Lecture : Simulation

• Choosing randomly “ The order of presentation”

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https://forio.com/simulate/mit/cleanstart/simulation/login.html
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 Scenario
Getting Started

• You are the founder and CEO of 1 Industries, Inc., a startup company that has developed a set of technologies to improve the
energy efficiency of commercial and industrial buildings. Your product consists of sensors, controls and software that integrate into
a building's existing HVAC, lighting and other systems to optimize energy efficiency, enabling dramatic energy and greenhouse
emissions-and financial-savings.

• Though you don't yet have any customers, you have raised $1,000,000 in funding from friends and family, and now seek to
introduce your innovative product to the marketplace. You will face competition from other startups with similarly innovative
products and from large, incumbent firms such as electric utilities whose products may be less innovative but have deep pockets
to establish their market presence. You must make a number of decisions each quarter as you build your sales and engineering
team, try to win customers, and become profitable before you run out of cash.

• Your business model seeks revenue from both initial product sales and annual maintenance fees. You set the price on the
dashboard and maintenance fees are contracted at 5 percent/year of the sale price. Initially, your product costs $60,000 per unit
to manufacture and install, but you expect that these costs will fall as you move down the learning curve and benefit from product
and process innovation. Although you believe your product provides excellent value, building owners and managers are
conservative and many are not aware of the potential for savings from this type of product.

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 Scenario
• To win customers, your product must not only be more attractive than that of competitors, but your sales people must work with
customers to build their awareness and understanding of the product and its advantages. Given the unfamiliarity of potential
customers with your technology, that process can take a long time. Your business plan anticipates a year or more to generate
revenues.

• In addition to setting prices, the dashboard enables you to manage employee hiring (and firing) and compensation. You decide
how many people to hire, and how many are engineers who can improve the product and support existing customers, and how
many are salespeople who can win customers. You decide compensation for your people, and what mix of salary, stock and stock
options, and profit sharing to offer. You can decide whether to finance your company from earnings, whether it should be wholly or
partially employee owned, or whether you will seek external funding from venture capitalists. Through the dashboard you'll have
the option to communicate with prospective investors - both to seek venture capital and, if you are successful, to pursue a public
offering. The dashboard also presents a wide range of information on your performance, so be sure to examine all the options
thoroughly.

• How long will the game last? The exact length of the game is up to your instructor, though you may go bankrupt sooner. As the
founder of the business you're in it for the long haul. Your goal is to build a profitable, sustainable business.

• You can open this guide again by clicking on the "Getting Started" link on the bottom. Good luck and have fun.

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• Click the “ Play as part of a class”
• Please each group login with email and password that you
have been assigned.

Do NOT login on more computers!

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Task
• You have 60 Mins to play for all round ( refer to 15 years) get the
highest result
• Pick all milestones ( your group did very well or very bad or any
quarter results that you think you learn a lesson relating to
operating your business )

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 BONUS POINTS for final group assignment
ONLY 1 RESETTING
Rank Points
1 3 If you reset over Twice, You
2 2 are failed
3 1

Only students who show up today get the points

If you fall Bankrupted,
reconsidering the reason
why to get bonus points

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information
• Initial Sales Force (People) : 1

• Initial Engineers (People) :4

• A New Employee Take 2 years to become a full experience worker

• Industry Average Compensation - Engineers ($/Year/ Person) :

100,000 $

• Industry Average Compensation - Sales Force ($/Year/ Person) :

100,000 $
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 information
• Total Compensation - Sales Force ($/Year/ Person) : 100,000 $

• Base Salary –Sale Force : 25%

• sale commission : 5%
Initial Cash on Hand for Player ($) : 1,000,000 $

• Minimum Firm Valuation for IPO ($) : 100,000,000 $

• Vesting Period for Employee Options : 3 years _ Mean that

Your employee options can be transferred into ownership after 3 years
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information
• Time to develop New Product Features : 1 year

• Initial Unit Costs ($/Unit) : 60000

• Product Life (Years) : 15 Years

• Initial Customer Energy Use (kWh/Year/Customer) : 700,000

• Sale cycle Time : 1 (years)

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HInts

• At initial period, your company is very small .. So carefully spending

money : Do not pay too high salary ; Do not hire too much employee;
do not sell very high price ,etc…
• Let check frequently your data ( especially in Sale )

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Individual Assignment
• You will play the game , then submit a report ( Max: 2-page A4) to present your
performance ( using the graphs ) and lessons you learned ( WHY your business is
bankrupt or success ?)
• Deadline : 23:59 ( Fri, 21/7/2023) , submit via the link below

https://forms.gle/mjncPNsi15BoPCUh8

P/s: You may get chance to increase your score if you persuasive me by a valuable
lesson that you learned from your mistakes or figure out the reason why you fail

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Web-Design
• Spend 15-20 mins to discuss about your group project and frame
a website that you would use and build a real website by
wix.com

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Final Project

• No Final Exam
• Presentation date : 26/7-28/7 /2023
• Note :
• Show me how to pre-test hidden assumptions before
launching your products or services in the proposal and
presentation as well.
• Create your website or “demo” version of your product

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