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Our value proposition
Given the non-profit nature of our venture, our primary source of uniqueness and distinctiveness is built on the core idea of intangible value. Our idea is a concept of competence-enhancing innovation, our information is customized to the needs of the synthetic biology entrepreneurs and our goal is to build a collaborative space to connect scientists to all stakeholders in the synthetic biology business development process via the introduction of a virtual directory.
Our Business Model: Pursuing the Hybridized Model
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Target Market
Our aim is to initially provide this service offering to the iGEM community within the Americas. The iGEM community is a prime example of an inclusive network that has not only expanded in terms of number of participants, but also in terms of its diversity. Teams are not only bringing forth ideas, but prototypes that have the opportunity to be commercialized. The regionals are being held in cities where the integration of synthetic biology technology and entrepreneurship are highly valued. Our portal is a method to retain the connections that were built within iGEM events, but also help to facilitate those that were missed.
Our target market milestone map is proposed below. Essentially the plan indicates that a pilot phase with the 2012 iGEM Entrepreneurship participants will allow us to gage the interest level and also identify opportunities for enhancements. Thereafter, the portal will be launched to the iGEM community within the Americas, and soon to the rest of the international cohort.
ROI
In every business plan, it is imperative that as financial backing is being sought, the investors understand that there is a structure in place for them to receive a return on their investment. For every dollar the investors put in, it is critical they understand to what end their money is going and the manner in which they can expect to get it back.
For some investors, the aspect of time comes into place. The question of ‘when’ their returns will be actualised will need to be addressed. This means that a metric to measure the performance of their investment needs to be created. This metric will be required to determine the relative success of their investment.
In most cases, the metric is measured as follows:
ROI= (Gain from Investment-Cost from Investment)/Cost of Investment
The above equation is a simple and highly versatile measure of an investor’s returns as a positive value indicates a gain for the investor whereas a negative value indicates a loss from the investment.
Furthermore, the magnitude of the positive (or negative) value can be used to compare different company performances since the ROI value can be expressed as a percentage. However, it is important that the calculation methodologies are similar.
In the case of our website portal, BizBricks, it is important to list out all the gains and costs that will be derived from investment into the portal. The portal will provide several intangible benefits as well as potential avenues for revenue generation which shall be factored into the gains.
*These aspects of the portal are not concrete and have not been incorporated into the prototype of the portal. They simply represent potential avenues for growth and opportunities to leverage the success of the portal itself. As it stands, BizBricks remains a non-profit venture.
Opportunities for Return on Investment when contributing to the funding of the portal
Due to the fact that the portal will be launched as a non-profit project, and that all financial contributions will be directly placed to help the BizBricks portal grow, monetary returns ought not be in the primary interests for investors.
The portal is an initiative to bridge the gap between Synthetic Biology in the lab and in entrepreneurship; this gap leaves a business vacuum that an educational tool is required to fill. As with most public goods, the market will fail to provide this service whereby there is no direct monetary return on investment.
However, given the eventual social good that may possibly be generated with more entrepreneurs from a rapidly emerging scientific field such as more successful start-ups and subsequent job creation, this is an opportunity for an investor to play a part in correcting a form of market failure.
For non-profit projects such as these, there are two general types of returns investors can receive from funding the portal:
1. Return on Community
The return which causes an influential change onto the community to be more engaged in the portal.
By investing in the Bizbricks portal, examples of the return on community include:
CSR Fulfilment
This focuses on corporate investors who would be interested in backing the BizBricks portal with their company name/brand. By investing in an open portal, companies will have the opportunity to actively participate in the growth of a young field with plenty of opportunity in both the corporate and educational world. Corporate financial backing is a win-win situation for the company as their name radiates positively in their involvement in a non-profit venture and they also get a first hand opportunity to interact with community members in an emerging field with potential for exponential growth. This would definitely assist in aggregating and attracting potential future stakeholders in the field of bioentrepreneurship.
