The Lean LaunchPad Lecture 2: Value Proposition Steve Blank Jon Feiber Jon Burke

Agenda Team Bus Model Presentations Value Proposition –Product –Service –Ecosystem

VALUE PROPOSITIONS images by JAM what are you offering them? what is that getting done for them? do they care?

Step 1. Spec. the Value Proposition Product(s)? Service(s)? Ecosystem? Is it a company or product?

Value Proposition – Common Mistake Is it just a feature of someone else’s product Is it a “nice to have” product Is it a “got to have” product Can it scale to a company?

Value Proposition - Discovery Product –Long term vision –features –Benefits –Minimum Viable Product spec For a web/mobile app –Low fidelity MVP live and running Understand Customer Problem and Solution Test Market Type

Product Problem Statement: What is the problem? Technology / Market Insight: Why is the problem so hard to solve? Market Size: How big is this problem? Competition: What do customers do today? Product: How do you do it?

Step 2: What’s the Minimum Viable Product – Physical First, test your understanding of the problem Next test your understanding of the solution –Proves that it solves a core problem for customers –The minimum set of features needed to learn from earlyvangelists -Interviews, demos, prototypes, etc -Lots of eyeball contact

Step 2: What’s the Minimum Viable Product – Web/Mobile NOW “low fidelity” web/app for customer feedback –First, tests your understanding of the problem LATER, “high fidelity” web/app tests your understanding of the solution –Proves that it solves a core problem for customers –The minimum set of features needed to learn from earlyvangelists -Avoid building products nobody wants -Maximize the learning per time spent

Step 2: What’s the Testing the Minimum Viable Product – Web/Mobile Smoke testing with landing pages using AdWords In-product split-testing Prototypes (particularly for hardware) Removing features Continued customer discovery and validation Surveys Interviews

Step 2: What’s the Testing the MVP– Web/Mobile - Tactics Interview customers –make sure they have a matching core problem Set up web site landing page to test for conversion –What offers are required to get customers to use the product (e.g. prizes, payment) –Use problem definition as described by customers to identify key word list – plug into Google search traffic estimator - high traffic means there is problem awareness Drive traffic to site using Google search and see how deep into a registration process customers are willing to go through

Pivot Example Robotic Weeding Talked 75 Customers in 8 Weeks

Our initial plan

20 interviews, 6 site visits… We got OUR Boots dirty Weeding Visited two farms in Salinas Valley to better understand problem Interviewed: Bolthouse Farms, Large Agri-Industry in Bakersfield White Farms, Large Peanut farmer in Georgia REFCO Farms, large grower in Salinas Valley Rincon Farms, large grower in Salinas Valley Small Organic Corn/Soy grower in Nebraska Heirloom Organics, small owner/operator, Santa Cruz Mts Two small organic farmers at farmers market Ag Services of Salinas, Fertilizer applicator Weeding Visited two farms in Salinas Valley to better understand problem Interviewed: Bolthouse Farms, Large Agri-Industry in Bakersfield White Farms, Large Peanut farmer in Georgia REFCO Farms, large grower in Salinas Valley Rincon Farms, large grower in Salinas Valley Small Organic Corn/Soy grower in Nebraska Heirloom Organics, small owner/operator, Santa Cruz Mts Two small organic farmers at farmers market Ag Services of Salinas, Fertilizer applicator Mowing Interviewed: Golf: Stanford Golf course Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6) Toro dealer (large mower manufacturer) User of back-yard mowing system Maintenance Services for City of Los Altos Colony Landscaping (Mowing service for stadiums) Mowing Interviewed: Golf: Stanford Golf course Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6) Toro dealer (large mower manufacturer) User of back-yard mowing system Maintenance Services for City of Los Altos Colony Landscaping (Mowing service for stadiums)

Autonomous Vehicles for Mowing & Weeding We reduce operating cost - Labor reduction - Better utilization of assets (mow or weed at nights) - Improved performance (less rework, food safety) Mowing - Owners of public or commercially used green spaces (e.g. golf courses) - Landscaping service provider Weeding - Farmers with manual weeding operations Dealers sell, installs and supports customer Co. trains dealers, supports dealers - Mowing Dealers - Ag Dealers - Innovation - Customer Education - Dealer training Dealer discount COGS seek a 50-60% Gross Margin Heavy R&D investment - Dealers (Mowing and Ag) - Vehicle OEMs (John Deere, Toro, Jacobsen, etc) - Research labs Asset sale Our revenue stream derives from selling the equipment Engineers on Autonomous vehicles, GPS, path-planning

