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Business Development Plan

Clarus Designs

Proposal Prepared by: Ms. Sara E. Boyce Ms. Sarah L. Peters Mr. Brian P. Boyce Mr. Anthony J. Blusius Jr. Ms. Hongyan Yuan

Clarus Designs 200 Rivington Street, Suite 305 New York, NY 10002 212-125-2787 212-125-2786 fax www.clarusdesigns.com info@clarusdesigns.com


Table of Contents Executive Summary ........................................................................................................................ 3 Company Information ..................................................................................................................... 4 Mission Statement ....................................................................................................................... 4 Company History ........................................................................................................................ 4 Company Goals ........................................................................................................................... 4 Organizational Partnerships ........................................................................................................ 4 Industry Status ................................................................................................................................ 5 Economic Outlook ...................................................................................................................... 5 Industry Outlook ......................................................................................................................... 6 Technological Influences ............................................................................................................ 6 Projected Opportunities .............................................................................................................. 6 Regulatory Environments ........................................................................................................... 6 Target Market/Customer Base ........................................................................................................ 7 Core Market ................................................................................................................................ 7 Geographic Profile ...................................................................................................................... 7 Demographic Profile ................................................................................................................... 8 Psychographic Profile ................................................................................................................. 9 Industry Size ............................................................................................................................... 9 Market Segment .......................................................................................................................... 9 Marketing Plan .............................................................................................................................. 11 Direct Competition.................................................................................................................... 11 Indirect Competition ................................................................................................................. 12 Pricing Objectives ..................................................................................................................... 12 Promotion Activities ................................................................................................................. 13 Advertising Incentives .............................................................................................................. 14 Growth Strategies...................................................................................................................... 14 Products and Services ................................................................................................................... 15 Results of Customer Satisfaction Survey .................................................................................. 15 Organization and Management ..................................................................................................... 16 Key Managers ........................................................................................................................... 16 Organizational Chart ................................................................................................................. 18 Professional Assistance............................................................................................................. 18 Exit Strategy.................................................................................................................................. 18 Additional Exhibits ....................................................................................................................... 19 Appendix A ............................................................................................................................... 19

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Executive Summary The Company Located in New York City, Clarus Designs was founded in 1998 by five motivated individuals who understand the importance of preserving history and culture, and the promise of education through computer based training and eLearning. Our primary focus is creating eLearning content for museums and tourist attractions. Over our ten-year history we have built successful partnerships throughout North America. Our client list includes the Smithsonian, Museum of Modern Art, and J. Paul Getty Museum. We are committed to our Global Vision Strategy for continued growth and success in the global market. The Global Vision Strategy, which encompasses our expansion into Asia and Europe, will establish the future standard in eLearning for the interpretive systems industry. Business Goals Clarus Designs is a results-driven and innovative company with the desire to build solid business partnerships. Our central goal is to gain market share globally with the intention of opening satellite offices in Asia by 2009 and in Europe by 2012. Our competitive advantage in these markets will be the recently developed Clarus V-Guide, a cost-effective mobile device designed to deliver our customized high quality multimedia content. As our company moves into the global marketplace, we will continue our double-digit sales growth and double our strategic partnerships by 2010. Products and Services Clarus Designs specializes in creating multimedia content for use at museums and tourist attractions. We have produced a working prototype of a unique handheld device for debut at the upcoming Olympic Games. Target Market Museums and tourist attractions in urban areas account for 89% of our target market. Smaller cities, towns and national parks account for the remaining 11%. Clarus Designs is expanding our target market by launching the Clarus V-Guide at the 2008 Olympic Games in Beijing. Management Team Clarus Designs’ management team includes President/CEO Sara Boyce, VP of Human Resources Brian Boyce, VP of Sales and Marketing Hongyan Yuan, VP of Learning and Development Sarah Peters, and VP of Research and Development Tony Blusius. Our combined abilities include the management of countless successful eLearning projects, extensive contacts in the industry, experience throughout the many stages of the hiring process, understanding of the international market, expertise in multimedia design and development for the museum industry, identification of future technological trends in eLearning, and the adaptation of new technologies to solve current problems. Funds Sought Clarus Designs is seeking USD 5 million in order to expand into the global marketplace. These funds will be used to manufacture and launch the Clarus V-Guide with exclusive content for the 2008 Olympics in Beijing, and to expand our business throughout Asia over the next four years. 3


Company Information Mission Statement Creating a memorable experience that stimulates the mind through the next generation of technology for museums and tourist attractions around the world. Company History For over ten years Clarus Designs has been developing the next generation of web based content to provide its clients with a rich intellectual experience. Centrally located in the heart of New York City, Clarus Designs was founded in July of 1998 by a group of five driven individuals with a single goal in mind, to provide an intellectually stimulating experience for their fellow humans. Today over 180 million people have experienced the Clarus difference at museums, cultural, historic, and civic centers throughout North America. The founders intended the name of the company to reflect their goals, principles and unique vision. Clarus is Latin for “clarity”, and our products are designed to bring learning and clarity to our customers. Throughout the years Clarus Designs has received multiple awards including being placed on Fast Company’s 2007 ‘Fast 50’ list of the world’s most innovative companies. Clarus Designs currently employs 70 people who are dedicated to creating cutting edge interpretive systems for our clients to stimulate learning, cultural growth and the museum experience. Clarus, an active proponent in the advancement of mobile content, is currently developing their own portable device as part of a continued commitment to clients. Company Goals • To work with organizations to transform learning for generations to come. • To expand our organizational partnerships into the continents of Europe and Asia. • To help preserve the past in order to shape the future. • To research and develop the next generation of web-based technology for our clients. • To continue double-digit sales growth throughout the 21st century. • To open our satellite office in Asia by 2009. • To open our satellite office in Europe by 2012. • To develop a low cost mobile platform in order to better serve our clients. • To initiate the IPO process and take the company public by 2009. • To double our strategic partnerships by 2010. Organizational Partnerships Clarus Designs has forged strategic partnerships with many brand name organizations. These partnerships allow us to maintain a presence among well-known companies and therefore increase our brand awareness among customers. • The Metropolitan Museum of Art, NYC • Smithsonian Institute, Washington DC • The Statue of Liberty-Ellis Island Foundation, NYC

