LYRIQ International Corporation 1995 BUSINESS PLAN
(February 20, 1995)
(PRODUCT PICTURES HERE)
A FAMILY ENTERTAINMENT AND EDUTAINMENT SOFTWARE COMPANY
CONFIDENTIAL LYRIQ International Corporation Company Fact Sheet
Company Description: Lyriq International Corporation develops and markets recreation and edutainment software for home and school markets. LYRIQ's products are original, family- oriented titles that have classic appeal; foster learning with a sense of exploration and fun; are mentally stimulating and challenging, have brand recognition or endorsement, and offer characteristics not found in other consumer software.
Established: 1991
Employees: 10
Ownership: Private
Product Mission: Lyriq is passionately dedicated to producing high quality software that is educational, interesting, unique and fun. To that end, its products are thoughtfully researched, architected and created with family edutainment in mind; provide mentally challenging and stimulating environmnets; add real value to each category by offering features not found in other titles, and are extensively kid and game-player tested for quality, usability and, of course, fun.
Products: LYRIQ Crosswords (DOS, Windows, Macintosh) Picture Perfect Golf (CD-ROM/DOS/ Windows Discovering Endangered Wildlife (CD-ROM/Windows) *The Princeton Review Test Preparation (Windows and Macintosh)
Distribution: Throughout the U.S. and Canada. Tech Data, Ingram Micro, ABCO Distributors, Josha Distributors, AMerican Hardware and Software Distributors, and Merisel/Canada. Major resellers of LYRIQ's products include Best Buy, CompUSA, Electronics Boutique, Software Etc., Babbages, Wal*Mart and Nobody Beats the Wiz.
Management: Randy Hujar, co-founder and President Gary Skiba, co-founder and Chief Technical Officer
Headquarters: 1701 Highland Avenue #4, Cheshire, CT 06410 *Distributed by The Princeton Review Publishing Company 1. Investment Overview
LYRIQ International Corporation is an emerging software company that is uniquely positioned to capitalize on the explosive growth in family recreational and educational software brought on by the rapid adoption of home computing systems and increased usage of PCs in schools. In 1995 LYRIQ moves from being a start-up with potential to a recognized software company that has multiple leading edge products that are acclaimed for their excellence in product design, as well as their ability to move off shelves into customers hands. In late 1994 LYRIQ introduced two new CD- ROM based programs: Picture Perfect Golf and Discovering Endangered Wildlife. Both products have already earned critical acclaim and were responsible for doubling the company's 1994 sales in just a few weeks. These products, with LYRIQ's successful Crosswords software franchise and several new products discussed in this business plan, along with a unique business model for generating sustainable and predictable revenues, will establish LYRIQ as one the top publisher's of software for this high-growth market. LYRIQ International is raising $1,000,000 in equity capital. These funds will be used to expand sales and marketing of existing product lines, expand the number of products offered through an affiliated label program, fund new product development, and provide the necessary cash to finance ramping up operations to meet increasing demand for its products. The Company is growing quickly and has been operating at a profit since Q3'93. The Company has scheduled the closing of this equity opportunity April 30, 1995 and will need firm commitments from investors by April 15 at the latest. The valuation of the company is set at $5.0 million, or $5.00 per share (see following page for valuation details). Minimum investment is $25,000 or 5000 shares. Sales and Earnings Projections are summarized below: (000) *1994 1995 1996 1997 1998 1999 Sales $923 $3295 $9763 $20,913 $34,231 $46,567 Net Income $71 $441 $1826 $4,508 $8,197 $11,478 * Actual Results 5-YEAR SALES CAGR = 119%
LYRIQ is committed to working with serious investors to quickly satisfy their needs for information required to make an investment decision. Due to the demands of the business, management can only afford to focus its time with a limited number of potential investors who are serious about LYRIQ and can make a decision quickly. LYRIQ International is a unique investment opportunity. The company does not have the usual risks associated with a software start-up with potential and no sales. LYRIQ has top rated products, a profitable operation, experienced and successful management, product ventures with top corporations in the industry, established retail distribution channels and great potential. The market potential for LYRIQ products is several hundred million dollars, and LYRIQ will continue to address this market with innovative and unique products and marketing. LYRIQ International's current valuation is derived by looking at both the Cash Value of the company's expected earnings stream over the next five years and the potential market value, using 1995 projected earnings, based on similar education/entertainment software company's valuations at the time of their IPO. Software company stocks Price/Earnings ratios typically fall within the range of 30 to 50. The Learning Company had an IPO (Initial Public Offering) in February 1993 and leveraged a P/E ratio of 49; Davidson & Associates' IPO in April 1993 was based on a P/E ratio of 46.7. These are two IPO's of Education/ Entertainment companies that offer products that are similar to those offered by LYRIQ. (See Appendix for further details on these companies).
LYRIQ valuation is set at $5.0 Million which represents approximately the net present value of projected earnings over the next five years using a 50% discount rate. These projections are conservative and assume no one product achieves more than moderate success. As the Company is at its early stages of growth, and a few years from an IPO, valuation is set to represent a fair discounted cash value, and a low market value as compared to similar companies in the industry. This valuation is expected to increase dramatically after this first round of financing as LYRIQ uses this capital to fuel its existing products potential and completes the execution of its business strategy. 2. Executive Summary
uLYRIQ International Corporation was founded in 1991 to become a high growth/high profit developer and publisher of quality PC based family entertainment and educational software for the home and school markets.
uLYRIQ was founded by Gary Skiba, Chairman and Chief Technology Officer, and Randal Hujar, President. Gary Skiba is co-founder of INSET Systems, a highly successful developer of graphics conversion software, and has held management positions at Ashton-Tate Corporation and IBM Corporation. Randal Hujar has held senior marketing and management positions at Hewlett-Packard, Ashton-Tate, IBM, and Lotus Development Corporation. The founders combined experience covers all stages of growth of software companies, and both have combined development, marketing, and operations skills that have resulted in bringing dozens of highly successful products to market. Both founders are results oriented and focused on building the Company to be a leader in sales, and recognized for innovative, award winning, products that add-value in the market.
uMost of LYRIQ's products use the Repeat Customer Business Model. All core products put into distribution must be able to generate an installed base of users that can be sold software updates and complimentaty products on a yearly or bi-yearly basis. Generation of predictable and sustainable revenues through new and installed base sales is a cornerstone of LYRIQ's business strategy.
uLYRIQ's ability to realize projected sales and product delivery goals is evidenced by the success of its first two years of self-financed operations. Few companies have achieved the product, sales, and distribution successes of LYRIQ: ×Developed and introduced 21 products in 4 product lines: Lyriq Crosswords for Mac, DOS, and Windows; The Princeton Review Diagnostic Exams for SAT, GRE, LSAT, and GMAT for Mac and Windows, Inside the SAT for Windows and Mac; Picture Perfect Golf CD for DOS, and Discovering Endangered Wildlife CD for Win. ×Received critical acclaim for all products: Lyriq Crosswords is the top rated product by PC Magazine and GAMES Magazine and was nominated for 1994 Software Publishing Association CODIES Award for Software Excellence in Consumer Software category. Picture Perfect Golf has received 5 Star and A ratings from ComputerLife and Electronic Gaming, and Discovering Endangered Wildlife an A rating from Electronic Games. More awards are on the way! ×Signed agreement with RANDOM HOUSE Corporation for development and distribution of Lyriq Crosswords through their distribution channels. ×Joint Venture with The Princeton Review and Random House for on-going development and distribution of standardized test preparation products. ×Agreements with Japan Entry and GAGA America for development and distribution of a localized version of Lyriq Crosswords and Picture Perfect Golf into the Japanese market. ×Product distribution in both United States and Canada through Tech Data, Ingram Micro, Baker&Taylor, ABCO, American, Josha, and Merisel. ×Broad based reseller distribution through Goodtimes Software into Wal*Mart and Caldors department stores. Distribution through top consumer software chains: CompUSA, Best Buy, Software Etc., Electronics Boutique, Babbages, Computer City, Lechmere, and more. Over 5000 locations carry LYRIQ products!
uLYRIQ, based on added capital, will launch an affiliated label program in 1995 that will bring selected educational, entertainment, and lifestyle software products to the market leveraging our success in establishing an extensive distribution network for consumer software products.
uLYRIQ will expand its distribution of crosswords products in 1995 through the use of on-line services. An Internet Hub will be established for electronic distribution of daily and monthly crossworords and negotiations
LYRIQ International Corporation Page 4 1995 Business Plan are being concluded with America On-line, Prodigy, CompuServe, Ziff Desktop Information, InterNet, and Microsoft On-Line to provide crosswords products, clubs, and forums. These on-line services will be expanded to leverage other product areas as they mature.
uIt is the founders vision and goal to build a highly profitable $100 Million software company in the next 12 years that is a trend setter in product innovations and quality, and recognized for excellence in marketing and distribution methods for consumer software. It is expected that the company will go public within the next 3 to 4 years after sales have surpassed $20,000,000, and the company's ability to consistently meet and exceed financial objectives has been established.
uLYRIQ International Business Strategy: ×Offer high-quality products that entertain and educate at broad market/ consumer value pricing levels (Between $15 and $49). ×Focus on profit with a commitment to customer satisfaction and product excellence. ×Focus on family entertainment and educational products that have excellent potential for repeat business through annual updates and frequent software add-ons. ×Constantly pursue new channels of distribution for consumer and educational software. ×Form alliances and business relationships with companies that provide brand recognition and increased consumer product acceptance. ×Leverage marketing and distribution strengths by selectively offering affiliated label products that compliment company product mix. ×LYRIQ will sustain product growth and excellence through fostering a development environment that focuses on small independent development teams that consist of a few highly talented and productive individuals that are motivated by results and achieving product excellence. Developer and team leader compensation will be tied to the success of their products in the market. This focuses attention on user needs and market requirements.
uLYRIQ's products, alliances, and marketing and distribution strengths will sustain high growth and profitability in the coming years that will meet and exceed sales projections. LYRIQ will achieve its vision and corporate growth goals by; reinvesting earnings to buy companies whose products compliment LYRIQ business strategy, further investing in an Affiliated Label programs to increase product offering and profit, and financing a public offering when the company and market conditions are ripe to maximize company assets and investor return.
uCapitalizing on the company's opportunities and current and future product offerings a compound annual growth rate of 119% is expected over the next 5 years taking LYRIQ from $923,000 in revenues in 1994 to $46,567,000 in 1999.
uLYRIQ product revenues and profits are not dependent on any single product or product line. The company will both strategically and tactically pursue offering new products on an annual basis to grow revenues and control risk.
