As we make our way in 2009, I decided to share some of the wisdom I have accumulated so far as it relates to executing in emerging markets. To start, I thought I would include a link to a paper I wrote (many years ago) with a few other business-school colleagues around the topic of establishing new ventures in emerging markets.

In case you are interested, send me an email and I am happy to forward you details on how to get access to additional papers from that year's International Financial Management course. Stay tuned for more discussions on this topic.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1601113

earning venture returns with water technology

Through my experiences working on Stonybrook Purification, below are some perspectives on investing in water (clean) technologies.

why I care about cleantech

Recently I have had a number of conversations with VC's, angels, and entrepreneurs on why cleantech (broadly defined) is important. Often times, the conversation quickly shifts to global warming, etc.I wanted to take this opportunity to clarify why I care about cleantech, and why you should care as well, regardless of your current views on global warming.

To start, just to make sure we are all in the same page -- Cleantech, as a category, represents products that will increasinglybe adopted from the environmental challenges that the world is facing (climate change being one of the drivers). This product category includes solutions for cleaner energy, clean water, improving efficiency of basic materials, lighting, etc (see GreenTech Media Taxonomy). For a long-time a purely socially conscious mission was the driver of environmental pursuits -- organizations wanted to make sure we were not affecting our planet. However, the fact is that there were enough resources to fulfill the basic needs of the developed countries, and this included energy, water, food, etc.

Today, though, the situation is changing and we are moving to an era of scarcity of real-world resources. (This is quite ironic, given that for the last 30 years the innovations of Silicon Valley have created a digital infrastructure that has brought to us an era of abundance in the digital world). This scarcity is primarily driven by the accelerated growth and demands of emerging markets (China, India, Brazil, etc) whose populations are now looking to attain some of the living-standard luxuries that all of us in developed markets take for granted. As we fast forward over the next 50 years, these countries will become more powerful, commanding aggregate GDP levels equivalent to that of the U.S. and EU (I will run through some of my calcs in another blog). At an individual level, the consumers in these countries will be commanding better access to basic resources that will push their standards of living above of the menial conditions that most live in today (ex: majority of India lives at under $1 per day). Combining this grass-roots consumer push for a better quality of life, and the stronger political power from aggregate GDP levels, these countries will become stronger negotiators to receive their fare share of resources.

Now why does this hypothetical scenario matter and how does it connect to the need for cleantech? Well the fact remains that unless we do things differently, the world will not be able to sustain a path for development for these countries that follows the path of development using the same solutions for resources that worked in the U.S. and Europe (oil, energy intesive processing, always on, etc). We have to find new ways to assure economic development, otherwise the competition we are witnessing for basic resources will accelerate, and the existing negotiations may escalate to major conflicts (think about what 200 M people will be willing to do if they can't get access to clean water). So to me, the investment in clean technologies is necessary to assure sustainable development!

So where does the climate change discussion come into play? The changes from climate change will only make this situation bleaker. Climate change will impact the availability of resources in emerging markets, further escalating both the rate and the degree of competition for resources. A perfect example of this point is if we look at water. Countries like India and China already have a relative scarcity of water (with growing strains) and with truly drastic climate change scenarios, this scarcity will only become more severe.

To bring about another point, a lot of investors point to price of commodities as being the driver for cleantech investment. Although I agree that prices is the catalyst that makes most individuals in the mainstream market finally care, this is looking at the effect side of the cause/effect relationship. Prices for energy today are increasing because of growing competition for the known energy resource we have relied on for years (oil). Regardless on your views of what OPEC should do to the supply that they make available, the largest change in demand has been from increasing pull from emerging markets for this resources and continuing growth of energy in developed economies (see oil tracking chart). Even if they increase their supply of oil, this is not a sustainable approach for next 100 years (even dismissing the climate change argument). The national security point is important, especially when it comes to making sure that we have access to energy and aren't dependent on imports. Hopefully though, by helping other countries improve access to resources themselves, we help create generally more peaceful global context.

My perspective is that developers of clean technologies will be increasingly rewarded from the growing interest and customer spend for solutions that will allow for both (1) to increase availability of clean resources available and (2) assure efficient use of existing resources. Today, the market multiples and transaction comparables for some of these sectors are showing the value that the market demonstrates for innovations targeted at this space (ex: solar multiples, etc). However, for the majority of other sectors this has not been the case.

