Content

Content Specialists

Technology

e-Learning about Technology for Age 8-13

Overview

• Large and growing demand to interest kids in engineering and technology• Large and growing need for constructive, after-school activities.• Need for quality, in-school, technology specialists despite tight budgets.• Need for content that readily captures youngsters’ interest. Based on:• Proven and acclaimed content created at MIT’s Media Lab.• Unique Internet delivery model offers high caliber university talent (Harvard,

MIT, Tulane, UCLA) anywhere there is Internet access.• Experienced, talented management & development team.

Build-it-Yourself is a collaborative e-learning solution aimed at the underserved age 8-13 segment. Based on groundbreaking work at MIT’s Media Lab, it addresses the demand to teach children to learn and appreciate science and technology

Build-it-Yourself satisfies:

Market Segments

At Home After School

Public School

Private School

Commercial After School

Public- After School

Private-After School

25 M

illion

BIY US Opportunity: After School Programs = 3.00 Million YoungstersAvailable budget: est. $1.8 Billion ($600/yr/child)

26,569 Schools (5 Million Kids)

15% (750 K youngsters)

71,270 Schools (20 Million Kids)

10% (2 million youngsters)

15 Million Youngsters

Source: Institute for Educational Science, US dept. of Education, Digest of Educational Statistics and Wallace Foundation May 2006

250K - 325K youngsters

Age 8-13

• vision, • product/service (IP) • customer examples

• market

The Vision

The Challenge: The next generation of leaders and builders must use complex technology to solve tough problems.

The Mission:

Inspire and guide kids to build creative inventions.

Empowering the next generation of builders

What We Do

Build-It-Yourself provides after-school and at-home workshops that inspire and empower kids to …create, design, build and invent.

We engage boys and girls in playful approaches to design, invention and scientific inquiry.

We train kids to apply complex technology to solve problems.


Who We Target

Boys and girls ages 8 to 13

Parents"One can imagine Build-It-Yourself students in later years sliding about a mile down the street to continue their projects at MIT."Quote from an article in The Improper Bostonian about the Build-It-Yourself laboratory near MIT


10 million are enrolled in after-school enrichment programs.

The Product

Database of Content Elements:Online database of:• Playful storylines and associated

challenges • Building tricks and lessons• Functional building blocks that

enable kids to build complex projects quickly.


Content Specialists

Collaboration

• Seth Mastin – BA Computer Science, MIT• Rebekah Gendron – MEd, Rhode Island Univ• Max Seidman – Sophomore BB&N• Valeria Roman – Science Journalist, Argentina• Naseem Makiya – Junior Harvard• Michael Hsu – Sophomore, Choate• Liu Huan – Senior, Shanghai High School• Joan Tarud – MS Mechanical Engineering, MIT

Network of Specialists:Graduates and students from the Harvard/MIT community who inspire and guide kids.


The Product

Content Specialists

Collaboration

Effective Collaboration Tools:2-way audio/video webcast platform enables kids to collaborate with peers and specialists in a global laboratory.


The Product

Content Specialists

Collaboration

Differentiation

1) Build-It-Yourself appeals to a high % of boys and girls.Technology is applied to a broad range of kids' interests and social issues in a playful way. It is a unique integration of technology with whimsical storylines, art, games, and social collaboration.

2) Build-It-Yourself students execute complex ideas quickly.The Build-It-Yourself database of construction modules encourages kids to break down complex solutions into simple, reusable, functional building blocks.

This database of construction modules minimizes mentor time spent on repetitive, basic concepts and maximizes valuable mentor time focused on individual questions and solutions.


3) Build-It-Yourself offers consistent, high-quality instruction at half the cost of traditional instruction.Experienced, inspiring, Build-It-Yourself specialists, (many from MIT and Harvard) collaborate with kids, parents and teachers via live Webcasts. ($10/hr for babysitter, $10-$20/hr for camp or after school program, $10/hr for public school, $50/hr for private teacher.)

If a member pays $10/mo and does a 1hr workshop each weekend, the cost is $2.50/hr for live collaboration. In addition members get access to on demand content and web space to post projects.

4) Build-It-Yourself projects are unusually engaging and creative.The Build-It-Yourself program focuses on the presentation of ideas as much as on the execution of ideas. Each project is presented on the Web. The result ... kids build confidence because their projects look good, win positive feedback and are accessible to a global audience.


Differentiation

Our Workshops Are In Demand

• 16 schools schools served:

– 70% are repeat customers

– Include BB&N, The Park School, Concord Academy

– Growth via word-of-mouth

• More than 1400 kids served

• More than 15,000 hours of workshops delivered

• More than $320K revenue generated

“Clio was thrilled. She couldn't stop talking about what she did.”