1995 1996 1997 1998 1999 Lyriq Crosswords $625,236 19.0 $1,416,365 14.5 $2,138,902 10.2 $2,994,848 $3,862,221 % % % Lyriq Discovery $555,787 16.9 $2,139,900 21.9 $3,992,060 19.2 $6,756,405 $7,622,650 Series % % % TPR Testing Products $150,785 4.6% $365,981 3.7% $604,968 2.9% $608,500 $631,000 Picture Perfect Golf $1,293,45 39.2 $3,128,793 32.1 $5,559,106 26.6 $8,775,893 $10,775,09 9 % % % 4 Affiliated Label Prod. $669,513 20.3 $1,411,910 14.5 $3,568,410 17.0 $4,270,838 $5,137,025 % % %
LYRIQ International Corporation Page 5 1995 Business Plan New Products 1996 $1,300,000 13.3 $3,250,000 15.5 $4,225,000 $4,858,750 % % New Products 1997 $1,800,000 8.6% $4,500,000 $5,850,000 New Products 1998 $2,100,000 $5,250,000 New Products 1999 $2,600,000 TOTAL REVENUES: $3,294,78 100 $9,762,948 100 $20,913,446 100% $34,231,483 $46,566,74 0 % % 0 uLYRIQ Net Income is projected to grow from $441 thousand in 1995 to approximately $11.4 million by 1999. Over $16 Million in cash assets is projected after five years of operations; however, this figure will most likely be reduced through major acquisitions during this time period. The company's commitment to minimizing costs and maximizing profit is expected to yield yearly after-tax profitability of between 15% and 25%.
LYRIQ International Corporation Page 6 1995 Business Plan 3. Company Overview
Company and Market Description
LYRIQ International Corporation was founded in 1991 with the goal of developing recreation and edutainment software for home and school markets. LYRIQ is dedicated to creating and bringing to market original, family-oriented titles that have classic appeal; foster learning with a sense of exploration and fun; are mentally stimulating and challenging, have brand recognition or endorsement, and offer characteristics not found in other consumer software.
LYRIQ shipped its first product, LYRIQ Crosswords, the Player's Choice, in late 1992. Since the original DOS version, the company has brought to market additional versions for Macintosh computers, for the Microsoft Windows platform, and pen and handwriting recognition systems. The company is poised, through LYRIQ Crosswords sales success and various licensing agreements with leading software companies, to become the standard for electronic crosswords.
LYRIQ's product line also includes Discovering Endangered Wildlife, which is endorsed by the National Wildlife Federation, and the highly acclaimed Picture Perfect Golf, the first virtual, desktop PC game that allows golfers to play their favorite courses using real photography. LYRIQ is also the developer of the Princeton Review Computer Diagnostics Exams and Inside the SAT, which have earned positions in the top 10 best selling educational software products in 1994.
While LYRIQ products take full advantage of today's PC technologies, the company is looking forward to providing software for powerful, virtual reality and cable platforms and systems. LYRIQ plans to deliver educational and entertainment products that incorporate 3-D interactive animation and multi-user functionality.
The company distributes its family recreation and edutainment titles in the United States and Canada through Ingram Micro, Tech Data, ABCO Distributors, American Hardware and Software Distributors, Josha Distributors, Merisel/Canada, and Baker&Taylor. Major resellers of LYRIQ's products include Best Buy, CompUSA, Electronics Boutique, Best Buy, Software Etc., Wal*Mart, and Nobody Beats The Wiz.
In the future, LYRIQ plans to leverage its marketing and distribution strength by selectively offering affiliated label products that compliment LYRIQ's product offerings.
Based in Cheshire, Conn., LYRIQ International Corporation is a privately funded and held company, and employs 14 people (4 part-time).
LYRIQ International Corporation Page 7 1995 Business Plan Company History
In 1991, LYRIQ International began with two operating groups: The Software Development and Publishing Group, which is described above, and The LYRIQ Group. The LYRIQ Group, which ceased active operation in December 1993, is an affiliated organization that performs marketing consulting, market research, and supplied marketing services to companies in the computer industry. Clients of the LYRIQ Group included; IBM, DataEase International, Digital Equipment Corporation, WordStar International, Lotus Development Corporation, and others.
The combination of the founder's capital investments and LYRIQ Group profits funded LYRIQ's initial software development efforts and operations through mid-1993. These consulting funds also launched LYRIQ's first software release: Lyriq Crosswords - The Player's Choice.
Company Milestones
6/92 Began development of LYRIQ Crosswords. 12/92 Shipped LYRIQ Crosswords for DOS. 3/93 Began developing The Princeton Review Diagnostic Exams for SAT, GRE, LSAT and GMAT test-takers. 4/93 Shipped LYRIQ Crosswords for Windows. 10/93 Shipped LYRIQ Crosswords for Mac. LYRIQ Crosswords is top-rated product per GAMES magazine. 11/93 Signed agreement with Random House Corporation for development and distribution of LYRIQ Crosswords through their channels. 12/93 LYRIQ Crosswords receives critical acclaim from PC Magazine- "The most thoughtfully designed crosswords software"... LYRIQ Crosswords is seventh on Merisel's December 1993 Hot List for Home Education and Recreation products. Agreement with Japan Entry for Distribution into Japan for LYRIQ Crosswords. Product ditribution widens in both Canada and U.S. through Tech Data, ABCO and Merisel/Canada. LYRIQ Crosswords nominated for 1994 Software Publishers Association CODIES Award for Software Excellence in Consumer Software category.
3/94 Shipped Princeton Review Series for Mac and Windows. 6/94 Announced Picture Perfect Golf and Discovering Endangered Wildlife CD's Distribution channels broaden to include Ingram Micro and Baker& Taylor. 9/94 Shipped Picture Perfect Golf to the delight of winter golfers. 1/95 Shipped Discovering Endangered Wildlife to the delight of children in the U.S. and Canada. 3/95 Picture Perfect Golf received perfect 5 Star rating from ComputerLife Magazine. Discovering Endangered Wildlife receives A rating from Electronic Games Magazine.
LYRIQ International Corporation Page 8 1995 Business Plan LYRIQ Products
Educational, Interesting, Unique and Fun
By careful design, LYRIQ's products share these characteristics:
uThoughtfully researched, architected and created with family edutainment in mind
uProvide mentally challenging and stimulating environments
uAdd real value to categories by offering features not found in other titles
uExtensively kid and game-player tested for quality, usability and fun
For example, LYRIQ Crosswords offers a new, electronic way to play America's favorite game and increase vocabulary; The Princeton Review series helps remove the fear and uncertainty from taking all-important college and graduate school admittance exams; Discovering Endangered Wildlife taps into kids innate sense of curiosity and exploration, as well as their concern for environmental issues, and Picture Perfect Golf is the first game to offer a life-like golf experience using actual photography.
LYRIQ's product excellence is attributed to fostering a unique development environment that focuses on independent development teams that consist of only a few highly talented and open-minded individuals. Teams are comprised of designers, architects, artists, sound specialists, programmers, and actors. These dedicated software creators focus on quality, usability and most of all -- giving the customer products they really want.
LYRIQ strives to ensure that its products pass the "real-world" test. To that end, LYRIQ developers work closely with "extended product team members including kids, parents, teachers, crossword constructors, golfers and other athletes, experts such Will Shortz, puzzle editor of The New York Times, high-profile organizations such as The National Wildlife Federation, and other experts and professionals in specific product areas.
All LYRIQ titles are available at resellers throughout the U.S. and Canada, or direct from LYRIQ by calling 1-800-433- 4464 or 1-800-CROSSWORDS. They also include free, unlimited technical support and a 30-day, no-questions-asked money back guarantee.
LYRIQ's best selling, award-winning products include:
LYRIQ Crosswords, The Players Choice
With puzzles from The Washington Post, Crossword Magazine, the Penny Press and special Edition Crosswords for Kids, LYRIQ Crosswords takes the game up a notch with state-of-the-art design for DOS, Windows and Macintosh users. Player's have access to new crosswords via on-line services inclusing America On-Line and the InterNet. Players can time and score their games, receive different levels of hints, enlarge puzzles for easier viewing, and see the current clue enlarged. In tournament mode, players can experience the thrill of competing under actual tournament conditions. The game also has a pause timer, so that timed play can be stopped if the player is distracted, and a travel option for
LYRIQ International Corporation Page 9 1995 Business Plan printing and playing crosswords on the road. The Courteous CursorTM automatically places characters in the correct squares. Also available are Puzzler PaksTM and a crosswords club. LYRIQ Crosswords was rated #1 by both PC Magazine and GAMES Magazine. The suggested retail price is $39.95 with a street price around $19.95.
There is also a Los Angeles Times Edition of LYRIQ Crosswords that is published by Random House.
The Princeton Review Test Preparation Software
The Princeton Review, the nation's leader in test preparation, is now available from LYRIQ so students can gauge their test-taking strengths and weaknesses, and access their performance for the Scholastic Assessment Test (SAT), Graduate Record Examination (GRE), Law School Admission Test (LSAT), and Graduate Management Admissions Test (GMAT). The Princeton Review series are the only programs available to familiarize students with the Computer Adaptive Tests (CATs) and to simulate the experience of taking a full-length test. Available in both Windows and Macintosh versions, the programs retail for $34.95 with an average street price of $19.95.