My hypothesis is though, that as people realize the magnitude of the problem (that there are just fewer basic resources available for consumption and that need for these resources is accelerating from rapid global development), the sense of urgency will rise. Innovators who today begin to identify solutions to help lower the cost curve of some of this solutions (and increase efficiency) in my mind will be increasingly rewarded for the economic value and social value they create.

If you ask my opinion on global warming, it is clear in my mind that there are significant environmental changes that have been created through increased development (including species extinction, habitat pollution, etc) from the consumption based habits we have chosen to embrace and reward as a population. CO2 induced temperature changes in my mind is just one of the most significant and impactful.

For related posts go to:

http://alwayson.goingon.com/permalink/post/27369

Stonybrook Purification

Stonybrook Purification

Stonybrook Purification, a spinout of Stony Brook University, announced the close of the first tranche of a $4.1 million Series A investment led by Battery Ventures. T2 Venture Capital (T2VC), the founding investor and early incubator of the company, also participated in this round, along with new investors Modern Water and TianDi Growth Capital. The company will bring to market a novel concept for increasing the performance of high flux membranes for a variety of purification, filtration, and desalination applications. The technology has the potential to significantly increase the performance of and reduce the costs of processing water on a large scale.

http://www.ereleases.com/pr/stonybrook-purification-secures-series-a-financing-university-spinout-aims-to-lower-cost-of-clean-water-10805

http://www.t2vc.com/news/2007/10/17/vcs-turn-on-spout-for-stonybrook-purification.html

http://www.dealipedia.com/deal_view_investment.php?r=5225

http://www.prnewswire.com/news-releases/stonybrook-purification-secures-series-a-financing-university-spinout-aims-to-lower-cost-of-clean-water-58697292.html

http://www.stonybrook.edu/research/otlir/technologies/Nanotechnology/R-7416.pdf

http://venturebeat.com/2007/10/17/stonybrook-raises-41m-for-water-purification/

personalization revisted - opportunity analysis

In the beginning of 2008, I led some major due-diligence in the personalization market and the emerging companies in the space.  Companies that I looked at in detail at the time included RichRelevance and Aggregate Knowledge.

disruptive cleantech - the beginning

Everyone is excited about cleantech. Everyone should also be concerned at the dramatic impact that our world will experience if we do NOT harness technology to help solve some our most fundamental challenges in reducing CO2 levels, finding cleaner ways to produce energy, regulate our water consumption, and reuse and recycle materials to reduce waste.

As we move forward into this nascent industry, I will focus on analyzing the NEW entrants in this space that are likely to make the most dramatic impact. Given that this space is so broad, I am planning to initially focus on companies which are pursuing disruptive approaches.

Now disruption is often a mis-used term so let me first define it so that we are all in the same page. In my mind, disruptive technologies are solutions that initially are lower performing than existing alternatives but are also at a lower-price point. Initially, these "less-for-less" solutions, as one of my HBS professors once quoted, are able to quickly penetrate a non-consuming segment (or individuals that for some reason or other decided to not adopt the existing technologies).

Now how does this relate to the broader theme of disruption. Today, most of the world is looking to invest in technologies that are making our existing infrastructures more environmentally sound. For us that live in the U.S., these solutions will still provide access to energy through our grid infrastructure or water through our pipes. What I am interested in, are individuals who are finding ways to bring power, water, and waste processing in radically different ways. These types of solutions have the potential to arise in emerging markets as much as in developed markets.

I am in the lookout for the "Google" of cleantech. Stay tuned to this blog if you are also interested.

For related posts check out the following:

http://www.news.com/8301-11128_3-9867655-54.html

http://blogs.greentechmedia.com/cleantechinvesting/2008/02/18/the-two-kinds-of-disruptive-clean-technologies/

more on our target themes

A recent article in the Stanford Social Innovation review captured some of our target "markets" effectively. They highlighted some major areas that deserve attention from the social, environment, and economic point of view. Consider them our"earth's current pain-points". Below is their top 10 list, one of my additions, and other general thoughts.