Parent

“I never thought my son would give up soccer for anything.”

Parent

Key Statistics Validation


Testimonials

"The goal is to highlight the 'powerful ideas' in the modules -- that is, the ideas that help you understand how the module works, and provide you with a foundation for building other things."

Professor Mitchel Resnick, from the MIT Media Lab, directing the collaboration between MIT and Build-It-Yourself to develop a database of construction modules

"Build-It-Yourself is a fascinating program that engages students in creative projects to design and build robots. Both of my children --ages 7 and 9-- have participated in Build-It-Yourself workshops and learned greatly from it. It's very interesting pedagogy."

Dr. Fernando Reimers, Associate Professor and Director of HGSE's International Education Policy program, describing the Build-It-Yourself program to colleagues at the Harvard Graduate School of Education

"Thanks for putting on one of the best Robotics workshops that I have been to."

Science teacher at the Jamestown Middle School, RI commenting on a Build-It-Yourself workshop for teachers


Testimonials


Customer Examples

• At Home - After-School • Microsoft Pilot Program

• Private Summer and After-School• Concord Academy

• BB&N

• Shady Hill

• Park

• Renbrook (Hartford)

• Public Summer School and After School• Greater Lawrence Schools

• Cranston Middle School (Cranston, RI)

• LaMesa California (SanDiego) Schools

• Runkle (Brookline)

Before using BIY they had mixed results using their own content or a competitor’s

Product/Content (IP)• Over 25 pre-packaged 12-20 hour projects, programs and lesson plans

• Ranges from basic animated vehicles to complex robots, vehicles, multi-player web games and personal web site development.

• Database accessible component library• Over 50 core control and operational components inspired by MIT Media Lab

education research.

• Structured database developed at the Media Lab

• Lesson plans for teaching technology and engineering fundamentals

• Process for engaging youngsters using web-collaboration software• Best practice for live, interactive e-learning

• Learn, create, construct

• Share

• Document

• Web-publish and present

Effectiveness-proven content based on over

1,400 youngsters in sixteen schools.

Build-It-Modules (IP)

Over 50 hardware and software building blocks:from gear trains to chassis to programmable modules

from graphic programming to graphic illustrating

On-Line Building Block Module Library Rotate 10

Shake, Flap, Gyrate 13 Sound Off 6 Roll, Walk 4

Throw 2 Squirt 1 Detect 5

Program Control 8 Other 3

Competition• Mad Science

• $100+M (franchisee total)• Franchise distribution delivers mixed quality

• Play-Well• Franchise and Direct• Focused on entertainment

• Children’s Technology Workshop• Direct – instructor on site• Web site is “game” oriented-only

• Odyssey of the Mind• Focused on Creativity not technology• Programs delivered by local school personnel

Unlike competitors, BIY offers live web access to technology student-teachers, content developed in collaboration with MIT, Build-It-Blocks and our On-Line database

Three Ways to Reach the Market

B2B via Channel: B-i-Y delivers e.instruction and content to youngsters in school settings

B-i-Y trained and certified instructors lead by B-i-Y specialist in web-cast

B2B via VARs: Programs delivered by certified Commercial Business Partners already providing education (Bright Horizons, Sylvan, Mad Science, Nobel Learning, etc)

B2C: Self-guided at home programs (with parent or home-care provider)

B-i-Y web specialist available via interactive video/audio

B-i-Y web-based virtual build projects

Plan

• Scale web delivery of after-school programs nationally; to public/private schools via alliances

• Secure VAR channel offering after-school programs

• Launch Build-it-Yourself web site

Build a base of youngsters, parents and educators who have experienced Build-it-Yourself programs, then launch the B-I-Y social/education site

Overview: Results by Channel• VAD Channel (Alliances): After School Public/Private Programs

• 2.75 Million (est.) children served• Served by over 90,000 schools• 4-6 month close cycle• At $12/hr retail: $445 million opportunity• 5th year goal: 2% market share = $8.9 million• Net Income: 13% of revenue

• VAR Channel: Commercial After-School Program Vendors• 325,000 (est.) children served• Under 100 organizations (Bright Horizons, Edison, Nobel, Knowledge Learning

Corp, etc)• 6-9 month close cycle plus 3-6 month time-to-pilot• At est. $600 per child/yr, opportunity = $195 million• 5th year goal: 6% market share = $12.5 million• Net Income: 24% of revenue

