Chalkboards have been replaced by interactive whiteboards (a $1 billion annual market worldwide), and textbooks are being replaced by tablets (a $5.4 billion market in the US). The printed globe is the last staple of the classroom that can be digitalized, and is highly complementary to IWBs and tablets. Not doing so carries an enormously large opportunity cost, as teachers could be far better equipped to engage students in a wide range of topics that call for spherical data, like geography, history, economics, earth sciences, astronomy, and so on.
WHAT SETS US APART
For K-12 teachers to better engage their students on global topics, we have built a completely new cloud-based educational ecosystem, akin to Apple’s iPhone and iTunes, combining spectacular hardware, software and content/media:
1) Proven Efficacy: In a third-party study of 1,400 students over a year, the Magic Planet improved post-test results by 16%, and participation increased by 50%, on average, across 15 different subjects. Students’ spatial reasoning skills are triggered, thus why they learn better.
2) Validated, Large Markets: In China, the Ministry of Education (MoE) granted us a 10-year exclusive listing on its National Standard for 2015 and beyond, which means we are the only recommended globe schools can purchase. We have deployed 1,500 units there; the MoE estimates it will order 100,000 units from us in the next 5 years, equal to more than $250 million in sales for us. In the US, we are in 400 schools, and are reaching out to thousands more with our new distribution channels.
3) “Branded” Content Partnerships: We have the largest library of spherical media and content in the world, with over 15 terabytes to date, because of our long-standing partnerships with the Smithsonian, NASA, NOAA, the European Space Agency, and many other world-class institutions that have created stunning animations, videos, apps, etc. with us. Replicating this library would be extremely costly.
4) Clear Path to Mass Marketability: While we have had tremendous adoption from progressive schools around the world, we must reduce our costs to build Magic Planets, so that every K-12 school can afford them. We have an extremely well documented and straight-forward plan to reduce our bill of materials four-fold.
5) Profitable: Our 5-year foray in China is paying off this year, as it will enable us to post strong net profit margins.
6) Management is Lean, but Achieved a Lot: Global Imagination is the fourth start-up led by Mike Foody, CEO & Co-Founder; he is supported by a team of 12. His expertise is in product management, corporate development, computer graphics, user interface design and enterprise-class software infrastructure. He used the proceeds from a previous $32 million exit, which was backed by NEA.
INTERNATIONAL PRESENCE AND GROWTH PLAN
- Formal education (K-12) in China
- Institutional/informal (museums, planetariums, government) education, primarily in the US, but also in 38 other countries
Global Imagination will focus its expansion efforts on China and the US, while working opportunistically in the rest of the world, as follows:
In China, there are over 1,400 Magic Planets in about 1,000 schools across the country. This penetration is built upon Global’s exclusive relationship, which is nearly six years in the making, with the Chinese Ministry of Education (MoE): the MoE has granted Global’s an exclusive position on its recommended equipment list, and in 2015, for the first time, Magic Planets will be included in the National Standard.
Among other functions, the MoE:
- Develops lesson plans for the Magic Planet;
- Informs schools as to its benefits (“evangelize”);
- Trains teachers on its use.
We also have a multi-year relationship with a reseller authorized by the MoE, who handles the commercial aspects (order taking, technical support, etc.) of the relationship with schools.
According to the MoE’s forecasts, by reducing the product price to schools by 75% to 15,000 RMB ($2,500 USD) or less, which is easily achievable, growth will be as follows:
- Year 1: 10,000
- Year 2: 20,000
- Year 3: 40,000
- Year 4: 60,000
Our strategy in China is twofold:
- Work with the MoE to scale their “evangelization” efforts substantially
- Expand the breadth of resellers, who already have commercial relationships with schools, so we scale to meet the MoE’s projections
Magic Planet has received exposure in thousands of US classrooms because we have sold over 100 systems for “outreach” to institutions like NASA, NOAA, the Smithsonian, the American Museum of Natural History, and other prestigious organizations. They create lesson plans, animations, videos, etc. for the Magic Planet and take their own “outreach” systems to schools, using them to explain a broad range of topics like astronomy, geography, etc.
In addition, there are Magic Planets in 14 US schools districts, representing about 425 schools total.
Our sales strategy in the US is to work through Interactive Whiteboard (IWB) resellers. The Magic Planet is a complementary product, to be sold at a comparable price to IWBs, to the exact same customers with whom the resellers already work. Moreover, IWB resellers are aggressively looking for growth opportunities due to the slowdown in IWB sales as classroom penetration has peaked for IWBs.
In addition, we will leverage our relationships with those same informal education institutions not only to share / distribute their media and content with schools across the nation and worldwide (in effect leveraging their brands and credibility), but also to leverage the extraordinary exposure they give to the Magic Planet by bringing it into schools. As the price of our globes continues to drop, institutions will have even more of an economic incentive to bring the Magic Planet into schools because it will drive field trip revenues up for them.
Rest of the World
About 40 million people in 39 countries view a Magic Planet every year, so Global has a large footprint, and is known by schools worldwide.
In the first 2-3 years after financing we will work opportunistically in countries like the UK, Australia and others to drive additional RoW revenue. We will focus upon signing resellers who are dominant in their countries, and who have the resources to develop content (e.g. lesson plans, animations, etc) tied to local curriculum. For example, we have signed ELECTROBOARD as a reseller. ELECTROBOARD is the largest IWB reseller in Australia, and they’re making a major commitment to the Magic Planet, having already sold a unit despite the relationship being young.
Long-Term Growth Strategy
The Chinese MoE estimates the overall market for video globes is about one in four classrooms worldwide. Our strategy is to reach these classrooms predominantly through IWB resellers in most countries. At the same time, our cloud-based strategy will “reach beyond” the classroom to target parents who have the desire to participate in their children’s education (through apps to guide them through lessons, primarily).
That “reach beyond the classroom” will form the basis of our consumer strategy. Just about every educated household had a globe not so long ago. And, in the same way that the iPhone revolutionized phone ownership/usage, Global will expand the breadth of usage for the once ubiquitous household globe.