Product Plan: Direct to User

Draft 4.0 Ned Hayes

March 19, 2010

Kiha Software, Inc. 100 South King Street, Suite 320 Seattle, WA 98104
MAIN 206-697-7760 MAIL ned@kiha.com WEB www.kiha.com

Kiha Software. All rights reserved. The information contained in this document represents the current view of Kiha Software on the issues discussed as of the date of publication. Because Kiha must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Kiha, and Kiha cannot guarantee the accuracy of any information presented after the date of publication. This document is for informational purposes only. KIHA MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS DOCUMENT. Kiha Software, Inc. 100 South King Street, Suite 320 Seattle, WA 98104 USA The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Product Plan: Direct to User

TABLE OF CONTENTS
Product .................................................................................................................................................................. 1 Product Ecosystem ................................................................................................................................................ 4 Target Users .......................................................................................................................................................... 6 Product Roadmap .................................................................................................................................................. 9 Market Segments ................................................................................................................................................ 11 Marketing Strategy .............................................................................................................................................. 18 Revenue Models .................................................................................................................................................. 22 Operations ........................................................................................................................................................... 27

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Product
Value Proposition
Kiha's application delivers a new layer of services that optimizes the mobile lifestyle. In a world of highly capable, always-on, information-aware devices, Kiha understands and optimizes your complex world into one clear, dynamic flow. Kiha knows…  Connections between contacts, acquaintances, new incoming data and older archived data. Kiha connects the people in your world with the information that matters.  Relevance of one email to the complete history of your interactions, mapping relationships between one piece of data and another piece of data: between one concept and every related term or contact.  Calendar events and their locations, and maps your schedule so it makes sense to you. Your activity matters to Kiha, and your calendar learns your preferences, your timezones, and your locations.  Context of your activity, your email, your contacts and your calendar all affect what action you need to take. Kiha's context-sensitive user interface makes it possible to take relevant action instantly. With Kiha, you don't need anyone's help: you can do it yourself.

What Kiha does
Kiha connects and finds relevant information. Kiha uses a proprietary semantic service to analyze the content and connections between your emails, documents and other information accessed through your phone. Kiha's analysis makes search incredibly fast on your phone. The computer-driven intelligence of the Kiha system ties together related concepts, people who work together, events & terms that are part of your personal lexicon. This makes it possible for Kiha to find & deliver exactly the actions & information you need, when you need it. Kiha keeps everything safe and accessible. Kiha uses terabyte-class online storage systems to save all the information you need from your desktop, your laptop, and your phone in one convenient place. You can access your day's "playlist" of documents, events, or music from one interface, on the Web or on your mobile device. Kiha's interface speeds things up. Kiha delivers our service through a patented user interface that goes far beyond basic touch screens to deliver multiple options immediately, in a new and innovative way of presenting "instant actions” to you without forcing you to leave your place in a document, or your page on the Web.

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Key Features
1) Connection-Finder: Kiha processes information on-the-fly and automatically finds connections and related data. These connections are exposed to the user through "related lists" and "instant actions". o Related Lists: Kiha understands English well enough to know that two terms are related concepts. From any of your standard terms, your contacts -- or even from any email or document, Kiha will pull up an automatic list of items related to that item, even a new email. o Instant Actions: Kiha provides instant actions on any document, email, event or recognized term. Instant actions are always context-sensitive and sensitive to your location and needs. 2) Better Mobile Browser: Kiha's browser highlights terms you know to enable these features: o Act Instantly: Touch to send an email, add a contact, make a call and other common actions. o Search without Typing: Touch on a term to automatically search your data or Web data o Find Your Sites Later: Kiha's system automatically archives information and relates your Web history to other information in your data, so that you can easily retrieve a related Web page. 3) Cloud Storage: Kiha stores all information connected to the system in a secure online storage system that delivers optimized on-time information to the mobile device or browser application. 4) Smarter Calendar: Kiha's calendar provides access to every calendar you register in the system, along with always-on access to schedule in multiple time zones and in multiple location calendars.

Secondary Features
Most of these features are secondary because they are "feature-parity" with existing phones & apps.  Direct Social Networking: Kiha pulls down social network updates and integrates updates, tweets, and comments into your social stream, tying together all your data and your friends into one seamless flow.  Faster Interface: Kiha analyzed common mobile device activities and optimized the number of steps you need to take for most actions: in many of the operations you need the most, Kiha's interface is faster by a factor of up to 3X.  Universal Search: Kiha's search is ubiquitous and universal: search anywhere for anything in your world. Kiha can find anything from docs on your desktop to emails and text message on your phone. (Google's Universal Search has made this feature a commodity:
http://www.wired.com/magazine/2010/02/ff_google_algorithm/all/1)

 Multitasking: Kiha switches task contexts rapidly, and always keeps your activity "alive" on the
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Product Plan: Direct to User phone. (Apple Insider - Apple iPhone to ship Multitasking in 2010 http://bit.ly/aEt04e)

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Product Ecosystem
Business & Pleasure Advanced mobile devices with fast processors such as the iPad and the Nexus One are increasingly treated by business users as indispensible always-on companions -- even "extensions of the person… part of their identity" (Stanford Study March 2010). Users o f these smart devices often don't have the sense that some other system is doing the work for them -their tactile interactions with touch-screen devices give them a greater sense of involvement with their electronic activity. It feels more personal: in fact, users report that they feel they have "done the work themselves more" than when they are at their desktops or laptops (LA Times Jan 2010). Most business users of these devices provision their device with full access to all email accounts -- business and pleasure -- and view both business data and personal data on the same device, within the same span of time (ABI Research Feb 2010). Yet many smartphones today separate activities and force data into separate silos. Kiha's application will be different: our application must emphasize synergy and discover connections. Kiha's proposed value proposition speaks directly to this persona's daily life and expressed needs: "Kiha's application delivers a new layer of services that optimizes the mobile lifestyle. In a world of highly capable, always-on, information-aware devices, Kiha understands and optimizes your complex world into one clear, dynamic flow." Paradigm Shift: Smartphones to Superphones The market for smart mobile devices and data-aware applications has definitively moved away from the late 90s separation of devices into segmented categories: the "Blackberry for Business" and other devices (such as Sidekick or iPod) for entertainment (Forrester 2010). The user with disposable income (or an expense account) to purchase a "smarter" device tends to buy one device with the intent of using it for both business and pleasure. These devices are rapidly becoming the primary phone and email device for business users and often serve as a secondary entertainment device for multiple users -- not just the original purchaser (Forrester 2010, Gartner 2009). They are always on, always connected, and always receiving new information. The Superphone as Commoditized Platform The shift from a segmentspecific device to a device with an operating system that can be used as a foundation for many types of applications and uses is best seen as a shift from "Smartphone" to "Superphone." The "superphone" is a device that has available tens of thousands of potential applications, and whose user experience and individual

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Product Plan: Direct to User personality is at least partially driven by the user themselves.
Seattle Mobile Breakfast Series, March 2010). (Rob Glaser,

For advocates of the "superphone" as a touch-driven vehicle of personal expression and alwayson full Web connectivity, this is an exciting prospect. For OEMs and carriers, this should be a terrifying idea, because at the end of the day, this implies that the smartphone hardware and even the underlying operating system become a commodity vehicle to deliver a rich user experience based on applications. The platform itself is worth next to nothing: this parallels Microsoft's work in delivering Windows to a large worldwide market for commodity prices, working directly with OEMs to install that operating system as default on a vast majority of computers worldwide. Microsoft makes much more margin per installation of their productivity suite -- Microsoft Office -- than they do on the operating system. (The operating system revenue shortfall in margin is made up in the vast volume of their install base.)