The Princeton Review Computer Diagnostic Exams and Inside the SAT are developed by LYRIQ International and published through The Princeton Review Publishing Company.
Picture Perfect Golf
Picture Perfect Golf for DOS CD-ROM systems is the only game featuring real photography and first person play. The "county club" of golf games, Picture Perfect Golf uses thousands of actual images from the world's finest courses, featuring Harbour Town Golf Links in Hilton Head, South Carolina; and Coeur D'Alene in Coeur D'Alene, Idaho. The game uses the same sophisticated technology found in indoor virtual golf games. With first person play, PC golfers see their shots leave the club head and travel down the fairway or across the green with varying golf club projectories and real golf shot rolls and bounces. Players can preview each hole layout with aerial views, and fine tune shots with visits to the putting green and the driving range. There are easy preset ball address options for draw, fade, punch shot and others, which can be adjusted as desired. Players can take a mulligan, a gimme or rehit with just one mouse click. Picture Perfect Golf also records and can print statistics for up to eight players per game. Picture Perfect Golf requires a CD-ROM, an IBM PC or compatible and DOS 3.1 or later. The suggested retail price is $79.95 for the main product and $34.95 for additional golf courses. The product streets for between $39.95 and 49.95 with golf courses selling for $19.95.
Discovering Endangered Wildlife
Discovering Endangered Wildlife takes children ages 8 and up on a mission to help save Planet Earth's endangered animals. Endorsed by the National Wildlife Federation, kids experience incredible sights and sounds as they set out on an expedition in learning. Discovering Endangered Wildlife challenges, educates and entertains children with puzzles, full-motion video clips, digitized sound effects and music, and 256-color super VGA graphics. The game has easy-to- use point and click interface, and was designed and tested for use at home and in school. Discovering Endangered Wildlife requires a CD-ROM for PCs running Windows. The suggested retail price is $49.95. Product streets for $39.95 or less.
LYRIQ International Corporation Page 10 1995 Business Plan LYRIQ Management Team
Randy Hujar Co-founder and President
With more than 15 years of management experience in the high technology industry, Hujar has a proven, successful track record in all aspects of company management and software development.
Prior to founding LYRIQ, Hujar was Director, 1-2-3 Product Line Marketing, Spreadsheet Division at Lotus Development Corporation in Cambridge, MA. He was responsible for all marketing and business planning for 1-2-3 desktop spreadsheet applications. He established an end-user seminar marketing program, and initiated telemarketing within Lotus that resulted in over $1 million in incremental revenues.
Before that, he spent one year with IBM Corporation as a Product Marketing Manager in the company's Desktop Software Business Unit, where he was responsible for DisplayWrite word processing business that was 50% of the business unit's revenues. During that time, his team successfully launched DisplayWrite 5 and Composer.
From 1986 to 1988, Hujar was Director of Marketing, Presentation Products Business Unit for Ashton-Tate Corporation. In that role, he had full P&L responsibility for the MultiMate word processing line that was a $60 million worldwide business, and 20% of the company's revenues. In 1988, He received the Ashton-Tate President's Award for top product line performance for exceeding revenue and profit plans, and spearheaded the launch of MultiMate Advantage II.
Prior to that, Hujar spent five years with Hewlett-Packard Company in several product and marketing management positions.
Hujar earned a B.S. Degree in Finance and Marketing from the University of Santa Clara in Santa Clara, Calif., and completed a pre-graduate program for top U.S. business and pre-law students at the University of Vienna in Vienna, Austria.
LYRIQ International Corporation Page 11 1995 Business Plan Gary Skiba Co-founder, Chairman and Chief Technical Officer
Before to founding LYRIQ, Skiba spent four years with IBM Corporation as Manager of Advanced Word Processing Products. As Development Manager, he was responsible for producing IBM's next generation of PC-based text processing technology. He also served as technology advisor the division vice-president.
From 1988-1989, Skiba was Program Manager at Ashton-Tate Corporation. In that role, he lead the product team responsible for developing the MultiMate product line and managed the MultiMate 4.0 project team.
Before that, Skiba founded Skiba Data Systems, a systems integration company. The company wrote more than 30 software applications in C, Pascal and dBASE. He also provided negotiation and business planning services in the leveraged buyout of Extrusion Technology Corporation in Danbury, Conn.
From 1984 to 1987 Skiba co-founded INSET Systems, Inc., a supplier of graphic conversion utilities and advanced graphic tools. He co-authored Inset, the first PC program that enabled graphics to be integrated with text in documents. Inset was subsequently licensed to MultiMate, WordStar and other major software publishers.
As a staff accountant with Peat Marwick in New York, Skiba audited small, New York-based companies during 1983- 1984. During that time, he also wrote the computer-based staffing system that was used to allocate resources in the company's New York office.
Skiba earned a B.S. Degree in Accounting, Summa Cum Laude, from the University of Connecticut in Storrs, Conn.
LYRIQ International Corporation Page 12 1995 Business Plan LYRIQ Organization
LYRIQ International Corporation Page 13 1995 Business Plan 4. LYRIQ Business Model
Overview
LYRIQ's management team understands that in order to succeed in today's highly competitive software industry that a company needs to be founded on products that are unique and offer long-term revenue and profit potential, and based on a business model that focuses on generating predictable sales. The only way to generate predictable sales is to minimize reliance on distribution channels as the sole method of selling products and build on-going relationships with an installed base of customers that you continue to sell products to on a regular basis. This is the focus of LYRIQ's business model.
LYRIQ's core products, existing and planned, fit the Repeat Customer Business Model. Electronic crosswords is the perfect example of a product that can be introduced into the general software distribution channels as a vehicle to sell product and build a customer base and offer unlimited repeat customer sales as end-users will run out of crosswords and require a source of on-going supply. Lyriq Discovery Series of products and Picture Perfect Golf fit this model in that future editions and updates of these product lines can be sold to the same installed base on a regular yearly to bi-yearly basis.
In addition to generating sales through the above business model, LYRIQ will also introduce complimentary products into its software distribution network through Affiliated Label publishing. Given LYRIQ's relationships with the software distribution channels and breadth of stores that products can be distributed to LYRIQ will leverage this resource by selectively introducing high quality complimentary products developed by Third Parties.
Repeat Customer Business Model
The Repeat Customer Business Model essentially duplicates the traditional software business models used by business productivity software packages and applies it to the home entertainment/education software market. The benefit of pursuing products that fit this model is that it allows for predictable revenues and long term sustainable growth. The business can accurately predict a minimum revenue level based on installed base sales and manage to this profitably while striving for higher revenues through riskier distribution channel software successes that can spike sales activity.
The first stage of this model is to generate new customers. This is accomplished through maximizing sales through the traditional software channels (i.e. CompUSA, Egghead, etc), and the new consumer software channels (i.e. Wall*Mart, Sears, Sam's Club, etc.). LYRIQ efforts and successes in building these channels are dicussed later in this business plan. In addition to these software channels, new business is derived through direct marketing (i.e. catalogs and direct mail) as well as through on-line sales through services like America On-Line, Prodigy, and CompuServe. This first stage is typically the only stage for most family entertainment and education packages.
The second stage of the model calls for building the installed base of users by first converting end users from direct sales accomplished in stage 1, and then expanding usage and users of the product through OEM sales and bundles and on-line services usage. LYRIQ with Crosswords has completed bundle agreements Microsoft to bundle a demo version of the product in all pen computing operating systems of Windows, and with CD-ROM and OEM versions of Windows 4.0. This agreement, along with a number of others, will expand the active user base of Crosswords by hundreds of thousands. The use of the InterNet and on-line services is another method LYRIQ is using to promote use and trial of
LYRIQ International Corporation Page 14 1995 Business Plan the product as vehicle to expand the user base and ultimately the active installed base.
The third, and most important, stage of the business model is generating repeat sales from the installed base. Through direct mail, tele-marketing, and online marketing LYRIQ will promote product add-ons and new versions of product lines to the base of users who have purchased the product. In the case of crosswords new puzzles and on-line crossword clubs will be promoted to the installed base on a regular basis to keep the base active and excited about their software and hobby. (See Illustration on previous page). With products like Discovering Endangered Wildlife (Discovery Series), new wildlife additions to the product and new versions of the series (i.e. Discovering History) will be promoted to the installed base. For Picture Perfect Golf new upgrades to the product, golf courses, and hardware add-ons will be promoted to the installed base.
As LYRIQ expands product lines using this model we can increase sales volumes that are sustainable and predictable.
Select Affiliated Label Products
As resources are available, and as opportunties are found, LYRIQ will introduce products developed by third parties into its established software channels as Affiliated Label products. LYRIQ's past distribution of The Princeton Review Computer Diagnostics Exams is an example of utilizing our distribution and marketing capacity to distribute and profit from third party products. While LYRIQ is the developer of The Princeton Review Diagnostic products the brand and products are owned and now distributed by The Princeton Review Publishing Corporation.
A number of products have been evaluated by LYRIQ and its sales organization Channel Sources, Inc, as having excellent market potential and can be brought to market as LYRIQ affiliate labels once resources are available. LYRIQ's presence as a east coast software publisher provides it access to a number of quality software publishers that do not have the resources or knowledge of how to bring products to market. Only products complimentary to LYRIQ's market focus of family entertainment and educational products will be considered.
LYRIQ International Corporation Page 15 1995 Business Plan 5. LYRIQ Business Strategy
LYRIQ is focused on the following as the basis for achieving its corporate goals and objectives:
×Offer high-quality products that entertain, educate and add value at low broad consumer market pricing: $15 to 49. ×Focus on products that fit the Repeat Customer Business Model. ×Focus on profit with a commitment to customer satisfaction and product excellence. ×Constantly pursue new channels of distribution for consumer and educational software. ×Form alliances and business relationships with companies that provide brand recognition and increased consumer product acceptance. ×Focus on software for home and school markets. ×Leverage marketing and distribution strengths through selectively offering affiliated label products that compliment company product mix.
