E Ink in 2005 Case Assignment

Questions for the E Ink in 2005 Case Assignment:

QUESTION 1: Put together a business canvas for E-ink. (Refer to your Business Model Generationreading, which is pages 1-51!) To replace the reading, I sent this video link to help: https://vimeo.com/125360627?from=outro-embed
Please refer to the link above to watch the how-to video on “Getting Started with the Business Model Canvas”. It clarified the Business Model Generation reading material (not included in order) and the steps for creating a business canvas for E-Ink.

QUESTION 2: What did E Ink do right? What did it do wrong? What might they have done differently?

QUESTION 3: Assuming the company gets the money it needs to stay alive, what do you do as CEO? Which markets would you attack? Which sort of business model would you adopt (it may help to look at the BMG reading to answer this question)?

VERY IMPORTANT NOTE:
Please note that this assignment should be the business canvas temp (to answer question 1) plus another one (1) double spaced page to (answer questions 2-3).

E Ink in 2005 Case Study

Things were looking up for Russ Wilcox, the 37-year-old CEO of E Ink. After years of laboring
with products in the lab and numerous false starts, E Ink was shipping real products for Sony’s first
eBook. For a start-up with a leading-edge technology, this was a major accomplishment. E Ink had
started in 1997 as a spin-off from MIT’s Media Lab. Since its inception, management had raised over
$120 million with the mission to deliver a new electronic display that would have all of the
advantages of paper (reflective, high contrast, and flexible) with all the advantages of an ideal
electronic device (very low power, updatable, and capable of color and video). E Ink not only
demonstrated a commercial version of this product, it had also built an extensive supply chain and
network of high-profile partnerships including a manufacturing agreement with a $10 billion
Japanese firm, Toppan Printing. Due to a recent round of investment from Intel Capital, the company
was solvent through October 2005.
Wilcox, however, was still grappling with the issues of business model and focus. As a new
technology, E Ink could alternately become a licensing company, a materials supplier (supplying a
layer of electronic ink sold as an imaging film ready for integration into a display), a subassembly
supplier (offering display modules, including an electronic backplane and driver electronics), or even
a product supplier (offering eBooks or similar products that uniquely leveraged E Ink technology).
The company had flirted with all of these approaches over the course of its history and most recently
had focused on selling electronic ink as a display component. Whether this was the right answer
remained the ongoing topic of hot debates among the members of the management team.
The other big question was market focus. On one hand, the biggest potential market continued to
be matrix displays: conservatively, Wilcox estimated that E Ink’s total available revenues in the
graphical display segment could reach $300 million. E Ink’s technology appeared to be far ahead of
that of its nearest competitors, and Wilcox felt that they might capture up to 80% market share in
niches related to electronic publishing. Moreover, E Ink could probably earn better than 50% margins.
However, the time frame for consumer acceptance of eBooks, e-dictionaries, and related products was
unclear. No previous eBook device had yet exceeded 50,000 units sold. Moreover, finding great
content for eBooks was problematic. On the other hand, E Ink could also try to apply its technology to
the “segmented” display business for products such as signage in retail stores and displays for
watches and clocks. Wilcox estimated that the segmented display market could be worth about $100
million in revenues. Yet unlike selling into eBooks, which were an emerging category, selling into the
relatively mature signage business meant many competitors, substitute products, and, at best, a
market share of 2% to 3%. Still, if E Ink could generate even modest revenues with segmented
displays, it might shorten the time required to reach positive cash flow. As with many new technology
companies, E Ink was facing a chicken-and-egg problem. How could they balance the resources
required in the short term to generate revenues with those needed to produce a long-term home run?