1. Treating human waste: To me this should include new approaches or technologies for recycling both organic and inorganic materials.
2. Cleaning the air: Examples are filtration devices for air and water for both industrial and consumer applications.
3. Harnesing the sun: I would expand this to say "Harnessing natural energy" and I would include technologies or services that help harness the power of the sun, water, and wind to people.
4. Enhancing nutrition: I think about the services or products that help bring more balanced nutrition to people around the world.
5. Educating the world: Services and products that make knowledge more accessible to everyone and help connect people to potential role models.
6. Fighting illiteracy: I would place this as a subset of education...
7. Crafting inexpensive vaccines: New types of biotechnology that helps speed the current drug development pipeline, or alternatively, provides alternatives to current drugs.
8. Helping people see: More broadly I would think of services and products allowing individuals across all socio-economic standings gain better health.
9. Reducing child labor: Services and new ways of conducting commerce that not only reduce unfair labor for children, but help promote fair trade.
10. Bridging the digital divide: Ideas that help bring technologies to those that are farthest from societies where leading technologies are being developed (one laptop per child comes to mind).
11. Enhancing democracy and connecting people: Anything that helps with the proliferation of information and allows people to more easily connect to each other. Some parts of the world still live in information silos.
    

Although each of these efforts are very different, my hope is that by connecting people who are aware of these problems and have noble intents, a community will form to bring more of right types of innovations to the world -- faster!

The organization assists its target audience by connecting them to a like minded community and increasing general awareness to their cause. In addition, we provide strategic advice and referrals to projects which are demonstrating greatest potential. To support the community, InspiredInnovators.org maintains its own professional network and publishing channels. To raise awareness project efforts we provide visibility to community of potentially interested parties in entrepreneurial and venture capital industry.

what is Google stock worth?

As business models related to the ubiquitous internet rely more and more on advertising, I thought that an interesting exercise would be to understand the implied growth rates in Google's stock. Afterall, Google is the gorilla of all advertising driven business models.

Assumptions:
- Current price per share of $369
- Earnings per share of $5.02
- Beta ranging from 1.25 to 3 (since it is such a new offering it's best to do some sensitivity around this value
- P/E ratio in 10 years between 20-80

Calculation:
- If you run through the numbers you come up with the following sensitivity table on implied growth rates of Google's stock assuming different Beta's and P/E ratio in 10 years:
1) Taking Beta constant at 2 and changing the P/E ratio growth rate varies from 25% to 9% (P/E ratio of 20 and 80 respectively).
2) Keeping the P/E ratio constant at 30 (Microsoft's multiple after 10 years), growth rate varies from 18% to 23% (Beta of 1.5 to 3 respectively).

Implications:
I would think that it is very unlikely that in 10 years Google will maintain its current P/E share of over 70, so assuming that it follows the record Microsoft has had (P/E of 30 after 10 years) and volatility somewhat more marked then the market (Beta value of 2) you are looking at implied double digit aggressive compound annual growth rate of 20%. So if you were to buy the stock today, it would have to grow at this rate in order for it to maintain its value, and it would have to exceed this growth rate for you to make any money. Now, earnings have grown 100% for Google in the last year, and with a few more years of such dramatic growth you might average out the less stellar results later in the lifecycle of the company to possibly still give you 20%. Note, however, that Microsoft ended up growing at rate of about 10%.

So the next question is whether Google's can capture revenue by diversifying into other offerings (subscription fees, wireless access, etc) and whether their current model of providing state of the art software supported through advertising revenue streams has more room to grow. To think about the second issue more precisely, you would need to consider the growth of the advertising market across the various segments that Google operates in (search) and growth in advertising from segments they are likely to expand into (mobile services, digital content aggregation, etc). You would also need to consider how this market is likely to be divided among other incumbents (Yahoo, Ebay, Microsoft) and new upstarts. Look for my thoughts on this market analysis in one of my future posts.

Related article:
http://online.wsj.com/article/SB114114129311685373.html?mod=home_whats_news_us

podcasting advertising market

As business models related to the ubiquitous internet rely more and more on advertising, I thought that an interesting exercise would be to understand the implied growth rates in Google's stock. Afterall, Google is the gorilla of all advertising driven business models.

Assumptions:
- Current price per share of $369
- Earnings per share of $5.02
- Beta ranging from 1.25 to 3 (since it is such a new offering it's best to do some sensitivity around this value
- P/E ratio in 10 years between 20-80

Calculation:
- If you run through the numbers you come up with the following sensitivity table on implied growth rates of Google's stock assuming different Beta's and P/E ratio in 10 years:
1) Taking Beta constant at 2 and changing the P/E ratio growth rate varies from 25% to 9% (P/E ratio of 20 and 80 respectively).
2) Keeping the P/E ratio constant at 30 (Microsoft's multiple after 10 years), growth rate varies from 18% to 23% (Beta of 1.5 to 3 respectively).