Key Opportunities and Tactics
In keeping with its business strategy to meet short term goals and objectives, as well as market potential, LYRIQ will capitalize on the following opportunities over the next 12 months:
×Leverage the InterNet and On-line Services to establish Lyriq Crosswords as the industry standard format for electronic crossword gaming. ×Increase retail stores carrying LYRIQ products from 5000 to 10000 in U.S. and Canada. ×Expand product distribution in Europe, Australia, and Asia utilizing distributors and re-publishers to achieve maximum penetration and sales potential. ×Launch LYRIQ Crosswords II upgrade to solidify position as top rated crosswords product and extend line of products into retail through complimentary lower priced editions (IE. The Washington Post Edition). ×Introduce Macintosh versions of Discovering Endangered Wildlife and Picture Perfect Golf CD-ROM titles. ×Extend the Discovery Series line of products through the development and introduction of the next in the Series: Discovering History. ×Introduce at least two more golf course upgrades for Picture Perfect Golf and introduce product bundle with Sports Sciences infra-red club for Father's Day and Christmas 1995. ×Initiate Affiliated Label program and launch at least one additional entertainment and edutainment product from third parties.
LYRIQ International Corporation Page 16 1995 Business Plan 6. LYRIQ Product Development
Goals
Product development at LYRIQ focuses on the achievement of the following goals:
×Quality ×Usability ×Timeliness to market
Quality - Providing products which exceed customers expectations in terms of features and product stability. Successful achievement of this goal both enhances word of mouth advertising, and decreases the burden of customer support.
Usability - LYRIQ's goal is for customers to perceive our products as employing the most obvious interface for a given task. Simplicity of design, the use of visual aids, and pertinent assistance is critical.
Timeliness to market - The obvious assumption here is that there is no product if it has no customers. Developers need to be comfortable with the staging of product features. Depending upon the competitive environment, it is often more important to get a product with the most important core features to market quickly to stake out our position; than to wait until we have every potential feature covered. Only through interaction with real, paying, customers can we understand the complete set of features required. This takes time, but does not mean that we have to spend that time without a product offering.
Methodology
To attain the above stated goals, LYRIQ employs the following development philosophies:
×Small teams ×Very few developers ×Open minds
Small teams - LYRIQ's founders experience in other companies has shown that failure is most often caused by lack of communications, and things falling through the cracks. Small teams make up for their lack of size by their ability to move quickly; the relative simplicity of communications; and their clear understanding that their efforts are critical to the success of the product.
Very few developers - LYRIQ's philosophy concerning programmers in atypical in the industry. The Company believes that one or two highly talented and committed programmers can produce all of the code required for a product... even for multiple products. In the history of the PC industry, many of the most successful products were written by one or two people (dBase, Visicalc, and others). Given the nature of LYRIQs products, as well as the wealth of programming tools available to todays developers, this philosophy is very practical. Thus, while the Company will probably pay more on average for individual developers (talent is not cheap, and we expect that developers will be LYRIQ's highest paid non-
LYRIQ International Corporation Page 17 1995 Business Plan executive personnel), the company's total cost for programming, as a percentage of revenue, will be less than most other software companies.
Open Minds - This may seem odd as a philosophy, but it is extremely important. The products we produce are for others to use. While every team member is expected to contribute to the design, in the end the design should be considered to be owned by our customers. We are building what they want to buy, not what we want to build.
The Product Team
The development team for a product consists of a program manager (PGM); programmers; artists; testers; a marketing lead; consultants; and outside experts in the specific product area. The Program Manager is responsible for: the product feature-set; user interface design; quality assurance; the use of outside consultants and experts; the schedule and its dissemination to the other team members; and for working with the marketing lead on product roll-out. It is the call of the PGM as to when the product is ready to ship. On an on-going basis, the PGM works with manufacturing to ensure that the latest code release is being built.
LYRIQs products are, and will continue to be, very graphical. The education and entertainment markets require effective artwork to be successful. Our artists work along side the programmers to provide a thorough integration of artistic creativity into the products.
The marketing lead is responsible for: communicating market demographics and expectations to the PGM; providing market feedback to the development team; planning and implementing the product launch.
Product testing is performed by both internal personnel as well as external beta testers. LYRIQ product support technicians double as product testers.
Consultants and experts are utilized for both routine (e.g., documentation, testing) and product specific purposes. For example, on the Lyriq Crosswords product, we consulted with puzzle constructors, crossword solvers of all levels of expertise, as well as crossword industry figures such as Will Short (of Games Magazine, now the puzzle editor of The New York Times). It was through all of these people that the features and interface for the product took shape. Our recent positive press confirms that we listened.
For our upcoming educational products, we have lined up educators of various expertise (from teachers, to educational consultants, to specialists in childhood development). We will show them our initial versions, and then work from there to bring about products which successfully present the material in a manner which is fun as well as educational.
LYRIQ International Corporation Page 18 1995 Business Plan 7. Market for LYRIQ Software
Market Overview
LYRIQ International Corporation plans to focus its efforts on developing products that address the consumer software market in the software categories of Entertainment and Home Education. Examples of software products in these categories are as follows:
Entertainment ×Flight Simulator ×Solitaire ×SimCity
Home Education ×Where in the World is Carmen San Diego ×Oregon Trail ×Mavis Beacon teaches Typing
These software categories are among the fastest growing in the software industry, and given market trends toward increased penetration of computers at home and in the schools, these categories should continue to grow rapidly over the coming years.
Entertainment and Home Education software products generated over $950 Million in revenues in 1994; over 15% of total PC software sales. These software segments rank among the hottest for growth in the software industry and are projected to continue to grow at a rate of 30-40% for the next several years.
Key Market Trends
LYRIQ's corporate focus and product planning has been based on the following market trends and resulting customer needs and opportunities:
1. The adoption of the home computer in mainstream America
Over the past 15 years, the personal computer has transformed the way we work and operate in business. This occurred because of the dramatic increases in capability, usefulness, and approachability of these machines and software; combined with a lowering of the cost to obtain them. This price/performance trend, combined with a comfort factor of using computers at work, paved the way for the computer to enter the home. Based on studies by Links Resources it is estimated that between 30 and 40 million households own personal computers. These estimates were for a timeperiod ending in late 1993. With heavy sales during 1994, particularly during the holiday season, the estimate for households is easily 35 Million+, with the potential of being much higher.
Surveys of home computer owners (performed by CI/InfoCorp, 1994) indicate that over 90% of households with children and 70% of households without children use these computers so that they can play games/entertainment software; and that over 40% use these systems for educational/training software. The number one use of home computers was for word processing (80%). The average age of home users that are playing entertainment products is 12
LYRIQ International Corporation Page 19 1995 Business Plan years vs. word processing and other personal productivity products of 35 years. This trend has created the following needs:
×More software geared for home entertainment and education for PC's with emphasis on kids from 8 to 16 years of age (and applicable to the kid in all adults). ×More software that provides information for home productivity usage (i.e. home medical references, restaurant guides, wedding planners, cooking). ×More software that allows hobbies to be played or improved using the computer (i.e. Crosswords, Card games, etc.). ×Software products that are priced and are used like books - low cost, relatively short usage, and usually discarded or stored away.
Of homes with PC's approximately 12 to 16 Million or 40%+ own machines with CD-ROM drives. Within two years it is estimated that 80%+ of systems will have CD-ROM drives and these systems will represent the active PC home consumer market.
2. Increased usage of computers in Education
The adoption of PC's in schools continues to grow. U.S. public school districts and schools spent $2.1 billion for microcomputer related educational technology products and services during the 1992-93 school year. Twenty-three percent (23%) or $570 Million was spent for software used in instructional programs. (SPA K-12 survey Aug'93).
Overall 5.5 million PC's are installed in public schools, of these 90% are used for instruction. Of these, 1.3 Million are Macintosh PC's and 1.6 Million are IBM PCs and compatibles with 286 processors+. Use of computers in school is fueling the use of computers at home. Key Needs:
×Educational software that compliments existing course content. ×Teachers manuals/tools that provide specific projects for school/home use of software. ×Educational products that can be easily purchased for home use/recommended by schools.
LYRIQ International Corporation Page 20 1995 Business Plan 3. Multimedia Computing
In less than two years CD-ROM drives and high-resolution displays with 386 or better PC's have penetrated homes in sufficient numbers that this segment drives the development and purchase of software applications for entertainment and edutainment products. There were 7 million homes in the United States with CD-ROM PC's by the end of 1993, and this number is estimated at over 15 million by the end of 1994.
The price of Multimedia PC's has dropped to as low as $1,260.00 for a 486 PC with full multimedia options (CD-ROM, sound card, and speakers). Computer games for CD-ROM have become the top selling games. In the past 12 months products like Seventh Guest and MYST have grossed over $50 million in retail sales.
Key Needs and Opportunity:
×CD-ROM based entertainment and edutainment software that fully leverages the hardware capabilities of multimedia systems.
4. Run away success of the Microsoft Windows operating environment
Over the past three years, the Windows operating environment has gone from having great potential and being a contender, to being the outright standard operating system on all active PC's. Active PCs is defined as being those systems where their users are purchasing or planning to purchase more software to increase their usage of the machine. In the past two years, sales of DOS vs. Windows applications has gone from 60% DOS/20% Windows in 1991 to 25% DOS/60% Windows in 1993.
The transition to Windows in the home has also progressed quickly. Above are the SPA estimates for the current distribution of operating systems in the home computer market. Based on these estimates, it would be easy to assume that entertainment and educational software sales would reflect this operating system split. The fact; however, is that current software sales reflect a lopsided availability of DOS software titles (80% of sales are DOS), and relatively few Windows titles (20% of sales are Windows).
In the public school system, of the IBM PC's and compatibles in use today, 42% have the Microsoft Windows operating system installed. Approximately half of the software purchased is for instructional topics or problem solving, while the other half is for productivity or creativity usage.
