Empowering the next generation of builders

1. Build-It-Yourself seeks partners who can help bring our unique online learning environment direct to kids and their parents at home. John Galinato 617-875-1960 john@build-it-yourself.com www.build-it-yourself.com Empowering the next generation of builders

2. What We Do … Inspire and guide kids to create, design, build and invent. Empowering the next generation of builders

3. Content Specialists Collaboration The Product • Mission: • Inspire and guide kids to use technology constructively, collaboratively and creatively. • What we offer: • A unique, online laboratory for builders • Parents pay a $30/mo. membership fee: • Access to project plans, modules • Four live, mentored Webcast lessons/mo. • Invention Universe online virtual community Empowering the next generation of builders

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

5. Value Proposition We provide consistent, high-quality, high value technology enrichment at a fraction of the cost of traditional instruction. We bring the university student TA (Teaching Assistant) concept, coupled with proven content and online collaboration tools, to kids online. Empowering the next generation of builders

6. Target Customers Boys and girls ages 8-13 interested in art or technology. Parents who want their kids to go to college and understand the need to be fluent in technology. Skills exercised in a BIY workshop series: 1) Problem solving skills 2) Presentation skills Empowering the next generation of builders

7. 2-4 years Rollout $50M+ revenue 150,000+ members 2013 Proof of Execution 1,000+ members Thru 2012 Proof of Concept $600K+ revenue 3000+ customers Growth Plan Partner with after school programs like Sylvan, Kaplan and Bright Horizons, publishers and retail outlets to grow quickly. Grow the team and infrastructure to serve 1,000+ members Validate that parents value the Build-It-Yourself vision. Empowering the next generation of builders

8. Proof of Concept Phase – Validation (through 2012) • 3,000+ customers / 20+ schools • $200+ revenue per customer • $600,000+ revenue • 6+ years in development • 90% of business is recurring • 15% of revenue is on-line. Empowering the next generation of builders

9. Proof of Concept Phase - Validation Proven content and supporting platforms 30 Projects 20 Lessons 100 Build-It-Blocks Record of attracting talent from the Cornell, MIT, Harvard and Mass Art communities. Empowering the next generation of builders

10. Proof of Execution Phase - 2013 Raise our valuation • Strategy: • Hire an MBA business developer. • Evolve our content and supporting platforms. • 3. Close corporate distribution partnerships. • Assets (2012): • Repeat customer base. (500 kids/yr. at $200/kid) • Well-tested content and supporting platforms. • Access to network of developers and Webcast specialists from Cornell, Mass Art and MIT communities. Empowering the next generation of builders

11. How big is our market? College bound Kids: Every kid who goes to college should be technology fluent and therefore is a potential customer. 300K Members: We need 2% of target US market to build a $72M business. (300K x $240/yr including supplies and embedded advertising) 30 million kids ages 8 - 13 15 million target market. Half will go to college. 62% have broadband access at home. Empowering the next generation of builders

12. 2017 Rollout $72M revenue 300,000 members 2013 Proof of Execution $540K revenue 3,000 members 2011 Proof of Concept $100K revenue 500 customers Growth Plan Partner with after school programs like Sylvan, Kaplan and Bright Horizons, publishers and retail outlets to grow quickly to 300,000 members. Grow the team and infrastructure to serve 3,000 members Validate that parents value the Build-It-Yourself vision. Empowering the next generation of builders

13. Proof of Concept Phase Validation • 3,000+ customers / 20+ schools • $200+ revenue per customer • $750,000+ revenue • 6+ years in development • 80%+ of business is recurring • 25%+ of revenue is on-line. Empowering the next generation of builders

14. Proof of Execution Phase - Serve 3,000 members Viral Marketing Program: 12 interns 10 developers 15+ schools 500 students / year Network of specialists Corporate Partnerships: Close a corporate distribution partnership that has the potential to generate 3,000 members in a year. (300K members @ $240/year in 3-5 years)

15. Proof of Execution Phase - Serve 3,000 members The Team: We need to recruit, train and manage a network of 30 Webcast specialists. We need to recruit an MBA deal maker. Infrastructure: We need to automate and expand our infrastructure.