Market for Applications
In a world where the underlying platform -- the mobile device operating system and hardware -- is largely a commodity, the real money and impact is to be made in the customized applications delivered on a near-universal platform. As Microsoft has already proven, productivity applications are valued by users -- especially business users -- as premium purchases. Users will pay for productivity. The essential play for Kiha is to deliver a premium application experience on one or more of these initial commodity platforms and gradually extend the Kiha value proposition into increasing platforms in the "superphone" world (i.e. iPhone, Android and eventually new or resurgent platforms such as Palm WebOS and Microsoft Mobile 7+). One of the keys to Kiha's success in the market is the Internet-based nature of both the semantic processing and the always-on storage and retrieval of data from an "in-the-cloud" repository. Kiha's value prop is mobile productivity -- not necessarily tied to the attributes of any particular operating system or mobile device. If you lose your iPhone and "upgrade" to a Nexus One or a new Microsoft device, your data and productivity is never interrupted.

Data Types for Working Adults
Smartphone users consistently state that their smartphones are being used for a great deal of their working and leisure day, regardless of their particular activity at that time (Compete.com 2010). Today, smartphones are being used at nearly all points of the day, from the morning commute, to the waiting room at a personal appointment, to a meeting at the office, to texting with friends at night while trying to understand that week’s episode of Fringe. Because activity-specific market segmentation is fading in the "superphone" world, and the operating systems are no longer tied to a specific type of usage, it is vital that a productivity application does not create artificial boundaries between data types. Salesforce.com's CEO recently observed that Facebook is a productivity tool for many of their business sales people, and that new collaborative capabilities in his software mirror and integrate Facebook functions (Marc Benioff March 2010 http://tcrn.ch/9gX305).

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Product Plan: Direct to User A mobile device that processes data and focuses on productivity would be well positioned in this new paradigm if it did not simply process one type of data well, but instead was capable of processing multiple term clouds and was semantically aware of terms, locations, and data from multiple sources. In an environment where a user is using their iPhone or Nexus One to look at business email one minute, and Facebook the next, it makes little sense to compartmentalize these activities into different silos (Stanford Research Study March 2010).

Target Users
Persona
Kiha's target market is composed of adults 25-45 who use their smartphones for at least half their day -- for activities both business-related and leisure-related. This kind of online service and smartphone user must have a considerable disposable income as well, as current smartphones require the user to pay for the phone outright and often cannot be purchased without an expensive data plan. This places our target application user in an income bracket of at least $65K/year (Forrester 2010). Today's smartphone users must be technology savvy, with multiple online accounts and familiar with recent online innovations such as Facebook, Twitter and Blogging. The specific segment targeted by Kiha are productive working adults who are self-directed and can download and use their own purchased applications for business and personal reasons: a majority of workers who describe their work as self-directed and self-managed are SMB and SOHO workers (CompTia / McKinsey). Avid smartphone application users often state they need on-device applications that can effectively "manage their family's complex schedules" and/or their "complex work schedules" (CompTia 2010). Therefore, more likely than not, our target audience has a family of their own, with minor children to manage or supervise. This also means the scheduling functions of Kiha's productivity applications must be able to support multiple schedules and must be able to flexibly import and analyze multiple schedules.

Persona Characteristics
Age Income Household Work Type
SMB SOHO

Social Networks
FB, Twitter, Blogs, etc

Online Behavior
Online 14 of 24 hours

Smartphone
65% iPhone 25% Android 10% Other

On-Device Applications

25-45

$65k$200k

3-5 members

20-100 apps

Use Cases
Kiha's application product will tie together a user's complete day, creating a holistic picture of activity and upcoming data needs. In Kiha's application, processing information related to business should be coupled by the basic ability to process information related to consumer

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Product Plan: Direct to User entertainment activities, such as Web browsing for pleasure and interactions over text messaging systems and the like. Kiha is an application oriented at working adults, and the types and magnitude of "entertainment" processing suitable to this audience does not differ significantly in data types, volume, or even in terms from business text. (The obvious exception to this statement is the processing of streaming video content and video tagging. These media types are outside the scope of this proposal.)

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Business Use Cases
Kiha's on-device application should be able to absorb, process and semantically recognize business email, business contacts, business documents, and other business-related textual information. Kiha's ability to recognize and provide user interface "actions" and "lists" relevant to business content would play out in the following use cases:

Business Scenario
A customer calls you

Kiha Use Case
See all communications and documents related to that customer during the inprogress call. Check all your email accounts from one unified inbox that’s color coded by account. Find items related to any recognized person, location, organization, date, and time mentioned in an email message. Search your information or the internet for highlighted items. Get estimates of the time required to go from one scheduled location to the next. If you’re running late, get alerts well in advance. Send a message to the meeting attendees from your calendar. Find the account representative's name and phone number, and call her, even if you don’t regularly correspond with her, and she is not in your contacts list.

You receive a business email message from a sales prospect

You have a meeting soon

You're reading an email message about a customer, from someone you have never met before. A customer requests a document during an in-progress phone call. You're searching for a new customer you wrote to last week You want to store some information in one place

Search for and send the file while you're talking--without downloading It to your phone. Retrieve contact information for people with whom you have communicated in messages, even if you haven’t added them to your contact list. Use spaces to create custom desktops on which you can store categories of pages, links, documents, widgets, and applications.

Consumer Use Cases
Kiha's on-device application should be able to absorb, process and semantically recognize consumer email, consumer contacts, consumer documents, and other pleasure and entertainmentrelated textual information. Kiha's ability to recognize and provide user interface "actions" and "lists" relevant to consumer content would play out in the following use cases:

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Consumer Scenario
A friend calls you, to confirm a date that evening You receive a personal email message at your work account.

