Richard & Mary
Smart Wearable
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BUSINESS PLAN
Chapter 1
ABOUT
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Section 1
ABOUT
The original data contained in this business plan comes from a our internet survey of Taiwanese adults, which was conducted from September 18-19, 2014. The survey was designed by TechnologyAdvice Research, and conducted by Richard Chen. A total of 979 Taiwanese adults (age 18 and over) were surveyed on their general fitness and health tracking habits. A further 419 adults, who indicated they did not track their fitness using devices or apps, were then surveyed about the reasons for their decision, and their willingness to track their fitness in the future, given various incentives.
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COMPANY SUMMARY Company Summary Richard Co. Technologies is a privately owned start-up company, located in Taipei, Taiwan a north city of Taiwan. Richard Co.Technologies was formed as a company committed to developing next-generation remote Personal Locator Devices in order to immediately locate and aid in the timely rescue of: • missing children • the active elderly (including Alzheimer's patients) • soldiers in the field and at sea, mariners lost at sea • and even pets while also serving the business arena, as a way to better manage the logistics of: • outside personnel • fleet vehicles • valuable parcels • and deliveries
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COMPANY SUMMARY The company's management philosophy is based on responsibility and mutual respect, while encouraging ownership of responsibilities to help foster personal and professional growth. Richard Co.Technologies focuses on productivity for growth and profitability, and respect for its customers and employees to increase repeat and referral business while minimizing employee turnover. Additionally, the company encourages employees to have fun by allowing creative independence and providing professional challenges that are realistic, attainable and rewarding.
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PREFACE
Since wearable fitness devices1, such as the FitBit and Nike+, began to appear on the market, the healthcare community has recognized their potential to provide unbiased, accurate insight into patient activity. Patientgenerated data can be used to improve preventative care strategies, monitor patient outcomes, and analyze overall trends in patient populations. However, there is little information on the number of adults who track their fitness and health using such devices, or the ways in which adults who do
 not track their fitness can be convinced to do so. Without such information, physicians and other stakeholders cannot e eectively encourage the adoption of self-tracking.
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In order to provide a better view of the fitness and health tracking market,
 and current obstacles to adoption, TechnologyAdvice Research designed a nationwide internet survey, which was conducted September 18-19, 2014. Over 900 Taiwanese adults were surveyed on their general fitness tracking habits, and 419 adults were surveyed on their specific reasons for not using tracking devices or apps. Specifically, respondents were surveyed about their willingness to use a free tracker (provided by their physician or insurance company), reasons why they have not yet adopted such technology, and which incentives would make them more likely to track such data in the future. 25.1 percent of adults are now using either a fitness tracker or smartphone app to track their health, weight, or exercise. This gives healthcare providers the opportunity to collect accurate, previously- unobtainable patient data, for use in preventative care strategies and patient-outcome tracking. Despite this growth, approximately three quarters of Taiwanese are not us-
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ing a digital device to track their fitness or health. This leaves large room for improvement, given the importance of patient-engagement and patient-centered treatment in modern healthcare. We were able to find significant opportunities for both healthcare and health insurance providers to incentivize fitness tracking. There are currently few real barriers to adoption. A plurality of adults surveyed (43.7 percent) did not have specific concerns surrounding the use of fitness tracking devices or apps. The most common specific objection was a general lack of interest (27.2 percent), followed by concerns over cost (17.7). These objections can be overcome by increased marketing (raising awareness among consumers), providing incentives to use such devices (overcoming consumer indierence), and the development of cheaper devices (market expansion). There are also many opportunities for the healthcare industry to incentivize fitness and health tracking. Approximately half of non- tracking adults would use a fitness tracking device provided to them by their physician or health insurance company, while over half would be more likely to track their health in exchange for discounted insurance premiums. If healthcare providers help make fitness tracking devices (or apps) available to their patients, or work with health insurance providers to encourage device usage through discounted premiums, they should be able to significantly increase the number of self-tracking adults in the Taiwan.
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EXECUTIVE SUMMARY Richard Co.Technologies is an exciting start-up company in the newly emerging field of Personal Tracking Devices; respected industry analysts such as Google and APPlE Research predict this will become a $22 billion market within the next five years.