16. Proof of Execution Phase - Serve 3,000 members $540K annual revenue (3,000 members x $15/mo) Investment of $105K is required to: • grow the team • expand infrastructure • develop distribution partnerships John Galinato www.build-it-yourself.com 617-875-1960 Empowering the next generation of builders

17. (Partners) (Build-It-Yourself) (Retail) Rollout Phase - Serve 300,000 members Build-It-Yourself sells content branding to highly targeted strategic partners including publishers, after school programs manufacturers and distributors. 1 to 4 Leverage Strategic partners place highly valued content in retail outlets such as Home Depot, Radio Shack, Sylvan Learning Centers, Barnes & Nobel. 4 to 5,000 Leverage Retail outlets promote Build-It-Yourself memberships because they drive sales of their products, encourage family shopping and monetize their on-line presence. 5,000 to 300,000 Leverage

18. Rollout Phase - Serve 300,000 members $72M annual revenue (300,000 members x $20/mo) Investment of $1.5+ million may be required to: • grow the team • brand the product • evolve the product and infrastructure • develop distribution partnerships John Galinato www.build-it-yourself.com 617-875-1960 Empowering the next generation of builders

19. Business Plan Support Slides What We Do Product Development Market Segmentation Value Net Benchmarks Financials Team Comps Empowering the next generation of builders

20. What We Do … Build-It-Yourself provides after-school and at-home workshops that inspire and empower kids to create, design, build and invent. We engage boys and girls in playful approaches to design, invention and scientific inquiry. We train kids to apply technology to solve problems. Empowering the next generation of builders

21. More than 16 schools served: 85% are repeat customers Include BB&N, Concord Academy, Lawrence Academy Growth via word-of-mouth More than 2,500 kids served More than $500K revenue generated “Clio was thrilled. She couldn't stop talking about what she did.” Parent “I never thought my son would give up soccer for anything.” Parent “Wow!” Program director sitting in on a webcast from China. Our Workshops Are In Demand Key Statistics Validation Empowering the next generation of builders

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

23. The Product – Invention Universe Content Specialists Collaboration Tools • Seth Mastin – BA Computer Science, MIT • Rebekah Gendron – MEd, Rhode Island Univ • Max Seidman – Sophomore BB&N • Valeria Roman – Science Journalist, Argentina • Naseem Makiya – Junior Harvard • Michael Hsu – Sophomore, Choate • Liu Huan – Senior, Shanghai High School • Joan Tarud – MS Mechanical Engineering, MIT Network of Specialists: Graduates and students from the Cornell/Harvard/MIT community who inspire and guide kids. Empowering the next generation of builders

24. The Product – Invention Universe Effective Collaboration Tools: 2-way audio/video webcast platform enables kids to collaborate with peers and specialists in a global laboratory. Wiki project management Invention Universe Content Specialists Collaboration Tools Empowering the next generation of builders

25. Content Specialists Collaboration Product Differentiators 1) Multidiscipline - Attract broad range of kids 2) Build-It-Blocks (modular construction) - Build complex projects quickly 3) Collaboration with art and engineering students - Build mentor relationships 4) Focus on the presentation of ideas - Kids get positive feedback when their projects look cool. Empowering the next generation of builders

26. Value Proposition High-quality technology instruction at a fraction of the cost of traditional instruction. • Large and growing demand for technology training and constructive, after-school activities. • Collaboration with MIT. • Proven and acclaimed content. • Unique workshop delivery model. • Access to Cornell/MIT student specialists. • Project has attracted talented developers. Empowering the next generation of builders

