| Androids - The Greatest New Industry of the 21st
Century
March 2005
The Android World business
plan is not an offer or solicitation to buy or sell securities. The
information contained on this website has been compiled from sources
believed to be reliable, but its accuracy is not guaranteed. This is
not a solicitation to buy or sell securities and does not give
investment recommendations. This website may not be construed as
investment advice. Investing in securities is speculative and carries
a high degree of risk. Past performance does not guarantee future
results. Independently investigate and fully understand all risks
before making any investment.
TABLE OF CONTENTS
EXECUTIVE SUMMARY
INTRODUCTION
This business plan was developed to introduce Android World Inc. to all interested
parties. It also explains how future funds would be used to complete product development, begin manufacturing operations and
implement the marketing plan detailed in this document..
THE COMPANY
Android World Inc. was originally founded in 1998 in Delaware as a normal corporation.
It was incorporated in Texas in 2001 (again as a normal corporation). The principals,
Christopher R. Willis and Jennifer O. Fung, own 100% of the assets. The company is
headquartered in Denton, Texas. The business operates as a developer, manufacturer,
distributor, and retailer of androids, android parts, and android software which are
marketed under the name of Android World Inc. and Android World. The principals believe
that androids will greatly enhance the quality of life of people across the country and
indeed around the world by providing the in-home labor to perform the countless mundane
tasks which must currently be done by the head of household and their spouse (if any).
CONCEPT & MARKET NICHE
Androids are robots which look like humans and have similar intelligence and abilities.
Androids will satisfy market demand for relief from endless mundane, boring, tiring,
and time-consuming tasks around the home (or apartment). Androids will be capable of
performing most common household chores such as cleaning, dusting, vacuuming, washing,
drying, setting and clearing the dinner table, sweeping, painting, replacing light bulbs,
and so on. In addition, the androids will function as round-the-clock security guards
capable of phoning the police or fire departments in case of emergency.
Our initial market niche consists of home owners or apartment dwellers who wish to
enjoy more free time - and the additional personal security which androids will provide by
virtue of their constant vigilance against fire or burglary.
This market currently is devoid of actual available androids but numerous companies are
striving to develop them. Honda Motor Company, Kitano Symbiotic Systems, Fujitsu
Corporation, NEC corporation, and Sony Corporation, all of Japan are the current leaders
in this field. Toyota Motor Company has recently (December 2000) joined the field. (See
sidebar on left). They will be Android World's closest competitors. Androids are clearly a
new high tech product. As such, we expect them to follow a similar market penetration
pattern as have other high tech products in the past - most notably personal computers,
cellular telephones, and the internet.
Our market potential is enhanced by the existence of complementary products, namely -
the presence of home computers and the internet in nearly all middle and upper class homes
and apartments not just in the US but also in Europe and Japan.
MARKETING
The key points of our marketing plan are:
1. Complete development of our initial android model
2. Publicize the android through the media and appearances
at trade shows
3. Sign up franchisees to both invest in our company and
distribute our androids
4. Attract sufficient investor interest to allow ramp-up
of a significant manufacturing capability
Most of our sales will come from franchisees and internet marketing.
We have been marketing the following products since December 2000.
CURRENT PRODUCTS
Product SINCE:
1. Android Touch Sensor Board December 2000
2. Animatronic/Android Eyes December 2000
3. Gyro/Accelerometer Board December 2001
4. Animatronic Head (skull & skin) July 2003
5. 90 MB Artificial Intelligence CD October 2003
6. List of all Bird species in the world August 2004
7. List of all Mammal species in the world August 2004
8. List of all Dinosaur species in the world August 2004
We are currently preparing to release the following products.
FUTURE PRODUCTS
Product PLANNED LAUNCH:
1. Complete Android Head Fall 2005
2. Natural Language Processor Fall 2005
3. Android Hands Summer 2005
4. Android Knowledge Base Software Spring 2006
5. Fully functional android Spring 2006
We will invest in market research and product development to continually improve our
androids and launch follow-on products. Follow-ons will be introduced into developed
markets before existing products enter the declining stage of their life cycles.
We expect to have several products and a small number of showrooms open within the next
three years.
The following table shows our product development strategy in terms of product life
cycles.
STAGES OF PRODUCT LIFE CYCLES PROJECTED OUT 6 YEARS
YEAR INTRO GROWTH MATURE DECLINE
2006 A
2007 A
2008 B A
2009 B A
2010 C B
2011 C B
A. In home domestic helper android called Valerie.
B. Male android called Eric.
C. Space assembly worker called Apollo.
Androids will comply with EPA & FCC regulations with respect to emissions. In fact
we DO NOT anticipate any significant emissions of any kind.