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Chapter 2
VISION
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VISION We are extremely pleased to share the Richard Co. Technology Vision 2017, our annual prediction of the technology trends that will shape the future of companies in the next three years. How will the future unfold? What we know unequivocally is the digital revolution is here. It’s cascading across every industry, causing wide-scale enterprise disruption and wholly redefined customer expectations. Adaptability and a company’s ability to quickly rotate to the new has been critical – both for companies striving to become digital leaders, and for employees who are moving beyond the digital culture shock. We are now entering an exciting, unprecedented time in technology – with the pace of change and innovation continuing to accelerate. We are poised to drive the biggest change since the dawn of the information age. Technology will continue to transform the way we work and live, raising many questions about both opportunities and challenges. We believes that these innovations are a force for positive change, because the power lies squarely with people to bring great benefits to business and society. While there are risks, as there are with any technology, we are in control. We can shape technology so that it adapts to us, elevating our ability to create a future that fits our needs.
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Chapter 3
MISSION
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MISSION Our plan begins with a two month start-up period during which we will focus primarily on setting up our offices and developing our system designs, but also including significant initial marketing work. Our start-up expenses for these first months will be used for further product development, legal costs, payroll, marketing and typical expenses associated with opening our first office. The founders will provide the first round financing to launch the company, initiate a small production run of our Personal Locator Device(s), and initiate further product development, while marketing and preselling our devices. In addition, we will need another investor/partner to provide funds to cover the cash necessary to see us through our first year in business, as we begin to make and sell our products. We plan to fund future growth from sales revenues. Initially, we will be leasing a relatively small office space for administrative functions and an electronics bench lab in order to keep our first year expenses to a minimum, as we continue product development while marketing and pre-selling our Personal Locator Device(s) prior to production. We will consider a larger office space only when we have outgrown our current facility, dependent on sales, budgets and personnel needs.
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MARKET SEGMENTATION Market Segmentation Our market segmentation focuses on five key areas of potential customers. Our targeted market segments have so far failed to meet their own needs for low-cost, programmable tracking devices by developing such systems internally. While it is diďŹƒcult to make an exact classification of the market needs for such a new electronics product, our research suggests the following (full market analysis details can be found below in the Detailed Market Breakdown topic): Family Consumers: With over 875,000 children reported missing in the United States in just the last year, this low-cost device will help families concerned about the whereabouts of their children, teens, elderly parents (including Alzheimer's patients), and pets, by enabling them to keep tabs on their loved ones' locations at any given time. One of the many programming capabilities of this device will allow the family to set distance parameter guidelines, such that once the wearer of the device (for example, a young child) travels beyond a set distance from the "base" unit, the remote unit is automatically activated to alert the "home base" unit (a cell phone, pda or computer) of the child's location, direction and speed of travel. This will be a great asset in assisting law enforcement agencies in recovering missing persons within minutes. Statistics from the FBI indicate that missing children who are murdered are usually killed within three hours of abduction. The Richard Co.Richard Co. Technologies Personal Tracking Device (PTD) will save lives, by immediately alerting the "base" unit, aiding in timely tracking and rescue by law enforcement agencies. Another programming capability is the ability to download all medical information, contact information, emergency numbers, etc., in the event an individual is found incapacitated, allowing emergency teams to treat a patient ef-
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MARKET SEGMENTATION fectively, while alerting the guardian of her child's, parent's, or pet's whereabouts. Businesses: Our product enables a business location to keep real-time tracking of company vehicles, valuable packages, outside employees, deliveries, etc. We believe our device will be viewed by businesses as an economical way to increase productivity, giving them real-time data on the locations of their field employees and vehicles at all times, and helping to better manage fleet and deliveries logistics. One of our key strengths in this market segment is the low one-time cost, rather than a recurring fee for usage, adding to the business's ROI for our products.
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DETAILED MARKET BREAKDOWN Family Consumer Segment We predict our systems will appeal strongly to families concerned about the safety of their loved ones. According to the FBI's National Crime Information Center (NCIC), 85% to 90% of the 876,213 persons reported missing to America's law enforcement agencies in 2000 were juveniles (persons under 18 years of age). That indicates that 2,100 times per day, parents or primary care givers felt the disappearance was serious enough to call law enforcement. In addition, 152, 265 of the persons reported missing in 2000 were categorized as either endangered or involuntary. The number of missing persons reported to law enforcement has increased from 154,341 in 1982 to 876,213 in 2000. These figures represent an increase of 468%, and the numbers sadly continue to rise. According to the Missing Children Society of Canada (MCSC), in 2002 there were 66,532 children reported missing in Canada alone. And even more frightening, the National Center for Missing and Exploited Children (NCMEC) reports that 74% of abducted children who are murdered are dead within three hours of the abduction.
