Equal Opportunity Employer/Program. Auxiliary aids and services are available upon request to individuals with disabilities. Relay Texas: 711 (Voice) or 1-800-735-2989 (TTY) Igualdad de oportunidades de Empleo/Programas. Equipo auxiliar y servicios de apoyo están disponibles para personas con discapacidad al ser requeridos. Relay Texas: 711 (Voz) o 1-800-735-2989 (TTY)

STEM CHALLENGE RULES

Sponsored by:

Hello STEM Challengers! Do you have an innovative idea and think it will work? Then launch it! The 2015 STEM Challenge will introduce the innovative lean startup model1 which is transforming how new ideas are being built and launched everyday. Your team objective should be to work collaboratively to try and launch a start up business, successfully. As a challenger, you will be tasked with creating a business model canvas2 demonstrating how your ideas pivoted, produce a business plan document and present to potential investors and professionals to win this year’s competition. Prizes will range from $100 to $1,000 in awards. This year’s competition we will also incorporate six target industry sectors identified in the Borderplex Alliance Strategic Plan 2015-20203 as having the highest potential of economic opportunities for our Borderplex Region (El Paso /Cd. Juárez /Southern New Mexico). They are:

1.   Defense and Aerospace 2.   Life Sciences 3.   Tourism

4.   Advanced Manufacturing 5.   Advanced Logistic 6.   Business Support Services

Before you begin the STEM Challenge, there three key resources to study. These resources will provide insight into becoming a successful entrepreneur now and in the future. We will also provide technical workshops from industry leading professionals to help guide your ideas from concept to development. Resource one: Udacity.com An online university "by Silicon Valley" that teaches the skills that industry employers need, the credentials endorsed by employers and educates at a fraction of the cost of traditional schools. With industry giants—Google, AT&T, Facebook, Salesforce, Cloudera, etc.—Udacity offers Nanodegree programs and credentials, designed so professionals become Web Developers, Data Analysts, Mobile Developers, etc. For STEM Challenge we will use Udacity for the FREE “How to Build a Startup,” online course. Click on “Start Free Course”. You will need to register at www.udacity.com/account/auth#!/signup. This is the model for the 2015 STEM Challenge competition. You will learn from Steve Blank4 who is the innovator of the Lean Start Up Model. Resource two: businessmodelgeneration.com The Business Model Canvas is your guide for start up development. You will make mulitiple pivots along the way. The objective of the canvas is to ensure you “Get Out of the Building” and talk to potential customers/companies who will start to shape your value proposition. The canvas has nine components: Value Proposition, Customer Segments, Customer Relationships, Key Partners, Key Activities, Channels, Key Resources, Cost Structure and Revenue Streams. We provide you with an Excel template file or you can go to businessmodelgeneration.com and download their canvas. Remember, you should have muliple canvases as you talk to companies and potential customers. This will help increase your odds of winning. We are asking for your final canvas in the executive summary component of your team business plan. Resource three: The Borderplex Alliance Strategic Plan The report provides in detail the six industry sectors for our Borderplex region which have been identified as having the highest potential for economic opportunities. By understanding the report and its content, you will identify which industry area your start up product or service solutions will best align with, increasing your chances for sustainability. To read about industry sectors refer to pages 63-90 in the report.

1 Lean Startup Model https://hbr.org/2013/05/why-the-lean-start-up-changes-everything 2 Business Model Canvas https://strategyzer.com/canvas?_ga=1.42520359.342335349.1446509531 3 2015-2020 Regional Strategic Plan Recommendations Report completed by the Borderplex Alliance in June 2015 -(pages 63-90) http://www.borderplexalliance.org/resources/regional-strategic-plan-2015-2020 4 Steve Blank http://steveblank.com/about/

Let the start ups begin! Challengers here are your rules. Team Requirements:

•   Teams must represent a high school in the Borderplex Region •   Teams must be comprised of four to five members and must be in 9th through 12th grade •   Teams must have at least one faculty, teacher or staff as team mentor

Team Registration: To become a competitor, fill out the registration form at https://form.jotform.com/52994044518967. You must fill out and have a faculty, teacher or staff mentor endorse your team. This will help with communications and guidance with your projects. Business Idea Categories: Your idea must target at least one of the following industry sectors: 1.   Defense and Aerospace (e.g. drones, apps,

sensors, aviation, space, military) 2.   Life Sciences (e.g. biomedical, digi health,

pharmaceutical, drugs, medicine, devices) 3.   Tourism (e.g. quality of life, social campaigns,

customer data solutions, travel, sports)

4.   Advanced Manufacturing (e.g. consumer products, renewable energy, 3D printing, automobile)

5.   Advanced Logistics (e.g. tracking, security, trucking, shipping, packaging, bi-modal services)

6.   Business Support Services (e.g. language, accounting, data cloud management, education)

Document Requirements: ü   Business plans must be single space and no more than 12 pages in length (not including cover page,

table of contents and appendices). ü   Business plans must be printed on 8 ½ x 11” letter size paper and must cite all sources in footnotes. ü   Business model canvases should be included in your appendices of your business plan. Your “final”

business model canvas should be placed in the Executive Summary (page 1).

Scoring Breakdown and Requirements: Scoring will be based on how well your team applies Science, Technology, Engineering, and Math principles within each pre-determined section in the business plan template. Here is the scoring breakdown: •  Science - Market Research (20 points) •   Technology - Marketing Applications (20 points) •   Engineering -Commercialization & Operations (20

points)

•  Math – Financial Strategy (20 points) •   Innovation –Business Model Canvas (20 points)

Important Dates: •   Saturday, November 21, 2015 - Borderplex Industry Sectors & Intro to the “Lean Start Up” Model Workshop •   Saturday, January 30, 2016 - Lean Start Up Focus Group 1 Workshop •   Saturday, February 13, 2016 - Team Registration Deadline •   Saturday, February 27, 2016 - Lean Start Up Focus Group 2 and Elevator Pitch Workshop •   Friday, March 4, 2016 - Elevator Pitch Competition •   Saturday, March 19, 2016 – Office Hours- Professional QA •   Monday, March 28, 2016 - Business plan deadline (must be submitted no later than 11:59 PM MST) •   Friday, April 8, 2016 - Presentation Competition and Awards Ceremony For rural area schools, please contact Joseph Sapien at 915.240-5571 or by email joseph.sapien@borderplexjobs.com Business Plan Submission: Completed business plans must be submitted no later than Monday, March 28, 2016 by 11:59 PM MST by either email, fax or mail to:

Email: joseph.sapien@borderplexjobs.com Fax: 915.351.2790 Attention: STEM CHALLENGE 7 Mail: Workforce Solutions Borderplex

300 East Main, Suite 800 El Paso, TX 79901

Business Plan Template

Sponsored by:

Company Name and Logo

School Name Address

City, State Zip

Team Member Names 1st Member Name 2nd Member Name 3rd Member Name 4th Member Name 5th Member Name

Teacher Sponsor Name Sponsor Phone Number

Sponsor E-mail Date Revised

Table of Contents

I.   Business Model Canvas – Innovation 20 points (No more than 1 page)

1.  Value Proposition 2.  Customer Segments 3.  Customer Relationships 4.  Key Partners 5.  Key Activities 6.  Channels 7.  Key Resources 8.  Cost Structure 9.  Revenue Streams

II.   Market Research – Science 20 points (No more than 3 pages)

1.  Industry, Yesterday, Today and Tomorrow 2.  Competitive Analysis

III.  Marketing Applications– Technology 20 points (No more than 2 pages)

1.  Products/Services 2.  Sales Strategy 3.  Customer Relations 4.  Launch Plan Strategy 5.  Differentiation (Competitive Advantage)

