magma eng245 2017

Magma

Arnaud Dusser Dan Slotcavage Renato MeloniJerónimo Emiliano García De Brahi

Week 0:Our technology allows customers to switch glass

between transparent and opaque states

Week 10: We offer OEMs a luxury sunroof experience to

differentiate their vehicles

Total Interviews: 117Market type: New Market

Formation of Magma

Magma started with Dan’s PhD research in the McGehee Lab...

… and formed around experts in each potential customer segment.

Team Members

Jerónimo Emiliano García De Brahi

Arnaud Dusser

Dan Slotcavage Renato Meloni

● MSx, Master of Science in Management for Experienced Leaders ‘17

● More than 15 years of experience related to the automotive industry (target market of this project)

● Automotive Expert

● MSx, Master of Science in Management for Experienced Leaders ‘17

● Experience in funding and venture projects related to renewable energy

● MS in Sustainable Design and Construction (Civil Engineering)

● Experience in residential and commercial development/construction

● PhD in Materials Science and Engineering

● Technology Expert, based on his PhD research

● Team mentor● Cofounder, CSO, Chief Strategist

at LightSail Energy

Danielle Fong

Our first MVP

Transparent

Transparent

Opaque

Original Hypothesis

Magma

DevelopersOEMS

Anyone with windows

Where is it currently being used?

Jet Windows


Mercedes Sunroofs


Commercial Buildings

“”

As a startup, we needed to focus on one market. We chose construction.Rahul Bammi, CMO @ View.

We realized that we couldn’t target every market

First, we got Out of the Building!

Hypothesis: Our product is for buildings.

No More Blinds

No More Glare

Energy Savings

Interviewed 42 building professionals/customers:

Architects, Builders, Developers, Homeowners

Hypothesis: Our product is for buildings.

No More Blinds

No More Glare

Energy Savings

Interviewed 42 building professionals/customers:

Architects, Builders, Developers, Homeowners

Not enough savings

People like decor

“”

If money wasn’t an issue we would install dynamic glass in other projects, but right now it’s simply

too expensive.Mike Messick,

PM @ DPR Construction.

Current products are too expensive

Lengthy building construction channels offer many opportunities to cut us out!

Owner/ Real Estate

Developer

Engineering

Architecture General

Contractor

Subcontractors

Subcontractors

Completed Commercial

Building

Glazier subcontrac

tor

IGU manufactur

er

Window Manufactur

erMagm

a

Magma Magma

$20/SqFt

$40/SqFt

$34/SqFt$3

9/Sq

Ft

Owner/ Real Estate

Developer

Engineering


Contractor

Subcontractors

Subcontractors


Building

Glazier subcontrac

tor

IGU manufactur

er

Window Manufactur

erMagm

a

Magma Magma

$20/SqFt

$40/SqFt

$34/SqFt$3

9/Sq

Ft

Two players to convince


Owner/ Real Estate

Developer

Engineering


Contractor

Subcontractors

Subcontractors


Building

Glazier subcontrac

tor

IGU manufactur

er

Window Manufactur

erMagm

a

$20/SqFt

$40/SqFt

$34/SqFt$3

9/Sq

Ft

Several actors require training to build/install

the product properly


Owner/ Real Estate

Developer

Engineering


Contractor

Subcontractors

Subcontractors


Building

Glazier subcontrac

tor

IGU manufactur

er

Window Manufactur

erMagm

a

Magma Magma

$20/SqFt

$40/SqFt

$34/SqFt$3

9/Sq

Ft

Premium product is easy to value engineer out at

end of project

4 5 6

1 2

3


Owner/ Real Estate

Developer

Engineering


Contractor

Subcontractors

Subcontractors


Building

Glazier subcontrac

tor

IGU manufactur

er

Window Manufactur

erMagm

a

Magma Magma

$20/SqFt

$40/SqFt

$34/SqFt$3

9/Sq

Ft

Premium product is easy to value engineer out at

end of project

4 5 6

1 2

3


Not the right place to start

We also looked at alternative, niche markets

YACHTS JETS

AR / VR RVsMarkets too smallNo strong demand

WEEK 2

Hypothesis: Our product is for luxury vehicles

No More Shades Elegance

Heat and Glare

ControlInterviewed 60 automotive experts/customers:

OEMs, Tier-1/2 Suppliers, Dealers, Luxury car owners

Less fragmented market Strong value

proposition

Why the Automotive Industry?

Access to knowledge and

resources

1 BMW model=

1,470 individual homeowners

“”

Glass is one of the materials where we would like to innovate but we don’t receive proposals

from our suppliers.Carlos Paredes, Chief

Purchasing Officer @ Magna Cosma.