• Discovery Science Center, Santa Ana, CA • California Academy of Sciences, San Francisco, CA • Intrepid Sea, Air & Space Museum, NYC

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Industry Status Economic Outlook Fears of recession have caused a grim economic outlook in the United States for the next 12 months. Due to the current credit and housing market crises and the increase in food, energy, and fuel costs there has been less consumer spending in the retail, entertainment and tourism industries. However, the outlook for the museum industry is projected to remain strong. The American Association of Museums (AMA) estimates that there are 17,000 museums in the United States which attract a total of 850 million visitors every year. (The AMA classifies all sites of historical and cultural interest under the umbrella term “museums�. Therefore sites such as zoos, aquariums, parks and libraries will be referred to simply as tourist attractions and museums.) Museums in the United States have been focusing their efforts to bring more in-state residents and international visitors. The U.S. Department of Commerce/Office of Travel and Tourism Industries (DOC/OTTI) reports that there were a total of 21.6 million overseas travelers to the United States in 2006. Of these international visitors, 36% visited historical sites, 20% visited art galleries, museums and cultural heritage sites, and 18% visited National Parks. Recent efforts to attract international visitors are due to the current exchange rate with the U.S. dollar; because of the weak dollar, it is inexpensive for international tourists to travel to the United States. According to the U.S. DOC/OTTI, the United States was expected to attract approximately 54 million international visitors in 2007, which is an increase of 5% from 2006. The U.S. DOC/OTTI also predicts that by 2011, international tourists will reach 61 million, which is a 20% increase between 2006 and 2011. Along with this statistical data, the U.S. DOC/OTTI noted that international visitors also spent USD 100.4 billion from January-October 2007 which is a 13% increase from the same time frame in 2006. Although growth projections for international tourism are positive for the industry, museums are increasingly feeling the costs of transportation and fuel for traveling exhibits. Also, as disposable incomes fall, visitors require other ways to experience art and cultural exhibits without having to pay for gas and museum entrance fees. For these reasons, the online presence in the museum and cultural heritage industry is growing. According to the Smithsonian Institution, in 2003, the Smithsonian Museums had 78 million web visitors and in 2006, it reported having over 150 million web visitors. This represents a nearly 200% increase in web traffic within a 3 year time period.

This increase in web presence for museums and tourist attractions is also based upon the increase in ownership of personal computers and the public demand for museum websites. Clarus 5


Designs realizes that the business of eLearning within the museum and cultural heritage industry is expanding, and that this brief decline in the U.S. economy will not affect the long term growth of our company. Industry Outlook Technology in our target market has been increasing tremendously to compete with the booming entertainment industry. These sites are attracting more visitors with high-tech exhibits and interactive multimedia content such as touch screen kiosks, educational games, access to online databases, mobile devices, and wireless Internet access. According to the Institute of Museum and Library Services, 87% of museums are using technology such as computers and the Internet, and 54% of these museums are using technology for exhibits and educational programs. Museums and other sites are realizing that they must stay current and up-to-date in technology in order to attract younger visitors. There has been a revolutionary shift in the transition to digital technologies. For example, audio guides are being utilized in almost every museum in the United States, with the increasing use of MP3s and multimedia devices to display more interactive instructional content. This industry understands the importance and attractiveness of using eLearning combined with the latest technology to enhance the visitor experience. The expanding use of eLearning and technology in this niche market is fueling Clarus Designs’ business within North America. Technological Influences The influences of technology are changing the way Clarus Designs does business. Wireless Internet access, or Wi-Fi, has been expanding throughout cafes, restaurants, schools, libraries, and office buildings throughout the world. Wi-Fi is also a growing trend in museums and tourist attractions. In conjunction with the increase in wireless Internet access, the use of mobile devices is on the rise as well. Technologies such as the iPod Touch, iPhone, PDAs, and Nintendo DS have been embraced as the norm for exchanging information around the globe. There has also been an increase in development of content for mobile devices. These influences in technology have sparked Clarus Designs to research, design, and implement our own mobile device, the Clarus V-Guide, to deliver exceptional and more advanced instructional content to our clients. Projected Opportunities Opportunities for Clarus Designs in the eLearning market are rising. The desire for new technology and interactive instructional content in the museum and cultural heritage industry continues to promote growth within our company. Our strong Research and Development Department also provides us with a clear competitive advantage as we head into the global marketplace. Regulatory Environments According to the American Association of Museums (AAM), non-profit museums are regulated by the Internal Revenue Service and Congress. The IRS regulates tax filing requirements and liabilities for unrelated business income, sanctions for excess benefit transactions, and restrictions on election and lobbying activities. Congress implements oversight authority over the regulation of non-profit museums. The AAM recognizes and follows all federal reporting requirements. 6


Congress is currently considering new possibilities for funding technology in museums. However, according the AAM, the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) are pursuing new ways to regulate the flow of information and communication between museums and consumers. The AAM ensures that all museums adhere to the regulations set forth by the FCC and FTC. As Clarus Designs enters the development stages of an electronic device and initiates the Clarus V-Guide, we will follow regulations set forth by the FCC and the IEEE. The FCC regulates wireless communication, transmitters and wireless access points. The IEEE standards cover information technology, Internet best practices, mobile and stationary batteries, and telecommunications (wired and wireless networking). See Appendix A for specific FCC and international regulations and IEEE standards that apply to the Clarus V-Guide.