Key needs and opportunity:
×Development of MS Windows entertainment and educational titles to take advantage of the markets shift to Windows as the operating environment of choice.
LYRIQ International Corporation Page 21 1995 Business Plan 5. Increase in software sales at mass merchant and traditional retailers versus PC/Software only stores
A byproduct of the trends in home PC adoption is the trend toward usage of standard mass merchant retailers as the places of choice for purchasing PC's and software. Home buyers are comfortable with PC technology and therefore look for price and availability; instead of support. This trend is causing traditional PC hardware and software manufacturers to re-look at how they package and sell products.
Key needs and opportunities:
×Packaging that is effective on the shelf and more products that fit particular needs at a value price. Consumers are looking to purchase software the way they are used to buying books and stereos. They read reviews and periodical information in their area of interest and then shop at their store of choice for products that fit their requirements and budget. ×Development of the mass merchant channels for new home computer software titles before the major software vendors shift strategies address this market opportunity. ×Pricing of software that matches expectations set with competing book and videocassette products that typically retail between $10 and $40, with most selling under $20. More important to sell multiple products to a consumer at a lower price that a one time purchase at a higher price.
LYRIQ International Corporation Page 22 1995 Business Plan Market Size and Growth
The market for entertainment and educational products geared for home and educational usage is large and growing fast. LYRIQ has and is developing products that take clear aim at addressing this market today and for the coming years.
Entertainment/Education Market Size & Growth (000) 1991 1992 1993 1994 1995FC
Entertainment $265,400 $341,800 $410,200 $502,570 $678,500 Home Education $99,300 $146,100 $242,600 $493,142 $616,500 Total Target Market: $364,700 $487,900 $652,800 $995,712 $1,295,000 GROWTH % 33.8% 33.8% 52.5% 30.1%
Software Publishers Association ('91-94); 1995 is LYRIQ estimate (conservative).
LYRIQ International Corporation Page 23 1995 Business Plan 8. Product Strategy
Product Development Plans and Strategy
The company is actively pursuing the following development projects in 1995:
Project: Objective/Result: Due:
Picture Perfect Golf ×Deliver the first add-on golf course for the Picture Perfect Feb '95 Coeur D'Alene Golf Course Disk Golf product - CD-ROM.
LYRIQ Crosswords - Washington Post ×Version of LYRIQ Crosswords for Window incorporating Feb '95 Edition for Windows 100 Washington Post Puzzles. Product will be packaged in reduced size box for a $15.95 expected street price.
LYRIQ Crosswords - Premium Edition ×Upgrade to the award winning LYRIQ Crosswords Mar.'95 for Windows, Version 2.0 product. Will incorporate management of on-line Puzzle- A-Day delivery, crossword construction capability, and word look-up.
Picture Perfect Golf for Macintosh ×Re-write of Picture Perfect Golf for the Macintosh Apr.'95 platform.
Word Games for Kids (Windows) ×Combination of crosswords for kids, word find, and other Apr.'95 puzzle games. Picture Perfect/PC Golf Bundle for ×Bundle of Picture Perfect Golf with Sports Sciences PC Apr.'95 DOS Golf infrared golf club. Discovery Series: Inventions ×Follow-on product to Discovering Endangered Wildlife. Jul '95 Windows Focus on top inventions that have changed the course of history and people lives. Product will combine games, puzzles, pictures, film and audio for hours of multimedia entertainment. Picture Perfect Golf Course Disk- ×Deliver the second add-on golf course for the Picture Aug.'95 Pebble Beach Golf Course Perfect Golf product - CD-ROM.
Discovering Endangered Wildlife for ×Port of Windows code to the Macintosh platform. Aug.'95 Macintosh
It is the Company's product strategy to focus energies on completing and extending its existing code bases and product lines for the Crosswords, Picture Perfect Golf, and Dicovery Series while starting a new code base for future entertainment/education products based on 3-D Modeling and Cyberspace technology and methods.
3D/Cyberspace Entertainment Products
Cyberspace is a term used to describe a computing environment that simulates reality. Cyberspace technology combines high resolution computer visual effects with complex mathematical models that result in the display of objects and events that simulate the real world. A simple example of Cyberspace technology is a bouncing ball. A good implementation simulates the look of the ball as a Three dimensional object with color gradations and shadows, its
LYRIQ International Corporation Page 24 1995 Business Plan motion as it bounces off of objects and conforms to gravity in its behavior, ongoing changes to its shape and consistency as it hit objects and rebounds, and sounds made as all these events occur. The effect is to have the computer duplicate how a ball would look and behave as close as possible to the same image recorded by a video camera of a real event. On a more complex level objects are then combined to interact with the player in a unique new world or environment. Products like DOOM and MYST use different levels of 3D/Cyberspace technology. LYRIQ will use this technology to develop unique family entertainment games and educational products.
On-Line Services and Crosswords Clubs
LYRIQ and Crossword Magazine have signed a joint venture agreement for addressing opportunities for on-line crossword sales through on-line services. Negotiations with America On-Line, CompuServe, Prodigy, Ziff Desktop Information, and Microsoft On-line are concluding, with all these organizations expressing active interest. A monthly subscription Crossword Club will be established that will enable users to receive new puzzles monthly through their favorite on-line service, and provide additional benefits, such as special crossword products and forums, that are available to club members only. Non-club participants will be able to buy and download more puzzles on-line. LYRIQ will also establish an INTERNET Web or Hub were we can control the distribution of new puzzles to subscribers on a daily basis through the E-Mail network. With 20 Million INTERNET surfers a small percentage can add up quick for the electronic crosswords business.
Educational Multi-Media and CD-ROM Products
LYRIQ will continue to invest and expand its Discovery Series product line. The Discovery Series extends the crosswords code base to include use of multimedia (graphics, sounds, images, and film footage). This product line uses multimedia to redefine the art of crosswords as a fun learning tool for kids. Products also include word jumbles, picture scrambles, and text problems solving to complete and add to the fun and learning experience. Future product themes will focus on history, geography, birds, sea life, etc.
LYRIQ International Corporation Page 25 1995 Business Plan Product Descriptions
Current Products Win Product Description Price DOS dows Mac Entertainment: Picture Perfect Golf A virtual reality golf game that leverages the use of CD- $79.95 X ROM technology to utilize actual course photographs for every shot. With an optional infrared golf club add- on this program virtually duplicates the enjoyment of indoor golf centers. Lyriq Crosswords- The top rated crossword program featuring the broadest $39.95 X X X Premium Edition selection of crosswords from the highest quality sources, like The Washington Post, CROSSW RD Magazine, and Penny Press. Kids to Expert levels of play and loaded with features from sight and sound hints to tournament play. (250+ Puzzles included).
Lyriq Crosswords - Features the top rated crossword program with a $29.95 X X X Washington Post Ed. selection of 100 puzzles from the Washington Post Sunday Magazine. Puzzles are edited by the legendary William Lutwiniak and created by the country's top constructors. Medium to Expert puzzle ratings.
Lyriq Crosswords - Features the top rated crossword program with a $29.95 X X X CROSSW RD selection of 100 puzzles from CROSSW RD Magazine Magazine Ed. which are known for variety, challenge, and fun. (Direct Sales Only) Puzzles are from the nation's top constructors. Medium to Expert puzzle ratings.
Lyriq Crosswords - Features the top rated crossword program with over 150 $29.95 X X X Penny Press Ed. popular crossword puzzles from Penny Press (Direct Sales Only) publications. These are quality puzzles with grass roots appeal. Easy puzzle ratings.
Win Product Description Price DOS dows Mac Entertainment: Continued Lyriq Crosswords - Additional disks with 50 to 75 additional puzzles that $9.95 X X X Puzzler Paks can be added to any of the above Editions from the (Direct Sales Only) Washington Post, CROSSW RD Magazine, Penny Press and Kids crosswords.
Product Description Price DOS Win Mac Educational: The Princeton Review Prepared by The Princeton Review - the nation's leader $34.95 X X SAT Computer in test preparation. SAT Computer Diagnostics Exams Diagnostics help remove the fear and uncertainty from taking the (Distributed by The SAT exam. This educational software not only gives Princeton Review) students the ability to take computer based sample tests and be scored, but also analyzes their test taking skills and pinpoints strengths and weaknesses.
LYRIQ International Corporation Page 26 1995 Business Plan The Princeton Review Prepared by The Princeton Review - the nation's leader $34.95 X X GRE Computer in test preparation. GRE Computer Diagnostics Exams Diagnostics help remove the fear and uncertainty from taking the (Distributed by The GRE exam. This educational software is the only Princeton Review) program that simulates the new GRE computer adaptive tests and scoring. Analyzes test taking skills and pinpoints strengths and weaknesses.
The Princeton Review Prepared by The Princeton Review - the nation's leader $34.95 X X LSAT Computer in test preparation. LSAT Computer Diagnostics Diagnostics Exams help remove the fear and uncertainty from (Distributed by The taking the LSAT exam. This educational software not Princeton Review) only gives students the ability to take computer based sample tests and be scored, but also analyzes their test taking skills and pinpoints strengths and weaknesses.
Product Description Price DOS Win Mac Educational: Cont. The Princeton Review Prepared by The Princeton Review - the nation's leader $34.95 X X GMAT Computer in test preparation. GMAT Computer Diagnostics Diagnostics Exams help remove the fear and uncertainty from (Distributed by The taking the GMAT exam. This educational software not Princeton Review) only gives students the ability to take computer based sample tests and be scored, but also analyzes their test taking skills and pinpoints strengths and weaknesses.
The Princeton Review This product is targeted to students preparing for the $49.95 X X Inside the SAT SAT exam. Once test taking skills and strengths and (Distributed by The weakness are determined with Computer Diagnostics, Princeton Review) Inside The SAT focuses on improving specific course content skills and helping improve how you answer questions on these exams. The student is literally trained through a series of "drills" to help improve their abilities and ultimately score on these exams. Lyriq Crosswords- The first product of the Lyriq's Discovery Series, built $49.95 X Discovering with young peoples education and fun in mind, this Endangered Animals crosswords game teaches students (target ages 8-16) about different wildlife that is endangered. Students solve crosswords and other puzzles in a mission to rescue animalsfrom extinction. This game improves vocabulary, spelling skills, problem solving, and teaches about animals and geography. Puzzles, pictures, sound and reading combine for an experience that kids will enjoy and parents and teachers won't want to pass up for their kids. List Price: $49.95. For Windows.