27. Value Proposition High-quality technology instruction at a fraction of the cost of traditional instruction. Bring the university student TA (Teaching Assistant) concept coupled with proven content and online collaboration tools to kids online. Empowering the next generation of builders

28. Proof of Concept Phase Validation "The goal is to highlight the 'powerful ideas' in the modules -- that is, the ideas that help you understand how the module works, and provide you with a foundation for building other things." Professor Mitchel Resnick, from the MIT Media Lab, directing the collaboration between MIT and Build-It-Yourself to develop a database of construction modules "Build-It-Yourself is a fascinating program that engages students in creative projects to design and build robots. Both of my children --ages 7 and 9-- have participated in Build-It-Yourself workshops and learned greatly from it. It's very interesting pedagogy." Dr. Fernando Reimers, Associate Professor and Director of HGSE's International Education Policy program, describing the Build-It-Yourself program to colleagues at the Harvard Graduate School of Education "Thanks for putting on one of the best Robotics workshops that I have been to." Science teacher at the Jamestown Middle School, RI commenting on a Build-It-Yourself workshop for teachers

29. Proof of Concept Phase Validation Collaborating on-line comes naturally to the next generation! Empowering the next generation of builders

30. Proof of Concept Phase Assets Proven content and supporting platforms 30 Projects 20 Lessons 100 Build-It-Blocks Record of attracting talent from the Cornell, MIT, Harvard and Mass Art communities. (24 contractors) Empowering the next generation of builders

31. Summer Camps Summer Camps Private School Private After-school 23 Million Kids Grades 3 to 8 Public School Public After-school Commercial After-school @ Home Market Segments • Opportunity: • Summer Camps • 7.3 Million Kids • 2. After-school Time • Organized by schools • 2.5 Million Kids • 3. After-school Time • Organized by families • 15 Million Kids 12,000 Camps 7.3M Kids 26,569 Schools 3M Kids 450K Kids (15%) 71,270 Schools 20M `Kids 2M kids (10%) 5 largest for-profit organizations 160K Kids Assume 65% of kids can afford a computer and $120/year 15M Kids Sources: American Camp Association Institute for Educational Science, US Dept. of Education Digest of Education Statistics: 2005

32. The Value Net Customers: Summer Camps After-school programs Parents Competitors: Teachers Local Museums Mad Science Bright Horizons Complementors: Publishers Manufacturers Retail Outlets Schools Build-It-Yourself Suppliers: Marratech / Google Craft Stores Radio Shack

33. The Demand Factors Kids Parents Corporations • 1) Kids seek rich, online experiences. • 2) Two-thirds of U.S. families are now headed by either two working parents or a single working parent. These families need after-school programs. • 3) Many parents want to position kids to get into good schools. • 4) Corporations are demanding a labor pool that is better trained in engineering and technology. Empowering the next generation of builders

34. Customer Profiles Camp Directors Camp Directors seek popular programs. 7.3 million kids attend 12,000 summer camps. After-School Program Directors After-school Program Directors seek educational programs. 3 million kids are enrolled in after-school enrichment programs. Parents Parents seek engaging, constructive activities for their kids when not in school. Sources: American Camp Association Institute for Educational Science, US Dept. of Education Digest of Education Statistics: 2005 Empowering the next generation of builders

35. The Value Net Customers: Summer Camps After-school programs Parents Competitors: Teachers Local Museums Mad Science Bright Horizons Complementors: Publishers Manufacturers Retail Outlets Schools Build-It-Yourself Suppliers: Marratech / Google Craft Stores Radio Shack

36. Build-It-Yourself Interns $35/hr Invent Now Kids Sports Programs Local Museums ID Tech Camps Private Tutors Mad Science First LEGO Build-It-Yourself Members $5/hr After-School Enrichment Competitors Cost $25-$50/hr $10-$25/hr $5/hr Consistent Quality (Control over content + instructor)

37. Technology Program Competitors

38. Competitive Web Sites

39. The Value Net Customers: Summer Camps After-school programs Parents Competitors: Teachers Local Museums Mad Science Bright Horizons Complementors: Publishers Manufacturers Retail Outlets Schools Build-It-Yourself Suppliers: Marratech / Google Craft Stores Radio Shack

40. Potential Distribution Partners After-school Programs Retailers Publishers Manufacturers iRobot Mad Science Build-A-Bear Penquin Sunset • Add value to products. • Drive new product development. • Sell products. • Monetize web presence. • Expand curriculum. • Generate new revenue. • Monetize web presence.