An example of the potential benefits of a good corporate image being reflected on the bottom line is Whole Foods. They would be an example of a company whose CSR has definitely helped them to be known to the public; they have donated $10 million in low-interest loans to help fund local and microentrepreneurs. This helped Whole Foods to be ranked in Corporate Responsibility Officer’s “Top 100 Best Corporate Citizens” in 2007, as well as an array of other environment-friendly awards which helped move their brand name forward through its good reputation.
Stronger networking within the synthetic biology industry
Greater collaboration within the synbio industry can be induced with this portal. Often in an industry that has been greatly tainted by intellectual property battles and heavy patenting, entrepreneurs may be hesitant to move into the industry for fear of getting caught up in litigation.
Networking within this community in such a niche field may ultimately lead to greater levels of trust within the industry and lower levels of suspicion which ultimately fuels protectionist measures such as heavy patenting.
2. Return on Cause/Social Mission
This refers to the manner in which the actual portal itself will be able to grow and result in a greater positive social change.
As mentioned earlier, there exists a market failure whereby the Synthetic Biology industry does not have enough access to entrepreneurial literature and accounts relevant to their field. On the flip side, the potential for creation of employment opportunities via more successful start ups will remain untapped in the current conditions. Consider the success of Genentech, considered among the premier biotechnology firms employing 13,000 in 2011# and one of the best places to work according to several rankings over the years.
The trickle down effect of a synthetic biology startup with access to the information on best practices and accounts from industry leaders in the local community cannot be understated.
From another perspective, it is likely that synthetic biology may have answers for social issues that affect the livelihoods of a community. Consider an innovation that allows for quicker sanitization of water or a more efficient sewage system in lower income communities. The lack of information on how to successfully commercialise this innovation leads creates a lag from innovation to potential consumer.
The gap that exists between this innovation and successful commercialization slows down the speed at which synthetic biology can see its products creating a positive change in the affected community. The community continues to struggle with poor sanitation and/or a struggling sewage system while a product that could possibly improve their livelihoods lies stuck at the entrepreneurship bottleneck.
Potential For Revenue Generation
In the table above, we outlined possible avenues in which the BizBricks portal could potentially generate revenue. We will briefly expound on these opportunities since we shall include them as part of the ROI model.
1. Premium educational content
Based on the growth and popularity of the educational portal, it is possible to charge users for content. However, it is important to note that this will have to occur once the portal has crossed a certain user base threshold and level of activity. At this point, once the portal has greatly advanced and evolved to have several users who will have been greatly satisfied by the free content, only then can premium content be created.
Several business models have been based around the offering of free content first and ultimately charging users for more detailed and expanded content. One such example is AVG, offering anti-virus and anti-malware products. Currently it has over 106 million users of which 15 million are premium subscribers# who opted for an enhanced product having been subscribed to the free service. This represents just under 15% of users who opted to enhance their experience and pay for premium content. This model can be replicated onto the BizBricks portal as an avenue for revenue generation.
2. Network opportunity fee
As an emerging field such as Synthetic Biology, there are few structured settings in place whereby entrepreneurs can meet and share their experiences. Due to the fact that this field is emerging, extensive authoritative peer-reviewed literature is also hard to come by hence entrepreneurs seeking information on current trends and practices in the field would find opportunities to network with existing entrepreneurs a huge resource.
For existing entrepreneurs there is an opportunity to learn from the experiences of others in the same industry and exchange ideas on how to deal with industry challenges such as regulations and intellectual property.
Given this opportunity for networking, having gathered a large and diverse user base, it would be possible to introduce a networking service amongst users. The level of intimacy of interaction of users could be leveraged for a fee i.e. paid subscribers will have greater access to certain information and individuals as well as present themselves for networking. This business model would be similar to that of LinkedIn.
Other Possible Rewards
The potential return on investment as outlined above gives the monetary and non-monetary returns that are measurable. However, there is another avenue whereby the investor may gain in a manner that could far outweigh the above benefits. This lies in the possibility of opportunity.
It is difficult to compute and measure the value of an opportunity. It is also difficult to include it as a concrete benefit in the return on investment chart. However, the fact that investors will continuously meet and be introduced to new innovations in the synthetic biology industry via the portal means they will have very early exposure to potential money-making ideas/innovations.