IV.  Commercialization & Operations Plan – Engineering 20 points (No more than 3 pages)

1.  Location 2.  Operation 3.  Organization Structure 4.  Critical Suppliers 5.  Equipment 6.  Intellectual Property 7.  Design, Technical Merit and Solution/Address to Issue

V.   Financial Strategy – Math 20 points (No more than 3 pages)

1.  Cost Structure 2.  Revenue Streams 3.  Cash Flow Projection

I. Business Model Canvas

Key Partners Key Activities Value Propositions Customer Relationships Customer Segments

Key Resources Channels

Cost Structure Revenue Streams

II.  Market Research Determines access to the market by studying the industry, competitors and customer demographics (so you can choose a target market).

1.  Industry, Yesterday, Today and Tomorrow

i.   What industry does your product/service fall under? What has this industry

done in the last several years, what is it doing today, and what do industry analysts (trade organizations) predict for the future?

ii.   Conduct a thorough study of the demographics of the market your business

will become part of. Then, decide what type of person (target market) will buy your product. Does the population demographic in your area match? Is there enough of this type of client (target market) in your area to have a successful business?

iii.  Customer Archetype (examples can include):

i.   Age ii.   Gender

Factors Your Start Up Competitor 1 Competitor 2

1. Minimal Viable Product or Service

2. Cost Structure

3. Customer Segments

4. Product/Service Maintenance Plan

5. Customer Support Availability

6. Key Partners

7. Location

8. Product Specs (dimensions)

9. Customer Channels

10. Revenue Streams

iii.   Income iv.   Education Level v.   Occupation vi.   Location (region, neighborhoods) vii.   Lifestyle (psychographics, hobbies) viii.   Business Organization (size, industry)

iv.   Are there barriers to entry? High entry cost? High risk and cost to get

in, but limits the amount of competitors. Low entry cost? Low risk and cost to get in, but likely to have many competitors. Are there permits or regulatory approvals required?

v.   Are there other competencies you need to develop? Are they easily achieved?

2.  Competitive Analysis

Who is the competition? If there are many it will be easy to enter the market, but hard to get significant share- If there are few, it might be harder to enter, but you could gain significant share.

III.   Marketing Applications Build strategy from core competencies (quality, speed, service, product, price, convenience, location, etc.) your strategy should tell customers what you will do better than the competition; customer must be able to clearly experience value.

1.  Products/Services

i.   Give a detailed description of your minimal viable product or service. Including photos, creates a more powerful presentation.

2.  Sales Strategy

i.   How will you get your product/service to the market? Direct sales? Through

what channel (distributor, manufacturers representative, retailer, internet)? Pricing Strategy

i.   How are going to price your product or service? Look at the competition’s

price, what and compare to what you estimate your cost to be. Can you get the same price or a premium over the competition?

ii.   Penetration pricing strategy 1.  Price charged is set artificially low to gain market share. Once

achieved, price is increased. iii.   Skimming pricing strategy

1.  Charging a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply.

iv.   Follow-the-leader pricing strategy

1.  Set price based on competitors (leads to “price wars”). v.   Variable pricing strategy

1.  Price fluctuates based on (changing) cost of production. vi.   Economy Pricing

1.  No frills low price; the lowest possible regardless of what other are doing. Cost of marketing and manufacture are kept at a minimum.

vii.   Premium Pricing 1.  High price is for a uniqueness about the product or service. This

approach is used where a substantial competitive advantage exists.