Found weeding in organic crops is HUGE problem; % of costs Crews of 100s-1000 Back-breaking task (Ilegal) labor harder to get 1-5 weedings per year/field $250-3,500 per acre and increasing Food contamination risk

Decision to make – mowing vs weeding Application If ROI is < 1 yr they will buy Labor costs significant? Autonomous would solve problem? TAM Mowing of large fields Yes. Professionally run organizations Yes Adjusted up to xxx Weeding in Agriculture Agri Industry: YES! Large Growers: Yes Small Growers: No YES! for organic crops They are spending $500/ac! Not necessarily Key need is weed vs. crop differentiation TAM increased to $2.6 B (Total organic) Target Market (organic specialty) 162 M/yr 18%/yr growth

Autonomous vehicles WEEDING We reduce operating cost - Labor reduction (100 to 1) - Reduced risk of contamination - Mitigate labor availability concerns - Low density vegetable growers - High density vegetable growers - Thinning operations - Conventional vegetables Dealers sell, installs and supports customer Co. trains dealers, supports dealers - Ag Dealers - Ag Service providers - Innovation - Customer Education - Dealer training Dealer discount COGS seek a 50-60% Gross Margin Heavy R&D investment - Ag Dealers - Ag Service providers - Research labs Asset sale Our revenue stream derives from selling the equipment Engineers on Machine Vision Two problems: - Identification - Elimination

1 Week – 1 CarrotBot Confidential

CarrotBot Machine Vision data collection platform –Monochrome & Color Cameras –Laser-line sweep (depth measurement) –Encoders (position/velocity) –Onboard data acquisition & power CarrotBot 1.0

The Canvas Updated Research Labs Equipment Manufacturers Distribution Network Service Providers Technology Design Marketing Demo and customer feedback Cost Reduction Remove labor force pains Eliminate bio- waste hazards IP – Patents Video Classifier Files Robust Technology Farming conventions. Demo, demo, and demo!! Proximity is paramount Organic Farmers Weeding Service Providers Conventional Farmers Dealers Direct Service Indirect Service … then Dealers Asset Sale Direct Service with equipment rental … then Asset Sale Value-Driven

Visit Highlights Above: Organic Carrots, 7wks. Top right: Conventional carrots Bottom Right: Very weedy. Will require multiple passes of hand weeding

Visit Highlights Carrot vs. Weeds Due to small root systems, carrots have no chance against weeds

Visit Highlights Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked

Visit Highlights State of the Art in Weeding Technology for Organic Crops

Customer Hypothesis UsDealer Large Growers Industrial Growers UsDealer Industrial Growers Large Growers Service Providers Equipment Rental Hypothesis Confirmed Growers interested in own equipment Industrial (10,000s of acres) Large (1,000s of acres) Willing to pay $100k for one unit Smaller growers (100s of acres) usually subcontract the labor services or rent equipment All purchases through local dealers Customer service is essential Pre-Test Post-Test

Customer Map #1 – Industrial Growers End UserInfluencerRecommender Decision Maker Approver Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr Equipment Operator Director, Ag Technology Justin Grove, interviewed VP, Growing Operations CFO, CEO (Jeff Dunn) Local Farm Mgr Cliff Kirkpatrick, visited Equipment Operator Cliff, Farm Mgr

Customer Map #2 – Service Providers End UserInfluencerRecommender Decision Maker & Approver Example: Ag Services – Service Provider, Salinas Valley Equipment Operator Service Mgr ?? (service mgr’s boss) Me (left), Marty (middle, Service Mgr), Doug (right, Grower) Grower

The Business Plan Canvas Updated Research Labs Equipment Manufacturers Distribution Network Service Providers Technology Design Marketing Demo and customer feedback Cost Reduction Remove labor force pains Eliminate bio- waste hazards IP – Patents Video Classifier Files Robust Technology Farming conventions. Demo, demo, and demo!! Proximity is paramount Mid/Large Organic Farmers Agricultural corporations Weeding Service Providers Mid/Large Conventional Farmers Direct Service Indirect Service … then Dealers Direct Service with equipment rental ($1,500/d; 120d/yr ) Low density: $1,500/d High density: $6,000/d Value-Driven

