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Blog 7
• SECTION 1: Unit Economics Diagram
o Follow the Jersey Square example and format
• SECTION 2: Updated Business Model Canvas
• SECTION 3: Summary
o Tell the story of your initial opportunity idea when this process started
From the beginning to the end.
The word Labyrinth was created because our software simulates and understands human behavior in a given space. The market that we began with was security and was tested at the University of Houston, but we thought about testing other places like airports and malls. We pivoted away mainly because security had a lot of regulations permitting how they currently do things. We threw around a lot of ideas like Stock Market, Robotics and Architecture. But we eventually stayed with Architecture because of our offline capabilities which means that we can test a 2D product like a blueprint to see the correct layout and most common paths. We also thought of partnering with CAD. Then we found that their are some products out there that already do this. So we moved towards event planning and the retail industry of product planning. We found that we could be an add on to planograms, but then we found that there are companies who do this as a service and that we were not being a huge value add since they have market statistics and analytics to prove where a certain product should go in the store. Now we are focusing on the zones of a store so we can understand where the low density pockets or areas are. This is better since no one in the industry is focusing on low pocket areas to maximize value. This will also help to better maximize the sq ft space of a store.
o Tell the story of the key customer interviews or research that has driven business model decisions
When we were interested in the architecture industry we had interviewed with a librarian, a residential architect and the president of memorial city mall. Some had told us that they had already used a software similar to ours and found it to be useful not as often as we had hoped. When talking to architect we had found that there was no main points of priority in the space which we needed to be able to correct map out routes. They said that in the industrial architecture and event planning space the layout is based on attraction, not a destination this way they would group together similar items like food or booths. When we pivoted to the retail industry we talked to store managers at the mall for what they believed were the problems in the industry: Emma at Macy’s said that there is a communication problem between the corporate office, and the logistics, and the store managers. We thought about bringing a verification process to our planogram software. Some other problems were that The inventory that was pictured on the planogram did not match the inventory they were given. There were a few other problems like some small stores didn’t even use their planograms but corporate still did which is what mattered to us. Our last problem was one that made us pivot and it was when were talking to our PR student Vanessa who works at catherines. She told us that there are already services doing this and that they do what we are doing but with hard statistical data and analytics from their company. Now we have moved onto the deadzone areas of a store.
o Tell the story of how your business model has changed
Initially our business model was focused on an array of different aspect industries. We wanted to bring value to our customers by providing the service of designing a particular space in order to make it efficient. Our business channels was the only thing that has relatively stayed the same. Our Business model is now focused on the retail sector that targets how business can eliminate and utilize their dead zones to increase their conversion rates. However, between this period of time, we have juggled between ideas like Architecture, Medical, Event Planning, retail product placement planogram, and most recently, retail analytics.
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Blog 6
SECTION 1: Key Partners
o What partners do you need?
Our strategy for creating partners in the industry is to approach small retail stores so we can beta test our product then move to larger clients like Macy’s or H&M.This will create a win win situation where we will be able to test our technology and the small retail stores will be able to optimise there space for increased sales and space utilisation. We will do this by contacting corporate retail space planners to set up a meeting. Also we would like to create an exclusive partnership with some of these companies so they will not use two different programs to work on their store layout. This will hopefully decrease competition.
Other partners are individuals who understand how to use our technology and can teach these skills to potential users of labyrinth. These individuals are experts in environmental optimization via micro-space planning and technology experts within the trajectory forecasting field. These people are imperative to our company as they will help us educate the masses through a certification program and will also help us refine our technology by critiquing it.
o Why do you need them and what are risks?
We need to foster a relationship with all the small retailers that we will beta test with to create a proof point for our technology, we will then leverage our success to bring in larger companies. Approaching larger customers first will prove to be risky as the opportunity cost will be more significant as more money will be lost as a result of an error. Therefore, a small mishap in our technology will have a larger financial impact in a larger company as opposed to a smaller one. However, there are still risks when working with smaller companies as these companies may not have the manpower or capital to keep up with constant changes to their floor space as a result of inventory fluctuations. Labor cost and time implementing changes may bankrupt these small businesses.
Optimization experts and trajectory forecasting developers will help us create a certification program that will enable our users to utilise the program with ease. The developers and optimization specialists will have key insights on how our technology works and ar in a position to sell that information to competitors or create their own businesses. A noncompete and nondisclosure may solve the issue however there are not many experts in this field, so if they decide not to sign the agreements we wont have many other options to explore in regard to subject matter experts.
o Why will they partner with you?
The small businesses will want to partner with us to gain market share as a result of increased revenues. They will maximize their floor space utilization for better traffic flow within their store and increase customer experience overall.
The developers will want to partner with us because they may get a small royalty for each certification we charge our customers for.
o What are the benefits for an exclusive partnership?
An exclusive partnership agreement is something that you can make with a customer competitor or supplier to only provide or use your company's benefits.