3.  Customer Relations i.   How will you get customers archetypes (This goes back to demographics and

figuring out what types of person (customer archetype) will buy your product. So, what kind of advertisements does this person respond to the best?)

ii.  How will you keep your current customers iii.  How will you grow your customers

4.  Launch Plan Strategy

i.   When do you plan to launch your minimal viable product or service ii.  How will you promote your product/service to the customer? Provide

examples. iii.  What marketing strategies will you implement in launching strategy (web,

media, grass roots, social media, partners) iv.  How will you track progress of launch strategy v.  What are your leading indicators and metrics by month/quarter sales

5.  Differentiation (Competitive Advantage)

This brings your entire marketing strategy together.

i.   Why will you succeed? What will you do different than the competitors? These are called your “core competencies”, what you do well that perhaps the competition does not. List your core competencies. Examples would be superior service levels, exceptional quality, speed, better product or service, better location, etc.

ii.   If there is enough differentiation, you can be successful. If there is little or no

differentiation, then you will usually need to rely on price to get business; not the best option for a start up business.

IV.  Commercialization & Operations Plan

How product is made and/or service fulfilled, and other core characteristics of your business:

1.  Location

i.   (Include complete address)

2.  Operation

i.   When business will operate ii.  Hours

iii.  Seasonal or not

3.  Organization Structure

i.   Sole proprietor or L.L.C.1 ii.   Team structure and responsibilities iii.  How much product/service can you provide in a certain time frame.

4.  Critical Suppliers

i.   Manufactures ii.   Resources required from partners iii.  Which activities do your partners perform

5.  Equipment (Examples)

i.   Computer System ii.   Tools iii.  Fixtures iv.  Displays v.   Vehicles vi.  List everything you need to conduct business!

6.  Intellectual Property

(Examples) i.   Permits ii.   Licenses iii.  Insurance iv.  Contracts v.   Patents and Copyrights2

7.  Design, Technical Merit and Solution

In this section judges will be evaluating the design of your idea (what materials are used, how does it perform, were new technical ideas introduced); production (efficiency, effectiveness); technology (is it new, is it adapted, can it be duplicated); technical merit (can your invention/idea be engineered) and solution (did your idea/invention address the intended issue).

i.   Prototype design ii.  Materials iii.  Technology needs iv.  Power requirements

1 Texas Secretary of State http://www.sos.state.tx.us/corp/businessstructure.shtml 2 United State Patent and Trademark Office http://www.uspto.gov/

V.  Financial Strategy

What’s your business model? How will you generate revenue? How much effort will it take, in time and money, to develop your product? How much cash flow will you need to start generating revenue? Will you need to spend on advertising (local, paid campaigns, pay per click, salespeople)?

1.   Cost Structure (Product and Service Pricing)

List all of your products and services and how they will be priced. Then, describe your product/service unit and how many you will sell each month for the first year. Add these totals to your cash flow projection.

1.  Product and/or Service

Price / Rate 2.  Product and/or Service

Price / Rate 3.   Product and/or Service

Price / Rate

1.2 Operating Costs to deliver the services - These costs are usually fixed in nature and are driven by the number of staff delivering or managing the Direct Services. •   What are the most important costs inherent to your business model? •   Which key resources are most expensive? •   Which key activities are most important?

i.   Personnel ii.   Equipment & Related Costs iii.  Professional Services iv.  Other Expenses

-  Communication / Data Lines -  Printing / Reproduction -  Insurance

2.  Revenue Streams(s)

Explain where you intend to obtain revenue streams and how much you will receive from each source.

•   For what value are your customers really willing to pay? •   For what do they currently pay? •   What is your revenue model? http://www.bmnow.com/revenue-models-quick-

guide/ •   What are the pricing tactics?

i.   Entity

1.  Amount ii.   Entity

1.  Amount iii.   Entity

1.  Amount

3.  Cash Flow Projection Given the definition of the business plan financial budget (which may include operating costs and / or time-specific profile of the expected budget disbursements (or cash flow) is outlined. This facilitates assessing the scope, size, and timing of the financial commitments necessary for successful implementation of the business plan. Steps to create cash flow projection:

1.  Enter your beginning balance 2.  Estimate cash coming in 3.  Estimate cash going out (expenses) 4.  Subtract outlays from income

Appendix