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In the Pipeline
The Company & the Product

The Company

In late 1996, Maarten Byl, Nick Raschella and Nicholas Love were introduced to John McMahon, an electrician and inventor. One of John's many ideas was for a novel poly vinyl chloride (PVC) pipe repair system. He was resolute in his conviction that all enormous market existed for a product, which would make broken PVC pipe a snap to fix. John dreamed of further developing this vision and one day providing the market with his revolutionary concept. For six years, this vision consisted of little more than diagrams, as John was unable to overcome the numerous obstacles, which an inventor faces when he assumes the role of entrepreneur.

In the Pipeline (ITP) has been formed to take advantage of this divergence between the inventor's dreams and market realities. In the Pipeline will guide new products from conception of the idea to commercialization. To help convey this motion, the name In The Pipeline was chosen.

Since ITP's formation in November 1996, John's concept has undergone a rapid evolution. A prototype of a split conduit repair solution was manufactured and test marketed in Australia in early 1997. Responses from this showed a substantial demand for a product that could do more than repair straight PVC pipe. The market demanded a simple and cost effective total repair, redesign and installation system, utilizing identical joining technology. To address the need for a total system, ITP developed Snapfix.

ITP has arranged for the production of Snapfix by Marley Plastics for supply to Australia's two telecommunications companies and Ideal Electrical. Ideal Electrical is Australia's largest independent electrical wholesaler and will be marketing Snapfix in their upcoming June catalog.

We now seek to secure a joint venture manufacturer and venture capital funding to launch the product in the U.S. The successful launch of John's invention will ensure that the company's objectives of identifying, developing and commercializing innovative products are realized.

Snapfix

Snapfix is the first total repair, redesign and installation system for PVC pipe. Snapfix solves the problems inherent in the existing piecemeal approaches; specifically the costly and time consuming process of relaying large sections of pipe, the severing, removal and re-threading of encased electrical and telecommunications cables, and the use of toxic resins.

Snapfix is an integrated system comprising Straight, T-shaped, Y-shaped and Bend sections; it uses joining technology consisting of interlocking compression joints on opposing sides of a split conduit. A damaged PVC pipe can be repaired in seconds by snapping the required length of Snapfix over the break, thereby sealing and reinforcing the pipe. (See Appendix A for product diagrams). In comparison to alternative repair methods, Snapfix saves time and money. The product line will be produced in a range of sizes to fit most commonly used pipe in the telecommunications and electrical industries.

John's company, Zardoz Pty Ltd, assigned the intellectual property rights for Snapfix, which include a Patent Pending and a Trademark application, to ITP. This assignment is effective for five years from May 1997, with an option to renew for a further five years. Zardoz Pty Ltd will receive a royalty of 1% of Snapfix's gross sales and 25% equity in ITP.

Market Need

A survey of selected firms in the telecommunications and electrical industries revealed a large unanswered demand for a repair, redesign and installation system such as Snapfix. This demand has been long standing, as evidenced by the 40 patented pipe repair, redesign and installation systems dating back to 1975. None of these systems have been able to adequately fill this need. The demand for a total system such as Snapfix is driven by the:

Product Benefits

Snapfix's most substantial benefit is the cost savings that it delivers. Table 1 summarizes the major benefits of Snapfix.

Table 1 - Product Benefits

Product BenefitAdvantages to Users
1. Total system
  • Solution to repair, redesign & installation problems
  • Complementary products utilize identical joining technology
  • Available in Straight, T, Y and Bend sections
2. Product cost savings
  • Economically priced
  • No need to use expensive materials such as resins and sealants
  • Eliminates the need to use specialized tools
3. Labor cost savings
  • Minimizes required excavations and time taken to effect the repair
  • Entire repair can be completed instantaneously with no need for repeat repair treatments
4. Flexibility
  • Can be utilized for any length of repair
  • No need to carry specific lengths -just cut to length of repair
  • Wide variety of applications
5. Compatibility
  • Inside diameter of Snapfix equals outside diameter of existing pipe
  • Produced in sizes ranging from 3/4" to 4" - compatible with majority of pipe used
6. Environmentally friendly
  • Manufactured from up to 20% of recycled PVC
  • PVC is safe, environmentally benign material
  • Reduces requirement for sealants
7. Health & safety
  • Reduces reliance on toxic resins
  • User reduces extent of interference with potentially hazardous cables
  • Less excavation reduces risk of injury
8. Ease of installation
  • Limited training costs
  • Narrower scope for error
  • No need to use protective equipment
9. Durability
  • Restores structural integrity of original pipe
  • Impact resistant, non-conductive, fire retardant, unaffected by most chemicals, weather proof, and long life of repair
10. Lifetime warranty
  • Repair cost will not be incurred more than once on the same section of pipe
  • Provides security and confidence to the purchaser

Competitor Analysis

As Snapfix faces few direct competitors, the pricing structure is of reduced importance. The

pricing strategy for Snapfix is to emphasize the total cost of repair, redesign and installation solution, rather than the specific product cost. In broader terms, the PVC pipe industry is one which is characterized by decreasing pricing scales, based on customer buying power.

Snapfix's closest competitors and its substitutes are analyzed below in Table 2. This table compares the costs of each repair solution for a standard twelve-inch long break in a two-inch diameter PVC pipe, encasing standard electrical cables, located three feet under-round. The analysis excludes common excavation time.

Table 2 - Competitor Analysis

Repair SolutionRepair MethodMaterial CostLabor Cost@$40/hrTotal Cost
New PVC PipeRemove cables, fit new pipes & re-thread cables$1.00$120.00$121.00
3M Resin KitsRepair cables, fit clear box, mix and pour resin, and allow time to cure$35.00$60.00$95.00
Fel-Pro Fixmaster KitFill crack with epoxy, wrap urethane impregnated fiberglass tape around pipe & allow time to cure$30.00$40.00$70.00
Mayer Kreig Lock DuctClamp split conduit together (difficult), apply sealant along joint, and allow to dry.$45.00$20.00$65.00
Carlon Split ConduitFit split conduit together, apply joint sealing tape around both sections, tie with plastic strap $16.00$10.50$26.50
SnapfixHand snap together around break without disturbing cables$8.00$3.50$11.50

Repairing with Snapfix can provide a huge cost savings of up to 90% over alternative repair methods. This feature will aid market penetration at corporate and small business levels. Furthermore, the convenience and lower tooling costs will make Snapfix the preferred solution to repair existing installed pipe. A similar ease of use and time saving features also characterize the redesign and installation applications of Snapfix.


In the Pipeline
Table of ContentsAppendices
1. Executive Summary
2. Company & Product
3. Marketing
4. Operational Plan
5. Financial Plan
6. Offer to Investors
Product Diagrams
Executive Resumes
Action Plan
Financial Statements
The information and ideas herein are the confidential,
proprietary, sole, and exclusive property of the company's founders.