World Ag Expo interviews: the need is real and wide spread 10+ interviews at show –Everyone confirmed the need –Robocrop, UK based, crude competitor sells for $171 K Revenue Stream –Mid to small growers prefer a service –Large growers prefer to buy, but OK with service until technology is proven –Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)

The Business Canvas Updated Research Labs Equipment Manufacturer Distribution Network Service Providers 2 or 3 Key Farms Technology Design Marketing Demo and customer feedback Cost Reduction Remove labor force pains Eliminate bio- waste hazards IP – Patents Video Classifier Files Robust Technology Farming conventions. Demo, demo, and demo!! Proximity is paramount Mid/Large Organic Farmers Agricultural corporations Weeding Service Providers Mid/Large Conventional Farmers Direct Service Indirect Service … then Dealers Direct Service with equipment rental Low density: $1,500/d High density: $6,000/d Value-Driven R&D Bill of Materials Training & Service Sales

Autonomous weeding - Final We reduce operating cost - Labor reduction (100 to 1) - Reduced risk of contamination - Mitigate labor availability concerns - Low density vegetable growers - High density vegetable growers - Thinning operations - Conventional vegetables Direct - Provide high quality service at competitive price Direct - Alliance with service providers - Eventually sell through dealers - Innovation - Customer Education - Dealer training Costs for service provision COGS seek a 50-60% Gross Margin Heavy R&D investment - Ag Service providers - Research Institutes (eg UC Davis, Laser Zentrum Hannover) key farms Service provision - Charge by the acre with modifier according to weed density - Eventually move to asset sale Engineers on Machine Vision Two problems: - Identification - Elimination

Market Type

Definitions: Four Types of Markets Clone Market –Copy of a U.S. business model Existing Market –Faster/Better = High end Resegmented Market –Niche = marketing/branding driven –Cheaper = low end New Market –Cheaper/good enough, creates a new class of product/customer –Innovative/never existed before Clone MarketExisting MarketResegmented Market New Market

Market Type determines:  Rate of customer adoption  Sales and Marketing strategies  Cash requirements Market Type ExistingResegmentedNew CustomersKnownPossibly KnownUnknown Customer Needs PerformanceBetter fitTransformational improvement Competitor s ManyMany if wrong, few if right None RiskLack of branding, sales and distribution ecosystem Market and product re- definition Evangelism and education cycle ExamplesGoogleSouthwestGroupon

Market Type - Existing Incumbents exist, customers can name the mkt Customers want/need better performance Usually technology driven Positioning driven by product and how much value customers place on its features Risks: –Incumbents will defend their turf –Network effects of incumbent –Continuing innovation

Market Type – Resementing Existing Low cost provider (Southwest) Unique niche via positioning (Whole Foods) What factors can: –you eliminate that your industry has long competed on? –Be reduced well below the industry’s standard? –should be raised well above the industry’s standard? –be created that the industry has never offered? (blue ocean)

Market Type – New Customers don’t exist today How will they find out about you? How will they become aware of their need? How do you know the market size is compelling? Which factors should be created that the industry has never offered? (blue ocean)

For Tomorrow’s Presentation What were your value proposition hypotheses? What did potential customers think about your value proposition hypotheses? –Get out of the building and begin to talk to customers for Oct 12 th –Talk to customers more by Oct 18 th –Follow-up with Survey Monkey (or similar service) to get more data Submit interview notes, present results in class. Update your blog/wiki/journal with progress customers and value prop

Examples

Group Privacy: Nan, Jim, Sundaresan Protect privacy for users of location-based services (LBS)

The Business Model Canvas: ver 0.0 Privacy- concerned customers who use LBS Creating awareness Own website educational Increased privacy Technology Privacy advocacy groups Developing costs Marketing costs App revenue (direct or shared) LBS App Providers Bundling with LBS apps trust Building trust

The Business Model Canvas: ver 0.1 Privacy- concerned customers who use LBS Creating awareness Own website educational Increased privacy Technology Privacy advocacy groups Developing costs Marketing costs App revenue (direct or shared) LBS App Providers Bundling with LBS apps trust Building trust Smart phone users uneasy about privacy Subscription No loss of service quality

How to Test  Large number of privacy- concerned LBS users  Willing to pay for protecting locations  Directly or indirectly  Able to reach them with low cost  Able to ease their concerns through  education  endorsement by privacy watchdog groups  LBS app developers are willing to partner  Privacy groups are willing to endorse Existing market research Talk to customers Bid on Google AdWords for location privacy (now no ads) Talk to customers Talk to privacy advocacy groups (e.g., 25,000 adults stalked by GPS) Talk to LBS app developers Talk to privacy advocacy groups