Target Market/Customer Base Core Market Clarus Designs has established a core customer base of museums and tourist attractions that value excellence, commitment and reliability. Our successful recent expansion throughout North America enabled the implementation of our Global Vision Strategy for growth across the international market. Clarus Designs provides customized eLearning solutions and advanced multimedia content for handheld devices, tailored to the needs of our valued customers. Clarus Designs delivers several levels of services and products to our clients in the interpretations systems market through our software, content and now hardware products. We use a number of different business models to meet the needs of our customers, including direct sales, revenue sharing arrangements, and long-term contracts. Over 85% of our revenue is generated from recurring contracts that are usually for 2-3 years. Single contracts for small museums average USD 75,000, medium museums USD 150,000, and large museums USD 750,000 and up per year. Solo exhibits contracted on a short-term basis account for the remaining 15% of our revenue. Contracts and service agreements are negotiated by our sales managers with the vendor services representatives in the Educational Departments, Exhibits Design Departments and Interactive Technology Departments of our museum customers. These contracts are augmented by various share service agreements and visitor agreements. These agreements provide additional revenue through shared profits from device rentals and where a device is included in the cost of admission for special exhibits. With the introduction of the new Clarus V-Guide, we anticipate a 15-20% sales growth based on the exclusive lease and sale of our device to customers. The market for interpretive systems on a whole has been valued at USD 100-150 million in 2007 with Clarus Designs accounting for 10-15% of the market share. Geographic Profile Clarus Designs has a geographically diverse client base, and our presence can be seen throughout North America. The following represent some of our top clients: • • •

Museum of Modern Art (MoMA), New York • The Baltimore Museums of Art, Baltimore • The J. Paul Getty Museum, Los Angeles •

Modern Museum of Art, Fort Worth The Chicago Art Institute, Chicago Art Gallery of Ontario, Toronto 7


Additionally, Clarus Designs has a strong presence in and around smaller museums in metropolitan areas known for their cultural significance. Our clients in this segment of the market include: • • •

Dia Center in Beacon, New York Claremont Museum, California Pearl Harbor Museum, Hawaii

• • •

Gettysburg Battlefield, Pennsylvania Colonial Williamsburg NASA, Cape Canaveral, Florida

This market segment accounts for 8% of our customers, while the remaining 3% are national parks such as Yellowstone, Yosemite, and Lowell National Park.

Clarus Designs’ Global Vision Strategy for continued growth includes Western Europe and Asia. In China our strategy has targeted the 2008 Beijing Olympics as a debut platform for our services in Asia; we have forged an alliance with the Beijing Olympic Committee to provide virtual tours at Olympic venues and historical sites such as the Palace Museum and the Beijing Natural History Museum. These tours will be accessed on the official Olympic Games website, and through the Clarus V-Guide that will be provided to the athletes and rented to visitors at the events. In keeping with our Global Vision Strategy, Clarus Designs is working towards securing lucrative partnerships in Western Europe for our continued expansion through 2012 into markets in London, Amsterdam, Paris, and Rome. Demographic Profile Demographically the market for Clarus Designs’ products is two-fold: visitors to sites of interest and the museum industry for which we provide eLearning solutions. Visitors to museums and tourist attractions are defined as: Employed women and men in diverse occupations favoring liberal arts or science, holding college degrees, household incomes of USD 25,000-200,000 per year, married with 2 children, living in or around urban areas, car and home owners. Our core museum customers are fairly diverse but demographically break down as: • • • • •

Museums, sites of cultural interest, science centers, civic centers, and tourist attractions. On average these sites have been in operation for 10-150 years. The average net revenue is USD 2,000,000 per year. Number of employees averages 300 Company ownership is approximately 75% private and 25% public. 8


Psychographic Profile Clarus Designs identifies again two segments of our market in terms of psychographics: •

The consumers of our eLearning content are on average: status conscious, socially responsible, family-oriented, and environmentally conscious consumers. They have high standards and discerning tastes about leisure and consumer products, read intellectually and trend setting publications on art, culture, travel and technology, strongly believe in supporting cultural heritage and public institutions, and enjoy traveling, new technology, fashion, high-end consumer products and music. Our core museum partners are: innovative private and public trusts, cultural leaders, early adapters, who value excellence, are socially responsible, fiscally prudent, and committed to providing excellent service and a stimulating experience for the visitors to their institutions.

Industry Size The museum and cultural heritage industry is an exploding segment of the e-learning market. These institutions are increasingly scrambling to put their exhibits online as virtual museum tours, downloadable audio lectures and tours, and interactive multimedia content. They are also eager to create comprehensive multimedia tours for mobile devices in order to enhance the visitor’s enjoyment of the art and historical sites. According to the American Association of Museums, sites of interest in the US alone accounted for 2.3 million visits a day or 850 million customers per year. The market for interpretive systems for this industry was USD 100-150 million in 2007. The amount of business for this market breaks down as: • • • •

The average price of admission is USD 10, with larger institutions such as the Museum of Modern Art and the Baltimore Aquarium charging USD 25+ a day. 40 % of museum and industry revenue is generated by sales at gift shops, eateries, special events and rentals of audio-guides for the exhibits. Major exhibits, also known as “blockbusters”, are designed to be the greatest source of revenue for the year. The majority of sites schedule up to 40 smaller exhibits a year and this continual rotation of events accounts for steady revenue year round.