Planned Products Descriptions
LYRIQ International Corporation Page 27 1995 Business Plan Entertainment: Lyriq Crosswords - Premium The follow-on to the worlds most popular electronic crosswords game. This Edition, Version 2.0. upgrade will add the ability to create your own crossword puzzles, look-up new words to understand their meaning, and new features to tie into on-line services to play new puzzles daily, weekly, or whenever. A must have for all crossword puzzle addicts the world over. SRP: $39.95. Lyriq Crosswords of the Month Users of Lyriq Crosswords will be able to subscribe for 6 months, 12 months, or 24 Club months in a club where we send out 25-30 new crosswords every month. This (Q1 '95) service is a joint venture with CROSSW RD Magazine who will be responsible for puzzle content and editing. This service will mail out disks monthly or provide on- line access for users with modems. Will be sold direct or through on-line services (i.e., CompuServe, Prodigy, America On-Line). Pricing: $29.95 for 6 month subscription; $49.95 for 12 months.
Picture Perfect Golf Course The first add-on course for Picture Perfect Golf. Couer D'Alene is known for the Couer D'Alene world's only floating green, perfectly manicured fariways, and incredible beauty. (Q1 '95) Rated the most beautiful resort golf course by Golf Digest. List Price: $19.95 to $29.95. For Windows.
Word Games for Kids This game is targeted for the ages of 8 to adult. Product will combine crosswords (Q1 '95) for kids, word find, tic-tac-toe, and othe games in a fun windows based product. List Price: $19.95. For Windows.
Entertainment/Educational: Lyriq Crosswords- Discovering This is a follow-on product to Discovering Endangered Wildlife and part of the Inventions Lyriq Discovery Series. This product offers the same benefits and features (Q3 '95) except content will involve a mission of discovering key inventions that changed our lives by traveling through time to specific historic events and places in order to recover lost information and make sure key historic events occur. List Price: $49.95. For Windows.
LYRIQ International Corporation Page 28 1995 Business Plan Areas of Differentiation and Barriers to Entry
The personal computer software market continues to mature and the need for differentiation continues to increase in importance. Also, barriers to entry for new players have become much greater. The following touches on the areas of differentiation and barriers to entry for the Consumer Software market.
Areas of Differentiation:
×Technological innovation (using new technologies or improving established ones). ×Effective sales and marketing (superior product packaging, relationships with channel buyers, innovative and effective promotion). ×Leadership in meeting user needs and expectations (identifying new product areas to exploit on PC's and better user interaction between user and material). ×Use of recognized consumer brands (users will generally buy brands they recognize instead of experimenting).
Barriers to Entry:
×Cost of developing distribution channels and sales network. ×Cost of developing competitive products (movement to CD-ROM and Multi-Media products is expensive and beyond the resources of most new companies). ×Shrinking availability of non-licensed consumer brand names.
LYRIQ International Corporation Page 29 1995 Business Plan 9. Competition
Market Overview
There are literally a hundred potential competitors in the consumer software market, particularly in the entertainment and educational software categories due to the relatively low cost of entry and newness of the market. However, this situation is changing as the cost of developing and launching products increases and the channels reach saturation points on the number of vendors they are willing to support and do business with. LYRIQ International has been fortunate in breaking into this competitive market in a time of consolidation.
The competitors range from Microsoft Corporation, the industry giant, to dozens of one to four people shops that develop and sell products that generate $100,000 per year. However, the core of the industry lies with about 15 companies with revenues from $2M to $75M that generate most of the sales. These players include: Electronic Arts, Broderbund, Sierra On-Line Inc., Software Toolworks, Maxis, EdMark, Davidson & Assc., Accolade, and others. The industry continues to consolidate as the larger players purchase products rights from smaller ones, and smaller companies merge to compete more effectively.
LYRIQ International over the coming years will compete with most of these companies as its product line grows and expands into new categories of product. This industry, in its consolidation, is growing to become like the book publishing industry; in that to succeed, it is less important to be studying your competitors moves, as it is to concentrate on understanding the needs of the end-users and the retail channels that serve them. Companies must continually bring titles to the market that are new and have a targeted appeal to a substantial segment of the potential computer user base. The rest of this section will review LYRIQ's immediate product competitors in the area of crosswords and standardized testing products. The following are general competitive advantages that LYRIQ International brings to this market that drives its success and growth:
LYRIQ General Competitive Advantages:
×Top technical and engineering talent that produce top rated products. ×Top marketing and sales talent that maximize sales potential of products. ×Strong relationships with top companies that lend brand recognition and sales resources. ×Seasoned management team that has brought dozens of products to market and can leverage industry relationships.
LYRIQ International Corporation Page 30 1995 Business Plan Product Line Competition - Crosswords
Lyriq Crosswords is the undisputed top ranked product in the market. Every review of the competing products has picked Lyriq Crosswords as the best for content, ease-of-use, and playability (Features). Reviews from GAMES Magazine and PC Magazine (see Appendix) confirm this claim. Competitors for electronic crosswords are:
Product : Company: Advantages: Disadvantages: New York Times SWFTE Corporation ×NY Times brand and puzzle ×Limited features Crosswords content. ×User interface ×Packaging
Take-A-Break Dynamix ×Large company backing ×Grid Navigation Crosswords (Subsidiary of ×Channel leverage and ×Usability Sierra On-Line) distribution ×Puzzle selection/content
Puzzle Master Centron Software ×NY Times Puzzle content ×Packaging Technology, Inc. ×Early in market - good ×Limited Functionality distribution ×User interface ×DOS and MAC only-no Windows version LYRIQ recognized that crosswords is a huge consumer market with over 19% of the U.S. population playing daily or weekly. This means over 15 Million people on a regular basis play crosswords and are hooked on this pastime. In addition to sheer numbers of enthusiasts crosswords is a huge industry for book resellers and puzzle clubs which generate millions of dollars annually from selling crosswords. LYRIQ, with the guidance of experts from Crossword Magazine, has joined forces with the top players and developers of puzzles in the industry to develop a line of products that will provide the best crosswords content with the best program on all major computing platforms.
LYRIQ Advantages:
×The top rated program in the market. ×The best and broadest crosswords content: Washington Post, Crossword Magazine, and Penny Press; with Los Angeles Times and soon NY Times from Random House. ×Microsoft Windows bundle and distribution. Lyriq Crosswords will become the defacto standard electronic crosswords format when shipped with MS Windows 4.0. ×Random House backing - Full distribution of LA Times titles through Random House sales network. ×Pen support and handwriting recognition - leverages new pen devices. ×On-line puzzle distribution efforts underway with America On-Line, Prodigy, Microsoft, and Ziff- Davis with Crossword Magazine as content experts.
Product Line Competition - Test Preparation Products
LYRIQ's release of The Princeton Review Computer Diagnostics Exams for the SAT, GRE, LSAT, and GMAT are unique in two ways. First, The Princeton Review brand is the strongest in student mindshare in the industry, and the only software brand that originates from a company that is known for training students to prepare for these standardized
LYRIQ International Corporation Page 31 1995 Business Plan tests. Second, the product itself is unique in that it offers the only on-line exam experience that simulates the computer adaptive testing technology offered by the ETS (The Educational Testing Service) for the GRE today, and for the other exams in the future. The Computer Diagnostics Exams series is the first step for students in understanding their strengths and weaknesses prior to preparing a study plan to help to help improve their scores. The following companies are competitors in supplying software products aimed at the test preparation market. The products themselves do not directly compete with Computer Diagnostics exams, but will be direct competitors for the Drill Sergeant series due out in early 1995.
Product: Company: Advantages: Disadvantages: Your Personal Trainer for Davidson & Assc. ×The top selling product ×Only offer SAT product the SAT (Mac and DOS) for SAT ×Not a recognized vendor of ×Wide distribution and test preparation training promotion ×Good packaging
Studyware for SAT, GRE, Cliffs Studyware, Inc. ×Broad offering of products ×Not a recognized vendor of LSAT, ACT, and GMAT for ×Good packaging test preparation courses and DOS and MAC. materials ×Broad distribution ×Do not have Windows offering
Xenon Score Rx for SAT, Xenon Educational ×Broad product offering ×User interface and ACT, GRE, GMAT, and Systems ×Well financed entry technology LSAT for DOS and MAC ×Packaging
These software titles are among the fastest growing in the educational software category. Between two and three test preparation titles are always in the top ten best sellers every month in the retail channels. The Lyriq software technology is the best of all offerings, and The Princeton Review Brand and content is the best known. Approximately 225,000+ units of these software titles was sold in 1993 and this expected to grow rapidly.
LYRIQ/Princeton Review Advantages:
Top Brand in Test Preparation Highest quality of software - unique computer adaptive exams/Windows platform Product Line Competition - Interactive Golf Products
LYRIQ International Corporation Page 32 1995 Business Plan 10. Marketing & Distribution
Marketing software in recent years has traditionally involved a combination of selling to the top software distributors (Ingram Micro, Merisel, Kenfil, Software Resources, etc.), which in turn sold to computer software dealers (Egghead, CompUSA, etc.), or direct mail marketing to users. However, the trend towards consumer software has added complexity to this model, as well as opportunity, in that new consumer channels are opening to sales of software.
As a relatively new software developer and publisher, LYRIQ's marketing mission is to maximize sales of products and establish a distribution network in consumer retail channels for current and future products.