MANAGEMENT
The principals are uniquely qualified to nurture this opportunity, and we will seek
legal advice and the advice of external consultants to assist in management decisions and
other decisions requiring specialized expertise.
Our near-term business objective is to proceed with our product development and to
operate at a minimum loss until the business reaches breakeven sales, which is projected
to occur in the Summer of 2005.
So as not to jeopardize cash flow during the emergence of the business, the principals
will forego salaries from the company over the next 18 months.
We will also work at home, subcontract manufacturing and production rather than invest
in plant and equipment, emphasize internet marketing and solicit investors via the
internet and SEC Regulation-A at some later date.
VISION
Looking further ahead, we envision the android business rivaling the automobile
business in size and importance. Just as in any major industry, we believe that numerous
android manufacturers will join the field as the popularity of androids grows and the
general population recognizes their value. We expect that the impact of androids will be
every bit as important as the impact of automobiles or computers or the internet.
MANDATE
Within two years we plan to develop a successful domestic android capable of performing
common household chores without supervision in a manner very similar to the way humans
perform the same chores.
MILESTONES
We have made good progress over the past two years, as follows.
o Established the premier android website in the world.
o Completed development of our initial products.
o Applied for the several patents which will protect our
exclusivity throughout the world.
o Arranged for subcontractors to manufacture major components
of our products.
We are now planning to implement the following steps:
o Complete the final phases of product development and advance
immediately into the publicity phase of our marketing plan.
o Augment our team of quality people.
o Ramp-up manufacturing and produce sufficient inventory to
meet initial orders and anticipated demand resulting from
our planned marketing activities.
o Aggressively develop sales via a network of franchisees and
internet marketing.
o Appear on talk shows.
o Exhibit the android at robotics conferences and COMDEX.
o Get signed contracts from our existing list of interested
customers.
o Generate sales through the use of direct response marketing
and our existing database of prospective customers.
Within the next 18 months we are planning to:
o Launch several new products as listed above.
o Sign up numerous franchisees and open several showrooms to
help popularize androids and generate sales.
FINANCIAL HISTORY & OUTLOOK
The financial investment and personal labor the principals have invested in the
business during the past four years have directly contributed to the present opportunity.
Since the spring of 2001, we have operated at a small loss funded entirely by capital
invested by the owners. Total investment by the principals before
2005 was about $100,000
plus countless hours of labor.
SUMMARY OF FINANCIAL PROJECTIONS:
2004 2005 2006 2007 2008
Net sales $24000 $100,000 $1,000,000 $5,000,000 $10,000,000
Gross profit $12000 $30,000 $300,000 $1,500,000 $3,000,000
Gross margin 50% 30% 30% 30% 30%
Net income after tax $12000 $25,500 $180,000 $975,000 $1,800,000
Profit margin after tax - 25.5% 18% 19.5% 18%
Assets $130,000 $500,000 $1,000,000 $2,000,000 $4,000,000
Equity $50,000 $400,000 $800,000 $1,600,000 $3,200,000
(exclusive of intellectual property)
Return on equity - 6.375% 22.5% 60.9% 56.25%
Return on assets - 5.1% 18% 48.75% 45%
Debt-to-Equity Ratio 0 1 : 4 1 : 4 1 : 4 1 : 4
Debt Ratio 0 20% 20% 20% 20%
USE OF FUNDS: ($500,000)
Professional fees, consultants $100,000
Marketing campaign for launch $25,000
Working capital (incl. cash reserve) $125,000
Plant and equipment $250,000
Total $500,000
Our most likely case projections describe a vigorous growth business from which the
investor can quickly derive excellent returns. The initial infusion of $500,000, assumed
from the first month of 2005, is based on 500,000 shares of common stock at $1 per share,
which represents about 95% of assets exclusive of intellectual property. The infusion
includes working capital and a reserve to meet unexpected demands on cash and maintain
some flexibility. The principals are confident that these funds are adequate for the
business to reach positive cash flow in the second quarter of 2005 and operate at a profit
from that point forward.
MANAGEMENT & OPERATIONS
MANAGEMENT PHILOSOPHY
The principals believe that, next to our customers, our intellectual property is our
most valuable asset. Hence, protecting our intellectual property will be a top priority
for our management team and every employee or strategic partner of Android World. We
intend to employ a patent attorney at the earliest opportunity.
We will share technical information in "Quality Circles." Groups consisting
of management, staff, strategic partners will meet regularly to review operations and
discuss ways to improve the quality of our current products and services; develop new
products and services; develop our manufacturing, production, and delivery processes;
control costs; improve relationships with suppliers, distributors, dealers, and with our
customers.