Hence, exposure to opportunity is a very feasible opportunity for large returns on investment for an investor into the BizBricks portal. The fact that synthetic biology is still such a young field means that the early exposure to the current happenings in the industry could have large payoffs in the long run for an early investor.
Future potential investment opportunities
In order to attract potential investors, there are many different aspects of the company which must show the company’s well-being. Firstly, the web portal must have a large user database, meaning that the portal will be more well-known in the synthetic biology community. Greater publicity of the website will allow more investors to have been familiarized with the portal and its strategies. There are many strategies that our organization can take to increase the public’s awareness of our portal. They include: social media, content marketing, public relations, and search engine optimization methods.
In addition, it is also important to show detailed financial information in terms of running the portal. Having detailed financial information will attract investors looking to invest in the portal and wanting to know exactly how the business is doing initially, and how their contributions will be used to improve the portal.
Also, clearly demonstrating your short-term and long-term goals can be beneficial in attracting investors since it can also help to show specifically the areas of the business which require aid, whether it be in terms of funding or content verification.
For the online portal, it is also important to outline the future benefits that the investors will receive if interested in contributing to the portal. Since the portal is a non-profit project, the investors will receive non-tangible assets, such as goodwill and publicity from honourable mentions.
1. Charitable Contributions
Companies, more specifically more well-established synthetic biology companies may give donations to help fund the operations of the portal. In return for the charitable contributions, the companies can be placed in a special contributions list on the portal. If the portal can be well-recognized within the community of synthetic biology, it may allow the investors to gain positive recognition and augment their reputation.
2. Partnership/Buy-out Opportunities
There may be potential future opportunities for the portal to merge, or partner with other companies. By merging with synthetic biology companies, this can not only allow for greater funding of the portal, but it can also allow for a greater verification of the content posted on the portal. However, the company could also add information that would be advantageous for in their favour, but not necessarily for the growth and well-being of the portal.
Future Potential Figures of Authority
Initially, our portal will be a relatively unknown source of information on synthetic biology. To bring more and more traffic onto our website, it will be a great advantage to have verified contributors of information such professors, entrepreneurs, experts in the field of microbiology and any figures of authority that can contribute to our goal. Networking at prominent science conferences and events will allow us to gain more of these contributors. Also, when our website has gained some attention, verifiability and prestige, we expect credible sources will WANT to contribute to our portal seeing as it will build their reputation as a free supplier of knowledge.
Two authors from the Wall Street Journal wrote an article outlining the various techniques and steps new companies need to follow and take to gain credibility and in turn investors and sources of information.
Credibility
• Assuring investors that you can manage highly complex projects and proposals
• Displaying your credentials and relevancies to the task
• Researching about the investor or figure of authority
Professionalism
• Ensure investors company/product is professional and realistic
• Keep appearance of portal as fresh as possible
• Having prime real estate physically and electronically
• Meet clients and investors in only nice offices or other places (hotels)
• Make sure your URL and website can be easily found on search engines
Pedigree
• Prove previous accomplishments that relate to current project
• Produce a prototype (web portal created right now) to show to investors during pitch
Networking
• Networking, connecting and maintaining ties with stakeholders
• Possibly gain partnership or support from international organizations to essentially secure funding
Not only this, but it has been proven that pooling information onto an open sourced service is beneficial to all companies and inputters involved. Research has shown that companies can often make more money by combining their data rather than hoarding it. Pamela Silver, a professor of systems biology at Harvard University says she hopes one day “you will be able to sit at a computer, design an experiment and get DNA the next day.” But for that to happen, she says it needs to be “cheap, fast, predictable, accurate - and open to all”.
Ensuring Web Security
Considering that our portal will be completely online, it is very important that the website has the proper web security in place, as the users of the portal are the top priority of creating a successful bioentrepreneurship portal. The presence of hackers and malware on the portal could be detrimental to the integrity of the portal’s information. In addition, if there are any cyber-attacks on the users themselves, this could hamper its reputation and scare users away from using the portal.