1994 Marketing & Distribution Goals:
×Expand distribution of LYRIQ crosswords and Princeton Review products into all significant consumer software retail channels in the U.S. and Canada. ×Launch the Princeton Review Computer Diagnostics product line and achieve a minimum of 75,000 units in sales in 1994. ×Launch the Crosswords Discovery Series product line into all major consumer software and educational channels and achieve a min. of 50K units in sales in 1994. ×Launch Skeeball Cyberspace game and achieve 25K in 1994 sales. ×Leverage Microsoft WinPad and Windows 4.0 crosswords bundle agreement to significantly increase company visibility and sales to this enormous installed base. ×Expand OEM and software bundle relationships for crosswords products. ×Establish on-line crosswords distribution network with major providers (Prodigy, America On-line, Microsoft On-line, CompuServe, Ziff-Davis, etc.). ×Limit general advertising to periodicals where target audiences would have interest in product line and are not overwhelmed with software product advertising. ×Establish a direct marketing program that will merchandise LYRIQ products through direct mail vehicles to increase on-going sales volume and product visibility. ×Increase press relations efforts to continue visibility of company and products. ×Utilize leading edge packaging techniques to build products that both stand out on the crowded consumer software shelves and have low cost of goods.
LYRIQ, in late 1993, signed a marketing agreement with Channel Sources for this organization to be our exclusive marketing representation firm in the U.S. marketplace. This relationship is strategically very important to the success of the Company as the principals of this organization are senior, well known, and respected in the distribution channels and have a unique ability to place products, and get buyers and merchandisers attention. Channel Sources is affiliated with Bruce Fredrickson's Channel Tactics organization which provides additional leverage behind this companies ability to deliver results. In 1994/5, the Company will work with this organization to expand U.S. distribution beyond U.S. Software Resources to distributors like Baker & Taylor and Ingram Micro or Merisel. Consumer retail presence will be expanded beyond Wal*Mart (via Goodtimes SW) to include other major consumer retail distributors and outlets.
LYRIQ has successfully achieved distribution of the Lyriq Crosswords product in Canada through MERISEL Canada
LYRIQ International Corporation Page 33 1995 Business Plan and Dehaies Raymond. LYRIQ's marketing representation firm in Canada, Great North Marketing, did excellent work in 1993 in placing Lyriq Crosswords in most of the major retailers. Lyriq Crosswords sold 157% of MERISEL's projections in 1993 and was the 7th highest selling consumer software product, placing it on their December 1993 HotList. Emphasis in Canada in 1994 will be to continue to expand coverage of Lyriq Crosswords and introduce new products as they are released.
LYRIQ works with both Channel Sources and Great North Marketing to develop on-going promotions and programs to promote its product to distributors and major retailers in the U.S. and Canadian regions. Getting product into the most retail outlets possible is crucial to achieving the sales volume potential for LYRIQ products.
In 1994, LYRIQ will work with Japan Entry to expand distribution of Lyriq Crosswords into the Japanese market. The product will be localized by Japan Entry and documentation localized so that a Japanese version of the product can be sold to the Japanese as a product that provides a fun way to improve English vocabulary and word understanding. As part of our agreement with Microsoft Corporation, distribution will be expanded into the German, French, and U.K. markets in 1994. LYRIQ is working with a number of organizations in order to arrange this distribution.
To support PUSH marketing efforts in the channels, LYRIQ is developing end user advertising and direct marketing programs to drive demand. Due to the high cost of general advertising, 1994 end-user advertising will be accomplished using targeted publications for the crosswords and cyberspace products, and leveraging The Princeton Reviews general product advertisement for test preparation products.
LYRIQ International Corporation Page 34 1995 Business Plan Planned Media Placements Product Area: Publications: Crosswords & Kids Crosswords ×Crossword Magazine ×GAMES Magazine ×New York Times ×Washington Post ×LA Times ×Modern Maturity ×Child Magazine + other Kids publications
Princeton Review ×US News & World Report Computer Diagnostics ×Money ×New York Times ×College Newspapers
Skeeball/Trip to Fair ×PC Games Magazine ×Kids publications
Product advertising will also be conducted using direct mail catalogs which are mailed to millions of computer users monthly. Publications such as Multiple Zones, Tiger Direct, and Micro Warehouse all offer sales potential to market directly to users through these catalogs. Research has shown that at least 50% of sales generated through these catalog ad placements come through users buying the product at a local retail store versus the catalog itself.
Another key advertising vehicle will be an on-going commitment to Press Relations. Lyriq Crosswords built its current reputation based on excellent reviews and press stories relating to the product. This exposure has both been the most valuable and least expensive in generating sales and exposure for LYRIQ and its products. The 1994 marketing plan calls for increased attention to generating positive PR for the company and new products.
The most important advertising and promotion vehicle for 1994 and beyond, will be the exposure gained from bundling Lyriq Crosswords with the upcoming releases of Microsoft WinPad and Windows 4.0. The MS WinPad operating system has a smaller expected sales volume. However, Lyriq Crosswords will be prominently displayed and used, and the pen interface with handwriting recognition is the most conducive to users having repeated fun with the product. The bundle in Windows 4.0 will result in over 50 million users being exposed to the product in 1994/5 per Microsoft sales forecasts. This windfall of exposure will lead to very significant product upgrades, new crossword puzzle sales, cross sales of other LYRIQ products, and increased exposure for LYRIQ International.
In addition to emphasis on expanding distribution and effectively promoting products to target consumers, LYRIQ will be spending significant marketing resources on developing packaging that will stand out on crowded retail shelves and effectively communicate product benefits to the target consumer. It is recognized that packaging for consumer goods is the single most important sales tool available to influence the success or failure of the product.
Product/Channel Mix
LYRIQ International Corporation Page 35 1995 Business Plan The sales of product through the major channels is expected to shift over the coming years and behave differently by product line. Given 1993 was a start-up up year, much of initial sales came through bundle arrangements with hardware and software manufacturers, as well as direct end-user sales. As LYRIQ strengthens and expands its distribution channels the product mix will shift to show most sales going through retail. Planned direct mail efforts will maintain a portion of sales going direct.
The major deviation to this strategy will be crosswords sales which will shift to more direct sales due to the Microsoft Windows bundle. This bundle, with the imbedded 1-800-CROSSWORD line will yield significant on-going sales direct to the company.
LYRIQ International Corporation Page 36 1995 Business Plan 11. Financials
Financial History and Ownership
LYRIQ International was founded in 1991 and was capitalized by its two founding shareholders, who have contributed approximately $50,000 in equity capital. From its inception, the Company has generated revenues and profits from professional consulting through its affiliated organization The LYRIQ Group and software development contracts which have been directly related to building software products currently being brought to market.
The Company's common stock is currently split equally (50%/50%) between the company founders. The founders had originally planned for the company to be a self-financed corporation offering a few defensible niche software products. Based on faster than expected product sales growth, and signing of an agreement with Microsoft, sales projections have been revised and the Company must capitalize for this significant increase in growth.
LYRIQ International is seeking to raise $500,000 in equity financing. Based on our projections this provides sufficient funding to cover cash flow shortfalls anticipated with ramping up marketing and product development efforts associated with new product releases and leveraging the Microsoft bundle sales opportunities.
Revenue Projections
Based on conservative revenue estimates, the Company will achieve approximately $1.7 million in sales in 1994, reaching $23 to $24 million in annual revenues in 1998. These sales projections are based on estimates of sales of existing products to be released in 1994 and early 1995, and estimates sales figures for products that will be released in late 1996 and 1997. The projected compound annual growth rate is 121% over this five year period.
It is the Company's goal to surpass $23 million in 1998 and be limited only by our ability to attract good people and introduce high quality products that sustain long-term growth and profitability.
LYRIQ International Corporation Page 37 1995 Business Plan Product Line Revenues Projections
It is an important part of LYRIQ's strategy to continually introduce new products and product lines each year. Strategically the company does not want to get caught being too dependent on any single product or product line for its revenues and profits. The following breaks out the projected revenues for each major product line currently shipping and planned, as well as projected revenues for new product lines that will be introduced in coming years that will be further defined at a later date.
1994 1995 1996 1997 1998 Lyriq Crosswords $803,428 46.1 $1,689,787 27.6 $2,324,207 21.0 $2,359,119 $2,055,644 % % % Lyriq Discovery $395,912 22.7 $2,502,480 40.8 $4,153,220 37.5 $4,065,320 $3,739,325 Series % % % TPR Testing Products $384,625 22.1 $469,703 7.7% $767,038 6.9% $790,000 $812,500 % Cyberspace Products $158,514 9.1% $1,461,973 23.9 $2,819,573 25.5 $4,016,983 $3,856,703 % % Product Line TBA - 1 $1,012,500 9.1% $3,037,500 $4,725,000 Product Line TBA - 2 $2,025,000 $5,400,000 Product Line TBA - 3 $2,700,000 TOTAL REVENUES: $1,742,47 100 $6,123,943 100 $11,076,538 100% $16,293,923 $23,289,17 9 % % 2
Product Line Vintage Chart
1 9 9 8
Note: Lyriq Crosswords is segment to far right; Product Line C enters in 1998 on far left.
LYRIQ International Corporation Page 38 1995 Business Plan Lyriq Crosswords 1 9 9 7 TPR Testing Products
Lyriq Discovery Series
1 9 9 6 Cyberspace Products New Product Line A
New Product Line B 1 9 9 5 New Product Line C
1 9 9 4
0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 % Cash Flow and Expense Projections
If the Company is to maximize its sales potential and leverage existing opportunities with Microsoft, Random House and others, it is estimated that spending requirements for product marketing launches and product manufacturing will exceed available income by approximately $200,000 in 1994. Most of this is attributed to the long Accounts Receivable waiting periods imposed by distributors in the industry that are between 60 and 120 days. Projections show that profits will be sufficient by the end of 1994 to fund this A/R delay.