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DETAILED MARKET BREAKDOWN These figures indicate the strong market need for a method of quickly and reliably locating missing children. This so-far untapped market is quite large, even just within the Taiwan According to the 2002 Taiwan Census Bureau reports, there are 60,492, 447 are under 14 years of age in the Taiwan, including:
33,050,162 children in elementary school
4,005,938 children in kindergarten
4,613,179 children in nursery/preschool
But the family market also has to worry about its elderly loved ones. According to the same census report, there are 40,144,000 adults over 62 years of age in the Taiwan, 4.5 million of whom have Alzheimer's disease. With a median income in the Taiwan of $51,742 per family, our family consumer market in the Taiwan has the potential for selling our affordable devices for over 60,492,447 children under the age of 14, in addition to over 4,500,000 active senior citizens afflicted with Alzheimer', based on the above figures, for a combined target market of over 64,992,447 consumers.
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DETAILED MARKET BREAKDOWN Business Segment It is more difficult to determine exact numbers for the business segment, as specific data is not as readily available. However, as of 2001 (latest census data available) there were 12,753,076 businesses operating in the Taiwan which fit our target market, meaning they have a strong or immediate need for our products; this number excludes others, such as retail sales, wholesale traders, information management, education, public administration, or other services not defined. Business breakdown by employment in specific industries: 2,405,825 Taiwanese work in agriculture, forestry, fishing, hunting and mining.
9,161,256 work in construction.
17,067,103 work in manufacturing.
6,884,607 work in transportation, warehousing and utilities.
12,486,846 work in professional, scientific, management, administrative and waste management services. The price points for similar Personal Locator Device systems using GPS/ GSM technologies in the business segment are currently in the $200 $2000 range, and in most cases, do not offer the remote abilities or programming capabilities for specific businesses needs in managing logistics and tracking. We believe our low prices, combined with these features and the autonomous internal tracking ability (not reliant on a vendor's website with monthly fees) will be very attractive to the business segment.
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Chapter 4
OBJECTIVES
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OBJECTIVES Products and Services Richard Co. will develop and distribute miniaturized Personal Locator Devices (or Personal Tracking Devices). Initially, the manufacturing of our devices will be subcontracted, while we develop the supporting software and systems internally, although we plan to manufacture our products inhouse in future years. Unlike our competitors, we have military-inspired proprietary technology (patents applied for) which allows many of our systems to work with or without the presence of cellular towers, enabling their use anywhere in the world, including cities, deserts, oceans, lakes, mountains, or anywhere else adventurous travelers find themselves. Our products are also distinct in that they are small and fully programmable. Our systems can be customized by the end user for his or her unique, individual applications - for example, maritime applications which include a water-activated signal (as when a crewman falls overboard) are dierent from those required in business applications.
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OBJECTIVES Richard Co. Technologies has identified three types of objectives that will serve as challenging but attainable goals for the organization. They are: • To become the premier vendor in the new and evolving Personal Locator Device industry. • To reach profitability within one year of the company's launch. • To develop additional profit centers such as programming, training, seminars, ancillary equipment, etc. within the first two years. • Financial Objectives • Increase product sales to several million dollars annually by the end of the second year. • Bring gross margin up and maintain that high level by the third year. • Improve inventory turnover on an ongoing basis, until "just-in-time" inventory is standard by the third year. • Marketing Objectives • Focus on target marketing to increase market penetration and domination. • Expand target markets with controlled growth. • Establish brand awareness for the Richard Co. Technologies' name and products. • Position ourselves as the leading Personal Locator Device company in the world.
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Chapter 5
STATEGIES
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STATEGIES Differentiate ourselves from our competitors. This will be easy, as our product has more capabilities, is easier to use, is more concealable and will work with most cellular providers. We need to establish our products as cost efficient, viable solutions for our target markets.
Build a relationship-oriented business. For clients such as our channel market resellers, and institutional consumers like the military, relationships will be important. We will become a revenue-generating partner for them, not just a vendor, making these market segments increasingly receptive to our offerings. We must effectively convey the potential monetary value of the relationship, as well as the intrinsic value in being able to offer life-saving, user-friendly devices to their end-users and members.
Focus on target markets. We need to focus our sales and marketing efforts strategically in order to succeed in our target markets. As a start-up company, we believe the consumer market and channel sales will give us the quickest launch and penetration while immediately generating revenues to sustain our company's growth and expansion into other markets. The business market will likely be the next key, as we promote our products as tools for businesses to manage outside personnel and fleet costs and logistics.
