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Market Lessons Learned

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Analyzing markets for the creative founder class

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Market Lessons Learned

  1. 1. PROJECT ILEUM WeiWei Kailen Alex Nino
  2. 2. People Problem Solution People Problem Solution People Problem Solution The 24k ppl die (within 3 years) in SF Dying is expensive N/A Other Areas We Considered People Problem Solution Subscription Housing 18,695 Demand for Rent People who want homes only at certain times. Need for housing increasing N/A
  3. 3. Obsessive Viable Reachable Research funding & prestige for scientists There is money in research however it is inefficiently and poorly distributed. How do we bridge this gap?
  4. 4. Long Term Research Funding
  5. 5. “Technology startups today work very well for making a super-efficient piston engine, but they are unlikely to fund the kind of open- ended R+D required to develop a jet engine.” - Sam Altman
  6. 6. Researchers at Bell are credited with the development of the transistor, laser, Unix, and the languages C, C++ and S. Dupont Research Labs is responsible for discoveries such as Rayon, Teflon, and Solar Cells. Dupont & Bell
  7. 7. NASA ROI Every dollar invested returns $14 to the economy
  8. 8. Average Angel Investor Returns 2.6 times capital returns 3.5 years from investment to exit
  9. 9. People Problem Solution Scientist & Researchers Grants require a detailed objective and agenda, as well as a short-term return People Problem Solution
  10. 10. People Problem Solution People Problem Solution Tech companies Investors do not want to fund long-term research
  11. 11. SOM / SAM / TAM
  12. 12. SAM US tech funding $170 billion SOM Bay Area R&D funding $77 billion TAM Global R&D $2066 billion US R&D: $527 billion
  13. 13. Next steps
  14. 14. Thank you
  15. 15. San Francisco Housing analysis Why is money spent on NASA not wasted Apple R&D Spending Charts Apple R&D spending rises but still trails Facebook, Google, Amazon California companies lead nation R&D spending performance Annual Global R&D Report by R&D Mag Y Combinator Research Objective Dow-Dupont raises even more concerns America is abandoning corporate research Investing for the long term References
  16. 16. Appendix
  17. 17. In Q1, R&D totaled 16.6% of Google revenue, Bloomberg said, up from 13.8% two years earlier. While Google aims to make gains in artificial intelligence, it’s trailing in software bots, an area where both Microsoft and Facebook made recent announcements. Google’s R&D spending will rise 16% in 2016 to $14.3 billion, BMO Capital Markets estimates. Then there’s Amazon. In Q1, Amazon’s R&D spending was up 28% to $3.53 billion, Bloomberg reported. At that growth rate, Amazon’s R&D spending will likely top Google’s this year.
  18. 18. How is research funded?
  19. 19. Private funding Government grant Educational institutions
  20. 20. Is crowdfunding a viable solution to the lack of funding in the research industry?
  21. 21. Discovery: There is a lack of general interest in research projects, and distrust of science.
  22. 22. Why is there a lack of long-term research funding?
  23. 23. Shareholders. Besides the idea that long-term research costs too much, takes too long, and is high risk, Impatient investors are eager for immediate stock price boosts.
  24. 24. Dow-Dupont & Bell Nokia Bell Labs has virtually disappeared as a result of mergers that left it owned by Nokia. America’s two leading chemical manufacturers combined. About a month later, the new CEO vowed to cut R&D, and break the company into three smaller firms as a reaction to investor pressure.
  25. 25. Executive-level Pressure In a 2013 Survey of more than 1,000 Board Members and C-Suite executives around the world: 63% of respondents said the pressure to generate short term results has increased over the past 5 years 79% felt especially pressured to demonstrate strong financial performance over a period of 2 years or less
  26. 26. How to beat the investors. Tech companies such as Apple, Google, Amazon, and Facebook continue to invest in research at very high rates. This control over investors is often achieved by using two classes of stock: Voting and nonvoting shares. This allows these companies to invest billions in “moonshot” projects
  27. 27. We learned crowdfunding is not a viable solution Lack of: Public Interest Short term results (ex: Kickstarter backer rewards)

Analyzing markets for the creative founder class

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