By ensuring the user that the portal has the proper web security parameters in place, this will give the users a sense of protection and make them feel more comfortable with using the portal; this will ultimately lead to the users returning to the portal in the future.
Prevent idea from being stolen/Opportunity to Sell
There are two main methods of protection for a website: countermeasures and legal protection. Technical countermeasures are usually expensive and not user friendly so the primary technique most websites use is legal protection, more specifically copyright. To gain copyright protection on the portal, the source of the content needs to verified where it was from. Content from owners, helpers/workers and contributors is all owned by the portal. Any content from outside the portal will need a license or an agreement to use. Items that can be copyrighted and protected on the website include text, graphics, text and script, data and the code used to create the website. After gaining copyright for the portal it is important to register with the Copyright Office to gain the ability to sue companies for infringement.
On the other hand, it is important to ensure that the information which is posted on the portal by users have been referenced properly, and the users are responsible for the information which they post on the portal, in order to avoid copyright infringements and plagiarism issues.
However, this all needs to be taking into account for a web portal. A web portal is an open source service where individuals can input their research, information and data. Any information that is uploaded onto the website will need to sorted out as to whose property it is.
Next Steps
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BizBricks Portal Competitive Analysis
Before launching any business, it is important that the entrepreneur understands its competition. Indeed an entrepreneur seeks to fill a market gap by offering a product whose value addition is greater than what is already being proposed in the market for his target market. Hence, to clearly know just what their value proposition will be, an entrepreneur must understand those of his competitors.
In this portion of the business plan, we will analyse the competition faced by the proposed BizBricks portal. To do this effectively, we will map out the attributes that characterize portal as well as others and compare them in a Competitor Matrix. In order to appreciate the value proposition presented by the BizBricks portal, it is essential to juxtapose it against existing comparable but not completely similar sites. The advantages of this matrix are evident from its presentation: the traits are easily comparable and several competitors can be compared at once.
The BizBricks portal was compared to other learning portals freely available online. Due to the pioneering nature of the BizBricks portal in the synthetic biology industry, the portals in this matrix were not necessarily intended for synthetic biology but their end goal was similar to that of BizBricks: to educate the end user through freely available and at times open-sourced content.
Traits in the competitor matrix to be analysed:
- Open Sourced
- Availability at no cost
- Intuitive
- Interactive
- Friendly User Interface
- Customized for Synthetic Biology
- Aspect of Affiliation to IGEM
- Contribution of Best Practices
- Aspect of Networking
As seen from the competitor matrix above, the BizBricks portal, despite having a seemingly niche market, caters for its users in all aspects that would have been provided to them in several different places. Making a quick analysis of the competitor matrix, the portal is the only one that is open sourced and hence allows for input from several knowledge sources of different backgrounds. There is thus large potential for providing novel insight in an industry still in its formative stages and doesn’t have the luxury of lots of published and easily available literature.
This competitor matrix indicates the capabilities of the competition. One drawback is that in such a niche industry and a pioneering portal it is very difficult to find a direct competitor. Without a direct competitor it is difficult to analyse the strengths and weaknesses of the competition in direct relation to BizBricks. For example, MARSDD.com is a very good resource for entrepreneurs with extensive details on every aspect of how to start your own business. However due to the fact that it is not open sourced and is a broad-spectrum tool for all sorts of businesses it is difficult to assess challenges that BizBricks will face in it’s growth as a portal.
It is hence very easy to conclude that BizBricks has no direct competition. However, it would be foolhardy to assume that the rest of the synthetic biology entrepreneurs are not consulting online tools in their entrepreneurship adventure. Hence, in place of these tools, BizBricks offers an informative, valid and practical tool in one place.
Risk Analysis:
All businesses, non-profit or not, must deal with certain risks when starting-up.The online Biz Bricks portal is no different. A risk analysis is an analytical tool used to identify and evaluate any risks that can arise when creating and/or launching a project. A risk analysis allows you to predict and therefore prevent problems that may arise. Certain risks remain evident throughout the operation of the business but proper foresight can prevent a risk from transforming into a major issue.