We believe that our information-integrated operation will result in the following
benefits to the company:
o Highly involved and motivated people; minimum staff turnover.
o Maximum productivity and cost efficiency.
o Maximum inventory and receivables turnover
o Positive cash flow
o High product quality.
o High customer satisfaction.
o Maximum profitability.
MANAGEMENT TEAM
Christopher Willis and Jennifer Fung have excellent managerial and technical skills.
Christopher R. Willis, President & CEO
Mr. Willis holds the following degrees: Bachelor of Mathematics, Bachelor of Physics,
and Master of Science in Computer Science. He has over 20 years experience in computer
programming in a variety of languages. He is familiar with several operating systems and
computer platforms.
Mr. Willis has researched and developed the Android
World website over the past seven years. It is easily the finest android website in the
world. He is familiar with many of the projects which are being developed around the world
and knows their strengths and weaknesses.
Mr. Willis holds US
patent 5,305,974 which is entitled "Spaceship Propulsion by Momentum
Transfer" and has written five books including a book about the development of space
called "JOBS for the 21st Century".
He also maintains a website detailing manned
missions to the outer planets. He published the first practical manned mission
to Jupiter in 1992.
Mr. Willis is currently involved in all aspects of the development of the Valerie
android. He designed and built the android head which we are soon to offer.
Jennifer O. Fung, Treasurer & CFO
Ms. Fung holds the following degrees: Bachelor of Science in Accounting and Master of
Business Administration. She is also a Certified Public Accountant and a Certified
Government Financial Officer. She has over 20 years experience in accounting and taxation.
She was an assistant professor at Hong Kong Polytechnic University and at Centenary
College in New Jersey. She taught accounting and taxation for 11 years.
She has also worked in government for seven years. She was assistant finance director
for the City of Haltom City a suburb of Fort Worth, Texas and is currently Finance
Director for the City of McKinney, Texas - a post she has occupied for about four years.
She directs a staff of 35 in McKinney.
PROFESSIONAL ADVISORS
To help us make the best management, marketing and legal decisions, we will seek expert
advice from professional advisors as follows.
Management Consultant
Name: Regis Serrat
Address: 1124 Plantation Court #B
Las Vegas, NV 89117
Phone: 702-379-8991
Robotics Consultant
Name: John Bergeron
Address: 83 Meadow Rd.
Milton, VT., 05468
Phone: 802-893-4618
Marketing Consultant
Name: To be determined.
Address:
Phone:
Legal Counsel
Name: To be determined.
Address:
Phone:
Compensation for these consultants will be on a hourly basis.
STRATEGIC PARTNERS
We plan to operate, at least initially in strategic partnerships with service
companies, consultants and subcontractors in order to reduce our product development time
and costs. We will also sell franchises in order to expand our sales force at low cost and
to help to sell our androids.
Four principles will guide our strategic partnerships.
1. Trust. In addition to contributing physical and human resources, each partner will
contribute knowledge and information to the venture. To eliminate constraints, all
partners will sign non-disclosure and non-circumvention agreements.
2. Information-Integration. A feature of our partnerships will be network
communications and Quality Circles. Partners will meet regularly to measure progress and
to help develop products and to improve our processes.
3, "High Product Quality." We will establish very high standards on all goods
and services contributed by partners as well as on promptness of delivery. Pursuing
perfection will reduce rejects, save time and directly impact customer satisfaction.
4. Customer sensitivity. We will regularly canvas our customers for suggestions of ways
to improve our products and services. And we will also ask them for suggestions for new
products and services which they would like to acquire.
SOME OF OUR PARTNERS ARE:
Name of company: Advanced Communications & Controls
Contact: Regis Serrat
Address: 1124 Plantation Court #B
Las Vegas, NV 89117
Phone: 702-379-8991
Contribution: Management expertise. Electrical engineering
design and PC board manufacturing capabilities.
Terms of arrangement: project basis.
Name of company: Matrix Metals Manufacturing
Address: 2097 McGee Lane
Lewisville, TX., 75067
Phone: 972-317-7679
Contribution: Sheet metal fabricating capabilities.
Terms of arrangement: project basis.
Name of company: Kit Model Design Ltd.
Contact: David Ng
Address: 8680 Seafair Dr.
Richmond, Vancouver, BC,
Canada
Phone: 604-272-0886
Contribution: Mechanical engineering design and manufacturing
capabilities.
Terms of arrangement: project basis.
TABLE OF ORGANIZATION
Some of the company's key posts have been filled. Those remaining are so indicated in
the following table. Based on our business-development plans, these posts will need to be
filled on the dates indicated in the table.
MANAGEMENT
President and Chief Executive Officer
Christopher R. Willis
Ownership: 100%
Salary: $0
CEO TASKS: Gather, organize, and direct the use of any and all
information that can advance the company's success in all areas
of operations. Supervise product development.