Creating a partnership with our customers will benefit us by having less competition in the marketplace if we can get them to use it. If you create a partnership with a competitor then you will be able to capture a larger market share. But we are creating our company by copying what our competitor is doing so we can capture the same market but have more features. We do not have any main supplies as we are mainly fixed overhead with our salaries to the developers. We do not have any variable product because our product is intangible.
SECTION 2: Customer Validation
o 2a. Contact at least 5 customers (or research examples) to validate your revenue model (Provide summary of findings)
We spoke to the store managers of H&M, Lululemon, Madewell, Topman, and Bath & Body Works at the Houston Galleria. All store managers expressed that the usage of our product is highly unlikely on a retail standpoint since the store design and product placement is based on the visual displays and observation. However, they confirmed that corporate retail stores have the the ultimate say on what to have in the stores. Therefore our target will be geared towards the corporate to adopt our new program. Our PR student
2b. Talk to actual partners to validate key partner information (Provide summary of findings)
After speaking to several retail stores in the Galleria area we have come to the realization that not every retailer on a micro-level sees a need for our technology. Some even described it as “something cool to have” but not a necessity. A store clerk from a small clothing store made the point that the employees understand where the customers will gravitate to within the store and place the items based on that knowledge. Furthermore, she believed that a store should be designed based on aesthetic and not for the sole purpose of increasing sell. From this information we concluded that store managers could not be our innovators as they may see our technology as a constraint on their creative freedoms as it pertains to layout redesign. As a result, they will not champion our product within the retail industry and help us reach “milestone one”, which is beta testing the technology. However, we do feel that the stores we approached would have a different reaction if we contacted someone in corporate who understands the importance of conversion rates and out the door pricing metrics. So we believe that we will be able to find our product innovators within the corporate departments of these retail stores. Once we find these innovators we will be able to beta test with small retailers which in turn will help us refine our product.
Prepare your initial “Pitch Deck”
Sample “Pitch” - https://slidebean.com/blog/startups/pitch-deck-examples
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Blog 4 Revisited
Section 1
Through which Channels do our Customer Segments want to be reached?
We plan to reach out to larger clients through sales calls to provide consultation and simulation of our software and then to have them sign up for a licence of the software. The main channel for our customers would be through the web since it would be a way for prospects to get a better understanding of what they want. We can create a website and create a subscription model. Have this as an adobe model where we partner with schools and institutions to create future consumers.
How are they being reached now?
Some of our competitors in the visual merchandising sector are Shelf Logic and PlanoGraphics. Competitors in the mass motion and trajectory software Oasys Software. These competitors are currently reaching their customers online through Google Adwords. Other than online means, our consumers would hired retail consultants who would use their own software to help with an array of optimization from inventory planning, to retail and supply chain analytics, to behavioral clustering (Relex Solutions).
Which Channel is most cost-efficient?
The most cost efficient channel would be online through a website along with word of mouth. This is why companies like ourselves will try to integrate some main players in the industry then have the word of mouth spread it to smaller companies. Website is the best start since it creates a fast and smooth installation process for customers. They can pay and then immediately install the software in their computer systems. This is the most ideal channel because it is easy to find.
How are your Channels integrated with customer routines?
Our Main channels of reaching out to our customers (corporate retail organizers) are online through our website platform and word of mouth through larger customers. The online customers that we will be targeting are small and large business owners that are searching for optimization softwares for their business. The online will not only help with brand recognition of our software but it will help to train merchandisers about our software, and it will help our customers to understand who we are. This will be an easy way for people to buy our software. People spend 2 hours on average on their phone and we will be able to reach business owners through google or social media. Our second way to reach out to customers would be through word of mouth. We plan to market to large corporations and it will have a trickle down process to smaller companies. This could apply to restaurants or to retail clothing stores. These corporate stores have many entities that fall underneath them.
How do you create end user demand?
We create end user demand through a user-friendly interface, competitive pricing of inventory, and most importantly, an seamless communication platform. The current issues store managers are experiencing is the lack of updated information from corporate which is creating frustration. This feature would create demand because it would be a new integration that solves the current issues. The end users are our main market any time we can add more to our product while keeping it simple the better. Some ideas that we have come up with is to automatically update based on the current layout of the store and instead of taking pictures of each product just do a 3D rendering.
How is demand creation different for your different channels?
All retail stores use planograms so the usage of software is a necessity. The only issue is how well it delivers. Currently we only plan on using one channel and educated the Corporate merchandising managers. For a marketing, there may be a certification process of using our program as a form to giving more value for the customer. A universal certification course can be offer to students and current visual merchandisers to adopt the program as well.
Evangelism vs. existing need or category?
We are attacking an existing market since retail industries are all using software to organize their products. These products are known as planograms. However, our approach is to be able to create an efficient planogram process in order to save time and money. In addition, bigger retail stores also look into loss technology through the flow technology. We are different from other planogram softwares because we have a unique forecasting algorithm that would perform on a higher level.
Section 2
Interview 5 – 10 people in your channel (sales, marketing, etc.)
What kind of initial feedback did you receive?