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STATEGIES Fulfill the promise. We can't just market and sell our products, service and support; we must actually deliver as well. We need to make sure we have the technological knowledge we claim to have, while keeping up with evolving technologies t o a d v a n c e t h e c a p a b i l i t i e s o f o u r n e w e s t p ro d u c t s a n d services.Competitive Edge
Our competitive edge lies with our innovative products, as well as the successful planning and implementation of our marketing plans. Richard Co.Technologies' unique application of a remote miniaturized unit that incorporates an end-user programmable transmitter/receiver inside a unit only 2" x 2" x 3/8" that has GPS/GSM technology is relatively new to the marketplace. It is this new technology which will make our Personal Locator Device(s) attractive to resellers such as our channel market segment. While not widely known, most of the major cellular phone manufacturers will be incorporating GPS technology into their newly manufactured cell phones over the next three years. We believe this is a key advantage for us, as our remote unit has been designed to work with these nextgeneration cell phones. We are a couple of years ahead of our competition in the sense that our remote unit will immediately work with these "new technology" Smart phones.
Another competitive edge is our positioning as a strategic ally with original equipment manufacturers of PDAs and cellphones, who are clients more than customers. By building a business based on long-standing relation-
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STATEGIES ships, we build defenses against competition through the demonstrated efficacy of our products, and our partners' loyalties. For our channel sales partners, our products translate into new customers and additional recurring revenues. The longer the relationship stands, the more our clients will understand what we offer them and why they need it, further solidifying our intended relationships with major cell phone carriers and computer manufacturers. Competitors' Disadvantages While Richard Co. Technologies competes against other companies and technologies meant to provide similar products and services, they cannot match ours. Our competitors have several disadvantages: Effectiveness: Most competitors do not offer remote miniaturized concealable units which users can wear; their devices would be especially bulky, awkward, and obvious on children. Their products do not allow for a locating "home-base" which is a Smart wearable,Smart phone wireless mobile computer or desktop anywhere in the world, which can report on the unit's location instantly, even while both units (remote and base units) are in transit. Our competitors' devices cannot be programmed for individual remote unit applications, such as water activation, parameter limit alert, medical history of the wearer, etc. The units cannot be armed from a remote location.
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STATEGIES Price: Greater initial cost to the end user ($2000-$9000), with fewer features and capabilities. Recurring monthly fees to the end user with most systems. The most significant dierence between our system and our competitors' is our use of "unassisted" GPS/GSM technology. Unlike our competitors', our system is not reliant on being in an area where cellular towers exist. Our competitors' products do not work in areas where there is no cellular coverage, or less than the three three cellular towers needed for triangulation. Our system uses military inspired radio frequencies which transmit directly to the GPS satellite network. Our system will work anywhere in the world, including deserts, mountains, oceans and all other remote locations. Richard Co. Technologies also eliminates the need for the "tracker" to -hone into a call center, or to sit in front of a computer to download from a our website (both for a monthly fee ranging from $20-$40/month) in order to find someone who is missing, losing valuable minutes which can mean the dierence between life and death. Our Personal Locator Device(s) allow the chase unit (wireless Palm Pilot, laptop, and most cell phones) to follow the remote unit, even as both units (remote and "base unit") are in transit.
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Chapter 6
ACTION PLANS
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WEB PLAN SUMMARY Web Plan Summary The Richard Co. Technologies' website will be the virtual business card and portfolio for the company, as well as its online "corporate home" for business-to-business marketing and investor relations. It will showcase our products and services, as well as hosting a portfolio of all past and current real-life testimonials. The website needs to be simple to navigate, yet well designed and flexible, to accommodate changes in our online needs.
Richard Co.Technologies is dedicated to helping find those who are lost, and will entertain adding links to recognized agencies that have the same goals, as long as it adds value to the company. To show our concerns and good will, while reminding visitors of our products' potential, we will add banner links to agencies such as The National Center for Missing and Exploited Children (NCMEC), AMBER Alert, Child Search and other national missing children's programs. We will also have a link to the National Alzheimer's Association. The key to the website strategy will be combining a very well-designed front end, with a back end capable of recording leads, processing online orders and information requests, oering online manuals and running Richard Co.Technologies' own online marketing program for OEM aďŹƒliates.
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DEVELOPMENT REQUIREMENTS Development Requirements The Richard Co. Technologies' initial website will be developed with few technical resources; a simple hosting provider will host the site and provide the technical back end.
The design, updates and maintenance of the site will be done by contracted web designers, for a more professional image of our company, freeing up senior management to focus on company growth and product development. As the website rolls out future developments such as new products, product add-ons and software updates, ancillary products, newsletters and downloadable market research reports. We may need to contract further technical resources to build the trackable download information with the capabilities of transmitting and organizing extensive information.
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