Clarus Designs works with the institutions to create a unique web presence for each new exhibit and this helps to create a steady stream of revenue per quarter. In addition to providing multimedia exhibition tours, Clarus Designs has been successful in increasing revenue for our clients by providing a means to make reservations for dining, purchasing exhibit catalogues and exhibit merchandise, or buying tickets to museum events using the handheld devices for the virtual tours. We have partnered with eCommerce services used by the museums to include this aspect of the museum experience in the web based and mobile tours. Our advertising arrangement will be further discussed under the Marketing Plan. Market Segment Clarus Designs has a clear advantage over competitors, and a leading edge in the market of the future with the introduction of our Clarus V-Guide. With the introduction of this new generation of handheld interpretive systems devices, our share of the eLearning market for art and cultural 9


institutions will be on par with our nearest competitor, Espro Acoustiguide Group, headquartered in Israel. Clarus Designs currently holds between 10-15% of the market with sales of USD 13.4 million in 2006. Our two main competitors are: Espro Acoustiguide Group and Antenna Audio. Espro, which claimed 15-20% market share after their acquisition of Acoustiguide in 2005, posted sales of USD 15.6 million for 2006. The market leader is Antenna Audio, located in London, which had approximately USD 35-40 million in sales and 35-40% of the market in 2006. Although we are vying for increased market share with these competitors, Clarus Designs has managed to acquire a large segment of the interpretive systems market through our strategic partnerships with major museums, the US National Parks Administration, the National Museum of Art and the Smithsonian Museums. We have also been endorsed by the National Trust for Historic Preservation and have been named to the Fast 50 list. Clarus Designs’ substantial client list with long term contracts includes: • • •

Metropolitan Museum of Art, New York • • Kimbell Art Museum, Fort Worth • National Gallery of Canada, Toronto

National Parks Admin., Washington D.C. Smithsonian, Washington D.C. Kennedy Space Center, Cape Canaveral

The diversity of our partnerships across the cultural spectrum allows Clarus Designs to tap into every segment of the museum market from natural science museum enthusiasts, space centers and military history site visitors, to devotees of fine art and cultural museums. According to the American Association of Museums attendance at these sites per day is:

Based on attendance figures alone, the market share held by Clarus Designs increases to 30%, when taken into account that 40% of the market segment for parks and national sites is exclusively under contract with our company. Although our competitors have longer client lists, mainly based on their dominance of the European market, Clarus Designs has a greater number of target customers at the sites of our largest clients. Building on our business model for future advertising revenue and rentals of the Clarus V-Guide, this will mean greater profits for Clarus Designs, our museum clients and the corporations and businesses that support them. Public institutions are also funded by grants by the US government, state, public and private foundations which provide a great source of funding for our clients. The Institute of Museum 10


and Library Services (IMLS) contributed USD 31.4 million to museums in 2004, with a substantial portion of that funding going to technology-related projects. The American Association of Museums has asked Congress to approve the USD 40 million FY 2008 budget request for grants to museums within the IMLS 2008 Labor-HHS-Education appropriations bill. Most of that funding is currently being allocated for current and future technology initiatives such as interactive tours and web delivered multimedia content. Based on figures obtained from Fed Tech Magazine, a publication designed to assist IT decision makers and implementers as they use technology to build a more effective government at the federal level, museums are using technology for a variety of reasons: • • • • •

87% use some form of technology, such as PCs, Internet access or office productivity software. 54% use technology for exhibits and other educational programs. 53% plan to use additional technologies to support exhibits and other educational programs in the next 12 months. 62% have Web sites. 32% are digitizing photographs and images of their collection and artifacts.

Source: 2002 Survey of 341 museums by the Institute of Museum and Library Services Much of this funding will be allocated to Clarus Design clients such as the Smithsonian and its satellite museums, the Metropolitan Museum of Art, and the National Gallery of Art. Similar grant funding is provided to the national museums and galleries of Canada, four of which Clarus Designs obtained exclusive contracts with for use of the Clarus V-Guide, content design and software implementation.

Marketing Plan Over our ten-year history, Clarus Designs’ business grows steadily and has built successful partnerships throughout North America. With the launch of our Global Vision Strategy our four year sales goal are as follows: • • •

Continued 15% sales growth. Place the Clarus V- Guide at 20 sites. Adding 3 new large clients per year in Asia and North America.

Direct Competition Several major competitors are creating interpretive audio tours and other self-guided multimedia content for museums and tourist attractions globally, they include: Espro Acoustiguide Group, Antenna Audio, and Tour-Mate. Although these three main competitors have a substantial share of the market, they also have higher operating costs due to their size, and therefore a smaller return on profit. Clarus Designs is smaller, better structured and the clear quality leader in this industry because of our strong eLearning and instructional design background, knowledge of mobile device platforms, design and development expertise, and future cost-effective mobile technologies. 11


Clarus Designs

Antenna Audio

Main Business

Create a memorable experience for museum visitors

Location Years Employees Unique Device

New York 10 70 Clarus V-Guide

Design, manufacture and manage portable digital information systems and multilingual audio-visual productions England 20 350 XP-vision™ CAT™

Global Business Device Cost (est.)

Yes USD 175

Company

Yes USD 190

Tour-Mate

Espro Acoustiguide Group Develops and Offers digital markets selfaudio and visual guided audio tour interpretation to systems visitors via cell phones, multimedia players, and the internet Canada 19 N/A Tour-Mate Mobile Yes USD 150 (audio only)

Israel 50 300 exSite Classic, exSite Premium, Opus Guide-U Yes USD 200

Indirect Competition Over 60% of museums in the U.S. have their own web sites with 54% using interactive technologies and virtual tours. There are a number of companies offering virtual tour services, such as virtually-Anywhere and 3dtour. These online virtual tours will compete with Clarus Designs for potential clientele. Many museums have tour guides and docents, guided services which are a source of competition for Clarus Designs products and services. Clarus Designs will retain a competitive advantage over our direct and indirect competitors. Our high quality, affordable to rent and easy to use Clarus V-Guide and creative approach to content creation ensures that each visitor has a significantly enhanced learning experience. With the Clarus V-Guide in hand, visitors are able to experience a self-guided, personalized and flexible multimedia tour on site. The Clarus V-Guide gives each visitor the freedom to experience the information they want, at the time and place they choose. None of our indirect competitors can provide this advantage and compete with us. Pricing Objectives The goal is to maximize market share and profit. Some museums and tourist attractions are nonprofit organizations. Therefore, our pricing objectives are low-cost and have the following policies and activities: •

Customer loyalty Discount Pricing: Clarus Designs offers an incentive program to clients who continually select us for their design needs. We offer a 5% discount for major package deals that include 3 year contracts for content creation, Clarus V-Guide sales and leases, training and installation. 12


• •

Discount Pricing: Clarus Designs gives 5% off to clients who buy in bulk (1000 devices). Penetration Pricing: Clarus Designs sets the price point low compared to similar products in order to outbid the competition and secure wide market share. Geographic Pricing: Clarus V-Guide manufacturing will be based in China, therefore shipping fees within China are free. Clarus Designs has a corporate account with UPS for global distribution and shipping. Shipping: The Clarus V-Guide will be directly shipped from manufacturer to the client on a per order basis.