Implications:
I would think that it is very unlikely that in 10 years Google will maintain its current P/E share of over 70, so assuming that it follows the record Microsoft has had (P/E of 30 after 10 years) and volatility somewhat more marked then the market (Beta value of 2) you are looking at implied double digit aggressive compound annual growth rate of 20%. So if you were to buy the stock today, it would have to grow at this rate in order for it to maintain its value, and it would have to exceed this growth rate for you to make any money. Now, earnings have grown 100% for Google in the last year, and with a few more years of such dramatic growth you might average out the less stellar results later in the lifecycle of the company to possibly still give you 20%. Note, however, that Microsoft ended up growing at rate of about 10%.

So the next question is whether Google's can capture revenue by diversifying into other offerings (subscription fees, wireless access, etc) and whether their current model of providing state of the art software supported through advertising revenue streams has more room to grow. To think about the second issue more precisely, you would need to consider the growth of the advertising market across the various segments that Google operates in (search) and growth in advertising from segments they are likely to expand into (mobile services, digital content aggregation, etc). You would also need to consider how this market is likely to be divided among other incumbents (Yahoo, Ebay, Microsoft) and new upstarts. Look for my thoughts on this market analysis in one of my future posts.

Related article:
http://online.wsj.com/article/SB114114129311685373.html?mod=home_whats_news_us

related

Characterizing the business opportunity associated with the introduction of a new product is one of the most important tasks required of any entrepreneurial organization. The assessment of each specific opportunity sets the expectations of investors, employees and partners. An assessment performed objectively will help guarantee that you don't invest energy and capital commercializing the wrong product or one for which a market does not yet exist. It may even prevent you from starting an effort that may be destined for failure.

I've specialized in understanding what we think are the most important issues to consider during the assessment of any product's commercial potential. These include:
- estimate the available market and market access
- customer needs and bias analysis
- help with product definition
- pricing and costs
- competing technologies

Having a goal of being your entrepreneurial wing-man, please do reach out if I can provide helpful perspectives on developing your commercial hypothesis, exploring opportunities, and generally pursuing your new ventures.

tracking an always connected future

Since the advent of the browser and widespread proliferation of broadband, we have experienced the dramatic impact the internet has made in our lives. We find, capture, and share information and entertainment radically differently then previous generations. The development of mobile computing and wireless technologies will continue to propel such radical changes creating lucrative opportunities for new ventures that capitalize on the concept of an ubiquitous internet.

Moving forward, I will track and analyze the markets, technologies, customer segments, products, companies, and regulatory changes related to innovations in this area. Stay tuned as I post any research, thoughts, and insight relevant to the due diligence of any ideas you think will define an always connected world..

beginnings of personalization

Trusted Consumer Intelligence
Executive Business Plan

The future of personalization

Concept

Personalization is an undelivered promise from the internet revolution.  Responding to this need, Innovai is creating the first trusted consumer intelligence service. This service is a trusted 3^rd party available to all marketing channels for truly one-to-one interactions with the consumer.  It uses proprietary statistical and artificial intelligence based datamining solutions to derive information from consumer purchasing histories across distributed sources, filtering and focusing all marketing interactions.  This cutting-edge technology enables improved recommendation capabilities to proprietary merchant channels as well as bulls-eye targeting through existing marketing providers. With better technology and more data about the consumer, our trusted consumer intelligence service will dramatically improve marketing across all channels, changing it to become a continuous and intelligent conversation with each individual consumer.

To have a sustainable competitive advantage and execute through the initial hurdles, it is crucial to create the latest proprietary recommendation and predictive technologies, build the platform to market this capability, and continue to commit resources to improve and innovate these assets for next generation technology.  Innovai is creating this improved proprietary data mining technology, helping businesses search through their existing consumer purchase data for recommendations of future purchases.  Current players operating in the personalization market have been slow to move to new forms of delivery of their technologies, and alter their present business model.  However, as previously noted, there is a growing demand for businesses of all types and sizes to have access to the latest state-of-the art personalization capabilities as a service, allowing merchants to continuously improve their relationship with the consumer.  Fulfilling this need is the first step in Innovai’s plan.

However, Innovai has a greater vision for the future.  Its emerging technology capability targets access to a large number of independent merchant repositories.  With the consumers' permission, purchase information across merchants are combined together, enabling a unified prediction capability that benefits both the consumer and participating businesses. In turn, Innovai is creating the first personalized “google” of marketing.  Its proprietary technology,  SmartPredict, focuses on this vision through features that automatically help it learn and improve its predictive functions as more data becomes available.  Combining SmartPredict with datawarehousing infrastructure our  “trusted consumer intelligence” is provided to parties owning the advertising distribution channels such as internet service providers, cellular providers, and direct marketing players.  The consumer indirectly benefits from this service because he/she receives more accurate recommendations on proprietary merchant channels and more relevant offers across existing marketing channels.

