Archicamp

“A software platform for monitoring manufacturing machinery” (Original Idea)to

“A platform to enable collaboration between architects, designers, and engineers” (Current Idea)

Our Team

Ryan Jung, MBA

Alex Bergin, M. Arch. (Advisor)

Guillaume Miara,M.Eng.

Anirudh Subbarao,M.Eng.

3D Prints Express TimelineDigital Manufacturing

ID Link 3D Prints Express

4-sided mktplc

2-sided mktplc for modeling

Architects Workflow

Pain Points

Collaboration Ambiguity

Wireframe

Design Groups & Thought Leaders

Tech Adoption LH Side of Canvas

Cost Structure

Rev Model

Willingness to Pay

Income Statement

BUSINESS CANVAS

Modeling Marketplace, Market SizeCalculation of $10 per hour margin:Estimated Cost to Firm:

$3,500 annual seat license for AutoCAD$4,000 per workstation (HP Z820 workstation; 2 year depreciation)Average salary of $60,00020% general and administrative costsTOTAL ANNUAL COST: $78,600Divided by 2000 hours per yearTOTAL HOURLY COST: $40 per hour

Average Hourly Rate of Freelance CAD Drafter:

$30 per hourSource: Average of 5 interviews + 20 postings on oDesk / Craigslist

1$5 billion

2$3.5 billion

3$500 million

1 250,000 CAD drafters * 50 weeks * 40 hours * $10 per hour 2 70% of revenues from architecture / manufacturing 3 15% of part 2

Programming

Concept

Schematic

Design Development

Instruction Documentation

Construction

Tools People Pain

Google SketchUpRhinocerosRevit

1 Sr. Architect2 Jr. Architects~1 Engineer

Converting sketch into 3D model

Process Flow

Sources: Perkins & Will, H.O.K. ~ 1500 employees

NavisWorksRevit

2 - 3 Sr. Architect2 - 6 Jr. Architects2 - 3 Engineers

Integrating models from each team (Arch, Eng, Dsgn)

Revit 2 - 3 Sr. Architect3 - 8 Jr. Architects3 - 4 Engineers

Labor intensive to add all specs

3D Modeling Outsourcing Platform

"You can't export work Jr. Architects do. That's what makes them architects!"

- Susan Ubbelohde, Architect, Consultant, Professor

Google Doc Like Collaboration

Architect

CAD talent

*Didn’t like it – Deleted Real time!

*Approved design! Expedited!

TypicallyConflict!

*improved design

-avoid multiple versions-avoid overwriting each other

Existing Products

SaaS 3D modeling platform• Store and access files on the

cloud• Multi-party and remote

collaboration• Documentation of

collaboration process• Secure infrastructure

Universal file support• 3D model viewing,

measuring, sectioning• File sharing and sync• Documentation of

collaboration process• Communication tools• Remote collaboration

Neither of these has been mentioned in our 50+ interviews with architects!!

What We Did

• Went to UC Berkeley School of Architecture to recreate the problem– In process, we recruited

our domain expert

• Built a landing page and used web tests to validate the value proposition– Team needed to build

something even if they weren’t 100% sure what they were building

Thought Leaders

Mario Guttman

Developer of arch+tech products

Leading BIM Expert

30+ years architect exp.(Partner P+W)

Eric Freed

“World’s best green architect”

Syndicated in 33 industry magazines

Speaks at 40+ conferences/yr

Phil Read

“THE Revit Guru”

Industry Blogger/Author

Global product manager AutoDesk

Federico Negro

Partner, Case Design

Blogger/Writer

Prof. Architecture Columbia

Jim Balding

ANT Group

Architecture Conference Organizer

Prominent Consultant

Technology Adoption

Techie ArchitectsDomain BloggersThought LeadersBIM ManagersSr. Architects

Design Groups Consultants

Small Architecture Firm B

Small Architecture Firm C

Small Architecture Firm A

AmericanInstituteArchitects

Acquire Activate Keep Grow

Contractors

Engineering Firms

Collaborative Platform

Partner Diagram

3D PE

Consultants

Customer

ProductTransactionData

StorageCosts

Subscription based on storage

Revit Store

Sales

Product Recs.

Conversion Funnel

From Twitter, Blogs of Thought Leaders: 10,000

View Landing Page

Sign up for Free Trial

Become Paying Customers

Observed Conversion

Rates with Lo-Fi MVP

Target Conversion

Rates

17.5% 40%

6.5% 20%

Not tested yet 20%

160 paying customer firms

CAC & LTV

Customer Acquisition CostCAC = Cost of Marketing / # Customer firms= $60,000 / 160= $375 / firm= Gross Margin / firm* 3 months

Lifetime ValueLTV = Expected Life *Avg GM / Cust. Firm= 24 months * ($200 - $70) / ($200 / month)= $3,120 / customer firm= CAC * 8

Metrics that Matter

Metric Target Value

Total Reach10,000 (initial)

Conversion to Landing Page40%

Conversion to Sign Up20%

Conversion to Paid20%

Willingness to Pay$200

Gross Margin65% (determined by WTP)

CAC$375

LTV$3,120

Retention Rate80%

Breakeven Users420 (depends on WTP)

Is this a viable business?