Methodologies User interviews at Tresidder and I-Corps (11) LBS Domain Expert Interviews (1) Google AdWords (up and running) Online Survey (32 responses) Privacy Group Interviews (pending)

Hypothesis 1: Large number of privacy-concerned LBS users User Interviews - Reasons for lack of concern –Trust the provider –Don’t believe that data can be used against them –Never crossed their mind –Don’t use LBS –Don’t have smartphone –Data already available to carriers & government Survey: 66% not concerned User Interviews – Reasons for concern –Uncertainty how data used/misused –General unease Survey: 34% concerned –37% chose not to use a LBS because of privacy concerns Most had low concern about location privacy

Hypothesis 2: Willing to pay for protecting locations User Interviews – Unwilling to pay –Not interested in even a free service –Not concerned enough to pay –Not enough value add Survey: 28% would not use it even if it is free, 54% would not pay User Interviews – Willing to pay: –$15/month for total privacy protection, only a “few bucks/month” for location privacy –$1/week –$5 one time payment Survey: 46% willing to pay –9%: $1 –19%: $10 –9%: $1/month –9%: $5/month Even some unconcerned customers are willing to pay!

Hypothesis 3: Able to reach them with low cost Yes – at least at first Google Ad Words: –Should be cheap at first - We are the only advertiser for “location privacy” (and related) –Location privacy is a popular search term

Hypothesis 4: Able to raise awareness through education Yes User Interviews – education may prove effective to some, as many did not think about or understand that LBS providers would get their location data, and indicated more concern

Hypothesis 5: Able to ease concerns through endorsement Yes User interviews – endorsement from “famous people” and “serious organizations” would help ease concerns on the effectiveness of privacy protection.

Hypothesis 6: LBS app developers are willing to partner No – so far Domain expert interview: –LBS app developers will hate our service –Increase LBS app’s operational cost User interviews –Overwhelming issue – not lack of privacy protection But lack of perceived LBS value –Secondary: LBS reputation and trust

Hypothesis 7: Privacy groups are willing to endorse Unknown

Market Size Estimation Number of Users  Entire market  > 100m unique Google Maps mobile visitors/month  Served available market  55% users concerned about sharing location information [Nielsen 2011]  Target market  Open Question, but rapidly growing market Pricing Originally considered 1x payment But customers naturally assumed subscription service Possible to charge more? –Reduced price --/--> willingness to use

Pivot Point? Not yet, but if user interview data trends against our hypotheses… Two new models to consider –Licensing –Location based monitoring Privacy scorecard Hyperlocal news

 Hypotheses: Improved novel (integrated) thermal dissipation technology can significantly improve LED lighting performance and reduce cost Our technology allows direct replacement of commercial high lumen but low efficiency incandescent bulbs with LEDs without light quality/output compromises This can deliver a scalable business model ARKA Lights High Performance Heat Dissipation Technology for LED Lighting

Reduced number of LEDs Higher lumens in the same form factor Commerci al Customer s -Replacement Lamps - Indoor Applications Trade Presence, publications, shows Direct Sales to Institutions Web based demos, education OEMS Luminaires Manufacturers System integration Requires no infrastructure changes ASME, Professional Groups Environmental conscious Groups Systems Design IP Government Agencies (DOE) Cost of Sales LED manufacturers Luminaire Manufacturers Developments Costs Sale of Products Suppliers Certifications Awareness Building Increased reliability Experienced manufacture r as a partner Component supplier costs CANVAS FOR ARKA – Version 1

We’re talking to (some combination of): –OEMS –Architects (Rita Koltai – Koltai Lighting Design) –Technical Experts/Consultants (Stanford University), Prof. Robert Davis, (CMU) –Lighting designers and manufacturers (Greenray Lighting) –Lighting Distributors (Stanford Lighting) –Facility Managers (Sheraton Hotel) –Retail Outlets (Pottery Barn) GETTING OUT OF THE BUILDING

1)Prof. Robert Davis, Founder of CREE – a leading LED company - Heat transfer is a major issue. Not sure whether the internal phonon reflectance may in fact be the leading thermal limit. 2) Prof. James Harris, EE Department, Stanford University - Heat transfer issue – The phonon reflection increases significantly with the doping of new materials. This reduces thermal conductivity of the LED. Eventually it becomes the limiting factor. Need to include reduction in the thermal conductivity in the heat transfer modeling. - Bought six PAR38 lights for his family room last week. Wants them to last years as changing them with a ladder was a major hassle. - Light intensity was lower than incandescent bulbs it replaced. Not happy about that. CUSTOMER FEEDBACK