No clear leader in automotive glass tech

Key StakeholdersIP

Fundraising (1st round)

Prototyping

Fundraising (2nd round)

Facility

OEM/Tier 1

Contracts

Provisional Patent

Lab-scale Prototype

CompanyCreation

Funding

PrototypeOptimization

Testing material

production

OEMs VC (or traditional VC)Confirm OEMs

interest

Size Confirmation

Build or Subcontract?

Certification / Trials

Commercial Negotiation

Terms and Conditions

SUPPLY

University

Grant Agencies /

Government

VC arm OEMs

VC and Investors

OEM Partners

Tier 1 Partners

Glass Producer Partners

Material Suppliers

$

$

$$

$$$

$$$

$$$

Lab

Technical Expertise

Funding

Funding

Chemists

Lab / Equipment

Materials

Contacts

Funding

Manufacturing Capacity

Engineers

Manufacturing Capacity

Engineers

Legal Expertise

Regulatory Approval

Labor

Regulatory Approval

Labor

Contacts

Resources

Activities

TasksPart

ners

We found specific key

players

Automotive Channels

Tier-2 Supplie

r

Tier-2 Supplie

r

Tier-1 Supplie

r

Distributor & 3PL

Dealer

OEM

R&D

Service Supplie

r

Customer

Ind. After

Market

F & I

Money related to glass

Magma

Magma

$375(total sunroof)

$200

Channel Economics

$1000 / 2000

Joint Decision Making Process OEM support is crucial

Strong Technical Involvement

• OEMs• VC arms OEMs• Glass Producers• Tier 1• Tier 2• Research Labs

• Luxury cars and new companies in the Market

• Keep customers cool and comfortable

• Block glare when sunny, allow light when desired

• Cool: Almost no cars with similar feature

• OEMs, specifically for luxury, need to differentiate

• Become a Tier 2, partnering with OEM and Glass Producer

The Automotive Approach

TAM, SAM and Year 7 Revenues

# Cars manufactured in US/year: 12M cars% luxury + crossovers luxury vehicles: 20%BMW, GM (example assumed first adopters): 25%% of first adopters’ vehicles (BMW X5/6 series/Lincoln):

25%Smart glass/vehicle: 10 SqFt Revenue/sqft: $40

Year 7 revenue potential12M * 20% * 25% * 25% * 10 SqFt * $40/SqFt = $60M

10 SqFt5 SqFt

5 SqFt 5 SqFt

5 SqFtTAM:$ 7,260 M

SAM:$ 960 M

Year 7 Revenue:

$ 60 M

Final MVP

5x faster switching

Neutral coloring

4x largerOriginal

Final

“Wow, that’s impressive” - Ben Cotton, Director of Sales at NSG Pilkington

Research and Development Pilot Certification and Scale

Our path from prototyping to scaling and production

KE

Y M

ILE

STO

NE

S


Financial / Operations TimelineKE

Y M

ILES

TONE

S $350k1ft x1ft. prototype



Y M

ILES

TONE

S $500kFull 0.6m x 1m prototype



Y M

ILES

TONE

S

$3MScale our production of prototypes and develop full pilot line

We may be a “shiny object” to glass companies

Competitor

Glass company involved in funding Amount/

Date$65MJan. 2017

$100MJan. 2017

AcquiredMarch 2012

What’s next?Building bigger prototype and patenting IP using Stanford resources

Working on further interviews w/OEMs to make a decision about moving forward

Moving on to work in the sustainable construction industry

Moving on to work in the finance industry but will continue being involved with the company as an external advisor

Questions?

Arnaud Dusser Dan Slotcavage Renato MeloniJerónimo Emiliano García De Brahi

Business Model Canvas

• Automotive companies / parts suppliers (specifically we have connections with main automotive OEMs, General Motors Research and Aisin Technical Center)

• Glass manufacturersKey Suppliers:• Glass manufacturers• Material suppliers• Deposition tool

suppliers

• Large-scale development of window production

• File patents• Acquire funding for

prototype• Develop manufacturing

capability

• Lab / manufacturing facilities

• Process engineers• Corporate VCs

(OEMs)• Manufacturing

specialists

• Less glare: Increased comfort for occupant of vehicle

• Decreased solar heat gain and potential energy saving from decreased A/C

• Removal of blinds and shades: less parts to produce a car and/or greater cleaning ease

• Maintain expansive view

• Act as supplier and provide product support

• Word of mouth generation

• Trade shows

• Automotive OEMs and tier 1 and parts suppliers

• Module sale to suppliers/tier 1 OEMs

• Labor (assembly line workers, engineers, management)

• Capex (pilot line equipment, full production line, space)

• Materials (supplies for construction of window)

• Smart glass (1 pane) sales to tier 1 OEM

Week 9

Licensing vs. Selling Money Flow

MagmaMarket

product

Sell product

Magma

Dyn

a mic

gla

ss

Request Magma

Licensing

Lice

n se

Selling$9 $2

00

$375

$375 (total

sunroof)