Quantitative reasons Qualitative reasons

Large Addressable market $400+ million

Low Breakeven 420 paying customers out of 60,000 architecture firms in US

CAC quickly covered 1 project

High margin LTV ~ 8*CAC

Positive Initial feedback from thought leaders in industry

Opportunities in adjacent marketsStructural engineering and design

Possible product extension opportunities

Will we pursue this after the class?

• Need a High Fidelity MVP to test: Reach into target market of TLs through Twitter/ blogs Conversion rates Willingness to pay

• None of us have technical skills to build the Hi Fi MVP SolutionSet offers to do it for $90,000

• At this point we have decided not to continue with this business

Thank You

To the Teaching Team, Mentors, and other teams!

APPENDIX

Final Market SizingTrends supporting collaboration

1. Pressure to be cost competitive to compete for tenders

• 59.2% of revenues are spent on wages• ~10.0% of revenues is spent on equipment and software• Firms are searching for ways to balance workloads, reduce

labor costs, and speed up production of projects

2. Increased use of technology• Increasingly complex designs are requiring architects to

use advanced 3D modeling technologies

3. Demand for more value-added services• To combat declining margins, architectural firms are

adding services such as pre-design planning, interior design, and engineering to become vertically integrated

4. Growing demand for environmentally friendly design

5. Growing trend towards outsourcing by firms• 11% of firms have outsourced labor.• Trend is more pronounced for firms with revenues >$5m

6. Low concentration in architecture industry• 63% of firms in industry have less than 5 employees• 4 largest firms account for less than 5% of total industry

revenues

7. High unemployment of licensed architects• Per AIA, 105,596 licensed architects in US• Per BLS, 71,460 architectural jobs in US; mean salary of

$79k

1$7 billion

2$2.1 billion

3$420 million

1 $9.8 billion Design Software industry (IBIS World) x 70% revenues for AEC/CAD/Industrial Design

2 105k licensed architects in US per AIA, 500k construction mgmt, 262k civil engineers per BLS

3 20% of part 2

Breakeven AnalysisAssumptions• Willingness to pay is subject to further testing to assess demand curve.• We sensitized our breakeven analysis at various price points and used our

40% / 20% / 20% conversion rate targets to get an idea of the necessary size for the “top of the funnel”

• Total licensed architects in US = 105,596 per American Institute of Architects

Price Paying Customers Top of Funnel

$200 420 26,250

$175 515 32,188

$150 680 42,500

$120 1,090 68,125

$100 1,800 112,500

Finance and Operations Timeline

Fundraise Hi-Fi MVP Test Beta Test Final Development

Operational

6 weeks 8 weeks 2 weeks 8 weeks 2 weeks 26 weeks

$250k

-$90k

-$30k

-$30k

$150k

Cash

Burn Rate

• At pricing of $200, breakeven users is 420.– We are assuming conversion rates of 40% / 20% / 20%

which will be tested during Hi-Fi MVP and Beta stages.– For now, these conversion rates are hypotheses.

• At these conversion rates, we believe we can get this number of paying users in 3 months.– This takes into account our initial conversion funnel– Assumes a retention rate of 80%.

• Our estimated monthly OpEx is $25,000 and gross margins are 65%.

• Net cash burn is estimated at $10,000 through first three months until breakeven.

Digital Manufacturing, Inc.

1- Fortune 1000

2- Medium Manufacturing Enterprises

3- Small Manufacturing Enterprises

4-Small Job Shops

-Develop a tailored solution

for each customer: coding, improving

UI, developing knowledge base

-Reduce downtime of machinery;

manufacturing cost savings & service

cost savings.

-Knowledge base; prognostics (big

data) for real-time monitoring and

signaling preventive

maintenance.

Who are our Key Partners?

Who are our key suppliers?

-IP development

-Webservices

-Sales & Marketing

For what value are our customers really willing to pay? How do we make money?

Through which Channels do our

Customer Segments want to be reached?

-IP, Software Platform: Opentok

-Cloud based server

-Knowledge base

1

3

4 2-Facilitator between

customer and service persons

to implement app

5

6

7

89

We create value to every person

who has forgotten an important

paper/ does not want to carry it

Initial customers are people

entering a bar, who have

forgotten their ID or don’t want to bring it along.

Software development,

product promotion, and ID

verification.

We will provide a service for identity and info verification

via electronic means (i.e. mobile

phones).

We help everyone who desperately

need a paper (Passport forgotten for an international flight, driver license for police control,

ID card forgotten to get into a bar, etc.)

First, we will start with the bars and clubs in the Bay

area, until we reach state and

federal governments.

No suppliers.

Product development, marketing, investment in machine/software for ID

verification.

People using the “verification” service pay per use until a threshold for transfer to a

subscription plan

Through an App store, site, and via

the person who requires the ID

(police, bouncer…)

Experts in data security, lawyers, security/encryption companies, ID

verifiers.

1

3

4 2A relation of trust,

from a service that works at all

times and is highly secured.

5

6

7

89

BUSINESS CANVAS

Business Canvas Week 4

Canvas Week 5

Canvas Week 6

Canvas Week 7

Canvas Week 8

Canvas Week 9

Final Canvas Week 10