Kiha Use Case
See all past communications (including text messages, calls and emails) related to that friend during the in-progress call. The personal email is automatically tagged with an appropriate color and is connected to all personal email from that same person – even if they didn’t use the same email address as before. You can easily search your information or the internet for highlighted items. Kiha provides estimates of the time required to go from work to the next scheduled location (even if it’s just on your “home” calendar, not your business calendar). See automatically if traffic is an issue. If you’re running late, get alerts and suggestions for alternative routes. Find the movie’s local showtimes, and a phone number for the theater, without leaving the email message. Retrieve contact information for people with whom you have communicated in messages, even if you haven’t added them to your contact list. Use spaces to create custom desktops on which you can store categories of pages, links, documents, widgets, and applications.

You have a soccer game on your personal calendar

You're reading an email message about a new movie You're searching for a friend of a friend

You want to store your son’s soccer game dates and roster in one place

Product Roadmap
Kiha plans to deliver a productivity-focused application that can be installed on multiple phones and devices that are supported by a single ecosystem. Kiha should deliver one productivity application that is available through a Web-based interface, and through an interface made available on leading smartphone ("superphone") platforms.

Smartphone Platform Market Share
Smartphone owners in the U.S. constitute a group of 42.7 million people. RIM's Blackberry platform continues to lead the field with 43% share of U.S. smartphone subscribers, while Apple's iPhone ranks second with 25%, but is accelerating rapidly with year over year increases. Microsoft's aging 6.0 and 6.5 platforms is slipping rapidly from its 15.7% market share, and their next release has been significantly delayed. What's most interesting is that Google's Android is already growing, in the first 18 months of release, and now ranks at 7.1% overall (up 4.3%). (ComScore, March 2010
http://bit.ly/bFeNns)

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Takeaways to this ComScore market analysis are A) Apple rising, B) Google’s Android platform continues to see rapid gains in market share, C) Other platforms stagnant or hold steady. Most telling is another data point from ChangeWave (Jan 2010), in which we can see the true cost of Apple's dominance and the ability of Google Android to continue to rise in this space and challenge Apple. In 2009, 32% of smartphone users planned to upgrade to a new iPhone (orange). In 2010, this has slipped slightly to 28%. The platform with real gains in 2010 looks to be Google Android, moving from 6% to 21%. Today, the leading smartphone platforms in North America are ranked in this order of preference by users: 1) Apple iPhone, 2) RIM, 3) Android, 4) Microsoft. Smart application developers targeting large audiences of users would be wise to target the iPhone (ChangeWave 2010 http://bit.ly/c8znOB) and Android. RIM is increasingly becoming the domain of enterprise business users, as companies can more easily "shut down" the installation of third party applications on these devices (ChangeWave 2010). Therefore, it is not a receptive environment for Kiha's productivity application. Therefore, it is recommended that Kiha NOT target the RIM platform in the first years of release.

Kiha Product Delivery Timetable
Kiha should deliver an application that delivers to each of these segment types, in this order: 1) Apple iPhone + Web 2) Android
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Q4 2010 Q1 2011
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Web App iPhone Android iPhone v2 MSFT Mobile Android v2

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 2010 2010 2011 2011 2011 2011 2012 2012 2012 Web application, Data can also be accessed & updated via smartphone apps iPhone App v1 Android App v1 iPhone App v2 MS Mobile App v1 Android App v2

A projected release timeline for application deployment follows:

The majority of early adopters of new applications install such applications within 60 days of purchase of a new device: over time, the install rate of new applications diminishes to a steady trickle, instead of the early blast from new purchasers or upgrading purchasers (Silicon Insider 2010).It is advantageous to launch applications as close in time as possible to the release of new versions of the target handsets. If Kiha can map application release product release schedules to key deliverable dates for the target platforms, the Kiha application can achieve maximum impact. Here are two examples: APPLE Q3 2010 Apple iPad Delivered (hypothetical) Q3 2010 First (1.) Delivery of Kiha Application for iPad, iTouch, iPhone Q4 2010 (Expected) Update to Apple iPhone (hypothetical) Q4 2010 Second Version (2.0) of upgraded Kiha Application for iPad, iTouch, iPhone ANDROID Q4 2010 Android Devices ship on AT&T, Verizon, T-Mobile (hypothetical) Q4 2010 First (1.) Delivery of Kiha Application for Android Gen1 Devices Q1 2011 Android Second-Generation Devices Ship (hypothetical)

Market Segments
Smartphones are the remaining growth segment in a static mobile environment, and replacement phones are moving towards smartphones like iPhone & Android (IDC 2009, Forrester 2010). If Kiha hopes to deliver a mobile application, Kiha will sell to an existing or emerging smartphone market segment. The three standard segments in technology sales have traditionally been: 1) Enterprise, 2) SMB, 3) Consumer. In the new world of smartphone and mobile device sales, Apple has had remarkable success by delivering a closed device (i.e. Consumer-level) that then blurred the lines between
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Product Plan: Direct to User "Consumer" and Enterprise/SMB by selling heavily to business users in release 2.0 (but without significant changes to the product line). Apple sold a device aimed squarely at the high end of the consumer market, and then used its App Store model and upgrades to its product to add features and applications that appeal to business users, ranging from secure Exchange access to productivity apps. Apple's success was predicated on two factors: 1) Apple shipped at the time when the upgrade cycle to smartphones was just beginning, 2) Apple correctly anticipated the fact that consumers were fed up with phones as a technology sink-hole, and wanted a bone-simple Consumer level device that could be extended. In short, Apple proved that there was a large pent-up desire for always-on mobile devices that can provide much of the computing power of a laptop, but without the hefty form factor or maintenance overhead. Google, obviously, is now attempting to capitalize on that success with releases that open the device to more customization and to more customizable form factors and enterprise-class applications. Kiha's Productivity Opportunity Yet neither Google nor Apple have yet delivered an on-phone productivity suite that is on par with the capabilities of their devices: we believe that Kiha has a prime opportunity to capitalize on this gap by delivering a semantically-enabled productivity suite that brings together all textual content on a device and allows a user to take action very rapidly and smoothly. The App Store model used effectively by Apple also created a prime opportunity for a Kiha application. Prior to the iPhone, mobile developers pursuing Consumers had to work with carriers to get "on the stack" and if they wished to pursue the Enterprise market, they had to work directly with large enterprises, or be a large enterprise vendor themselves (such as Microsoft, Oracle CRM, etc.) This is the not the case any longer: today, an application can be developed for either Android or iPhone and be purchased directly and immediately by Consumers or by SMB users. Note that Enterprise users are often blocked from purchasing applications themselves for use on Enterpriseprovided iPhones or other devices. Thus, Apple's initial work in familiarizing business people with touch screens and an App Store model provides Kiha with a solid foundation on which to build. Market Estimates Today, there are over 25 million iPhones in the market. Approximately 60% of those phones -- or 15M -- are used for business during at least part of the day (IDC 2010). If we discount approximately 1/2 of those devices as being purchased by large enterprises (7.5M), and thus inaccessible to third party applications such as Kiha, we are left with a target group of approximately 8M existing iPhone users who may wish to use a third party productivity application for business purposes. This 8M number happens to correlate with a recent estimate that there are 5.7 million small businesses in the U.S. and an additional 3-4 million SOHO workers in the United States (Analysys Mason 2010). SMB customers themselves validate their use of smartphones for work -- 44% of surveyed SMBs said they plan to invest more in smartphones in the next 2 years (CompTIA). The same is true for SOHO -- the smaller the business, the higher the use of smartphones for work (DigiWorld 2009). Kiha's total available market for an initial iPhone application for SMB and SOHO would thus be approximately 8-9 million business-oriented users in the United States. The emphasis on business-oriented users is necessary, because only business users seem to pay for App Store applications. The majority of applications in both the iPhone and Android app stores are