Chief Information Officer
To be filled by Summer 2005. Currently being performed by C.R. Willis
Salary: To be determined.
CIO TASKS: Implement the successful evaluation, installation,
integration, and maintenance of the company's information-gathering,
-processing and communications network. Train management, staff,
strategic partners, and customers in the use of our information
technology.
Vice President Public Affairs
To be filled by Summer 2005
Salary: To be determined
TASKS: Further the company's interests by keeping informed of all
government and industry regulations affecting the company's
operation. Stay in touch with regulating bodies and action groups.
Work with lobbyists. Participate in industry association conferences.
Keep abreast of all relevant journals, studies, and forecasts, both
domestic and global.
Chief Operating Officer
Currently being performed by C.R. Willis
Salary: $0
TASKS: Coordinate all aspects of operations: R&D, manufacturing,
production, distribution, sales, customer service.
MARKETING
Vice President Manufacturing
Regis Serrat
Salary: $0
TASKS: Coordinate and supervise all aspects of the manufacturing
and/or production process: plant layout, work cell design, materials
sourcing, handling and just-in-time supply. Train work teams and
integrate all human and technological aspects of manufacturing and/or
production. Set work schedules and manage quality control.
MONEY
Treasurer and Chief Financial Officer
Jennifer O. Fung
Salary: $0
CFO TASKS: Manage the company's financial affairs including inventory
control and cash management. Set up accounting and billing procedures.
Continuously track financial progress and update financial forecasts
and budgets. Make sure we have the proper insurance coverage at the
best price.
CONSULTING STAFF We currently have two
staff consultants.
Consulting Electrical Engineer: Regis Serrat
Mr. Serrat holds the following degrees -
Associate in Chemistry, Associate in Telecommunications, and Bachelor of Science in
Electrical Engineering. He has over 20 years experience in business and manufacturing.
He has lots of valuable contacts in industry. He is an expert at designing and
building PC boards. He built the two boards which Android World is currently selling (Touch Sensor Board & Gyro Board).
He is also very good at programming low level I/O interface routines. Mr.
Serrat has his own consulting company in California called Advanced Controls and Communications. He also
builds and flies model airplanes and is working on is pilot's license.
Consulting Robotics Engineer: John Bergeron
Mr. Bergeron is a self educated robotics
engineer. He has over 10 years experience building robots and specifically ANDROIDS.
Mr. Bergeron is also a very capable electrical engineer. He is working on a cheap absolute
position sensor unit which we will be using on Valerie to measure cylinder positions. He
is an expert at micro-controllers and programming them. He is familiar with many
programming languages and operating systems such as DOS, Windows, ECOS, & Linux.
Also Mr. Bergeron has his own website
and his android called Tara has been featured on our personal android
projects page since its inception.
Other staff
Initially, we will need a staff of four people to support our operation. Staff will be
expanded only as justified by growth. Staff will be remunerated on a salary plus stock
options basis. Stock options are intended to reduce current salary costs and help to
optimize productivity.
PROJECTED STAFF STRENGTH PER YEAR
2006 2007 2008 2009 2010
Attorney 1 1 2 4 8
Engineer 1 1 2 2 4
Programmers 2 2 4 8 16
Staff payroll $90K $220K $440K $880K $1756K
Android World will NOT be a union shop.
SALES FORCE
Sales to franchisees will be handled directly by our management team.
The following table shows our projected sales force strength for five years. Sales
personnel will be remunerated on the basis of base salary plus commission plus stock
options.
PROJECTED SALES FORCE STRENGTH PER YEAR
2005 2006 2007 2008 2009
Franchisees 0 8 16 32 64
(no salary)
Average commission $0 $2K $2K $2K $2K
(per unit)
Service personnel 2 4 16 32 64
(hourly as required)
Average salary $30/hr $33/hr $36/hr $39/hr $42/hr
Field personnel will use their own cars instead of company-leased cars.
Total projected payroll for management, operations, and sales
2006 2007 2008 2009 2010
Management payroll $50K $50K $100K $150K $200K
Staff payroll $90K $220K $440K $880K $1756K
Payroll taxes and benefits are estimated at 15%. Annual salary raises are estimated at
5% per year.
OPERATION & PRODUCTION
Consistent with our management philosophy, Android World will operate with a flat,
flexible structure. Strategic decisions will be made by the management team with the
assistance of our professional advisors and strategic partners. Emphasis will be on
marketing, which includes product development and production and manufacturing (our
manufacturing plan is detailed at the end of Section II). Day-to-day decisions will be
made by the individuals responsible for our marketing operation, which integrates the
following activities:
1. Product Development (R&D)
o Design packaging, merchandising and promotional materials.
o Identify reliable sources of supply for components.
o Set up just-in-time delivery schedules with suppliers.
o Design work cells for manufacturing, including selection of
production equipment
o Determine production cycles to meet market demand.
