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ENGR110/210Perspectives in Assistive Technology

Guest Lecture: ROTA Mobility Inc.

From Development to Commercialization

R TAM O B I L I T Y

R TAM O B I L I T Y

ChrisCo-founder, ROTA

MichaelCo-founder, ROTA

CEO and FounderDiamond Semiconductor Systems

CEO and FounderSales Management Innovations

DirectorHeraeus GmbH

Material Science and Physics

Assoc. Project ManagerApple, iPad Engineering Design Team

Metrology EngineerKLA-Tencor, VLSI Research Laboratory

Manufacturing EngineerDiamond Semiconductor Systems

Industrial Engineering and Business Management

ROTA HQ

ROTA Factory

Stanford

1. Our motivation

2. Our analysis of the market

3. Our decision to design

4. Our disruptive efforts

1. Our motivation

Scooter$1,000 - $6,000

SubsidizedNo Exercise

Super Heavy (Requires Lifts)High Failure Rate

Not Cool

Lightweight$2,000 - $8,000

SubsidizedPainful Exercise≤ 35 lbs

Medium Failure RateCool

Traditional$500 - $1,000

Subsidized (Leased)Exercise for Someone Else

HeavyLow Failure Rate

Not Cool

Hard to propel

Impossible to turn

Difficult to transfer and transport

Causes elbow, wrist and hand pain

Retails for $3,000 - $8,000

Rarely subsidized by government and insurers

Difficult to operate

Adds weight and width to chair

Not cool (the stigma of disability)

Causes repetitive strain injury (RSI)

Retails for $4,000 - $8,000

Rarely subsidized by government and insurers

Utility

He

alth

R TAM O B I L I T Y

R TAM O B I L I T Y

2. Our analysis of the market

Scores Rating

0 Not Available

1 Poor

2 Average

3 Good

4 Best

Usability and Effectiveness Factors ComparedUsability and Effectiveness Factors ComparedUsability and Effectiveness Factors Compared

CompanyCompany WijitWijit Enabling Tech.Enabling Tech. Rio Mobility Rio Mobility WillgoWillgo SRB Engineering SRB Engineering Nu-DriveNu-Drive Quantum Runner Quantum Runner Magic WheelsMagic Wheels RoTrikeRoTrike RoChairRoChair

Propulsion modePropulsion mode Push only 2 Push Only 2 Push-Pull 3 Push only 2 Push/Pull 4 Push only 2 Push/Pull 3 Push only 2 Push-Pull 4 Push-Pull 4

Power to weight increasePower to weight increase Average 2 Good 3 Average 2 Poor 1 Poor 1 Good 3 Poor 1 Average 2 Best 4 Best 4

PricePrice High $4.5k 1 < $1K? 4 High $5.5K? 1 High $5K 1 Very High 0 Low $.65K 4 Medium 2 High $5K 1 Good $3.5K 3 Good $2.5K 3

Mechanical advantageMechanical advantage 1.2:1 2 1.7:1 3 2:1 4 1:1 2 1.7:1 3 1.2:1 2 1.8:1 3 2:1 4 2:1 4 2:1 4

Optimized ergonomicsOptimized ergonomics Average 2 Average 2 Average 2 Average 2 Average 2 Average 2 Average 2 Average 2 Best 4 Best 4

Effective braking/parkingEffective braking/parking Average 2 Average 2 Good 3 Good 3 Good 3 Average 2 Good 3 Average 2 Best 4 Best 4

Increase in chair widthIncrease in chair width Poor 1 Poor 1 Good 3 Good 3 Good 4 Average 2 Good 3 Average 2 Best 4 Best 4

Telescopic LeversTelescopic Levers NA 0 NA 0 NA 0 NA 0 NA 0 NA 0 NA 0 NA 0 Best 4 Best 4

Shiftable gearingShiftable gearing NA 0 NA 0 Good 3 NA 0 Good 3 NA 0 NA 0 Good 3 Best 4 Best 4

Front-&-center propulsion & handlingFront-&-center propulsion & handling NA 0 No 0 NA 0 NA 0 NA 0 NA 0 NA 0 NA 0 Best 4 Best 4

One-arm propulsionOne-arm propulsion No 0 No 0 NA 0 NA 0 Best 4 NA 0 NA 0 NA 0 Best 4 Best 4

