PowerPoint Presentation - From Invention to Startup - Fall Qtr

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PowerPoint Presentation - From Invention to Startup - Fall Qtr Powered By Docstoc
					Commercialization of
an Acoustic Camera

      Ed Belcher
      Bill Hanot
      Joe Burch

  Sound Metrics Corp.
Dual-Frequency Identification Sonar

                                      14 Nov 2006
                7.9 ft Shark

A 2.4m (7.9 ft) shark
swims in the
Oceanopolis Aquarium
in Brest, France. The
data were collected with
the DIDSON Diver Held
model held over the top
of the aquarium tank
Courtesy of Jean-Yves
Cueff, NEOTEK.

                               14 Nov 2006
             Deck of Sunken Ship

Changing the tilt of
DIDSON, captures
the deck or railing of
a sunken ship and
fish above the deck.
Taken with Diver-
Dave Elliott, NOAA

                                   14 Nov 2006

• This is a discussion on our commercialization process. I am not
  endorsing this process for everyone.

                                                                    14 Nov 2006
                Before the Beginning

• At APL we mostly made systems that satisfied the sponsor but
  did not generate much interest outside the sponsor’s specific
• We thought our lens-based sonars could be commercialized.
• We tried to license the technology to an existing company.
• Companies were not interested. One, company, said it would
  accept a license only if we first found a buyer for 40 systems.
• After 15 DIDSONs were sold from APL to a variety of users, we
  decided to try to form our own company.
• We had no promise of purchase from anyone. We thought if we
  started small and only sold 3 to 6 sonars, we could at least pay
  off our start-up loans.

                                                                     14 Nov 2006
               The Steps We Took

• Stated our intentions to the APL chain of command
• Learned specific steps from UW Office of Technology
• Obtained permission to work outside the UW in a area
  of potential conflict of interest. (forms and permissions
  from Department Head, Director, Dean of COFS, and
  a Vice Provost.
• Incorporated Sound Metrics
• Completed negotiations for an exclusive license with
  the UW OTL
• Teamed with Ocean Marine Industries, Chesapeake,
• Mortgaged equity in our homes and established lines
  of credit

                                                          14 Nov 2006
                The Steps We Took

• Started operations in my basement

                                      14 Nov 2006
             The Steps We Took

• Plowed revenues back into the company to build
  more sonars.
• No SMC salaries were paid in 2003
• Ed retired in Dec 03, Joe resigned May 04, Bill
  resigned Sept 04
• From March 2003 to July 2005, we operated in the
  basement of my house.

                                                     14 Nov 2006
                 The Steps We Took

• In July 2005, we moved to a suite (1,900 sqft) in an
  office building at 15029 Bothell Way NE

                                                         14 Nov 2006
The Steps We Took

                    14 Nov 2006
               The Steps We Took

• DIDSON status through Nov 1, 2006: over 100 shipped and
  7 demo/rental units are in operation
• Our start-up loans are paid off
• We are getting a salary
• Number of Employees: 3 full-time and 2 part-time.

                                                            14 Nov 2006
            Teaming with an Experienced
• Ocean Marine Industries, Chesapeake, VA, is valuable for selling
  our products and as a business consultant
• We value their experience:
   – Obtaining and tracking customers and closing deals
   – Processing Government Contracts, POs
   – Expediting payments
• They are paid by commission

                                                                14 Nov 2006
             Commodity Jurisdiction

• APL asked the Department of State for a commodity jurisdiction
  for DIDSON
• DoS responded and put DIDSON on the U.S. Munitions List
• To ship outside of U.S.A (Canada is an exception) we needed an
  Export License
• Ocean Marine worked hard for over 2.0 years to get us off the
  USML. We are now off, and go through the DoC.
• Try hard to avoid getting your product on the USML.

                                                               14 Nov 2006
              Out-Sourcing, a Type of Leasing

• How do we make sonars with only 3 full-time and 2 part-time
  people? We chose to work with a number of companies with
  needed talent and equipment rather than do all the work in-house.
    –   Machining Parts
    –   Circuit Board Assemblies
    –   Array Fabrication and Potting
    –   Cable Assemblies
    –   Payroll
    –   Books Checked and Taxes Prepared by Certified Public Accountant
    –   Specialists that do needed tasks outside of our expertise
    –   Sales and Contracts with Customers
    –   Rent office and work space
• There is risk in this approach. You cannot easily control the
  schedules and priorities of outside help. So far, we have not been
  severely burned.

                                                                      14 Nov 2006