• •

Promotion Activities In order to communicate ideas about our services and the Clarus V-Guide to future customers, Clarus Designs will advertise its business to promote the brand “Clarus Designs” and the “Clarus V-Guide” to the public. Guided by this strategy, Clarus Designs will implement the following promotion activities: • •

• •

Advertising and newsletters at conferences, in newspapers, professional journals including Museums Journal, and web media including Museum Practice and Technology Horizons in Education online Promotional booths at museums including the Smithsonian, Museum of Modern Art and technology conferences such as 5th International Conference on Information Technology and Application, O'Reilly Emerging Technology Conference, International Conference on Web Information Systems and Technologies, and International Symposium on Information Systems & Management. Promotional advertising at schools with Museum studies. These schools include Seton Hall University in New Jersey, School of the Museum of Fine Arts in Boston, and National Academy Museum and School of Fine Arts in New York. Promotional strategies for the Olympic Games in Beijing. Athletes will be given a device to use during the Olympic Games in order to access event and cultural content. Tourists and visitors will be able to rent the device at the Olympic Village or at the museums. Clarus Designs will also sell clothing and apparel with the Olympic Games and the Clarus Designs logos. Billboards, advertisements on public transportation (cabs, buses). Clarus Designs will set up billboards on the highway from Beijing Airport to the Olympic Village.

In order to build our company’s reputation, establish our image, and to develop customers’ loyalty to our product, Clarus Designs will take the initiative to gain a higher percentage of the market share by providing excellent customer service and exceeding clients’ expectations. Guided by this strategy, Clarus Designs have the following promotion activities: • • •

Competitive and flexible pricing for different clients Provide a free device with sample content to institutions that request one Free installation and training

Clarus Designs will also work with clients to stimulate sales directly to the end-users by carrying out the following promotion activities: • Discounts available for books, gifts, food and beverage for interactive device users. 13


• • • •

Those who donate to the museums can get free device Members of museums can use the device for free Group price is available for groups over 10 people Discount for students and seniors

Advertising Incentives Clarus Designs has established exclusive contracts to provide advertising on mobile devices and web sites for which we create content for companies affiliated with museums and tourist attractions. The following is an example in order to illustrate this arrangement: MoMA has special partnerships with various businesses and corporations in New York City. Members of the museum, as well as staff and patrons, receive special discounts at stores that are partnered with the museum. These stores and products include: The Nike Store, Estee Lauder cosmetics (Ronald Lauder and David Rockefeller are the senior trustees of the museum) and the MoMA Design Store. Revenue from these contracts is generated by providing a means for viewing discount products available exclusively to museum visitors who rent a device, view the web tours, or purchase a ticket to special exhibits. On the devices one can also make reservations at museum restaurants, buy tickets for venues that have partnered with the museums, or arrange hotel reservations. Clarus Designs works with eCommerce services used by these retailers to allow visitors to purchase merchandise online. The revenue generated from this advertising niche has doubled since it was introduced 3 years ago, and now accounts for 15% of our total revenue growth. Growth Strategies As part of our Global Vision Strategy, Clarus Designs has identified the following key areas for future expansion: • •

To gain more tourism and amusement park industry customers in North America. Clarus Designs is focusing its attention towards tourism industry giants such as Disney and Universal Studios. To gain new market in China and other Asian countries. Clarus Designs will open its satellite offices in Asia by 2009 and in Europe by 2012. With our Global Vision Strategy in place, Clarus Designs is expanding into Asia by launching the Clarus VGuide at the 2008 Olympic Games in Beijing. To target larger museums for contracts. Clarus Designs is in the final stages of signing partnership contracts with the Beijing Natural History Museum and the Beijing Palace Museum. We are also in the process of recruiting additional large museums as clients, including the China Fine Art Gallery and China’s Great Wall Museum. Clarus Designs is improving its products/services and is actively promoting the new Clarus V-Guide mobile device. Clarus Designs successfully secured Olympic Licensing from the Beijing Organizing Committee for the Olympic Games (BOCOG). The Clarus V-Guide which will be launched in Beijing in 2008 features interactive Flash-based maps of Beijing, and the Olympic Village, multimedia tours including the Beijing Natural History Museum and the Beijing Palace Museum, downloadable games and quizzes, and other services.

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Products and Services Clarus Designs specializes in creating customized instructional multimedia materials for mobile devices for use at museums and tourist attractions. Our company takes pride in its design methodology. We utilize the latest Instructional Design theories and development trends to provide the highest quality instruction to our clients. Our Learning and Development Department has significant experience working with and designing eLearning materials for the museum industry, which gives us a competitive advantage. We work closely with our clients by first dispatching a Site Survey team to identify the client’s instructional need, determine the scope of the project, and address any technical concerns. After establishing the client’s needs and the project details, our Design and Development team continues the process by designing, developing, and implementing customized instructional materials. We work closely with the client to evaluate every level of the project to ensure that it exceeds their expectations. We also offer training to our clients after completion of the project. Clarus Designs’ Research and Development Department is also in the final stages of designing and deploying our own mobile device the Clarus V-Guide. This unique device will enable us to present our clients with a less expensive alternative to current mobile device technology, and offer a higher level of interactivity for instructional content than any other competitor. Our products and services increase revenue for clients, and provide the user with exclusive access to content, which enhances the learning experience. Sample products designed and developed by Clarus Designs include a complete multimedia tour for the Toshiba Pocket PC created for a contemporary works exhibit at the Museum of Modern Art (MoMA) in 2005. This multimedia tour includes an interactive Flash-based map of the entire exhibit, exclusive video footage, podcasts featuring well-known contemporary artists, access to restricted portraits and paintings only viewable through the mobile tour, and downloadable games and quizzes as part of the Modern Teachers Series for K-12 educators. This content was designed to teach students about contemporary art. Results of Customer Satisfaction Survey Clarus Designs conducted a visitor exit survey to rate the user’s experience of the multimedia tour designed for the contemporary works exhibit at the MoMA. 100 visitors were chosen at random to complete the survey. The results of the survey were overwhelmingly positive. Of the positive results, the users commented that the multimedia tour enhanced their experience and that the cost of renting the mobile device was well worth it. Of the negative results, users commented that they found the technology distracting and not easy to use. Detailed results are shown on the following page.