2. Production & Manufacturing:
o Purchase components.
o Hire sales staff
o Train sales staff
o Manufacture products to specifications provided by R&D.
o Prepare to distribute our products to the showrooms and
franchisees.
3. Order Fulfillment:
o Design and implement sales, merchandising and promotions
strategies and campaigns.
o Develop sales to franchisees and end users.
o Develop and implement customer service and aftercare programs.
o Track customer satisfaction and feed information to R&D.
4. Total Quality Control:
o Establish zero-defect standards for all goods and services.
o Establish achievable just-in-time schedules with suppliers.
o Design and implement training programs to facilitate quick
product repairs.
o Develop diagnostic systems for locating and eliminating
problems in our androids.
o Continuously monitor customer satisfaction and recommend
improvements to product quality, manufacturing proesses,
and customer service.
MARKETING
ANDROIDS
Androids are robots which look like humans and have similar intelligence and abilities.
Here is our Valerie android.
 Valerie
Your android will listen to your commands and do what you ask it to do - if it can (and
within certain limitations). The android will speak to you in English (or several other
languages).
This android is capable of basically the same muscle actions which all (normal) humans
can perform. This android is intended to function as a domestic servant. It will perform
most of the mundane tasks around the home which now take up so much of our time. This will
therefore give us humans more free time which we can enjoy as we wish. Examples of the tasks which Valerie will be able to perform are:
Cleaning, Dusting, Clearing the table, Setting the table,
Doing laundry, Washing dishes, Sweeping, Picking up stuff,
Putting stuff away, Vaccuuming, Painting, Cleaning windows
The android will also function as a 24 hour a day security guard because it doesn't
need to sleep like we do. It will also be capable of calling the police in an emergency or
the fire department in case of fire.
MARKET NICHE (THE CUSTOMER)
Our consumer market fits the following profile.
DEMOGRAPHIC INDICATORS:
SEX: either but females may tend to buy more.
AGE: adults
OCCUPATION: any occupation
INCOME: middle income and up.
EDUCATION: better educated.
MARITAL STATUS: any - but may be more popular with single head of
households.
HOUSEHOLD: any - but more likely as number of children increases.
DWELLING: any except low income housing.
NEIGHBORHOOD: any
FAMILY ROLE: decision-maker or head of household
PSYCHOGRAPHIC INDICATORS:
ATTITUDE/ PERSONALITY: anyone who longs for more free time.
MOTIVATION TO BUY: android will give you more free time and
security for your home.
VALUES: anyone who longs for more free time.
POLITICS: any
ENVIRONMENTAL CONSCIOUSNESS: very low environmental impact
WORK ETHIC: busy or active lifestyle.
CHARACTER: willing to try out new high-tech products.
SOCIOGRAPHIC INDICATORS:
ASSOCIATIONS: nearly any.
RECREATION: those who are more active should tend to be more
likely to buy.
HOBBIES: those who are more active should tend to be more
likely to buy.
BUSINESS TRAVEL: those who travel more should be more likely
to buy because of the security aspects.
DRIVES: higher income seems more likely to buy.
Our typical customer can be characterized as follows: o trendy, middle to
upper-middle-income urban and suburban active individuals who are looking for more
personal free time
PROSPECTIVE CUSTOMERS:
Android World will immediately begin to close sales among the following prospects.
PROSPECT LIST:
- K. Carmody
- J. Casale
- J. Greenidge
- J. Prince
- M. Ridley
- D. Ramano
- P. Soldex
- you?
MARKET & COMPETITIVE ANAYSIS
Our perceived market (for androids) is based on several factors: the very real need for
personal assistants in the home (or apartment), the growing popularity of robots around
the world, and the popularization of androids by various media including movies and the
internet.
According to the Japan Robot Association, health care robots will reach sales of $250
million per year by 2005 and $1 billion per year by 2010. Japan sold $5.7 billion worth of
industrial robots in 2000 of which $3 billion were exported. Japan has over 4500
registered robot engineers. Since Japan accounts for about 50% of all robot sales, we can
assume the world market for industrial robots was over $10 billion in 2000.
The android market is currently extremely limited. Only Honda motor company has an
android which can walk very well. But, their android, Asimo, has very limited use as a
personal assistant because the functionality of its hands is very low. In fact, critics
have called Asimo "the most expensive light-switch flipper ever built". However,
IBM's main office in Tokyo has reportedly leased one to roam its main lobby for the not
insignificant sum of $166,000 per year.