3) Mr. Mo, Co-owner of Greenway Lighting, Santa Rosa, California - T8 lighting (tube light replacement) is their main product. PAR38 replacement is needed, but not available today. They recommend PAR30, a much lower intensity product. The available PAR38 do not meet the lighting intensity and light quality demands for replacing the current incandescent lights. - Replacing light bulbs is a major hassle. Costs $400 to rent a cherry picker to replace bulbs – makes very expensive. Need to have longer life. - Offered a business proposition to do thermal design of his LED lights on a consultation basis (Not an attractive business model for us due to very low returns and limited scalability). CUSTOMER FEEDBACK

4) Prof. George Tayo, ME Center for Design, Stanford University - LEDs are evolving very rapidly. Thermal issues are similar to PCs – cooling will remain major issues as performance and quality envelope will continue to expand. 5) Mr. Bruno (maintenance supervisor) – Sheraton Hotel, Palo Alto - Use 100’s of PAR38 in this hotel. Replace every 6 months or so. Would be happy with longer life product - Current weight of LEDs might prevent them from being used in establishments with high ceiling. (Heavy aluminum heat sink adds significantly to weight). CUSTOMER FEEDBACK

6. Pottery Barn Staff – Pottery Barn, Palo Alto  Title 24 has changed the procurement patterns of corporate headquarters regarding light fixtures – no dimming or two-way switches (Need to become familiar with local laws)  Use incandescent lights for all general illumination (counted 34 in front foyer alone) without dimming or daylight control. Extensive use of CFLs in displays (not directional so less suitable for task lighting). 7. Paul (salesperson) – Stanford Electricals - Advocate of LEDs; largely ‘self-educated’ Indicated that rising prices (~30% in last 6 mths) of fluorescents (due to phosphor costs) and falling LED prices will boost LED sales Indicated unwillingness of smaller retailers to experiment with new suppliers products’ Highlighted form factor of LEDs and emphasized that products need to be used without changing current infrastructure. Seeing significantly increased adoption of LEDs by customers (particularly over last 5 mths) CUSTOMER FEEDBACK

Lower purchase cost Higher lumens in the same form factor Commerci al Customer s -Replacement Lamps (PAR38) - Indoor Applications Trade Presence, publications, shows Direct Sales to Institutions Web based demos, education Luminaire Manufacturers System integration Requires no infrastructure changes ASME, Professional Groups Environmental conscious Groups Systems Design IP Government Agencies (DOE) Cost of Sales LED manufacturers Luminaire Manufacturers Developments and Certification Costs Sale of Products Suppliers Certifications Increased reliability Experienced manufacture r as a partner Component supplier costs CANVAS FOR LED – Version 2 Reduced weight Awareness Building Thermal modeling of LED cooling

IMMEDIATE Next steps Conduct further interviews to asap validate value proposition and channel hypotheses –OEMS and Institutions –Specifiers and Contractors Begin work on key activities including reduction of technology to practice (prototyping)

Summary Contacted 8 diverse feedback nodes (experts, customers, supply chain) Partially validated three components of the initial canvas. –Learned more about possible value proposition. –Modified key activities to include thermal modeling –Recognized need for engaging with OEMs asap Disclaimer – The conclusions drawn here are based on a limited data collected. Further validation will be conducted.

Thank you!

Problems with existing LEDs  Cannot deliver enough lumens to replace existing incandescent bulbs  Heavy weight  Low life due to higher temperatures Our Enhanced Heat Transfer Technology  Higher heat removal ability allows  Lower operating temperature  Increased lumen intensity per LED  Reduced number of LEDs  Increased life

I-Corps 10/11/2011 Ground Fluor Pharmaceuticals Advanced Chemistry for Pharmaceutical Progress Team: Kiel Neumann (EL) Stephen DiMagno (PI) Allan Green (Mentor)

I-Corps 10/11/11 68  PET is a non-invasive medical diagnostic technique for cardiac, brain, and tumor imaging  GFP technology makes new (unknown) and known (but clinically inaccessible) [ 18 F]-labeled radiotracers readily available  Fast, multiplatform, high efficiency synthesis of these fleeting, precious agents.  Initial target indications: pediatric neuroblastoma, Parkinson’s disease.