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Product Plan: Direct to User still free today. There are several options for revenue growth using the Kiha application as a beachhead application (discussed later in this proposal), but all but one of these options involve an eventual upsell and money changing hands.

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Go to Market Options
Paid App Only: Although productivity suites on the desktop have sold well for decades, the same is not true on mobile phones. In fact, most productivity software on mobile phones and even on "superphones" has been bundled into the underlying platform. This is true of basic productivity software such as Email clients (even Exchange-capable clients such as the iPhone's on-phone Mail client) and of document markup and document editing software. The most installed and used software is "free" on the phone. Data from application business cases in both Apple and Blackberry App Stores clearly demonstrate that delivering ONLY a "paid" productivity application is one way to ensure a minimal install base. Free App Upselling Paid App: Providing a minimally-featured product alongside a paid version has worked for many applications that are in constant use, such as IM Clients and the like. However, it is not a viable path to short-term assured revenue: 4 years of effort leading to 1M "paid" installs is not a viable long-term roadmap for a growing business.

Advertising as Game Changer
Many applications on the iPhone and Android have turned to advertising support as the primary revenue stream for the application business. A recent finding by Compete.com demonstrates that mobile advertising may be even more successful when it is pertinent to a user's activity or location. Compete’s Quarterly Smartphone Intelligence Report found that nearly half of smartphone users would be interested in mobile advertising, making this a viable product option.

Consumers were most interested in receiving grocery coupons (36%), scanable barcodes (29%), offers to save and pursue at leisure (26%), movie theater offers (26%), and ads via SMS when going by a retailer with a promotion / coupon (21%). The fact that over 1 in 5 smartphone owners would be interested in these top-5 is very promising for the mobile marketing industry (Compete Feb 2010).

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This recent demonstration by smartphone customers of openness to mobile advertising that is pertinent to their communication usage, location and/or mobile activity provides a firm grounding for a delivery recommendation for Kiha.

Delivery Recommendation
Kiha should take its initial product to market via both a free application supported by advertising and a paid mobile application. The following sections present both a conservative approach to this model, and a more aggressive approach. In the Conservative approach, the Free Application should be 99% functional, but supported by advertising. The Paid version is 100% functional, but simply gets rid of the advertising. The additional 1% of added value can take the form of business-specific features, such as additional security protections and a data encryption layer. The Paid version is worth considerably more to Kiha in this scenario. In the more Aggressive approach, the Free Application would also be 99% functional, but would be supported by semantically-targeted advertising. The application itself -- with user opt-in upon application installation -- consistently mines the user's data for current activity, current interests, current schedule and current location and provides targeted advertising specific to that moment. Conservative Growth Forecast in U.S. This conservative forecast is based upon a basic App Store business model of a "simple advertising" supported application, which also upsells an ad-free "premium" version of the application. Note that this forecast is followed by a more aggressive forecast that is predicated upon Kiha fully using the product's datamining and semantic analysis capabilities. The proposal is that Kiha would ship a free iPhone application in 2010 and a similar Android Application in late 2010, both aimed at the immediate needs of the SMB/SOHO target customer. Because Kiha's application would not be markedly distinct from other productivity applications, it is reasonable to project that Kiha will first achieve 1% of the target market (480K install base Year 1 out of target base of 8M). With continued marketing and product improvements, Kiha can expect to see a substantial CAGR over the next several years, leading gradually to an install base of 1.7M out of 13M target users by Year 5. (Estimates are that each application user would be worth approximately $0.59/annually to Kiha, and the Paid version of the application would be sold for $9.99 per subscriber as a premium business app.) "Conservative Recommendation" projected install rates for both paid and free applications, on iPhone and Android can be seen in the graph below:

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Conservative Recommendation / Install Forecast
1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 -

iPhone (free) iPhone (paid) Android (free) Android (paid)

2010

2011

2012

2013

2014

The Conservative Recommendation demonstrates a successful iPhone or Android application story, but it is not a groundbreaking success as a company's sole product asset. Therefore, in this scenario, Kiha would have to productize and sell the Kiha online service as a separate monetizable asset in order to achieve a truly breakthrough revenue plan. Aggressive Growth Forecast in U.S. In this approach, Kiha would take its initial product to market via both a free and a paid mobile application. The Free Application should be 99% functional, but supported by semantically-targeted advertising. The application itself -- with user opt-in upon application installation -- consistently mines the user's data for current activity, current interests, current schedule and current location and provides targeted advertising specific to that moment. This model was first pioneered by Google based on a user's entered search information and information they found in a search: narrowcast advertising has never been done based on semantic content of messaging and personal data, and carries with it potential unforeseen risk. In this proposal, the Paid version is 100% functional, but simply stops data-mining in order to place targeted advertising. Many businesses will pay to not have their data mined, so this is a valued up sell in the business market. The Paid version gets rid of the advertising, and in this scenario is a lesser revenue source for Kiha. (Again, the additional 1% of added value can take the form of businessspecific features, such as additional security protections and a data encryption layer, and removal of semantically targeted advertising.) The aggressive forecast is predicated upon Kiha fully using the product's datamining and semantic analysis capabilities to deliver targeted advertising in text and visual form that are contextually aware: advertising will reflect terms and concepts within the recent activity stream, will demonstrate "awareness" of user's data activity, recent data consumption, data searching proclivities, recent and current acquisitions and business relationships and the user's location in space and time (i.e. calendar, time of day and user's physical location). The recommendation is that Kiha deliver an entirely "free" version of the Kiha smartphone application which contains this semantically-driven advertising, and monetizes through sales of these types of narrowly targeted advertising.