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Clarus Designs has also designed and developed several virtual tours and online exhibitions delivered via the web such as Astronauts: Past and Present for the Kennedy Space Center, Exploring the Brain for the Maryland Science Center, and Dinosaur Discovery for the Smithsonian National Museum of Natural History. These web tours and exhibitions included slideshows, 3D tours of galleries and exhibits, 360-degree panoramic displays, and interactive games. The virtual tours and online exhibitions are extremely popular with teachers, students, and parents. These projects have led Clarus Designs to become a leader in the multimedia design field for the museum and cultural heritage industry.

Organization and Management Clarus Designs’ management team is comprised of five highly qualified and skilled professionals. The team founded Clarus Designs in 1998 and we have experienced 10 years of successful business and growth together. Since start-up, the Clarus Designs management team has significantly increased their client base every year, and has been able to take on multiple projects simultaneously. This positive growth reflects their overall qualifications and experience as individuals and as a team. To maintain and sharpen their skills, key managers attend industry and professional conferences, leadership seminars, and internal management and career development training sessions. Clarus Designs offers professionalism and expertise in instructional design and development within the museum and cultural field. The management team believes in the importance of preserving history and culture, and the promise of education through eLearning. Key Managers President and CEO The President of Clarus Designs is Sara Boyce. Ms. Boyce worked as the lead Project Manager and Senior Instructional Designer at eVision Learning for five years before stepping into her current position at Clarus Designs. She oversaw the management of three Instructional Design teams, consisting of 5 personnel each. Ms. Boyce also secured over 20 large design contracts bringing in more than USD 2 million for eVision Learning. Her education and extensive experience in managing successful eLearning and Instructional Design projects has proven her 16


ability to make sound business decisions. She is responsible for making all key decisions for the future direction of the company and its overall management. All department heads report directly to Ms. Boyce. VP of Human Resources The head of the Human Resources department is Brian Boyce. Mr. Boyce served as the Administrative Manager at Quadrivium Technologies in Baltimore, MD. With an annual operational budget of USD 500,000, Mr. Boyce managed all administrative and Human Resources programs for the entire company for over three years. His current responsibilities as the Director of Human Resources at Clarus Designs include managing the both the Human Resources staff and the Legal Division, which is staffed by four personnel with an operating budget of USD 1 million. Mr. Boyce is in charge of all personnel hiring and retention, employee benefits, employee training initiatives, and conflict resolution. As the head of Human Resources, he reports directly to the President of Clarus Designs. VP of Sales & Marketing The Sales and Marketing Department is lead by Hongyan Yuan. During her three-year tenure as the Director of Product Marketing for Innovative Solutions in Los Angeles, Ms. Yuan built a team of seven personnel that proactively implemented a marketing strategy that obtained an ROI of USD 3 million. She is highly experienced in identifying emerging markets, and future trends in eLearning, and her experience in international markets is a strong asset for Clarus Designs. Ms. Yuan is currently responsible for overseeing both Sales and Marketing Departments at Clarus Designs, which consists of 10 employees. She leads all advertising and promotional initiatives aimed at expanding Clarus Designs’ client base. Ms. Yuan reports directly to the President of Clarus Designs. VP of Learning and Development Our Learning and Development department is the largest department at Clarus Designs, headed by Sarah Peters. Ms. Peters previously served as the Senior Instructional Technologist and Project Manager for the Museum of Modern Art in New York. With four years of experience at this top position, Ms. Peters oversaw all eLearning and multimedia projects, and routinely managed and trained Instructional Design teams of up to 15 personnel. Her strong leadership and expertise in multi-media design and development for the museum and cultural/historical heritage market provides Clarus Designs with a distinct competitive advantage. She currently serves as the Quality Assurance manager for multimedia and learning content on our instructional design projects. Ms. Peters oversees two divisions within the Learning and Development department, which has a total of 46 people. Each division consists of three teams; a Survey Team, a Design Team, and a Development Team. Ms. Peters reports directly to the President of Clarus Designs. VP of Research and Development Dr. Tony Blusius is in charge of Clarus Designs Research and Development department. Before starting at Clarus Designs, Dr. Blusius was the Technology Director for Data Systems Incorporated in Edison, NY, where he developed long-term strategies for developing mobile technologies for two years. Dr. Blusius also lead a five-member team of designers with a research budget of USD 1.5 million to pioneer new technological advancements. His 17


engineering skills and research abilities puts Clarus Designs at the leading edge for eLearning Mobile Technology. Dr. Blusius currently leads a five-member design team that is developing a high quality and inexpensive mobile eLearning device that displays our unique instructional content. Dr. Blusius reports directly to the President of Clarus Designs. Organizational Chart President/CEO Sara Boyce

Human Resources Brian Boyce 2

Sales & Marketing Hongyan Yuan 11

Legal Division 2

Learning & Development Sarah Peters 47

Division A

Survey Team 3

Design Team 8

Research & Development Tony Blusius 6

Division B

Development Team 12

Survey Team 3

Design Team 8

Development Team 12

Professional Assistance Clarus Designs works with The Browning Financial Group, a well-known financial consulting and accounting firm, to manage all payroll and financial affairs, including tax preparation and accounting. The Browning Financial Group, based in New York City, has been in business for over 60 years, recently focusing on small business accounts and Internet companies. Clarus Designs has worked with The Browning Financial Group since start-up in 1998.