Sell product

Week 1Window tinting

Curta

ins

TraditionalBlinds

Magma Glass:

DynamicWindows

Low-e glass

Hundreds of designers

Elec

troc

hrom

icW

indo

ws

Week 8Window tinting

Autom

otive

Electr

ochr

o

mic gla

ss

Electrochromic

films

MagmaLow

-e glassCom

mer

cial

Bu

ildin

g

Elec

troc

hrom

icW

indo

ws

Projected Revenue: Automotive

# Cars manufactured in US/year: 12M cars% luxury + crossovers luxury vehicles: 20%BMW, GM (example assumed first adopters): 25%% of first adopters’ vehicles (BMW X5/6 series/Lincoln):

25%Glass/vehicle: 30 sqftGlass/vehicle that is smart: 30% Revenue/sqft: $40

Year 7 revenue potential12M * 20% * 25% * 25% * 10 sqft * $40/sqft = $60M

Luxury

Source: IHS

10 sq ft5 sq ft

5 sq ft 5 sq ft

5 sq ft

Crossover

Midsize car

Small car

Pickup

SUV

Van

Large car

11.111.6 12.0 12.3 12.1 12.1

Products / Services

• Tunable transparency sunroofs• Controls for variable amounts of transmission (including automatic option)

Pain relievers

• Solar heating resolved• Customers don’t have to choose just one tint

Gains Creators

• Highly infrared reflective technology• Ability to go fully dark• Neutral coloring• Less parts needed to produce a car

Value Proposition: Luxury Automotive Customer Segment: Automotive OEMs and part producers

Pains• Sunroofs only exist in static tint• Heat through windows/sunroof can be uncomfortable• Light through windows/sunroof can be blinding (dangerous)• Have to sacrifice views for darkness• Removal of blinds and shades: less parts to produce a car or greater cleaning ease (But potentially removing good acoustics?)

Gains• Passengers can choose desired opacity• View is preserved at all light intensities• More temperature comfort (avoid heating)• Aesthetic appeal• Differentiation

Customer Jobs

• Make automobiles sleek and sexy• Make passengers as comfortable as possible• Offer innovation in aesthetics and comfort

Value Proposition Canvas Week 8

Get/Keep/Grow Diagram

KEEP

Expansion to other OEM

s

Com

petition betw

een OEM

sA

war

enes

sIn

tere

stC

onsi

dera

tion/

Te

stin

g

Purc

hase

Viral Loop

Trade shows

Word of Mouth

Business Relationships

Product support (warranty, technical support)

Tech improvement (switching time)

Cost reduction (economies of scale)

Using product on m

ore car m

odels


• Large residential / commercial construction developers (relationships with Irvine Company and Build SF) and architects

Key Suppliers:• Glass manufacturers• Material suppliers• Deposition tool

suppliers

Week 1

• Understanding of specific customer demands for product



• Process engineers

• Cheaper than existing electrochromics

• Better and more Functional aesthetics: better transparency without blue hues

• Significant energy savings (reflect infrared light, keeping spaces cooler)

• Durability (technology is based in metal electrodeposition, and light won’t degrade the metals)

Our customers expect us to act as a supplier

• We create value for any window application. Automotive and aerospace manufacturers as well as residential and commercial construction all benefit from our technology. Traditional B2B

interactions.We have already been approached by automotive suppliers

• Materials costs (glass, ITO deposition, chemical salts)Development / construction of manufacturing line (including space for facility)


• Technology licensing to automotive / aerospace manufacturers

• Window sales to construction developers



• Aviation Companies• Niche consumers: Pilots,

Motorcycle drivers, Bikers


suppliers

Week 2









• Our customers expect us to act as a supplier

• We create value for any window application. Automotive and aerospace manufacturers as well as residential and commercial construction all benefit from our technology.

• Niche consumers: Pilots, Motorcycle drivers, Bikers

• Traditional B2B interactions.

• We have already been approached by automotive suppliers




• Window sales to construction developers• Sell lense and helmet to niche markets







suppliers










• We create value for any window application. Automotive and aerospace manufacturers as well as residential and commercial construction all benefit from our technology.