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Kiha should also deliver a Paid version, which simply turns off the semantic & context-sensitive advertising. Businesses will find this version useful, but it is not as monetarily profitable to Kiha. If Kiha ships a free iPhone application in 2010 which is supported by semantically-aware advertising, we have the opportunity to build a new category of applications and a new kind of revenue stream on the mobile device. The kind of services we offer, coupled with the uniquely targeted advertising we can deliver during actual productive activities may sufficiently differentiate Kiha from the crowded App Store market. The resulting negative and positive press around this new class of semantically-aware application may help to lift our product line to a level of public and professional interest and provide a substantial lift in installations. In this model, the expectation is that Kiha may almost double our Conservative install forecast, hitting nearly 10% of our target market in Year 1 (700K install base). By Year 5, Kiha could expect to achieve an install rate of nearly 25% of our target market of SOHO/SMB business users of "superphones" (3.1M out of 13M target users). The real difference in this model is that the "free" application is worth much more to Kiha, because the advertising can be sold at a premium. (Estimates are that each application user would be worth approximately $14.99/annually to Kiha. In contrast to this, the Paid version of the application would only be sold for $9.99 per subscriber per year.) Revenue estimate details can be seen in the Revenue section. "Aggressive Recommendation" projected install rates for both paid and free applications, on iPhone and Android can be seen in the graph below:

Aggressive Recommendation / Install Forecast
3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 iPhone Free Install Base iPhone Paid Install Base Android Free Install Base

2010

2011

2012

2013

2014

Android Rising Smartphone market analysts largely concur that Android's open marketplace, low cost to invest, open development platform will gradually subsume some of the market momentum of the proprietary and closed iPhone platform, much as the open development environment of Microsoft Windows created a larger value-add for developers and consumers over the proprietary and expensive Macintosh operating system in the personal computing world (Forrester 2010, IDC 2010, ABI 2009, etc.)

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Product Plan: Direct to User

Kiha believes that as Android moves from an initial install base in the "tech-savvy" early adopter world to more mainstream acceptance, that our application will track this platforms substantial growth. Today, the iPhone continues to have an edge in usability and in install base with non-technical business users. Over time, Android will become part of mainstream productivity. It would be wise for Kiha to anticipate that shift in late 2012, early 2013, and shift substantial resources to creating new and improved versions of our applications for this Android growth market. Long-Term Global Growth Over time, if Kiha has some success in the U.S. market, it is worth noting that there are 200 million SMB / SME customers worldwide today (ABI 2009), a number which is expected to reach 330 million by 2014 (ABI 2010). These are impressive figures, but it is important to remember that Kiha's semantic technology has not yet been tested on non-English vocabularies and non-English datasets.

Marketing Strategy
Key Message Kiha wants to communicate that we make users smarter, connect Information and make businesses faster. A quick shorthand call to action that speaks to these Kiha values of "smarter action" "connected information" and "faster business" and also can be built into a viable viral marketing campaign is the simple statement: "Do It Yourself" (DIY) This statement emphasizes action (Do), productivity (It) & personal achievement (Yourself + the DIY aesthetic).

Distribution of Kiha Application
Distribution is only a means by which we would deliver the same Kiha value to our customers, and should not have an undue influence on the marketing messages and the core value we can deliver. How we reach our target audience does NOT depend on what platform Kiha elects to target with our initial shipment if Kiha targets the iPhone/iPad ecosystem or the Android ecosystem, our key value prop will be the same. Although the market sizing has already been presented in our Product Roadmap section, it is key to consider Apple and Android as two different types of distribution mechanisms for the same productivity product. Here are the advantages of both platforms as distribution strategies: Primary Proposal: Deliver an iPhone / iPad Application Largest market for "smarter" mobile customers today is the Apple iPhone, iTouch and iPad ecosystem. Apple provides a stable underlying operating system and a well-documented set of application programming interfaces. Apple further provides a well-established Application Store model for product delivery, and already has significant penetration in the SOHO and SMB spaces. Advantages 1) Reach of the Apple platform. Apple has a very large market for applications in the App Store, and has made this a viable business for many players.
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Product Plan: Direct to User 2) Closed platform for UI innovations may actually allow Kiha to focus on what makes us unique -semantic processing and in-the-cloud storage, rather than trying to innovate in UI as well with our first app shipment (Apple March 2010 lawsuits may further demonstrate closure of UI innovations to other developers on
areas such as multi-touch, etc.)

3) High Adoption by Target Market (a slim majority of smartphone-ready SMB and SOHO customers are already Apple customers) 4) App Store model is well established for Apple customers, and Kiha would not have to establish a model or a price point to sell our product. 5) Stability of platform Apple’s smartphone has demonstrated re-start issues only in approximately 12% of use scenarios. This is in contrast to Android’s documented re -start and device wipe issues, known to be in the 20% to 35% range, depending on device and scenario usage. Disadvantages 1) Closed Apple Platform, and therefore all of our value must be contained In offline storage and semantic processing, rather than through UI enhancements (this is both an Advantage and a Disadvantage) 2) Rise Above the Noise? Apple's App Store's success may make it difficult to rise above the noise with a unique product proposition. 3) Built-in Apps: iPhone/iPad ship built-in applications for productivity (iWork) and Email. Third party apps already exist for strong social network datamining. Shipping products in this productivity and communication space would mean competing with Apple head-to-head in some areas 4) Getting Additional Data: Closed Apple Platform additionally means that access to additional information, such as email records, calling records and call-in-progress information may be difficult to get. Secondary Proposal: Android Application Secondary proposal is to build a product specific to the Android platform. Ideal would be to be "on the stack" as a pre-installed productivity application on an Android device with significant marketing, such as Droid (2009) or Nexus One (2010). Advantages 1) Kiha Could Lead: No clear leader has been demonstrated leader in productivity applications on Android platform -- Kiha has the capability to lead here with our own brand and productivity apps 2) Define Value: Ability to drive business terms and define our value ourselves (rather than being beholden to Apple for the complete model) 3) Open Platform provides Kiha with more insight and flexibility in development 4) Getting Additional Data: Open Platform additionally means that access to additional information, such as email records, calling records and call-in-progress information may be easier to get. Disadvantages 1) Low Adoption by Target Market Android has potential, but carriers are selling individual brand names, and the idea of “Android Inside” (a la Intel) hasn’t really taken off yet for customers. 2) Lack of Viable App Store model is not well established or well populated for Android customers, and fragmentation of app stores means that Kiha would have to work harder to establish ourselves and market ourselves as available in the Android App Store. 3) Stability of platform Android has demonstrated some instability, especially as compared to Apple (35% in some cases, compared to Apple’s 12%) 4) Open Platform has already led to some fragmentation, especially in UI and App Stores. The Android platform is fragmenting to some degree. This makes it less suitable for broad penetration.

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Product Plan: Direct to User 5) Open for UI Innovation may actually force Kiha to innovate here, which may muddle our primary and hard-to-replicate value in the market – which is our unique semantic processing and in-the-cloud storage.