• Web Site: social/collaboration/learning network • 300,000 subscribers in 5th year• $8 per month• 5th year goal: $28.8M revenue• Net Income: 50% of revenue

Sources: Digest of Educational Statistics 2005, The Catalyst 2006 and After School Alliance

The Team1. Steve Fisch: CEO. COO Iona Technologies (NASDAQ:IONA),

president Attunity (NASDAQ:ATTU), CEO Virtual Access Networks (acquired by Symantec) and Reconda International (acquired by MQ Software). Sales and Marketing executive at McDonnell Douglas (Boeing), Prime Computer and Computervision. BSEE and MBA. School Committee: Sudbury Mass

2. John Galinato: Founder and Product Manager. BEE and MS Cornell; co-founder and product manager at Autographix; founder/president Computer Aided Communications.

3. Ann Butler: Content Advisor. M.Ed. 1998, Technology in Education, Harvard Ed School

4. Barbara Ross: Operations & Marketing Advisor. Co-Founder/COO WebCT acquired by Blackboard Inc.

Growth to $50+ M

Revenue by Source Year 1 Year 2 Year 3 Year 4 Year 5

Alliances (B2B2C) $221,880 $1,310,240 $2,293,920 $4,587,840 $8,899,200

EBITDA -245,188 134,760 488,168 983,336 1,423,672

Commercial Vendors (B2B) $0 $360,000 $1,800,000 $3,600,000 $12,500,000

EBITDA -275,000 -224,050 137,750 725,500 3,041,000

Web2C $0 $75,750 $9,847,500 $18,512,500 $28,850,000

EBITDA $0 ($332,370) $4,188,990 $9,256,250 $14,425,000

Total Revenue $221,880 $1,745,990 $13,941,420 $26,700,340 $50,249,200

EBITDA ($520,188) ($421,660) $4,814,908 $10,965,086 $18,889,672

In 5Years => 402,800 children

Kids Engaged Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Alliances 570 3,360 5,880 11,760 22,800

Channels 0 6,000 30,000 50,000 80,000

Web2C 0 500 65,000 175,000 300,000

TOTAL Youngsters 570 9,860 100,880 236,760 402,800

Series A Investment in two $750,000 tranches:

• 1st builds out core business nationally and initiates channel/alliances• 2d builds-out channel and enables initial launch of Web2C site

Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5

Beginning Cash $1,400,000 $789,084 $345,240 $5,172,236 $16,286,498

Cash Flow ($610,916) ($443,844) $4,826,996 $11,114,262 $19,107,392

Ending Cash $789,084 $345,240 $5,172,236 $16,286,498 $35,393,890

Louisiana Fund committed to lead with 50% of funding based on $1M pre-money valuation

Valuation Comps

• Web2.0 Social Networks– ClubPenguin/Disney (WebKinz,

NeoPets/Viacom MTV, etc.)

• Education Applications– BlackBoard (SunGard, etc.)

• Education Content & Texts– McGraw-Hill (Pearson, etc.)

• Full Services Education– Bright Horizon ( Nobel, etc.)

• 10:1

• 5:1

• 2.4:1

• 1.5:1

BIY moving up the value chain

Cap Value: Rev (examples)*

Exit is possible through any of the companies in these categories

* source: Fidelity FY06 revenue, recent CAP and published reports

www.build-it-yourself.com

Investment of $1.5 million is required to expand the B2B business, fill-out the team, shrink wrap the product, expand infrastructure and develop distribution partnerships.

• Large and growing demand for constructive, after-school activities.

• Consistent, high-quality instruction without in-school specialists

• Collaboration with MIT Media Lab.

• Proven and acclaimed content.

• Unique web delivery model.

• Access to high caliber student specialists.

• Experienced, talented team.

Addendum

Testimonials"The goal is to highlight the 'powerful ideas' in the modules -- that is, the ideas that help you understand how the module works, and provide you with a foundation for building other things."

Professor Mitchel Resnick, from the MIT Media Lab, directing the collaboration between MIT and Build-It-Yourself to develop a database of construction modules

"Build-It-Yourself is a fascinating program that engages students in creative projects to design and build robots. Both of my children --ages 7 and 9-- have participated in Build-It-Yourself workshops and learned greatly from it. It's very interesting pedagogy."

Dr. Fernando Reimers, Associate Professor and Director of HGSE's International Education Policy program, describing the Build-It-Yourself program to colleagues at the Harvard Graduate School of Education

"Thanks for putting on one of the best Robotics workshops that I have been to."

Science teacher at the Jamestown Middle School, RI commenting on a Build-It-Yourself workshop for teachers

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