COMPETITOR PRODUCT PRICE USE
Honda Motor Co. Asimo $166,000 (lease) Promotions
TMSUK TMSUK - 4 $45,000 limited assistance
Fujitsu Corp. HOAP-1 $41,000 toy or research
Sony SDR-4X $40,000?? entertainment
NEC Papero not for sale entertainment
Kitano Sym Sys Pino $48,000 research
Morph ??? toy
DISTRIBUTION
Currently sales are so limited that you must contact each manufacturer directly to
purchase a unit.
COMPETITIVE COMPARISON CHART
Android's name Valerie Asimo TMSUK - 4
Manufacturer Android World Honda Motor Company TMSUK, Japan
Degrees of freedom 111 24 23
Height 68" (173 cm) 48" (122 cm) 47" (120 cm)
Weight 64kg/140 lbs 43kg/ 95 lbs 100kg/ 220 lbs.
Customer service does household chores for entertainment only ???
Responsiveness 1)talks 1)talks 1) talks
to customers 2)can understand speech 2)can understand speech
3)has sense of touch
4)interface to internet
5)can print data for customer
Price $25,000 - $30,000 Rental $166,000/yr $45,000
R&D spending $100,000?? $100,000,000?? ???
Freq of follow-ons two years 18 months 2 years?
Brand awareness low high low
Internet connected yes no no
Financial resources low high ??
Production costs low high ??
HOW WE CAN COMPETE
No doubt many readers will be wondering how we think we can compete against the likes
of Honda, Sony, NEC, Fujitsu, and Toyota or the big universities like Waseda University,
Tokyo Institute of Technology and Massachusetts Institute of Technology. The short answer
is we have different goals and plan to use different approaches. The long answers are
below:
1. Autonomy. Honda has spent millions to develop a short-time autonomous android. We
have decided to begin with a tethered android and follow with an autonomous one later when
we can finance its development. Sony, NEC, and Fujitsu all have developed small androids
which are not suitable as household helpers. The universities are not trying to build
anything marketable.
2. Muscle actions (referred to as degrees of freedom = DOF). None of the above
manufacturers have more than 40 DOF. Our Valerie will have 111 DOF. We believe this is why
they have had so much trouble making their androids walk. Their androids are barely
capable of it due to their limited muscle actions. Imagine trying to walk without using
your hips.
3. Hands. Honda’s Asimo can do almost nothing with its hands. This makes it
useless as a household helper. The others are not much better. We plan to emphasize the
hands and provide useful working hands with 21 DOF each.
4. Programming language. We plan to program our android in English. This will give us
the power of the English language. We claim there is nothing you cannot describe in
English. It is self-documenting and modifiable by anybody - not just highly trained
programmers - which means that each user can modify their android's behavior as they wish
(except for certain areas which will be protected).
5. Bureaucracy. We believe that large companies get bogged down in committee meetings
and lengthy decision making processes which greatly impede progress. From many years of
experience in American business I can tell you that none of the companies I worked for
listened to the workers. The managers all thought they had all the answers. I have seen
numerous reports about Japanese businesses also being very unappreciative of inventors in
their ranks. NASA has no interest in my spaceship propulsion system in spite of the fact
that it is far superior to rockets. My propulsion system can carry a manned mission to
Mars in 5 weeks or less and NASA's rockets take 8 months.
6. Internet. We plan to interface our android to the internet to allow it to search the
world for answers to their owner's questions or to provide their owners with service. I
have seen no mention of others planning to do the same.
7. Artificial Intelligence. We plan to use as many different approaches as we can
think of (contrary to the plans of several of our competitors). We will use: fuzzy logic,
neural networks, databases, internet search engines, propositional calculus, and predicate
logic.
POSITIONING
Our Valerie android can be differentiated in the marketplace
on the basis of physical capabilities and a high level of artificial intelligence. Our
unique positioning will be Valerie's vastly superior capabilities and intelligence. Our
android has 111 degrees of freedom (this corresponds to 222
muscles) whereas the highest previous count of degrees of freedom was 52 - for the "Wendy" project
at Waseda University, Tokyo, Japan.
PRICING
Android World's pricing strategy satisfies the following
prerequisites:
o Optimize the perceived value of androids, thus fostering
market acceptance
o Ensure maximum gross margin.
o Foster high volume sales.
o Keep manufacturing costs low.
Our pricing structure, shown in the following table, is based on the cost of
manufacture of each product.
Current Product Ave. Unit Price
Touch Sensor Board $595
Animatronic/Android Eyes $750
Gyro/Accelerometer Board $695
Planned Product Timeframe Est. Unit Price
Complete Android Head Fall 2005 $10000
Natural Language Processor Fall 2005 $200
Android Hands Summer 2005 $2500
Android Knowledge Base SW Spring 2006 $300
Fully functional android Spring 2006 $35000
Retail pricing will be approximately three times manufacturing cost and wholesale
pricing will be approximately twice the manufacturing cost. Our average gross retail
margin in 2004 is estimated at 60% and gross wholesale margin is estimated at 30%.