Our Risks:
• Lack of buy-in by investors due to non-monetary ROI
Since the online Biz Bricks portal is a non-profit project, there is no”tangible” profit to be shared with investors. This may pose as a risk when trying to find investors who would be willing to invest in our portal without receiving some sort of monetary ROI. However, this online portal will be providing important information on successfully launching a startup in a clear and concise manner to entrepreneurs that need it most; thus helping the greater good. Also, the potential of transforming our portal into a premium service is always an option that will attract and keep investors interested.
Strong Competitive Reaction
o Wikipedia
o Copycats
o Other biotech/lifescience/synthetic biology entrepreneur sites
Once the Biz Bricks online portal is released, depending on how successful it is, it is highly conceivable that existing online databases, websites or portals may attempt to provide the same service that we are providing; for example Wikipedia; and attempt to pass it off as their own original content. This risk emphasizes the importance of keeping the online portal up-to date and reliable, so that it is providing a higher level of trustworthy information to its users, than our competitors.
Being that the online portal is created using information, that cannot be protected through copyrights or patents. The risk of competitive reaction is very important since we cannot protect our idea of an online open source synbio portal from being stolen. If this does occur, our copycats can enter the market and take away from the market share, we would have already gained.
Ex. The Samwer Brothers are known for creating international copycats of various American websites and claiming ownership. However, this article discuss their inability to successfully launch a copycat website for Fab.com because “... all they care about is growth and numbers and not about emotions and design.” Therefore, if our Biz Bricks team continues to strive to provide top knowledge to our online users through our online portal, the fact that we have a genuine interest in getting this information out, is already a competitive advantage for us.
Overestimated Demand
Overestimated demand is a risk that exists for all companies or groups attempting to release a new product, technology or service to consumers. This risk was evident in RIM’s recent struggles with the Blackberry playbook. Their overestimated demand for the device forced them to aggressively reduce the price of the playbook, thus decreasing their overall gains. On top of this, they were also left with a large inventory that accrues holding costs and because more obsolete everyday.
Although the Biz bricks online portal is not a physical product, it still runs the risk of overestimated demand if resources are wasted on areas of the portal, which are not aligned with its current number of users. For example, if the Biz bricks team spent the majority of its resources focusing on the online portal’s functionality worldwide and its ability to host a large number of users, but in reality the portal does not have as many users early users, then resources that could have been used marketing the portal or keeping it updated were wasted.
Overestimating demand for a product or service is a large risk as it creates inefficiency in a company and it shows that sufficient market research was not conducted. Market research tools that can decrease this risk include: surveys, focus groups, marketing mix analysis, analyzing market trends and segmentation.
Capital Shortage
A shortage of capital is a high risk for non-profit organizations, which may face a tough task of finding investors and raising capital. It is important that the steps taken to raise capital for our online portal due not infringe on the regulations set in place for non-profit organization’s tax exempt status. However, if this is not possible it may be in the best interest of the group to drop its non-profit status and gain revenue, either by getting advertisers for the portal; licensing services to various start-ups or offering our portal as a premium service to our users. According to Statistics Canada, in 2009 45.9% of the funding received by non-profit institutions was from the sales of goods and services. Since Biz Bricks is offering the online portal as a free service to its users, we are potentially losing almost half of the funding we would expect to receive. This should be a major concern for us; however the fact that, currently, it is not very expensive to maintain the portal, we should be fine.
Security Issues due to open source nature of portal
With the expansion of the internet it has become increasingly important to maintain a high level of security online. The same way mortar and brick businesses must protect their merchandise from vandalism and theft, so too do online businesses. If precautions are not taken to protect the portal’s online content it will be susceptible to viruses, hackers, malware and theft. Any sign of security issues with our portal will damage its reputation and users may no longer trust the site. This is why it is essential to continuously ensure that proper security parameters are in place to protect users, which will allow the portal to gain a reputation as a trusted source.
Liable for information on portal
As owners of the online Biz Brick portal, we are liable for its content. Therefore, it is paramount to insure that:
1. We use reliable sources
• The information on the Biz Bricks portal will be used as a resource for synthetic biologists and related stakeholders to build an entrepreneurial mindset. Therefore, it is important that the information given to our users has been vetted by reliable sources.
