Report – Innovation Management Solutions

Founded in 1997, Info-Tech Research Group is the world’s fastest-

growing information technology research and advisory company, serving

over 30,000 IT professionals