And their value proposition, as even they realized later, was pretty unclear.

We should be charging for it from day 1, or Wait a minute.

Not really, because the next thing we want to look at is, what we call the served available market.

In other words, how are we going to make money?

How big is this and what's the percentage marketshare realistically you could get?

Sell, sell, sell.

So, you're selling costs were embedded here, this was the commission or direct sales costs or whatever you were paying your direct sales people and you made 37 selling directly.

And so this is what this looks like.

Now, when companies first started, there were essentially manufacturing concerns and they hired agents, outsiders to be their sales channel, and the first types of companies we had made physical products and therefore, had physical channels salespeople, stores, etc., but with the emergence of the web, we now have web and mobile channels.

The new model will retail for 30,000 yen.

Now what's really interesting is pre 1990s, the only channels to get to a customer was at physical channel.

And so therefore on the x axis, we see increasing complexity of what each channel can actually have.

But this is, of course, an optimistic scenario. Let's think of other scenarios.

I'm offering you the opportunity of a lifetime... a new car dealership.

And the reason why they're the sell side is because they're always selling you stuff.

That machine is, today, about as fast as my iPhone.

He's like, you know what, we have to match his prices.

You are going to start thinking about, well, if I have a direct sales force, how much can they sell in dollars, or if I'm using an indirect channel, what's realistic number they sell for other customers?

But remember, our costs were lower.

Sold

PHOTO RELEASE

What do you sell?

There's only two news stands within a block of here that sell Persian newspapers.

The company plans to sell the new product for 1,000.

So you might be selling hundreds or hundreds of thousands of cases of toners, but you might be doing ten large system integrations a year.

And then the next question, obviously, is who are they selling ads to?

I had to break a machine open.

We call it a select opportunity .

But it wasn't until the mid 1990s with the emergence of the Internet that we were able to distribute physical products through a virtual channel.

Is this a business? Are you selling Freedom Boxes to make money?

So the first thing when you sell a widget is you make it and you just sell it.

In a physical channel, a direct sales force are sales people that work for you directly and typically sell directly to the end user.

Anything from the trolley?

You know, the average grocery store today offers you 45,000 products.

My dad sells tractors.

But this time, we have resellers and the resellers don't work for us.

Just like before, our list price is 100 and in the store the end user expects maybe a 10 discount and so the revenue to the sales channel this time, not to us, is 90.

And the marketing complexity, would simply just say toner for you printer.

Tennis shoes are sold behind the counter.

Orange Cards are available from the conductor.

The new product will not be distributed through conventional channels.

Let's say they do 30 miles per gallon.

This is the PC guy over here.

Quite an idea of yours... selling dealerships for cars that don't exist.

100 vendors were co located adjacent to the plant, and innovative business models for automobile dealerships were developed.