2. Keep information up-to-date
•Keeping our information current allows our users to make better business decisions because it allows them to spot opportunities and problems early and thus be proactive in their decision making process
•Another reason to keep the online portal up to date is that it gives the impression of being leader in the market; thus users will come to the Biz Bricks online portal before any of its competitors
3. Copyright laws are not infringed upon
•This is a very important being a startup because Biz Bricks team does not currently have the “deep pockets” to withstand litigation.
•Even being accused of copyright infringement creates a type of stigma for your business that may not be easily overlooked by the portal’s users. This can cause users to view the portal as untrustworthy.
Not meeting these points will negatively impact the Biz Bricks’ brand and therefore deter users from its future projects. As Forbes.com contributor Andrew Klausner wrote, “At the end of the day, all you or your firm has is its reputation. Protect it, promote it – always.”
Lack of global expansion due to technological shortcomings in different countries
Although there have been drastic technological advances worldwide there is still a large gap in capabilities between developed and undeveloped nations. These gaps in capabilities, essentially prevent us from reaching our full target market. Fortunately, with time the gap between these nations continue to decrease, therefore reaching these markets is a goal for the future.
Tools:
Porter’s 5 Forces
1. Bargaining Power of Suppliers (High)
Suppliers for the online Biz bricks portal include the content suppliers as well as our financial investors. The sources we use to populate the content on our online portal are key for the portal’s success and therefore these sources, whether they are individual people or knowledge bases, can ask for some sort of recognition in return for their input into the creation of the portal. This recognition may be expressed in monetary terms and therefore may impact the availability of important resources. Without investors, the Biz bricks team will not have the capital needed to launch and sustain the operations of the bioentrepreneurial portal.
2. Threat of Buyers (High)
Our buyers include our users, their bargaining power is a high threat for the Biz bricks online portal. Since the portal is a non-profit, its users do not need to pay to use it and therefore do not feel inclined to use only our portal, since they haven’t invested in it financially. This gives users the freedom to switch between different online services at anytime.
This online Biz Bricks portal is tailored made for synbio start-ups that wish to commercialize their technology. If they do not view this portal as relevant to their needs, then we’ve lost our largest target market. Therefore, their reaction to our portal plays a key part in our long term plans whether it be to expand our services or initiate a contingency plan.
3. Threat of Rivalry (High)
Threat of rivalry is always evident within an industry, however once the online portal is released; this threat should increase substantially. Large information databases such as Wikipedia and Webopedia have the deep pockets to invest heavily in creating a copycat of our portal.
Other online e-learning and customized learning tools such as Khan Academy, GetBiotechSmart.com etc. may also decide to start focusing on biotechbological startups, this will create a much more volatile market due to the increase in competitors attempting to specialize in our area of focus.
4. Threat of Substitutes (Medium)
Online e-learning tools, like ours, have become a substitute for classroom learning. As of now there is no large threat that a new type of learning tool will cause e-learning tools to become obsolete, however the possibility of some users preferring face to face interaction in a classroom setting is always present. This threat is not as large as the threat for buyers, however it exists nonetheless.
Substitutes for the Biz bricks portal also include knowledge sources such as Wikipedia, Marsdd.com, Nature.com/bioent etc; do offer services similar to that of the online portal, however they do not have a specialized focus of building networks, relationships and creating tailored best practic entrepreneurship material for the next generation of bioentrepreneurs.
5. Threat of New Entrants (Medium)
Given that the idea is currently not protected, there is the likeability for another organization or group to adopt the value proposition we have presented and integrate it into their existing e-learning platforms. If the BizBricks team is able to achieve a high level of loyal relationships with investors and stakeholders, this may provide us with a slight competitive advantage. In turn, our key asset is our hybrid knowledge in the fields of science and business. Depending on the parties that choose to engage in a similar branch of learning, the team’s accumulated knowledge plays a key role in maintaining a competitive advantage as well.