Exit Strategy The management team sees two possible exit strategies. First, the company could be taken public (2009) and the managing partners could then liquidate their shares of the company. Second, Clarus Designs could be sold to the competition allowing the managing partners to leave the organization.

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Additional Exhibits Appendix A The wireless Clarus V-Guide will meet the following FCC and international regulations when finally launched: • • • • •

• • • •

FCC Part 15 Class B EN 300-328 ARIB STD-T66 AS/NZS 4771:2000 CSA-C22.2 No. 60950

Canada RSS-210 EN 301-489 RCR STD-T33 UL 60950

Clarus Designs will also comply with the following IEEE standards as we introduce the Clarus V-Guide: • • • • • • • • •

RFC 1918: Address Allocation for Private Internets 802.11: set of standards for wireless local area network (WLAN) computer communication RFC 2577: FTP Security Considerations RFC 4828: TCP Friendly Rate Control (TFRC): The Small-Packet (SP) Variant RFC 777: Internet Control Message Protocol RFC 1945: Hypertext Transfer Protocol - HTTP/1.0 RFC 4330: Simple Network Time Protocol (SNTP) Version 4 for IPv4, IPv6 and OSI RFC 792: Internet Control Message Protocol

• • • • • • •

RFC 2041: Mobile Network Tracing RFC 2585: Internet X.509 Public Key Infrastructure Operational Protocols: FTP and HTTP RFC 2428: FTP Extensions for IPv6 and NATs RFC 4787: Network Address Translation (NAT) Behavioral Requirements for Unicast UDP RFC 2068: Hypertext Transfer Protocol -- HTTP/1.1 RFC 1866: Hypertext Markup Language - 2.0 RFC 1361: Simple Network Time Protocol (SNTP)

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Sara E. Boyce CEO/President Clarus Designs 200 Rivington Street, Suite 305, New York, NY 10002 (212) 125-2787 • seboyce@clarusdesigns.com

EXPERIENCE Chief Executive Officer/President Clarus Designs – New York City, NY July 1998 – Present Chief Executive Officer and President of this multimedia design and development company. Responsibilities include making all key decisions for the future direction of the company and its overall management. Project Manager/Senior Instructional Designer eVision Learning Systems and Design – Hoboken, NJ November 1993-June 1998 Managed multiple instructional design and development projects to help eVision Learning clients meet their goals and objectives. Planned and managed all phases of the instructional design and development process for over 20 large-scale projects. Evaluated the impact and effectiveness of training solutions designed and developed by eVision Learning project teams. Information Systems Specialist eVision Learning Systems and Design – Hoboken, NJ June 1990-October 1993 Managed multiple instructional design and development projects to help eVision Learning clients meet their goals and objectives. Planned and managed all phases of the instructional design and development process for over 20 large-scale projects. Evaluated the impact and effectiveness of training solutions designed and developed by eVision Learning project teams.

EDUCATION Master of Science in Instructional Technology New York University, New York City, NY

August 1993

Bachelor of Arts in Information Systems Business Specialization Minor in French University of Maryland, College Park, MD

May 1990

EXPERTISE Fluent in French Tennis Trainer

18 years 5 years

SKILLS Adobe Creative Suite, Blackboard, SAP Enterprise SOA, Moodle, Coral Painter X, Alias Studio, 3DStudioMAX, MS Office 2003-2007, HTML, XHTML, CSS, Cold Fusion 8, ASP, PHP, Mac OS, Windows

AFFLIATIONS City Parks Tennis League New York University Alumni Association Toastmasters International

2002 - Present 1993 - Present 2000 - Present


Sarah L. Peters VP of Learning and Development Clarus Designs 200 Rivington Street, Suite 305, New York, NY 10002 (212) 125-2787 • slpeters@clarusdesigns.com

EXPERIENCE Director of Learning and Development Clarus Designs – New York City, NY July 1998 – Present Daily management for department of 14 instructional designers, graphic artists and developers. Develop staffing strategies and implementation plans to identify appropriate candidates for key positions. Promote comprehensive learning initiatives and recommend training strategies for client solutions. Conduct needs-analysis, identify target audience, develop learning objectives and strategies. Manage project development of graphic designs, detail-level designs, storyboards and product evaluations. Supervise production and manage department budget. Ensure compliance with brand consistency and corporate requirements. Senior Instructional Technologist/Project Manager Museum of Modern Art – New York City, NY August 1994 – July 1998 Designed and developed content for online exhibits catalogs and educational outreach programs. Managed multiple elearning projects for education and curatorial departments. Implemented learning solutions for special exhibits courses and educational guides for K-12 teachers. Managed project timelines, resources, and built project plan to optimally leverage team members. Developed and execute project strategy approach, work plan and prepared project status reports. Managed, trained and evaluated L&D team consisting of 5 to 15 people. Communicated, collaborated and completed work jointly with curators and administrative staff.

EDUCATION Master of Science in Instructional Technology New York University, New York City, NY

June 1994

Bachelor of Arts in Design and Technology Parsons School of Design, New York City, NY.