Go to Market Strategy
Analysis of the application store market demonstrates that providing a paid application thru the App Store (on either Apple’s storefront or the Android store) is not a viable long-term business model as a stand-alone strategy (IDC 2010). The financial viability of the App Store model for any individual developer of an application is relatively small (Apple Cut of App Stores, ZDNet 2010). App Store should be a beach-head application, not the end game. However, if the application can pay for itself through other means, then an initial application install can be a viable first step. There are several ways of ensuring the application pays for itself over time: 1) Advertising supported “Free” Application: Many applications in the Apple App Store have managed to cover their expenses through advertising and partnerships. They become a brand-vehicle for other corporate entities who want their name associated with the application, and want to be seen by the eyeballs on the application. The kind of detailed information that Kiha might be able to share with advertisers (with user opt-in) would be quite compelling, and might enable partnership and co-branding (i.e. “Hulu Entertainment Organizer!” OR the “Amazon Connections Application”) Mobile App as Beach-head for Service: Applications have also had some success as a beach-head for continued use of their service. The customer pays for access to the service, and the mobile application “head” for the service thus becomes simply a “feature” of the service. One consumer applicat ion with considerable success is Pandora, whose revenues only took off after their mobile apps received sufficient interest. Mobile App as Beach-head for Desktop App: Kiha’s role as a productivity application might also have legs on the desktop. If Kiha used the mobile app as a way to build interest in the desktop app – and to provide another front-end for basic functions, Kiha might be able to make a play for desktop growth.

2)

3)

Revenue models for each of these options are included in the "Revenue Models" section below.

Call to Action
Kiha's value proposition is consistent, clear, and concise. The underlying values are always the same -"Kiha makes you smarter, connects information for you, and makes your business faster." A quick shorthand call to action that speaks to these same Kiha values, and connects with our target audience is simple and direct, and is powerful in its multivalency: "Do It Yourself" (DIY) This DIY aesthetic can be used in multiple ways through a campaign, and can be seen both as the primary call to action for a user-created viral campaign (described below), and as a description for the application's use by the consumer. After the application has some market penetration, and other messages are being delivered, this DIY moniker can be used as a standard marketing tagline, and can be appended to every instance of the application in action, in order to emphasize the individualistic nature of the application, and the power

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Product Plan: Direct to User of "fast action" that Kiha delivers. The use and implications of the DIY tagline is explored in greater detail in the proposed Viral Marketing campaign outlined below. Here is a brief explanation:
 Do "Do" It -- focuses the user on Action. This is not a passive application. This is an application to

-- multivalency of "it" focuses on Productivity. Throw anything at Kiha, and we will do "it" -- focuses on user persona. Connects directly with the mobile device as an "extension of person." Also connects with the individualistic character of our SMB/SOHO target

 Yourself
the audience.

Viral Marketing Campaign
The disaggregation of media influencers have made it more difficult for large-scale product launches to receive the kind of consumer – or business – attention they once received. Today, loosely joined social media circles and viral messaging should be treated as primary methods of getting a message out. The key element to success in viral and social media messaging is creating “participants”, rather than just “consumers.” Consumers of your message have to be involved. Kiha can drive early buzz and viral interest thru online social networking and user-built collaborative multimedia that "pre-announces" Kiha's un-released, futuristic smartphone application. Prior to and concurrent with product launch, Kiha build on the power and growth of this social and empowered online user network with extensive online resources about the product. Kiha should launch the product using these same online social network and viral tools. The actual Product Launch itself can do a soft-switch on the gear, but use the same messaging and leverage much of the user-created content. Our marketing campaign should always foreground user-created content. Here’s how we encourage, acquire, and develop this user-generated content, and how we use it to deliver our application to market. Phone Context Today, the carriers have standard marketing plans that they follow in launching any new phone. These plans typically include X% of dollars to kiosks, X% print and online collateral, X% to online/SMS contests, etc. Phone marketing spends are split with handset vendors, third party service providers (IM, Good, TeleNav, OS vendors like MS, etc). Carriers and large vendors – including Apple – do not effectively market paid third party applications. The results are that consumers and self-purchasing business people are largely NUMB to the messages that come out of these marketing plans. Users have little sense of ownership in their phones or their experience. They are not brand loyal, and change phones regularly. Apple has built a base of users, but their controls have alienated some users from the brand (i.e. cracking phones, installing other Apps, etc.) Application Marketing?

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Product Plan: Direct to User Furthermore, the lack of effective marketing for applications has made applications into a commodity product, rather than a premium “must-have” product to install on new phones. A corollary situation would exist if Microsoft had never branded MS Office, and had just given it away with every new PC – Office would be a commodity product, rather than the premium brand it is today. The Office example is pertinent because Kiha provides similar productivity gains with our semantic intelligence and our user interface improvements. A user-generated enthusiastic embrace of a new product can allow for a market penetration strategy that includes a significant up-sell and a premium priced model (unlike most consumer available apps today). Short-Term Marketing Proposal Create a viable sense of audience participation by intentionally using "low tech" or seemingly "audiencecreated" introductions to a product that appears to be somewhat user-generated in its actual features. Most of the early preview releases should be done in low-tech mode, as in the mode of http://commoncraft.com/ The goal through this audience participation phase is to build buzz and "audience ownership" around the Kiha application in advance, so that there's a real groundswell of interest. Make it participatory, and engaging, so that there's an audience of people who build features, and have a real sense of ownership about the phone. Again, with the tagline “Do It Yourself”, it’s highly possible to engage people in designing their own kind of smartphone application, and essentially saying to the audience “We’re taking the best of your ideas, and shipping an application tailor-made to your specifications.” (Part of the reason we can do this with some confidence is that the Kiha concepts were often independently proposed by focus groups and large groups, and the ability to deliver the Kiha proposition continues to resonate with mobile users. See primary Kiha Market Research, May 2008 – Jan 2010) Necessary Components To execute on this proposed viral marketing model, Kiha will need: 1) 2) A viable web presence with the ability to solicit user input and feedback Other online outlets that would link back to the main “Kiha -DIY” website. Links such as a Facebook group, several Twitter accounts, a YouTube Channel, and other social media outlets. 3) An online community organizer & content editor whose full-time responsibility is the management of the community and the sensitivity to deflect trolls and direct users in useful directions 4) A part-time marketing person who would be able to message out interesting user proposals to sites such as Engadget and Gizmodo so that our site could begin to receive buzz for “cool ideas” 5) A fund that would reward user creativity with small prizes, increasing in size closer to launch Long-Term Marketing Proposal Using the social media and online content model, Kiha could encourage our users tremendously with their ideas and build a rabid base of users who function as evangelists, who are empowered to help other users, and who contribute to an ongoing user community. Given our limited size, this also creates a user-base of people who will help other people with our application once an initial version launches. (The downside is that the sense of ownership can lead to backlash if the company does not do what the users "want" them to do. Therefore, transparency and clarity is essential with the community.)