• Niche consumers: Pilots, Motorcycle drivers, Bikers






• Window sales to construction developers• Sell lenses and helmet to niche markets

Week 3







suppliers





• Less glare: Increased comfort for occupant of building or vehicle

• Removal of direct sunlight allows for an increase of floor space usage



• Maintain expensive view



• Commercial real estate buyers (developers//clients)


• Niche consumers: Pilots, Motorcycle drivers, Cyclists, RVs and Yachts




• Sales to commercial developers



• Technology licensing to automotive / aerospace manufacturers• Sunroof sales to automotive manufacturers (tier 1, OEMs)• Window sales to construction developers• Sell lenses and helmet to niche markets

Week 4




• Aviation Companies• Niche consumers:

Pilots, Motorcycle drivers, Bikers, RV or Yacht owners


suppliers





• Less glare: Increased comfort for occupant of building or vehicle

• Removal of direct sunlight allows for an increase of floor space usage






• Trade shows

• Commercial real estate buyers (developers//clients)


• Niche consumers: Motorcycle drivers, RV and Yachts (as starting point)


• Sales to commercial developers



• Sunroof sales to automotive manufacturers (tier 1, OEMs)• Window sales to construction developers

Week 5



• RV or Yacht ownersKey Suppliers:• Glass manufacturers• Material suppliers• Deposition tool

suppliers











• Trade shows






• Sunroof sales to automotive manufacturers (tier 1, OEMs)

Week 6



• RV or Yacht ownersKey Suppliers:• Glass manufacturers• Material suppliers• Deposition tool

suppliers





capability




specialists







• Trade shows




• Process engineers• Materials costs (glass, ITO deposition, chemical

salts)• Development / construction of manufacturing line

(including space for facility)

• Sunroof sales to automotive manufacturers (tier 1, OEMs)

Week 7



• Glass manufacturers• RV or Yacht ownersKey Suppliers:• Glass manufacturers• Material suppliers• Deposition tool

suppliers




capability




specialists







• Trade shows




• Labor (assembly line workers, engineers, management)

• Capex (pilot line equipment, full production line, space)

• Materials (supplies for construction of window)

• Sunroof sales to automotive manufacturers (tier 1, OEMs)• Smart glass (1 pane) sales to tier 1 OEM

Week 8

Customer Interviews● Construction - Customers: 13 Contractors, 1

Architect/Builder● Building: 2 Architects● Construction - Customers: 3 Architects,1 Real Estate

Developer, 1 Architect/GC, 2 General Contractors 2 Architect/Builder, 1 Architect/Owner, 1 Residential Architect,

● 1 Recent Home Builder, 1 Hotel Designer,,1 Home-Owner,

● Construction - Competitors: 3 Competitors● Construction - Competitors: 2 Glass fabricators● Construction - Competitors: 1 Marketing VP of main

competitor● Construction - Competitors: 1 Dynamic film fabricator

● Construction - Customers: 1 Building Expert, ● Construction - Customers:1 Building Expert● 1 Window Expert,

● Construction - Customers: 2 Partners, 1 Building Automator

● Aviation: 1 Recreational Pilot/Aerospace engineer● Aviation: 1 Military Pilot, 1 Commercial Pilot● Aviation: 5 Flight Attendants● Aerospace: 1 Spaceship Engineer

● AR/VR: 2 Customer

● Yachts: 1 Avid Sailor● Boat owners: 3 Sailors

● Automotive - Customers: 2 Purchasers, ● Automotive - Customers: 1 Automotive fabricator● 1 OEM,● 7 Automotive engineers, 2 Executives ● 2 Engineers, 1 Executive, ● Automotive - OEM: 3 ● 3 OEMs

● Automotive - Customers: 2 Automotive Suppliers, ● 2 Automotive Suppliers, ● Automotive - Tier-1: 2● Automotive - Customers: / 1 Automotive

Supplier● Supplier: 1 Glass supplier

● Competitors: 1 Co-founder

● Automotive - Customers: 3 Sales Representatives, 1 Dealer

● Automotive - Customers: 1 Sales Representatives,

● Automotive - Customers: 3 Luxury car owners● Car owners: 2 Luxury car owners● 1 Automotive customer, 1 motorcycle driver

● Experts: 1 Licensing Lawyer, 1 Green tech VC● Expert: 1 Automotive Research Institute● 1 SBIR grant recipient● Experts: 1 Clean-tech VC● 1 R&D

● Potential Partners: 1 Transparent Solar Cell Startup

● Construction: 42○ Architects/Builders: 27 (Contractors,

Developers, Residential/Commercial Architects)

○ Competitors: 6○ End Customers: 3 (Homeowners)○ Partners: 3 (Building automator,

fabricators)○ Experts: 3 (Energy Efficiency, Windows)

● Automotive: 60○ OEMs: 23 (Executives, Engineers,

fabricators)○ Suppliers: 11 (Glass, Tier-1)○ End customers: 7 (Luxury car owners)○ Experts: 7 (Licensing, Green Tech, R&D)○ Dealers: 8○ Competitors: 2○ Partners: 2

● Niche Markets: 15○ Aviation: 9 (Flight Attendants, Engineers,

Pilots)○ Yachts: 4 (boat owners)○ AR/VR: 2 (End customers)

magma eng245 2017

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