EDI Web 3.0 More Tools, Less Cost…
Mark Pattison, Founder and CEO October 2008
16 Mile has the Solution What we do: •Revolutionize EDI with a SaaS solution that dramatically reduces cost by 40%. •In today’s economy, everyone is looking to reduce the bottom line. No other company can offer dramatic cost savings while increasing their EDI efficiency. •16 Mile will create a cash cow over time like Comcast or any of phone companies.
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What does this mean? • A company generating $25 Million in Revenue is likely to pay $25,000 EDI cost. 16 Mile OV can easily save a company at least $7,000 or more!
• A company generating $1 Billion in Revenue is likely to pay $25 Million in EDI cost. 16 Mile OV can easily save a company at least $7 Million or more!! •
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Market Opportunity Worldwide Supplier Relationship Market (millions of dollars) 2,500.00 2,000.00 1,500.00 1,000.00 500.00 0.00 2006
2007
2008
2009
2010
2011
Source: ARC Advisory Group 2007
• The supplier relationship market (SRM) is expected to grow at a compounded rate of 8.2% — from $1.6 billion in 2006 to $2.35 billion in 2011. • Today, 35% of small- to medium-size companies — those earning annual revenues of $30 million to $1 billion — still use manual processes for communicating with their suppliers.
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Market Summary Breakdown No incentive for current competition to change. They all charge based on transactions and would have to restructure their entire business to adapt which would mean massive revenue loss. • Of 309,909 U.S.-based businesses, 79,804 fall in in our target market — companies with $30 million to $1 billion in annual revenue. • We only need 2,200 companies as customers (2.75%) to reach our annual revenue goals. A
B Key: A = annual revenue B = number of U-S.based companies with that revenue
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Supply Chain Order Process Today
$ $ $ $ $ $ $ $ $ $ $
The competition charges for every message/ Kilobyte that is sent. This is very costly.
$$ $$ $$$ $ $$ $
Vendor 1
$ $ $$ $$$ $$ $ $
Retailer Manufacturer
$$
Bank $
$$ Tr an $$ sfae crti $$ ofn PCO $$ haD ragt eas Logistics
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16 Mile SaaS Approach We charge a seat license with bundled tools to process orders. Chinese Factory
Bank/Factor
Nordstrom Bob’s Shoe’s
No DTar taan Msao cvt eison FrC ehea r
ge s
Logistics 7
16 Mile OV (OV = order visibility) Our inaugural product, 16 Mile OV, is a hosted solution that differs from its competitors if five important ways: •
New Pricing Model: Results in 50-100% lower EDI costs, plus no charge for transactions to and from suppliers sent via AS2 and FTP. Others charge by kilobytes for each transaction.
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Multi-dimensional Order Visibility: Delivers real-time, multidimensional order information across supply networks, along with EDI (electronic data interchange). Others only offer EDI.
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New Technology: Based on new database structure that integrates data from Oracle, VANs and other back-end systems, results in better end-to-end management of supply and demand.
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Built-in Tools: Unites EDI and order visibility with tools and reporting capabilities for vendor performance, event alerts, inventory tracking, response management, scanned-based trading, and more.
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Mobility Enabled: 16 Mile OV can “mobile enable data” extra to any Smartphone or PDA. 8
16 Mile vs. the Competition
Gray boxes = capabilities
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Milestones PRODUCT MILESTONES Beta testing completed January 2007 (with Starbucks) Product launch April 2008 SALES MILESTONES CLOSED DEALS: Robins and Meyer, Olympia Sports, Carbon 5, Inmoda, Mello Sales, Staub USA, The Pattison Group (translating data between them and retail giants Adidas, Columbia Sportswear, KB Toys, Nike, Reebok, Sam’s Club, Starbucks, Target, Wal-Mart, PetSmart, Dillards & more) PENDING PROPOSALS: PetFood.com, Safeway, Kassatex, Venture Products, Red Wing Shoes, Capacity, K&M International, plus 20 others IN DISCUSSIONS: Nordstrom, Starbucks Coffee, Restoration Hardware, Schenker Logistics, True Religion Jeans, Baden Sports, Car Toys SALES TEAM: Hired supply chain experts from key competitor, Houstonbased Dicentral. OTHER MILESTONES LEGAL: Perkins Coie agreed to provide legal representation as part as its “Emerging Company” program. PATENTS: 1 process and 1 technology patent pending for warranty claims facilitation. 10
Financial Summary GOAL: Reach 2.75% of our target market for success
Detailed revenue model available upon request 11
Experienced Team Founder has experienced supply chain issues first-hand:
• • • •
Founded 13-year-old branded merchandise and import co. 1,000s of transactions, 100s of customers 10-year Preferred Vendor of Starbucks Coffee Manufacturer of all Starbucks’ outdoor umbrellas and bases for North America, Latin America, and Asia
• Co-founder, 2000 • Makers of coffee table games • 700 retail locations, seven countries • Family Fun “Toy of the Year” Award 2002 and 2003 • Angel and VC funding • Acquired December 2006
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Board of Advisors •
DEAN BAKER: Founder of Asset Recovery Specialist Inc. ( www.equipmentrecovery.com), asset management for banks and leasing companies
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JOHN BAUGHN: Former partner of Accenture for business and IT architecture, managing over $100 million dollars
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DIANE DEWBREY: CEO/President of Foundation Bank
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TIM DOWLING: VP Business Development McAfee
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TERRY DRAYTON: Co-Founder of Home Grocer, Count Me In, Ramp Technology Group (www.RampGroup.com)
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DAN NORDSTORM: Former CEO of www.Nordstrom.com, current CEO of Outdoor Research Company ( www.outdoorresearch.com) Each advisory member has invested in 16 Mile Solutions.
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Funding Requirements Prior Funding: $200,000 from founder Series A Raise @ $1,500,000 $1,500,000 raised Pre-money valuation: $2.5 million Preferred shares .35 Series B Raise @ 2,500,000 Capital will allow us to: Scale Acquire working capital Hire infrastructure (CTO, CFO, sales, marketing, support) Launch channel partner program (domestic and international) Continue public relations, search engine optimization, marketing Extend features of 16 Mile OV Complete development of Warranty Claims (currently in beta) Visibility, Efficiency, Lower Costs
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Where We’ll Be in 3-5 Five Years • $70 million in revenue • More than 2,000 clients worldwide • Established international channel partnerships • Next-generation status in retail compliance • Recognized market leader in automating supply chain collaboration, communication, and warranty claims • Exiting — through acquisition by company with compatible fit . . .
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EDI Web 3.0 More Tools, Less Cost… Mark Pattison, Founder and CEO 712 N. Motor Place Suite 3 Seattle, WA 98103 206.675.1066 206.675.1099
[email protected] www.16MileSolutions.com
Pricing Model Software as a Service (SaaS) • Based on a seat license and sliding scale • Transaction pricing (for VAN-EDI management): $0.25/kb, decreasing if competition increases. Never below cost plus 30-40%.
Seat Licenses
Price Per Number of Seats
1 to 10
$ 5,000
11 to 19
$ 4,500
20 to 49
$ 2,700
50 -99
$ 2,100
100 to 200
$ 1,700
Annual seat license
20%
Setup (Per retailer) Map to client environment
Chart prices derived from competitive analysis models between 16 Mile OV and other solutions operating in the hosted EDI market.
Seat
$250 by format
X.12 (Custom format)*
$2,500
XML
$1,000
ASCII Packet (In increments of 10
$500 $1,000
Training
$0
Support
$0
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