eink
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What did E Ink do right? E Ink originated from MIT Labs and secured their intellectual property with adeq uate patents. In the worst case they would be able to leverage those by licensin g their technology. E Ink considered various business models. Keeping their long term target of gett ing to radio paper, they also tried to keep the short term cash flowing by gaini ng experience in signage and flat panel markets. E Ink made several strategic partnerships for investment dollars as well leverag ing existing expertise, eg, with Philips, Toppan and Sony E Ink got the right people onboard at various crucial stages and also made appro priate changes to their staff and leadership teams as and when required. The initial alliance with Toppan provided E Ink with their first serious custome r in Sony. It also provided them the required capital to refine their product an d access to potential use in Toppans products. E Ink did the right thing and focused on their core competency of producing ink and gained success with their Sony deal E Ink also took timely decisions to get out of the signage and watch display bus inesses, which were distracting it from its long term goal of getting to a viabl e display for Sony. Towards the end E Ink also considered going back to the signage and watch displa y customers as a supplier of ink coated plastic and not finished products. What did it do wrong? E Ink took early diversification decisions by dividing their focus on multiple m arket opportunities E Ink made major estimation/forecasting errors regarding their technological mat urity and what was involved in getting a viable product out of the door. E Ink also over estimated its market in terms of the target segments and the val ue. It was naïve to project that the entire publishing industry would suddenly swi tch to radio paper. Short term commitments to the signage and watch businesses took away its focus f rom the long term efforts for Sony. In effect, E Ink was ignoring the bigger cus tomer to take care of immediate ones. Product development was also an issue before they made major changes to their R& D and product development leadership. Quality was also an issue. They were not a ble to keep up with their development milestones. E Ink consistently ran out of money and then somehow continued to scrape through by raising stop gap capital. It was around 7 years before it had anything that looked like a product. In the initial stages it had a large burn rate and not sufficient revenues What might they have done differently? They should have first focused on getting their product right without investing so much in different R&D and sales organizations. As a VC, would you invest in E Ink in 2005 at the time of the case? In 2005 E Ink finally tasted success with the Sony eBook. They got a lot of good press and serious enquiries about their product. Because of their massive reven ue jump (from 1 to 4.5M) they were able to attract more capital. I would be very interested in E Ink at the time because of the potential applications of the te chnology. It would be a matter of time before E Ink would figure out color capab ilities and a host of third parties would figure out how to make flexible backpl anes. That combination would be a huge leap from todays digital displays. All thi s would make E Ink a prime target for a buy out! Assuming the company gets the money it needs to stay alive, what do you do as CE O? E Ink was successful when it focused on one thing, the e ink display. That focus helped it to optimize its supply chain and pay the required attention to the de velopment activities required to polish the core product. As a CEO I would conti
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What did E Ink do right? E Ink originated from MIT Labs and secured their intellectual property with adequate patents. In the worst case they would be able to leverage those by licensing their technology. E Ink considered various business models. Keeping their long term target of getting to radio paper, they also tried to keep the short term cash flowing by gaining experience in signage and flat panel markets.
E Ink made several strategic partnerships for investment dollars as well leveraging existing expertise, eg, with Philips, Toppan and Sony E Ink got the right people onboard at various crucial stages and also made appropriate changes to their staff and leadership teams as and when required. The initial alliance with Toppan provided E Ink with their first serious customer in Sony. It also provided them the required capital to refine their product and access to potential use in Toppans products. E Ink did the right thing and focused on their core competency of producing inkand gained success with their Sony deal E Ink also took timely decisions to get out of the signage and watch display businesses, which were distracting it from its long term goal of getting to a viable display for Sony.
Towards the end E Ink also considered going back to the signage and watch display customers as a supplier of ink coated plastic and not finished products.
What did it do wrong? E Ink took early diversification decisions by dividing their focus on multiple market opportunities E Ink made major estimation/forecasting errors regarding their technological maturity and what was involved in getting a viable product out of the door. E Ink also over estimated its market in terms of the target segments and the value. It was naïve to project that the entire publishing industry would suddenly switch to radio paper. Short term commitments to the signage and watch businesses took away its focus from the long term efforts for Sony. In effect, E Ink was ignoring the bigger cus
tomer to take care of immediate ones. Product development was also an issue before they made major changes to their R&D and product development leadership. Quality was also an issue. They were not able to keep up with their development milestones. E Ink consistently ran out of money and then somehow continued to scrape throughby raising stop gap capital. It was around 7 years before it had anything thatlooked like a product. In the initial stages it had a large burn rate and not sufficient revenues
What might they have done differently?They should have first focused on getting their product right without investingso much in different R&D and sales organizations.
As a VC, would you invest in E Ink in 2005 at the time of the case?In 2005 E Ink finally tasted success with the Sony eBook. They got a lot of goodpress and serious enquiries about their product. Because of their massive revenue jump (from 1 to 4.5M) they were able to attract more capital. I would be veryinterested in E Ink at the time because of the potential applications of the technology. It would be a matter of time before E Ink would figure out color capabilities and a host of third parties would figure out how to make flexible backplanes. That combination would be a huge leap from todays digital displays. All this would make E Ink a prime target for a buy out!
Assuming the company gets the money it needs to stay alive, what do you do as CEO?
E Ink was successful when it focused on one thing, the e ink display. That focushelped it to optimize its supply chain and pay the required attention to the development activities required to polish the core product. As a CEO I would conti
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nue to refine the E Ink product, develop color and flexible displays. I would also scout many different finished product manufacturers, in different industries,that could use flexible displays. I would control costs and make sure the cashsituation is improved and the company is sustainable in the near future before making large bets or new capital expenditures.
Which markets would you attack?
I would be interested in the publishing (for readers), consumer electronics (eg,cell phones, audio equipment), home goods (eg, thermometers), medical devices (eg, monitors) and automobile (eg, center consoles, head up displays) industries.
Which business model would you adopt?Customer Segment: Multi Sided, because we would be selling to other finished product manufacturers in different industries, we would have diverse customer segments exposed to our productValue Proposition: flexible color e ink displays would be a disruptive innovation. It would be cheaper, use less power, can be folded/rolled up, be miniaturized, readable in different lighting conditions and be rugged and waterproof.Channels: Direct sell to manufacturers of finished goods
Customer Relationships: Dedicated personal attention to manufacturing partnersRevenue Streams: Asset sale with fixed menu pricingKey Resources: Physical facilities (plants, labs etc), Human Reosurces (R&D staff, Product Development, Engineering), Intellectual (patents), Financial (R&D dollars)Key Activities: R&D, Engineering, Production, Platform mgmt.Key Partnerships: Design to optimize and gain economies of scaleCost Structure: High R&D costs. Number of products should be limited to achieveeconomies of scope
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