business plan presentation mobius microsystems inc. 3430 e. jefferson ave. #140 detroit, mi 48207...
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Business Plan Presentation
Mobius Microsystems Inc.
3430 E. Jefferson Ave. #140
Detroit, MI 48207
614.571.5299
www.mobius-microsystems.com
MBA Jungle Business Plan Competition
New York, New York
April 25th, 2003
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Overview
• Pain and Solution
• Technology and Product
• Management Team
• Industry and Market
• Competition
• Marketing and Sales Strategy
• FinancialsFINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
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The Problem: Disparate Systems
Electronic products currently require assembly of many discrete components
Printed Circuit Board
Digital Microprocessor
Memory
Mixed-SignalCircuits
Mechanical Sensor
Crystal Oscillator
AnalogCircuits
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
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The Pain
These systems are:• Expensive: package costs• Large: package sizes• Power-hungry: signal across board requires 10x power• Limited in functionality: size and power constraints
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
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PCB
The Solution: Mobius Microsystems
Microsystems are intelligent miniaturized systems comprising sensing, processing, and actuating functions integrated onto a single chip. They are smaller, cheaper, lower power, simpler, more reliable, and more functional.
Printed Circuit Board
Digital Microprocessor
Memory
Mixed-SignalCircuits
Mechanical Sensor
Crystal Oscillator
AnalogCircuits
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
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The Solution: Mobius Microsystems
The vision for our products:Enable electronic system developers to produce less expensive, smaller, more functional, and more reliable products that consume less power.
The vision for our customers:Reap orders of magnitude improvements in the products they build and lead their industries in end-product performance, functionality, and value.
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
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The Clock is as Fundamental as Power
Every single synchronous semiconductor produced requires a clock to operate
Clock frequency signal drives processor inside
fclk
Pocket PC
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State of the Art vs. Mobius “DMC”Mobius“Digital Monolithic Clock”Existing Clock Solutions• Crystal-based• Large off-chip component• Fixed frequency• Power-hungry• Expensive
Mobius DMC• MEMS-based• Small on-chip• Tunable frequency• Low-power• Inexpensive
vs.
CrystalElectronics
4 MobiusDMCs
State of the Art versus
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
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The Mobius DMC in Action…
Example: iPAQ PDA Using Current Technology Using Mobius’ Technology
Clock Hardware Costs ~$1.00 ~$0.45
Clock Space Requirements 323mm2 on circuit board 0.09mm2 on semiconductor
Clock Power Requirements 32mW 4mW
Tuning Range Fixed (w/o add. electronics) 62.5MHz to 1GHz
What Mobius can do for Compaq• Reduce total cost• Increase functionality• Increase battery life• Decrease time to market• Reduce component inventory
COMPAQ Pocket PC
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PackagedSemiconductor
SemiconductorDesign Blueprint
Semiconductor Intellectual Property
• Manufacturing handled by customer
• Low COGS
• Like a software company
• Successful business model: ARM, MIPS, Parthus
Mobius’ DMC IP
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Why IP is Used
What Mobius IP offers chip designers• Functions outside their core competency• Accelerated time to market• More profit per chip
Samsung is building a cell phone• Market opportunity and window identified• System specification defined by engineering management• Chip specification defined and handed off
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
Chip designers need to meet deadline and budgets• Develop many parts of chip in-house (if capable)• Buy 3rd party IP (Mobius) for some functions• Integrate IP with their design and send to fabrication facility for manufacturing
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Management Team
Michael S. McCorquodale, CEO and CTO• Invented technology while electrical engineering Doctoral Fellow, U of Michigan• Commercial semiconductor experience with Hughes Space and Communications• Vision of how microsystems technology and Mobius will change the world
Jeffrey G. Wilkins, COO• MBA 2003, U of Michigan• Business development and start-up experience, Huntington Bank and Velocys Inc• The commitment and experience to turn Mobius’ vision into reality
James E. Vincke, CFO• M.S.E., MBA, U of Michigan• 23 years in start-up, executive management, Mechanical Dynamics Inc• Fund raising, acquisitions, international expansion, rapid growth• The financial acumen and perspective to manage growth from start-up to IPO
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
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Industry and Market Overview
• Semiconductor industry: $141B (2002)– CAGR: 8% – Cyclical, mature
• System-on-chip market: $32B (2002)
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System-on-Chip Explained
SoC’s combine a processing core, memory, and
logic on a single chip
SoC
SoC with microprocessor, memory, and communications
Clock
Sensor
Analog FrontEnd
OtherSubsystems
PCB
Microprocessor Core
Communications
Clock
Sensor
Analog FrontEnd
Memory
OtherSubsystems
Printed Circuit Board (PCB)
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Why SoC?