Opportunity

Although both pure Internet and traditional retail companies have embraced the web and soon the wireless web as a sales channel, personalization technologies are not being used at the same level of sophistication as they can be created.  Among the reasons for this discrepancy is that much of the technology is overpriced and its integration cost expensive.  Further, personalization as it applies to advertising, specifically for one-to-one marketing is an undelivered capability.  However, many technologies have now converged to create a window of opportunity to deliver these features together in a seamless manner through a new type of service.

Both the personalization and advertising markets are set to grow dramatically.  According to Datamonitor, the global personalization market will grow from the present $500m to $2.1 billion by 2006.  Datamonitor emphasizes that personalization technologies dramatically enhance the understanding a business has of its customers while improving their experience online. These capabilities will become an increasingly crucial competitive differentiator across all channels of communication and distribution with the customer.  Additionally, Jupiter Media Metrix predicts that although online ad spending in the United States will increase only 5 percent this year, it will rebound and grow at a compound rate of 22 percent over the next five years—reaching a total of more than $15 billion by 2006.  At the same time, Jupiter also forecasts, that spending on digital marketing initiatives such as coupons, promotions, and e-mail will surpass spending on advertising, reaching more than $19 billions during the same time period.    Through sustained pursuit, merchant adoption, and commitment to engineering unique enabling technology, Innovai will seize the opportunity from both these markets to create the first trusted consumer intelligence service.

Technology

Innovai's proprietary SmartPredict Technology powers this vision with cutting-edge predictive capabilities.  Combining statistical and artificial intelligence based approaches, the technology is on the path of creating a trusted consumer intelligence for intelligent marketing.  Our proprietary technology will work together with our own datawarehousing capabilities to deliver on the long-term proposition.

Our SmartPredict Technology allows predictions of consumer response to any type of marketing offer.  Its features include making recommendations on items that a given consumer is likely purchase and predicting which consumers would most likely be interested in a product, service, or marketing offer.   SmartPredict can mine distributed merchants' consumer databases to discover the latest product and consumer correlations.  Through it a merchant gains the ability to engage a consumer in a more personal manner during the sales and marketing process, offering and highlighting products which this particular individual is most likely to purchase. As our technology makes use of all available data, it continually adapts, improves, and becomes increasingly accurate as more data is available.  Both the features of recommending products for a consumer and the targeting of a product to the most likely consumers are part our current SmartPredict version.

Currently being developed, is the ability to effectively combine and normalize data from multiple sources to power  inter-merchant data mining.  This will result in better predictive capability through both the increased volume and variety of data.  In order to accurately process data from these different sources, an Advanced Classification System (ACS) is being developed.  In addition, with the ability to combine and normalize data from multiple sources using ACS,  SmartPredict will enable inter-business datamining to produce more accurate results.  This will result in even greater predictive capability through both the increased volume and variety of data. The goal of ACS is to enable the automatic categorization and association of products based upon their descriptions, attributes, availability, and consumer appeal. Prediction of market demand for unreleased products, as well the accurate targeting of newly released products is then enabled.  Combining it with it identity mechanisms working with marketing channels, SmartPredict enables a one-to-one targeting service to reach consumers individually with the advertising that they will be most interested in.    Patents are pending on methods and components encompassing our technologies.

Strategy

Innovai has a clear strategy to execute on the vision and take advantage of our technology assets.  After raising our first round of funding, optimally of $3 million, we plan to hire the required personnel and buy the necessary hardware and software infrastructure to maintain our own datawarehouse.  With these resources we plan to productize our current SmartPredict technology and create the delivery platform to sell our current predictive capabilities as a service.  We will give our product away at first to attract an initial customer base, and then charge additional clients in the future to use our data mining services.  Providing our advanced personalization technology to merchants as a service at a discount to the current competition enables us to quickly gain merchant customers that have not adopted this type of technology because of its cost.  Within a year we plan achieve our first goal which is to secure an initial number of merchants using our personalization technology and having varying types of consumer product purchase histories.