June 1991

EXPERTISE Project Management, Instructional/ Curriculum Design, Multimedia Expert, Graphics Design/3D Design, User-Interface Design, Web Architect, eLearning/ Distance Learning, Web Design, Content Development, Information Systems Architecture

SKILLS Adobe Creative Suite, Articulate Studio Professional, Raptivity, Lectora, Saba Centra Suite, Blackboard, SAP Enterprise SOA, Moodle, Coral Painter X, Alias Studio, 3DStudioMAX, MS Office 2003-2007, HTML, XHTML, CSS, Cold Fusion 8, ASP, PHP, Mac OS, Windows, Linux (Suse, RedHat, YellowDog), Tablet PC

AFFLIATIONS American Association of Museums Museum Association of New York New York University Alumni Association

1995 - Present 1994 - Present 1994 - Present


Brian P. Boyce VP of Human Resources Clarus Designs 200 Rivington Street, Suite 305, New York, NY 10002 (212) 125-2787 • bpboyce@clarusdesigns.com

EXPERIENCE Director of Human Resources Clarus Designs – New York City, NY July 1998 – Present Supervise all administrative and Human Resource related activities for staff of 70 employees. Coordinate all internal and external training events, and oversee the payroll, benefits plans, and conflict resolution for entire staff. Administrative Manager Quadrivium Technologies – Baltimore, MD January 1995-June 1998 Managed administrative and personnel programs, including training and hiring initiatives to meet company’s strategic goals. Supervised staff of 20 personnel and an operating budget over USD 500,000. Provided strong leadership by mitigating personnel conflicts. Administrative Assistant Quadrivium Technologies – Baltimore, MD

May 1993-December 1995

EDUCATION Master of Science in Instructional Technology University of Maryland, College Park, MD

December 1997

Masters in Business Administration University of Maryland, College Park, MD

December 1997

Bachelor of Arts in Library Science Purdue University – West Lafayette, IN

May 1993

EXPERTISE Fluent in German Conversational French Conversational Spanish

19 years 8 years 12 years

SKILLS Microsoft Office Suite 1997-2007, Adobe Creative Suite, Adobe Breeze (Presenter), Adobe Captivate, SnagIt, Blackboard, Centra, Mac OSX, Windows XP, Vista, UNIX, HTML, XHTML, CSS, XML, Actionscript 3.0

AFFLIATIONS Bibliographical Society of America Book Collecting Society of America Grolier Club

1991 - Present 1990 - Present 1996 - Present


Anthony J. Blusius Jr. VP of Research and Development Clarus Designs 200 Rivington Street, Suite 305, New York, NY 10002 (212) 125-2787 • ajblusius@clarusdesigns.com

EXPERIENCE Director of Research and Development Clarus Designs – New York City, NY July 1998 – Present Worked on the development new design techniques, research of new software applications, and new hardware platforms. Directly supervised engineering team of 6-10 project engineers responsible for new system development and implementation. Technology Director Data Systems Incorporated, Edison, NY July 1996-June 1998 Responsible for assisting the CEO in the development of the long-term technology strategy for the organization. Directly supervised a staff of five in day-to-day operations as well as project development and implementation. Supervised the research and implementation of various projects. Network Engineer Data Systems Incorporated, Edison, NY August 1992-June 1995 Responsible for assisting the CEO and Technology Director in planning future utilization of technology. Other duties include: server/phone system maintenance, web design, and insuring the proper application of technology resources.

EDUCATION Ph.D. Information Systems/IT Architecture Columbia University, New York City, NY

May 2003

Master of Science in Information Systems New York University, New York City, NY

July 1998

Bachelor of Arts in Computer Information Technology Pennsylvania College of Technology, Williamsport, PA

May 1992

EXPERTISE Development of graphical user interfaces, research in the area of multi-touch interfaces, development of dynamic webbased content, and the creation of content delivery systems

SKILLS Cisco IOS, PHP, MySQL, ColdFusion, C/C++/Java/Assembly, Designing Graphical User Interfaces, Flash Development, Wireless Implementations , Network design and implementation, Windows XP/Vista/Server 2000/Server 2003, Ubuntu, Fedora Core, Adobe Creative Suite, Microsoft Office 1997-2008, ActionScript 2/3, Mac OS X, OS X Server, Redhat Enterprise Edition 5

AFFLIATIONS American Philatelic Society Associate of Computing Machinery Institute of Electrical and Electronics Engineers New York Software Industry Association

1991 - Present 1993 - Present 1994 - Present 1998 - Present


Hongyan Yuan VP of Sales and Marketing Clarus Designs 200 Rivington Street, Suite 305, New York, NY 10002 (212) 125-2787 • hyuan@clarusdesigns.com

EXPERIENCE Director of Sales and Marketing Clarus Designs – New York City, NY July 1998 – Present Overseeing Sales and Marketing Department; leads all advertising and promotional initiatives throughout North America. Creation and implementation of global marketing strategy, tactics, and execution including domestic and international product management. Director of Product Marketing Innovative Solutions – Los Angeles, CA August 1995 – June 1998 Implemented an e-Marketing, email blasts, and web development strategy for an international business, attaining excellent reviews. Provided business plan, pricing, and proactive marketing ROI consulting to start-up organization. Marketing Manager, Product Marketing Executive Development Center – Santa Clara, CA June 1993 – July 1995 Leader in product marketing initiatives for Human Capital Management training offerings. Created an e-Marketing strategy for leadership and human capital training system.

EDUCATION Masters in Business Administration California State Polytechnic University, Pomona, CA

June 1996

Bachelors in Business Administration in Finance and Management Information Systems University of Wisconsin – Madison; Madison, WI

June 1993

EXPERTISE International Marketing, Strategic & Tactical Planning, Brand Management, Public Relations, Direct Response Marketing, Retail Marketing, E-Marketing, Competitive / Trend Analysis, Consumer Loyalty, Market Research & Analysis, Program Marketing, Search Engine Optimization Strategies

SKILLS Microsoft Office 2000-2007, Windows, 2000/XP/Vista, Adobe InDesign, QuarkXPress, Google AdWords, Adsense

AFFLIATIONS American Marketing Association Chinese Association for Science and Business Chinese Historical Society of America Direct Marketing Association

1993 - Present 1998 - Present 1994 - Present 1993 - Present


Clarus Business Summary