Wholesale pricing will be available at very low volume due to the high cost of our
products.
Our selling price will not include S&H. This policy is standard practice in most
industries. Hence, our policy will be consistent with the customer's expectations.
We are confident that our pricing strategy is realistic, for
the following reasons:
o No other companies offer similar products to ours and therefore
there is no pricing precedent.
o Competitors' prices are far higher for a lower quality product.
o We have received strong support for our product from
prospective customers.
PACKAGING
Our android will appear as human as possible. We believe this will foster rapid
acceptance of the android as a full member of the family. We plan to offer our customers
the option of a customized face. We believe this will be very popular among those people
who have recently lost a dearly loved spouse. Our manufacturing associate, David Ng of
Hong Kong will handle the manufacturing of the customized heads.
RETAIL OUTLET STRATEGY
We plan to open a small number of showrooms where customers can observe our androids
and even talk with them. These showrooms will be in major cities such as New York, London,
Paris, Tokyo, Berlin, and Moscow. Our major sales outlets will be franchisee owned stores.
Since we don't have sufficient funds to open large numbers of outlets, we will endeavor to
find franchisees who will each operate one or more retail outlets.
MEDIA
Customers will be attracted to our showrooms and franchise outlets by media publicity
and public appearances by our Valerie android.
PHYSICAL
The floor plan will be designed for personal contact between the Valerie androids and
the customers. Valerie will talk with the customers and explain what she can do for them.
The sales personnel will simply sign up the customers.
PEOPLE
The showrooms will have several sales personnel available to assist customers and to
sign contracts for delivery and installation of the androids.
FRANCHISEES
The franchisees will be given wide latitude as to how they set up their outlets.
SALES AND DISTRIBUTION STRATEGY
SALES THROUGH A NETWORK OF FRANCHISEES
Android World plans to organize an international network of franchisees. We plan to
attract candidates at trade shows and via a media campaign. The franchise selling price
will include marketing support, materials and advertising support, brochures, and a
functional android for display. We estimate that approximately 80% of Android World's
sales will be through franchise outlets.
Distributors will learn about Android World as follows:
o Direct internet marketing
o At trade shows
o Media publicity
o Personal appearances
We will provide franchisees with selling tools, including brochures, videos, and most
importantly, a functional android fully capable of doing her own sales pitch. We will
provide technical training to distributors and institute customer support programs which
will be actively promoted in advertising.
DIRECT INTERNET SALES TO END USERS
We estimate that approximately 15% of Android World's sales will be direct to end
users. These customers will be reached over the internet.
Prospects will learn about Android World as follows.
o Direct approach by franchise owners.
o Internet email sales campaign.
o We will exhibit at COMDEX in the US & Europe.
o We will exhibit at ROBODEX in Japan.
DIRECT SALES
Direct sales out of our own showrooms and from trade shows is expected to account for
5% of revenue.
Consumers will learn about us as follows:
o Media publicity
o Direct mailings
o Personal appearances.
o Brochures picked up by walk-in customers.
MARKET DEVELOPMENT STRATEGY
Our marketing scope encompasses primarily the economically advanced countries. However,
we expect limited sales in even the poorest countries. We plan to develop the market in
stages. The response in each of the introductory areas will determine how fast we expand
into the surrounding areas.
MARKET DEVELOPMENT SCHEDULE
2006 2007 2008 2009
Introductory showrooms x x x x
Advanced countries franchise outlets x x x x
Developing countries franchise outlets x x x
Introduction of a larger male android x x
MARKET ROLLOUT
We plan to introduce our android at one of the major technology conferences such as
COMDEX in Las Vegas or ROBODEX
in Tokyo. There are numerous other COMDEX
conferences around the world which we could attend - and will if possible. Currently we
are hoping to present Valerie at the November COMDEX
in Las Vegas.
EXPORT MARKETS
Our research indicates that sales in export markets identified in the following table
could account for as much as 60% of our total sales within 18 months. We have targeted
these markets on the basis of their historical interest in robots.
EXPORT ESTIMATED ANNUAL SALES PRINCIPAL
MARKET IN PRODUCT CATEGORY LANGUAGE
Japan 40% Japanese
Germany 10% German
United Kingdom 10% English
To develop these markets, we plan to open showrooms, form alliances with foreign
companies, and sign up franchisees in these countries. We plan to enter these export
markets in 2007.
CUSTOMER SERVICE STRATEGY
Android World's most valuable asset is our customers. We are pledged to surpass the
customers' expectations for quality of service.