Based on current conservative sales projections, operating expenses, and costs increasing at rates commensurate with increased sales activity; LYRIQ will achieve a healthy operating profit in 1994 despite the increases in marketing costs. As mentioned above, on-going operating expenses are not a problem for the company, as it is operating at a profit. The cash requirements of the company in 1994 are required to offset anticipated increases in costs associated with building more product and increasing marketing activity directly related with increasing sales. The cash flow delay between accounts payable and accounts receivable in Q3'94 attributed to holiday season sales is the Company's greatest challenge.
LYRIQ International Corporation Page 39 1995 Business Plan Financial Summary
LYRIQ International is currently on a path to become a highly profitable company of significant size. The Company has put in place a financial plan which will guide its growth and will clearly provide a substantial return for it's shareholders. The details of this plan are provided in the Appendix.
Based on projected year-end 1994 numbers, and reasonable growth projections, we believe LYRIQ International would be valued in the range of $5,000,000 to $8,000,000 assuming reasonable P/E ratios commensurate with the Company's earnings and growth momentum. This valuation is considered conservative given the Company's record of successful product introductions, established management talent, and finalized contracts with industry leaders that will generate significant revenues and profits for multiple years.
LYRIQ International Corporation Page 40 1995 Business Plan LYRIQ Company Confidential
Appendix
5-YR Financial Pro Forma
IPO Examples
Corporate Mission, Goals and Values
Resumes
Recent Press LYRIQ Company Confidential
Comparison of The Learning Company and Davidson & Assoc. IPO's (Background Information for Company Valuation)
The following are financial details of The Learning Company and Davidson & Associates' IPO's as printed in the March 1, 1993 Software Industry Bulletin:
TLC Davidson
NASDAQ Symbol LRNG DAVID Market Value at IPO $55,619,430 $180,515,786 Sales at IPO $13,891,000 $39,608,000 Profit Margin 11.0% 9.8% Sales Multiple 4 4.6 P/E Ratio 49 46.7 Market-to-Book Ratio 7 11.7 Sales Growth 38.9% 139.2% IPO Price $10.00 $10.00-12.00 From Software Industry Bulletin 3/1/93
The Learning Company: Founded in 1979 and located in Fremont, California. Product emphasis is on children's education products. Products include the Reader Rabbit series, Treasure Mountain, and Treasure MathStorm!. 140+ employees.
Davidson and Associates: Founded in 1982 and located in Torrance, California. Product emphasis is on educational software for home and school that are based on the needs of educators. Products include Kid Works 2, Zoo Keeper, Word Attack, Your Personal Trainer for the SAT, Math Blaster, and Alge-Blaster Plus. 260+ employees. LYRIQ Company Confidential
Corporate Mission, Goals and Values
Mission
Become a recognized leader in consumer software that entertains, educates and adds value by meeting customer needs and providing top quality goods and services in an efficient, courteous manner, while also providing for the needs of our employees.
Goals
LYRIQ International is focusing on the following corporate goals:
Short Term ×Establish consistent profitability of greater than 10% and grow revenues to $20 million within the next five years. ×Gain reputation as supplier of quality entertainment and educational software that adds value to the market. ×Introduce a minimum of 3 product titles per year. ×Establish broad distribution in both traditional software retail outlets and consumer mass merchant retailers.
Long Term ×Take LYRIQ International public after meeting short term revenue and profitability goals and use proceeds to fund expansion and grow revenues to $100 million within five to eight years of IPO. ×Be recognized by the industry and its users for developing high quality products that are innovative and set new standards for excellence in product design and usability. ×Establish strong direct marketing organization to increase market share, revenues, and profits. ×Identify and acquire products and companies that are complimentary to LYRIQ's business strategy that can be used as vehicles increase revenues and profits, as well as strengthen market position. ×Expand market presence and share in international markets. LYRIQ Company Confidential
Corporate Values
Profit ×The number one objective of the company must be profit. Without profit there can be no company.
Customer Satisfaction ×All products must be developed with the customer in mind and as the focus. ×All employees will keep customer satisfaction as a top priority.
Focus ×Do the right things well. ×Work on the top priorities above all else.
Quality & Value ×All products and endeavors must add value to the customer, market, and organization. ×If it is worth doing, it is worth doing right. ×Strive for excellence.
Innovation ×Only the products that are innovative get noticed. ×Innovation is more than high technology, it is improving a process or idea through any method that is new and adds value to the end result.
People ×The company's objectives and mission cannot be achieved without people that are motivated and well trained. We are dedicated to hiring the best and maintaining a work environment that allows people to strive for excellence and meet their full potential.
Integrity ×Strive for fairness and honesty in all endeavors.
The founders have succeeded in their careers and other ventures through focusing on building quality products that meet key market needs and surrounding themselves with intelligent and motivated people that strive to make a difference.
LYRIQ International will be guided by these beliefs and philosophies in the pursuit of achieving its goals in 1994 and beyond. LYRIQ Company Confidential
RANDAL J. HUJAR
1991-Pres LYRIQ International Corporation Cheshire, CT.
Co-founder and President
Prior Experience:
1990-1991 LOTUS DEVELOPMENT CORPORATION Cambridge, MA
Director, 1-2-3 Product Line Marketing, Spreadsheet Division. Drove marketing and business planning functions for 1-2-3 desktop spreadsheet applications (Dos/Windows/OS2/Mac). Responsible for driving tasks and priorities for Lotus 1-2-3 marketing infrastructure. Lead manager in developing and submitting for management approval 1991 business plan. Established and produced end-user seminar marketing program and initiated Telemarketing within Lotus that resulted in over $1Million in incremental revenues.
1989-1990 IBM CORPORATION Milford, CT.
Manager, Product Marketing, Desktop Software Business Unit. Responsible for DisplayWrite word processing business; 50% of business unit revenues. Launched Displaywrite 5 and Composer. Established business unit charter and business strategy, defined marketing strategy and constructed new marketing organization with emphasis on speed and creativity to compete with leading software vendors.
1986-1988 ASHTON-TATE COMPANY E. Hartford, CT. & Torrance, CA.
Director of Marketing, Presentation Products Business Unit in E. Hartford, CT. from August 1987 to December 1988. Full P&L responsibility for MultiMate word processing line- a $60M+ worldwide business; 15-20% of company revenues. Received A-T Presidents Award for top product line performance for exceeding revenue and profit plans (1988). Launched MultiMate Advantage II in April 1987. Senior Product Manager, Data Base Products Group, Torrance, Ca. from October 1986 to August 1987. Worked with executive management committee to develop and gain approval for a 3 year A-T business plan covering development, marketing, and launch of a family of over 15 major microcomputer software products across major PC platforms.
1981- 1986 HEWLETT-PACKARD COMPANY Roseville, CA. & Cupertino, CA.
Product Line Manager, Office Systems Division, Roseville, Ca. from January 1985 to October 1986. Managed product marketing for Micro-Mainframe software products. Produced Office Systems strategy for PC-Mini integration. Part of 5 member counsel that gained approval for concept/wrote business plan for HP's Personal Productivity Center product line and New Wave. Managed 5 product managers. International Marketing Manager, Information Systems Group, Cupertino, Ca. from June 1983 to December 1984. Responsible for HP's European and Canadian sales regions for commercial and technical LYRIQ Company Confidential
minicomputer and workstation product lines. Achieved 300% sales revenue increase in Canadian region. Marketing Representative, Cupertino, Ca. June 1981 to June 1993.
1979-1980 I.P. SHARP ASSOCIATES Vienna, Austria
Consultant/Programmer for Canadian based computer services firm while performing studies at University of Vienna. Improved internal accounting and communication systems. Programmed using APL.
Education:
University of Santa Clara, Santa Clara, CA. Bachelor of Science, Finance and Marketing. 4.0 GPA, Dean's List, 1981
University of Vienna Vienna, Austria Pre-graduate program for top U.S. business and pre-law students, 1979-80
Published: Directions of Word Processing technology, Amy Wohl Conference, 1987 Office Automation in the 1980's. Hannover Fair, 1983
Other: Fluent in Spanish, some French and German. Extensive travel in US, Canada, Europe, and Far East. Community Service - The Boston Computer Museum - Corporate Membership Committee. Hobbies include golf, tennis, and strategic games. Married with 3 children. LYRIQ Company Confidential
GARY SKIBA
1992-Pres LYRIQ International Corporation Cheshire, CT.
Co-founder; Chairman and Chief Technical Officer
Prior Experience:
1989-1992 IBM CORPORATION Milford, MA
Manager of Advanced Word Processing Products. Development manager responsible for a $13M budget to produce IBM's next generation of PC based text processing technology. Technology advisor to division vice-president.
1988-1989 ASHTON-TATE COMPANY E. Hartford, CT.
Program Manager. Lead product team responsible for developing next generation of word processing technology for Ashton-Tate MultiMate product line. Managed MultiMate 4.0 project team.
1987-1988 SKIBA DATA SYSTEMS Danbury, CT.
Founder and sole proprietor of systems integration operation. Company wrote over 30 software applications for clients in C, Pascal and dBase. Provided negotiation and business planning services in the leveraged buyout of Extrusion Technology Corp by its current owners. ETCA is now a $10MM company.
1984-1987 INSET Systems, Inc. Brookline, CT.
Co-Founded company that is now the leading supplier of graphic conversion utilities and advanced graphic tools. Co-authored Inset, the first PC program to allow graphics to be integrated with text in documents. Licensed to MultiMate, WordStar and others major software publishers. This technology was later used to create Hijaak, Inset's best-selling graphics utility. Also responsible for establishing company marketing & operations. Still maintains seat on Board of Directors and is a major stockholder.
1983-1984 Peat Marwick New York, NY.
Staff Accountant. Audited many small companies in NYC. Wrote the computer based staffing system which was used to allocate resources in the New York office. LYRIQ Company Confidential
Education:
University of Connecticut, Storrs, CT. BS Acctg, Summa Cum Laude. University Scholar. President of Business Computer Club & President of Beta Alpha Psi acctg fraternity. Passed the CPA exam in Nov. 1983.
Published: Technical articles for various magazines, including PC Tech Journal Printer Reviews and articles for PC Magazine (1984-1986)