General methodology for adding fluorine to lead compounds of interest The Business Model Canvas Accessibility (RCY) Purity Speed PET/SPECT Multiplatform Sensitivity (nca) Specific compounds IP PoP data Regulatory plan Understanding of the regulatory process Contract cGMP precursor manufacture Salary, Rents Clinical trials SOPs for precursors and drugs Recruit clinical sites In vivo animal studies Develop regulatory plan for pre IND meeting ID cGMP CRO Fund-raising cGMP manufacturer Radiopharmacies Nuclear Medicine and Radiology departments Technical Assistance (Image Atlas) FDA regulatory support Radiopharmacies Equipment producers Prescribing physicians Radiologist who perform studies Sales of intermediates Technology license Product license (royalty) Direct sales of precursor R&D and clinical studies presented in journals and meetings Drug developers Pharmaceutical development companies IP PoP data Radiologists Technical assistance

I-Corps 10/11/ )Radiologists and Nuclear Medicine Physicians 2)Radiopharmacy companies (Cardinal Health, Siemens, GE Healthcare, IBA, AAA) 3)Equipment manufacturers (GE, Philips, IBA, Advion) 4)cGMP manufacturers 1)Pharmaceutical companies 2)Radiologists and Nuclear Medicine Physicians

-Face to face with attending Radiologist at Stanford University -Face to face with radiopharmacist at UCSF -Conference call with Nuclear Radiologist at Memorial Sloan Kettering -Conference call with president of medium size drug company with PET product at the FDA -Telephone conference with cGMP facility Out of the Building I-Corps 10/12/11 71

Out of the Building I-Corps 10/12/ Immediate need for our product -Currently used SPECT product for neuroblastoma is limited by absence of correlative CT data -Our lead PET agent would provide more information on existing imaging equipment base -Two customers offered to participate in clinical trials -Potential for further development of other tracers identified in interviews -Actual need for the general procedure -Allow access to previously unknown tracers

-Initially seeking to market method technology -too diffuse, but many opportunities (i.e. product-driven opportunities more than general technology-driven) -Need to identify specific imaging product opportunities -Validated hypothesis for immediate need of tracers -Raised question on identity of lead compound pipeline for Parkinson’s disease -Recruited two potential partners for clinical trials Impact on the Value Proposition Hypothesis 73

I-Corps 10/11/11 74 Approximately 2.2 million procedures in the US. Drug costs range from $700 (on-patent) to ~$150 (generic FDG) US sales of radiopharmaceuticals for PET and SPECT $1.2 billion US sales expected to grow to $6 billion by 2018 Global numbers approximately 2x Source: Bio-Tech Systems Report #330; data for 2010.

I-Corps 10/11/ installed PET scanners PET radiopharmacies cover the entire US market Radiopharmacies have an interest in proprietary agents as a basis of competition in their market.

I-Corps 10/11/11 76 Neuroblastoma Prevalence: about 6000 US cases about 1000 new cases per year Subjects receive 3-6 images/year to follow response to therapeutic protocols World market at U.S. x 2 gives potential of 40,000-70,000 scans/year Drug costs $500/per gives ~$20 - $35 M Parkinson’s Disease DatSCAN sales in Europe ~$100 M The world's highest recorded prevalence of Parkinson's Disease of any region is in Nebraska, with people per 100,000 population US – 600,000 patients 1 scan per $500 = $300 M

Target Customer Fast Market Expansion 8 Million Severe OSA 686,000 Treated Untreated 7.4 Million Home Diagnosis Device Market Growing at CAGR of 7% Frost & Sullivan

8 Million Severe OSA 686,000 Treated Untreated 7.4 Million Target Customer Current treatment ineffective Option #1: CPAP Continuous Positive Airway Pressure Therapeutic treatment of OSA growing at CAGR of 17% Frost & Sullivan Option #2: Surgery Uvulopalatopharyngoplasty Maxillomandibular Advancement Tonsillectomy

8 Million Severe OSA 686,000 Treated Untreated 7.4 Million 412,000 Treatment Effective 60% 274,000 Treatment Ineffective 40% Initial Target Customer Current treatment ineffective

8 Million Severe OSA 686,000 Treated Untreated 7.4 Million 412,000 Treatment Effective 60% 274,000 Treatment Ineffective 40% Target Customer Initial Target Customer Current treatment ineffective