Revenue Models
The Kiha application can be sold in one of two business models.
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Product Plan: Direct to User

1)

Conservative Model: The first “Conservative” model would deliver a basic-advertising application for “Free” that can be upgraded t o a Paid version. The Paid version is worth more to Kiha in the Conservative model. The forecast for this model is $20M in five years. This model, the overall play would be to sell the service itself. (The revenue model for the service is not included here.) Aggressive Model: The second, “Aggressive” business model, would deliver a “Free” application that is underwritten through narrowcast targeted advertising that makes use of the system’s semantic capabilities to deliver context-sensitive advertising. Again, the Free version can be upgraded to a Paid version, but in this scenario, the Paid version is actually worth less to Kiha. The forecast for this model is $240M in five years. However, the assumptions underlying this model are complicated, and may create blowback for Kiha that will hurt the overall brand and the long-term revenue proposition.

2)

Both the Conservative and the Aggressive revenue models are presented in detail below:

Conservative Model Forecast
Revenue potential in the Conservative model can be achieved by a combination of free applications, funded by advertising, which can be “upsold” as a premium business productivity application that no longer includes advertising. In this model, Kiha’s free and Paid applications are worth approximately $21 million in the first f ive years of release for Kiha. This model focuses on the application as a stand-alone revenue source (aside from any revenues derived from an online or desktop-based application) This revenue model is predicated on this projected installation rate for Ki ha’s initial smartphone apps:

The overall revenue roadmap projects only $800k in the first year of release, rolling gradually to approximately $8 million in annual revenue for both the ad-driven free app and the premium application.

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Product Plan: Direct to User Conservative: Pricing (Revenue drivers and $/unit) Advertising rates for consumer-focused applications have been substantial and successful, but have not been tested broadly in productivity or business applications. Therefore, $0.59 annually as advertising revenue per application seems to be a conservative estimate for non-intrusive advertising. Within the first five years, with this conservative estimate, an advertising-supported application on the iPhone would be worth $3.3M. Paid versions of the application would be sold for $9.99 and upwards, as one of the more premium applications on either the Apple App Store or the Android App Store. Both paid versions of the application would be worth $15 million within the first five years of deployment.

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Product Plan: Direct to User

Aggressive Model Forecast
In the Aggressive model, Kiha would mine user data to deliver targeted advertising pertinent to the activity or the data they are currently viewing or transmitting. For example, if a user is reading an email about new gardening materials, the user would receive targeted advertising focused on “gardening”. This approach has been pioneered by Google: their work led to some controversy, but has been an overall success. A user might be able to customize advertising they receive, much as Facebook successfully targets ads and allows users to “turn off” ads they no longer wish to see. As previously discussed, the semantic mining and breakthrough nature of Kiha’s applications here may allow the company to achieve far beyond the Conservative forecast. This revenue forecast is predicated on the following installation rates on Kiha’s initial smartphone apps:

The basic “free” version of the iPhone application, with targeted context -sensitive advertising, would then more than double the Conservative projected revenues for the iPhone application, moving from $10M in the first year to approximately $47M in the fifth year, creating a stand-alone revenue source of $147 million in the first five years. Other applications on other platforms would benefit from a similar uplift in revenue projections, and the overall “superphone application play” would lift Kiha revenue projections into the $240M+ range, as an aggregate of all application revenues over the first five years. Here is the full Aggressive revenue forecast:

Aggressive: Pricing (Revenue drivers and $/unit) The monetary implications to Kiha are considerable. Instead of advertising worth only $0.59 per year, targeted semantically-placed advertising would be worth nearly $15/year per subscriber. Here are the complete revenue totals over five years, along with the sources for this revenue uplift:

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Product Plan: Direct to User

Although this is a large-sized opportunity, it is worth noting that the user privacy implications are considerable, and thus users would have to “opt in” to such a program through either a “small print” EULA or a formal statement of consent. Kiha would have to manage both user and press expectations such that the company would not receive a negative backlash from not informing users up front of the system’s capabilities or intentions. Mobile App as Beach-head for Service Kiha is following an established path by delivering an application on mobile devices to drive service adoption. The customer pays for access to the service, and the mobile application “head” for the service thus becomes simply a “feature” of the service. Business-focused applications such as Salesforce.com have led the way here. Consumer-focused “business” applications such as Mint.com and Zillow.com have also had marked success in using an iPhone application to drive traffic to their site. The most successful consumer-focused “online service” that has driven revenue through a “free” mobile app is the music service Pandora (NY Times March 2010). Applications have thus had some success as a beach-head for continued use of an online service. If the service is a paid service – or certain features are “paid premium” service features, then the application does not have as much success, but the uplift on the mobile application end is still available (as has been seen in Apple’s own “Mac Gallery iPhoto Application,” which is a free application promoting a paid-for (.me / .mac) online service.

Notes on Alternative Strategies
Potentially Viable 1. Desktop App Only: Although mobile applications and emerging smartphone platforms receive a great deal of press attention, Windows and Mac-OSX based applications – especially for business and productivity reasons – continue to be worth billions of dollars. Creating a desktop or smartbook application that relies on data analyzed and stored by Kiha in “cloud-based” services. Not Viable 2. Paid App Only: Analysis of the application store market demonstrates that providing a paid application thru the App Store (on either Apple’s storefront or the Android store) is not a viable long -term business model as a stand-alone strategy (IDC 2010). 3. Web-based App Only: not viable for the capabilities that Kiha offers. Our target customers are mobile: we need to be on a significant mobile platform. These mobile platforms can include smartphone and smartbook platforms.

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Product Plan: Direct to User

Operations
Kiha is currently staffed to deliver a smartphone productivity environment and complete user experience based on the Android operating system, along with a semantic Web service that processes user data and stores it in the cloud. To staff for multiple on-device application and cloud-based system that can deliver data to the on-device applications, Kiha will need to add additional personnel. This headcount should include: A) Engineering resources to develop these on-device applications, B) Release to Implementation (RTI) engineering and QA staff, C) Additional staff to the “Web Service” to ensure always -on connectivity to our new on-device applications. It is also recommended that Kiha add D) additional Program / Product Managers specific to the individual device platforms. The additional headcount will be Kiha’s largest incurred sunk cost. Kiha should also plan for a markedly increased marketing budget for promotion, advertising and go to market initiatives for all of these new on-device applications. As described previously in this document, much of this marketing budget would be allocated to a viral marketing campaign, which would begin early in the cycle, prior to release of any of the consumer -facing products. Complete Staffing Projections New additional headcount at Kiha should be mapped to the product rollout of new applications. The current proposal recommends the rollout of an initial iPhone application coupled with a Web Service, both marketed to consumers. Both would require additional engineering, QA and RTI headcount, as well as a PM for the iPhone application. New headcount in the same categories would also have to be added for an Android application, projected to ship in Q1 of 2011, and a Microsoft Mobile application, due to ship later in 2011.