SoC’s Market Dynamics and Needs
• Broad range of end products and markets
• Medium to high volume
• Fast design cycles to meet product windows
• Every SoC uses some IP
• Comfort with IP and IP companies
• Fabrication facilities (TSMC, IBM)
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
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Industry and Market Overview
• Semiconductor industry: $141B (2002)– CAGR: 8% – Cyclical, mature
• SoC Market: $32B (2002)– Growing 25% to 30%
– Players: Texas Instruments, Motorola, Intel, Sony
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First Addressable Market
• Clock generation for SoC– SoC: $32 Billion or (@ $20/unit) 1.6 Billion units/yr– Each unit now requires at least $1 for clock generation
– Mobius’ DMC average selling price of $0.45/unit• 1.6 Billion units x $0.45 per DMC =
First addressable market size:
$720 Million In Revenue
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0 5 10 15 20 25
Billions of Dollars
Transportation
LAN/WAN
Wireless Infrastructure
DVD Video Player
Personal Computers
Digital Set-Top Box/DTV
Disk Drives
Video Games
Modem/Remote Access
Digital Cellular Handsets
2004
2000
SoC End Markets
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
Source: Gartner DataquestSource: Gartner Dataquest
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Competition
Competitive landscape: 3 kinds of competitors• Discrete Crystal Clock Generation
– Epson
• Integrated Clock Manufacturers – Motorola
• Hybrid Clock Manufacturers – Epson + Texas Instruments
Currently there is no solution on the market for clock generation that is able to meet all of the needs of the market.
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Mobius’ Competitive Advantage
• Patent-protected intellectual property portfolio
• Design cycle lead
• Microsystems development trade secrets
• Industrial membership and “first-look” rights from “WIMS”: Microsystems Research Center
• “Product Hopping” strategy
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Marketing and Sales Strategy
Goal: De-facto standard in clock generation for SoC
Step 1: Create awareness and “buzz”– Existing relationships– Conferences, tradeshows, competitions
Step 2: Direct sales effort– Founders and technical sales representative– Specific existing relationships: Motorola, National
Semiconductor, TSMC, Cadence, IBM
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Marketing and Sales Tactics
Compaq Pocket PC End CustomerIntel Packaged SoC
Influence
To Compaq:Mobius = Less expensive, smaller, and more functional products
To Intel:Mobius = More revenue per chip
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IP PartnershipEffort
Direct Sales EffortFor Design Win
Packaged SoCWith Mobius DMC
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Electronic System Design Cycle
Influence
FINANCIALSMANAGEMENT MARKET COMPETITION STRATEGYTECHNOLOGYPAIN&SOLUTION
Concept
Design
Evaluation
Prototype
Production • No re-design cost
• No customer risk: • System functional independent of Mobius IP at prototype phase
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Initial Target Customer Profile
• SoC cost ≤ $10-20+ Volume per design: ~ 1M units/year+ Total electronic system COGS ≤ $50+ 2 or more crystals per system= Cell phones, DVDs, PDAs, microcontrollers, disk
drives, WLAN
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Existing Target Customer Relationships
• Cell phones– Motorola, Samsung
• PDAs– ARM, Intel
• Microcontrollers– National Semiconductor, IBM
• WLAN– Infineon (WLAN security chipsets)
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Business System
Revenue Model• Design License
– Tiered $100,000 to $300,000 (low to high volume)• Royalty
– Tiered $0.50 to $0.15 per unit (low to high volume)• Annual Support & Maintenance Contract
– 15% of initial license annually• Services
– Design services for customers
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(500)
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Net Income
Cash Flow from Operations
Revenue
Financials
Revenue, Net Income, and Cash Flow from Operations
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Investment Opportunities
Self-Fund Operations Until First Sale Is Made$110K Founders Investment (Q3 2003)
After First Sale (Q3 2003):Seeking $500K 1st Round InvestmentUses: Hire Marketing and Sales Director
Hire Additional Engineering ExpertiseEnable Additional Manufacturing ProcessesEstablish IP Partnerships
Milestone: 5 Reference Customer Relationships
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Investment Opportunities
$500K 2nd Round Investment (Q1 2004)
Uses: Hire Sales Person in Munich, Germany
Continue to Develop Engineering Team
Milestone: 3 International Reference Customers
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Why Invest?
• $720 million first addressable market
• Truly compelling, protected IP
• Committed and experienced management team
• Small investment required for high return potential