Plans for the next phase are focused more in our goal to become a trusted consumer intelligence provider.  With an additional round of funding we plan to ramp up our technology capability to productize the next generation of SmartPredict.  There would be a new focus, of gaining access to a large consumer base through existing marketing channels and emerging digital “passport” capabilities.  This would enable us to discover trusted targeting information about the consumer based upon the information we derived from their purchasing information across merchants.  This consumer intelligence would enable one-to-one targeting for both marketing campaigns across current communication channels as well as product and service recommendations through proprietary merchant channels.  With a critical consumer base, and growing access to merchant purchasing information, Innovai’s trusted consumer intelligence service would be so effective that a second wave of merchants, advertising channels, and consumers would seek our one-to-one targeting intelligence for marketing. Our roadmap for execution is a clear path to market domination.

Return on Investment

The return from investing on Innovai is immense, as defined by the large market for personalization technologies in addition to long-term vision to improve marketing targeting.  Competitors in the personalization market currently provide overpriced capabilities.  Embracing the web services adoption, Innovai positions itself to quickly provide leading edge analytic and datamining capabilities to merchants.  The risk of this proposition is justified given the lucrative profit generating opportunities from charging both merchants for improved personalization technology and marketing providers for one-to-one consumer targeting through a single delivery infrastructure. 

                The benefits of having personalization technology for merchants, such as retailers has already been studied.  According to a survey of 25 top online merchants by Jupiter Communications, Jupiter found that customization at 24 consumer e-commerce sites boosted new customers by 47% in the first year while revenues rose 52%.  Some of the documented benefits gained from two past business cases are:

·       BMG - BMG Music Service's site transaction volume increased tenfold after introducing a personalization service based ATG's Profile Station software.

·       N2K - Sell-through jumped at least fivefold during an early test at N2K's Music Boulevard, zooming from 2-4% to 10-30%. N2K uses a collaborative filtering system supplied by NetPerceptions.

The enabling personalization software cost in these cases varied greatly. BMG's site development fees rose from $200,000 to $2 million (PC Week).  In contrast, artuframe.com, which uses a NetPerceptions system, reports spending only $100,000.  Amazon.com is another well-known company that owns and uses personalization and recommendation capabilities.  By providing such capabilities as a service, merchants are assured that they will always be up to date with the latest personalization solutions, while minimizing the infrastructure and maintenance costs.  Combining the revenue generated from integration work derived from strategic partnerships currently being pursued with implementation partner, this is by itself is a great business.  

                The greatest opportunity is from the trusted consumer intelligence aspect of the proposition.  Table 1 (below) summarizes our financial projections based on this capability.  In the first year, the service generates little revenue since we provide our personalization technology (SmartPredict) to merchants at a significant discount.   Slowly as we begin charging for this feature, we make more revenue from merchant service fees, ranging from 100k to $1 mill per customer.  As our technology evolves it is applied for consumer targeting based upon inter-business datamining, and a more lucrative business emerges from additional revenue generated from fees charged to marketing channel customers such as internet service providers and direct marketing companies to use our service to enable one-to-one marketing.  Finally at the end of the 5^th year, as we have more merchant customers and have better consumer targeting/intelligence capabilities, we gain momentum attracting a larger array of marketing channels paying us a premium to provide intelligent one-to-one marketing to all of their customers.  Our costs are controlled, since much of the infrastructure is reused, but the added value is in the form of software enabling the intelligence.  In a short period of time, Innovai delivers on the vision of a “trusted consumer intelligence” provider, creating a very lucrative business, and capturing all the monetary rewards derived from enabling one-to-one marketing.

Trusted Consumer Intelligence Metrics	2002	2003	2004	2005	2006
Total Merchant Customers	2	8	20	40	60
Marketing Channel Customers	0	2	5	8	10
Total Participating Consumers (thousands)	0	2000	10,000	50,000	80,000
Expenses (millions)	3	20	30	35	50
Revenue (millions)	0	2	10	81	203
Profit (millions)	(3)	(18)	(20)	46	153

Table 1:  Innovai Financial Projections

Future

The future is bright and full of opportunities for Innovai, as the leading trusted consumer intelligence provider, personalizing the interaction with the consumer across mass-marketing channels and enabling improved recommendation services across proprietary merchant channels.  Developing state of the art technology that will find strategic marketing correlations, we plan to help science better guide the creative aspects of advertising.   Additionally, our technology will mine varying types of data to discover information providing insight into the effectiveness, depth, and efficiency of any marketing campaign—potentially right down to an individual advertisement.  With the growth and success of Innovai, personalization will no longer be accessible to a select few, and will make the visions of one-to-one marketing reality.

The TeamThe Innovai team is an energetic group of individuals planning to change the way marketing is done.

Hello Silicon Valley!