Total ScoreTotal Score 12 17 21 14 24 17 17 18 43 43

ROTA Con"dentialshown during lecture only

2.7M manual wheelchair users in the USWheelchair and scooter markets at $3.9B in 2009 are expected to grow to $7.9B by 2015

~10% compounded annual growth rate

Medicare to gain 7,000 new Baby Boomers per day in 2011

Wheelchairs are replaced every 3 to 5 years

ROTA domestic market TAM of >$600M

RoW market is 3X the domestic market

Source: AARP, WinterGreen Research, Susan Eustis, President, Cooper & Cooper, Trends and Issues in Wheeled Mobility Technologies, Department of Rehabilitation Science and Technology, University of Pittsburgh

ROTA Con"dentialshown during lecture only

Addressable Categories Unit Sales (2009) % Addressable Units Addressable Average MSRP TAM Dollars

Manual Wheelchairs

Lightweight 155,897 70% 109,128 $1,850 $201,886,615

Ultra-Lightweight 77,949 50% 38,975 $4,000 $155,898,000

Power Wheelchair

Power Assisted Pushrim 1,949 90% 1,754 $5,000 $8,770,500

Lightweight Indoor Use 19,487 10% 1,949 $3,000 $5,846,100

Indoor Use & Light Outdoor Use 38,974 20% 7,795 $4,000 $31,179,200

Active Indoor & Outdoor Use 38,974 20% 7,795 $5,000 $38,974,000

Electric Powered Scooter 136,410 50% 68,205 $2,000 $136,410,000

Institutional 68,205 25% 17,051 $3,000 $51,153,750

537,845 252,651 $630,118,165

Denotes categories where cash purchases are prevalent

ROTA Con"dentialshown during lecture only

Medicare40%

Medicaid13%

Private Insurance29%

Commercial/Institutional9%

Cash8%

Market data primarily sourced from: Cooper & Cooper, Trends and Issues in Wheeled Mobility Technologies, Department of Rehabilitation Science and Technology, University of Pittsburgh

ROTA Con"dentialshown during lecture only

DME applies reimbursement

Physician’s product

recommendation Customer

Physician’sexam

Notice of medical

justi"cation

Prescription DME"tting

Order form DME issuesRFQ to OEM Partial

Yes

No

DME ordersfrom OEM

All before ordering,

4-6 month total lead

time

Medicare40%

Medicaid13%

Private Insurance29%

ROTA Con"dentialshown during lecture only

DME applies reimbursement

Physician’s product

recommendation Customer

Physician’sexam

Notice of medical

justi"cation

Prescription DME"tting

Order form DME issuesRFQ to OEM Partial

Yes

No

DME ordersfrom OEM

DME"tting

Order form DME issuesRFQ to OEM

DME ordersfrom OEM

All before ordering,2-4 month total lead time

All before ordering,

4-6 month total lead

time

Private Insurance29%

Commercial/Institutional9%

Cash8%

ROTA Con"dentialshown during lecture only

DME applies reimbursement

Physician’s product

recommendation Customer

Physician’sexam

Notice of medical

justi"cation

Prescription DME"tting

Order form DME issuesRFQ to OEM Partial

Yes

No

DME ordersfrom OEM

DME"tting

Order form DME issuesRFQ to OEM

DME ordersfrom OEM

3-4 week delivery(only ROTA can do this)

All before ordering,2-4 month total lead time

All before ordering,

4-6 month total lead

time

Orderonline

Choose ship-to destination

Private Insurance29%

Commercial/Institutional9%

Cash8%

ROTA Con"dentialshown during lecture only

Cash

Institutions, Private InsuranceInstitutions, Private Insurance

Medicaid, MedicareMedicaid, Medicare

Distribution20%

COGS50%

Distribution50%

SG&A30%

COGS40%

COGS25%

Dist.10%

SG&A30%

SG&A15%

Pro!t10%

Pro!t10%

Pro!t10%

ROTA Con"dentialshown during lecture only

Cash8%

Phase 1

Direct sales

Online marketing, events, demos

Fastest growing sector due to:

Market data primarily sourced from: Cooper & Cooper, Trends and Issues in Wheeled Mobility Technologies, Department of Rehabilitation Science and Technology, University of Pittsburgh

population with discretionary income

desire for premium products

frustration with lengthy subsidy process

higher rates of subsidy denial

product choice and quality

ROTA Con"dentialshown during lecture only

Private Insurance29%

Commercial/Institutional9%

Phase 2

On-site clinics

Collaborative research

Medical bene!t documentation

Support for practitioner and patient

Market data primarily sourced from: Cooper & Cooper, Trends and Issues in Wheeled Mobility Technologies, Department of Rehabilitation Science and Technology, University of Pittsburgh

ROTA Con"dentialshown during lecture only

Medicare40%

Medicaid13%

Phase 3

HCPCS Coding

Dealer network support

Trade-shows

Market data primarily sourced from: Cooper & Cooper, Trends and Issues in Wheeled Mobility Technologies, Department of Rehabilitation Science and Technology, University of Pittsburgh

ROTA Con"dentialshown during lecture only

3. Our decision to design

“If you don’t have a process and the hardware you don’t have a business.”

Walter Benzing, Founder of Applied Materials

Great Product + Clinical Bene!t

Transferring

Going uphill

On the "at

Going downhill

Never designed to be self-propelled

Incredibly hard work

Minimal mechanical advantage

Harmful to user

RSI occasioned by pushrim propulsion and transfers

70% of wheelchair users report shoulder pain

65% of wheelchair users report impingement, tendinitis, rotator cuff tears

16% of wheelchair users report elbow, wrist, and hand pain

“signi!cantly improved biomechanical economy without increasing shoulder and elbow stresses.”

Department of Veterans Affairs, Journal of Rehabilitation Research & Development

Cardiovascular Health Is Essential

Provide Riders Individual Freedom

Solve Repetitive Strain Injury

Use Lever Propulsion

The Rowing Motion Is Most Efficient

Use Gearing

Make It Light & Compact

ROTA Con"dentialshown during lecture only

ROTA Con"dentialshown during lecture only

ROTA Con"dentialshown during lecture only

The most efficient and ergonomic vehicles for those who can’t walk.

RoChair & RoTrike

RoChair and RoTrike shown

First wheelchairs that are not harmful to users

Narrower than conventional wheelchairs

Walking or bicycling speed

Navigate indoors

Work for a whole lot of people

Look cool

RoChair shown

RoChair shown

RoChair shown

4. Our disruptive efforts

The Old Way The New Way• Pushrim propulsion mandates every chair be custom • Universal !t; because we drive from the wheel hubs

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β”

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AdjustableRoChair shown

• Bike shops are ideally equipped to service RoChair and RoTrike

• Bike shops are full of good people

• Bike shops already have spare parts on their shelves

• Bike shops make good money servicing rides

• Bike shops have shown interest in accepting delivery, assembling, servicing, and selling RoChair and RoTrike

RoTrike shown

Key patent !led, 18 claims

In production w/ local manufacturer on favorable terms

Optimized sourcing and componentry

Shipping units late spring

Secured VA, Rehab. Center and University !eld studies New World Machining, San Jose, CA

US Department of Veterans Affairs, Rancho Los Amigos National Rehabilitation Center, Stanford University, University of Groningen, University at Buffalo, Georgia Institute of Technology New World Machining, San Jose, CA is a 40,000 sq.ft. facility providing ROTA assembly, inventory, and office space

Buy Online

100% charged with orderManufacturer gets 25% of downpayment covering component costs

Manufacturer holds finished goods inventory per ROTA rolling forecast and spare parts inventory

Product ships from manufacturer in 3-4 weeks

ROTA pays manufacturer balance

1

4

2

5

3

6

RoTrike shown

Ship-to Home

Ship-to Rehab Center

Ship-to Bicycle Shop

Buy OnlineShip via UPS20”x22”x40”, <50 lbs

RoTrike shown

“The Silicon Valley culture and Healthcare industry culture don’t match.”

Comment made at the Silicon Valley planning commission.

Durability Testing

FDA Certification

HCPCS Coding

www.rotamobility.com

Fully integrated power assist manual wheelchairs.

RoTrike & RoChairPA PA

Marcus Albonico, Stephen Hibbs, Kevin Ting