Development Cost Projections The headcount projected above is proposed as additional FTE employees, rather than contractors or consultants. This is because Kiha should plan on updating all of our smartphone applications on a regular update schedule, and should release a substantial update on at least an annual basis: version 1.0 should be followed rapidly by release 1.1 and on to release 2.0. This kind of continued improvement is necessary to build a consumer audience, and to improve and modify the application as the underlying platform adds capabilities. FTE employees can maintain consistency across an application product cycle.

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Product Plan: Direct to User Engineering, QA and RTI personnel are calculated at approximately $80k per head. Program and Product Management are calculated at $120k per head. Both are mid-tier in the current market. All development and delivery headcount in 2010 is projected to total $1.8 million, with the remainder of the headcount hired over the remaining months of the product cycle. Over the next 24 months, total development and delivery headcount is projected to total $2.4 million in sunk costs.

Marketing and Collateral Kiha should also add additional marketing budget for promotion, advertising and go to market initiatives for all of these new on-device applications. As described previously in this document, much of this marketing budget would be allocated to a viral marketing campaign, which would begin early in the cycle. Some of the marketing activities to be undertaken would include development of branding and collateral materials, and work with multiple consultants in online branding, community building and online community organizing. Marketing activities would include: 1) 2) A viable web presence with the ability to solicit user input and feedback Online marketing that would link back to the main “Kiha-DIY” website. Links such as a Facebook group, several Twitter accounts, a YouTube Channel, and other social media outlets. 3) Online community organizing and content editing. 4) Messaging to online news and media sites. 5) A fund that would reward user participation and creativity within the Kiha online community Marketing and brand planning and collateral activities for each smartphone platform would presage the release of each application on a particular platform, so the largest expenditure always precedes the release, followed by ongoing brand maintenance and messaging activities. Over the first 24 months of the product cycle, Kiha is projected to spend a minimal amount on marketing, as we believe that the viral and community-focused marketing we do will help to create product evangelists out of our own users and messaging that is driven through continuing interactions with our users and through our users. The complete marketing budget for three platforms and five releases over two years is projected to be only $510,000.

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Product Plan: Direct to User

Customer Service and Support Kiha is delivering a consumer-available application. Although this application is oriented at technically savvy business people, this does not ensure that basic product documentation will meet the user’s complete product support needs. This is doubly true of an application that mines data, delivers semantically relevant content specific to a user’s specific context, and interfaces wit h multiple email accounts and document repositories. Therefore, Kiha must plan on providing online and offline (i.e. phone-based) customer service support. This support can be out-sourced to a variety of companies who specialize in application support on smartphone platforms. The total cost to Kiha for such ongoing cost should be estimated at no less than $480,000 over the first two years of release, or approximately $20,000 / month. Total Projected Costs Kiha’s investment in a Direct to User delivery plan for Kiha smartphone applications combines the projected additional development costs ($2.4 million), additional marketing ($510 thousand) and additional projected customer support costs ($480 thousand). The total investment in this project is expected to require at least $3.39 million over 24 months.

Competition
Kiha enters a crowded smartphone application space. On the Apple iPhone platform alone, there are over 170,000 current and updated applications (AppShopper.com). On Android, there are today 30,000 applications, while on the Blackberry RIM, only about 5,000 applications exist. However, analysis of the application space demonstrates that the majority of applications on the iPhone and Android are not targeted at the productive data-processing tasks that are compelling to our target market (ABI Research / MediaMatrix 2010). Few direct competitors exist today. Indirect Competition Out of the existing field of smartphone applications, approximately 12% of current iPhone applications are related to contact management, email management or document manipulation and management
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Product Plan: Direct to User (tasks pertinent to the Kiha value proposition). On Android, many fewer applications are targeted at business productivity – surprisingly so! (Silicon Valley Insider 2010).

On the iPhone, this 12% provides a competitive field of 20,400 indirectly competing applications. The majority of this field (95%) are oriented at direct editing of documents (such as Notes+, ZipExcel, etc.) or document cloud storage of information and retrieval of information from the cloud (representative apps are FileMagnet, SugarSync and Docs to Go). This means that approximately 1,000 applications integrate contact lists and email or touch on document downloading and appending of contact or sales information. Early analysis of a sampling of 24 of these applications demonstrates that all are either enterprise-oriented and/or sales or contact coordination oriented. The majority of applications that fit into this segment – and the majority of applications analyzed thus far – seem to be only available as “Paid” applications, rather than Free or Advertising supported applications. Future Competition The large great number of cloud storage applications that have integrated Web Services for document storage and retrieval. It would be relatively straightforward for existing document storage vendors to begin to analyze and semantically datamine the information they store for users. Thus, it is to expected that if Kiha’s application proves itself in the market, many of these applications will rapidly add these capabilities. Some of the potential competitors that could quickly add this capability include SugarSync, Soonr, Documents to Go. In fact, it may be advisable for Kiha to partner with several of these vendors out of the gate, so that these vendors can use Kiha’s semantic service immediately and integrate this service into their existing smartphone applications, rather than deploying their own, competing, service. The most dangerous and powerful potential competitors in this space are unlikely to want to license Kiha technology if it is appealing in the marketplace: these two large players are Google Docs (with Google Sync built-in + Google on-phone searching) and Apple’s own .Mac/.Me service, which currently indexes and syncs email and documents and provides a limited search capability on the iPhone. Direct Competition It is clear that direct competitors will emerge for Kiha’s value proposition in the applications stores. However, at this point in time there are few direct competitors that are available as “Free” applications. Several online applications proclaim that they will compete directly, but have not been released yet. Here are two projected Direct Competitors, neither of which is yet available on smartphones:

Smish http://smi.sh/
The following points are projected benefits and features of the (unreleased) “Smish” Web Service and on phone application suite:
Files: Smish gives you fast, simple access to all of the files on your computer so you can streamline your work. Now it's easy to email, organize, rename, print, backup, or search any of your files. Contacts: With one click you can email, chat, text, map, and even call any of your friends. Import their info from your Outlook, Gmail, Facebook, and other networks and put it all inside Smish. It saves time, and

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Product Plan: Direct to User
puppies. But mainly time. Web: Now you can enjoy at-a-glance previews of your favorite websites with one click. Smish

remembers your favorite sites and organizes them and lets you easily group them for split second access.

NASUNI http://www.nasuni.com/product/product-overview/your-management-tools/#snapshots
Nasuni stores files and documents in the cloud. The difference between Nasuni and other applications that sync documents to the smartphone is that marketing materials on the Nasuni website imply some level of semantic analysis available in a future release. This may be marketing moving beyond what the product can actually do – but the possibility definitely exists.

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Product Plan: Direct to User Additional analysis of competing applications available upon request.

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