41. Potential Distribution Corporate Partners After School Service Providers Sylvan Kaplan Bright Horizons Mad Science Build-A-Bear Publishers McGraw Hill Houghton Mifflin Penguin Sunset Marvel Comics Electronic Arts Retailers Radio Shack Home Depot Walmart Manufacturers Microsoft Xbox Nintendo Wii MidWest Hobbies Futaba Empowering the next generation of builders

42. Everyone Wins in the Build-It-Yourself Eco-system Parents - See their kids engaged and excited! - Collaborate and work with their kids. Kids Corporate Partners - Have fun! - Solve problems creatively. - Integrate multiple disciplines. - Reinforce core curricula. - Collaborate and share ideas. - Develop important tech skills. • - Deliver high-quality programs. • Reach kids and parents at-home. • Develop new revenue streams. • Differentiate. • Develop future employees. • Affiliate with a “do-good” program. Investors - Receive an attractive ROI. - Help solve a major social problem. Empowering the next generation of builders

43. On-site Fee per workshop In-person specialists Word-of-mouth distribution New England area On-line Subscription based revenue On-line specialists Distribution partnerships National and international Scaling to a Global Market Current Model Going Forward Model Empowering the next generation of builders

44. Growth Phases - Milestones 44

45. Proof of Execution Phase Strategy / Assets • Strategy: • 1. Hire and MBA business developer to lead the company. • 2. Close a corporate distribution partnership that has the potential to generate 3,000 members in a year. • (300K members @ $240/year in 3-5 years) • Assets (2012): • Repeat customer base (500 kids/yr at $200/kid.) • Content and supporting platforms. • Access to network of developers and Webcast specialists from Cornell, Mass Art and MIT communities Empowering the next generation of builders

46. Proof of Execution Phase - Serve 3,000 members

47. Proof of Execution Phase - Serve 3,000 members $91K - Worst case cash flow Empowering the next generation of builders

48. Proof of Execution Phase - Serve 3,000 members Revenue $156K - Online rev $84K - Onsite rev $72K Expense: $239K -Fixed cost $204K -Webcast cost $ 35K Worst case cash flow: ($91K) Break even: Month 10 Capital Required $105K To grow from $15K => $360K annualized online revenue.

49. Rollout Phase - Financials 5-year Target: 300,000 customers => $79M revenue

50. Rollout Phase - Financial Assumptions 1) Sales: There are 6 revenue streams: 1. Online memberships are the largest revenue stream. 2. Printed pieces in POS displays drive online memberships. 3. Workshops in after school programs drive online memberships. 4. Ecommerce results from projects that require parts, tools and supplies. 5. Advertising revenue results from website traffic. 1/2 of members are repeat customers or from a % conversion from printed pieces that are placed in schools, store counters and book stores. ($0 acquisition cost) 1/2 of members will come from effective, leveraged, distribution strategies. 2) Membership fee: The membership fee is equivalent to popular multiplayer game subscriptions. 10M WOW gamers pay $13-$15/mo; Guitar Master - $29/mo http://www.icelan.com/everquest/part3/everquest_review_p3.htm Members get access to project plans, Webcast lessons and feedback, online exhibits and project portfolios, Ecommerce discounts, and master builder certifications. For a membership fee of $240/yr, typically a member would spend 166 hours in groups of 8 members at a cost of $1.44/hr