ORDER PROCESSING
To ensure fast processing of orders, we plan to sell to customers directly over the
internet as well as from showrooms and franchisee outlets. The result will be faster
service, enhanced value and more satisfied customers. Real time electronic accounting will
speed collections of accounts receivable. Due to the high cost of our androids, we will be
offering our customers financing arrangements.
SHIPPING
Shipping will be via first class mail or parcel post for small products and via UPS for
our androids. Our selling price will not include shipping. This policy is standard
practice in many industries. There will be special teams assigned to install and train
actual customers in the use of their android.
INVENTORY
We believe that our androids will be so unique in the marketplace that we will have
difficulty keeping up with demand. We plan to distribute our initial production to various
showrooms to promote sales and satisfy franchise agreements.
RETURNS AND ADJUSTMENTS
Our industry has no standard practice with respect to returns and adjustments. Our
policy will be as follows. We will unconditionally refund purchase price less S&H to
any original purchaser for a period of one year should the customer be dissatisfied with
their android.
MARKET RESEARCH & PRODUCT DEVELOPMENT
Android World is committed to a program of ongoing improvement to our products. Our
research and development strategy integrates the following activities.
1. Information Gathering
o We will rely on customer feedback to learn what features or
improvements the customer wants. Based on this information, we
will continually improve our products so we can introduce the
right follow-ons at the right times and reduce the risk of
substitute products cutting into our market share.
2. Development
o Design and test new concepts and features.
o Conduct focus group research to verify acceptance of Androids
and promotional strategies.
o Determine production cycles to meet market demand.
3. Marketing
o Design and implement sales, merchandising and communications
strategies and campaigns.
o Develop and implement customer service and aftercare programs.
4. Quality Control:
o Establish zero-defect standards for all goods or services
purchased for production.
o Establish zero-defect standards for all goods or services
produced.
o Design and implement training programs for sales and customer
service staff.
MARKETING TASK FORCE
All members of the staff will participate in the promotion and marketing of our
androids.
CRITICAL PATH
The following tasks have been identified as critical to the introduction of our android
as planned.
1. Complete the development of android subsystems (products)
listed above.
2. Complete a full Valerie android.
3. Prepare franchise agreements, brochures, videos, and other
sales materials.
4. Prepare brochures, videos, and other sales materials for
our grand introductory appearance.
5. Sign up franchisees.
6. Produce limited quantities of androids for franchisees
and showrooms.
7. Develop production facilities.
MANUFACTURING
Uniqueness of the android business
The android business is unique in that OUR PRODUCT CAN MANUFACTURE ITSELF.
This has never happened before in history. This unique position will
enable us to keep our manufacturing costs very low.
We will use subcontractors for manufacturing as many subassemblies as possible. We
estimate that 75% of the components of our android can be manufactured by outside vendors.
The following is a list of components, suppliers, and costs which would constitute one
android.
COMPONENT EST. COST SUPPLIER(S)
Computers $3000 HP, Dell, Compac, Nucleus1
Pneumatic cylinders $500 Clippard Inst. Labs, Fesco
Pneumatic Valves $10000 Dynamco Inc., Fesco
Hydraulic Servo-Valves $5000 Android World
Touch Sensor Boards $1000 Android World
Force Sensing Resistors $1000 Interlink Electronics
Gyro/Accelerometer Boards $500 Android World
Video cameras $1000 Micro Video Products,
SuperCircuits.
Servo motors $500 Hobby People
Controllers & Other boards $1000 Scott Edwards Elect.,
Imagenation Inc.
Silicone products $500 Circle K Products,
Burman Industries
Miscellaneous hardware $1000 various sources
Proprietary components $2000 Android World
---------
$27,000
Androids will actually assemble themselves. They will be positioned along an assembly
line and each one will perform a limited number of tasks which will eventually result in
the creation of other androids.
MONEY
Forecast : Income & Expense
Our pro forma income statement for 2005 is shown below and projected for four years.
Annual Summary 2005 est. 2006 2007 2008 2009
Net sales $20000 $100,000 $1,000,000 $5,000,000 $10,000,000
Cost of goods $10000 $70,000 $700,000 $3,500,000 $7,000,000
Gross profit $10000 $30,000 $300,000 $1,500,000 $3,000,000
Gross margin 50% 30% 30% 30% 30%
Net income after tax $10000 $25,500 $180,000 $975,000 $1,800,000
Profit margin after tax - 25.5% 18% 19.5% 18%
Assets $130,000 $500,000 $1,000,000 $2,000,000 $4,000,000
Equity #130,000 $400,000 $800,000 $1,600,000 $3,200,000
END OF BUSINESS PLAN |