After speaking store managers of H&M, Lululemon, Madewell, Topman, and Bath & Body Works at the Houston Galleria. All store managers expressed that the usage of our product is highly unlikely on a retail standpoint since the store design and product placement is based on the visual displays and observation. However, they confirmed that corporate retail stores have the the ultimate say on what to have in the stores. Therefore our target will be geared towards the corporate to adopt our new program. We also interview with the Macy’s store manager who stated that they use a “zona-gram” to structure the department stores based on brands.
What are the entry barriers?
Our barriers to entry is the adoption to new technology and practices. Everything so far in these retail stores are more “manual” and observation-based.
Does anything change about your Value Proposition or Customers/Users?
Instead of focusing our users and customers as the small retail stores, our business model is going to shift and focus more on the corporate planogram users. Although our customer based has changed, our value proposition stays the same since the benefit of increased sales through creating a more efficient space still applies.
Does your product or proposition extend or replace existing revenue for the channel?
Our product extends existing revenue for the channel by innovating the approach for organizing retail space and improving individual retail store efficiency. We plan to replace any software that are used in the market because our features
What is the “cost” of your channel, and its efficiency vs. your selling price?
Because we’re selling through our personal website, there are no additional costs that would affect our margins. Other than the fix website and development costs, we don’t have any variable costs.
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Blog 5 Payments
Diagram of payment flows:
What’s your revenue model?
The customers requests are for a faster and a more efficient system to increase sales and help give them insights about their business. Our system will replace their old planogram system and add to it with human forecasting models and a digitalized app for each employee in the company to be able to access the planogram anytime from their phone. This is what a purchase of our system will contain. So they will begin by going onto Labyrinths website to choose how many people they want to access their software. We will be licensing our product per year and per user which will cost $1200. We wanted to do a yearly subscription so we can get most of our money up front to be able to fix problems, and to be able to sell off the company quick. After paying they will download their respective software and use it in the same way that they used their old software but this time you would have new features like human forecasting and the user could input common statistics about stolen products and sales prices. If this is a new system to a retailer then they could take our free training classes for our software.
How will you price your product?
$1200 for the first user annually, any additional user will be a smaller fee of 600/ each. With our total amount of potential customers being 226,530 this will bring us to a revenue of 271M and we would like to penetrate 1% of this in the first year. You will see more in depth explanations in the next question. We also plan to spend 1,906,650 much on costs in our first year of business. The training platform and capabilities will be free features of the software.
What are your key financial metrics? How do competitors price?
We are pricing our product based on our competitors prices and our main costs for the first year. Our main competitors are a basic planogram software who charge 15-50 a month for their software. Other competitors are Photoshop and Illustrator who charge 150 a year for drawing capabilities but no optimization capabilities. Based on these our system brings more capabilities which is why we chose to charge $1200 a year per user. We are looking to integrate into 4 main retail industries with the amount of stores being: Men - 12,679, Women - 57,401, Children - 16,947, and Specialty - 139,503 and a total of 226,530 stores. If each store or entity (Macy's Inc.) buys one software package our potential revenue ever will be $271,836,000. We would like to get 1% of these stores in our first year which will be a potential revenue of $2,718,360.
Another way to look for potential revenue is that we talked to a competitor and he told us that large stores spend an average of 1-2M on optimization. If you divide this from the average revenue of a large company (21-25M) we will see that the company spends .8% of their revenue on optimization. Next we will find the market size of retail stores for our four industries (9B for men +10B children + 30B specialty + 42B women) you will get a 91B market. If you multiply the total market potential 91B by the average amount spent on optimization .8% you will see that in total they spend 728M on their optimization budgets every year. If we would like to get one percent of this market then we will hopefully generate $7,280,000 in our first year.
Most of our costs will go to developing the software and having updates, marketing, and creating a website and maybe a phone app to help decrease the costs of paper books sent to each individual store.
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Blog 4
Through which Channels do our Customer Segments want to be reached?
Labyrinth is a software used in retail product placement that creates a visual e-commerce shop with the flow of your customers in the space of the shop. This helps customers to assign selling potential to every square foot of the space. while seeing how your customers will react to the space without having to use a trial and error style of retail mapping. We plan to reach out to larger clients through sales calls to provide a free one month trial of our software than to have them sign up for a subscription of the software.
We can create a website and create a subscription model. Have this as an Adobe model where we partner with schools and institutions to create future consumers.
How are they being reached now?
Some of our competitors in the visual merchandising sector are Visual Retailing and Relex. A competitor in the mass motion and trajectory software is Oasys’s pedestrian modeling software. We believe that since being an online downloadable software they reach out to their customer online and through word of mouth. They also reach out to their customers by cold calling.
Organizational depth of retail more supply chain people, people who do pricing not retail consultant
Which Channel is most cost-efficient?
Online through a website would be the most cost-efficient along with word of mouth. This is why companies like ourselves will try to integrate some main players in the industry then have the word of mouth spread it to smaller companies. A website would be a good start since it creates a fast and smooth installation process for customers. They can pay and then immediately install the software on their device.
How are your Channels integrated with customer routines?
Our Main channels of reaching out to our customers (corporate retail organizers) are online through our website platform and word of mouth through larger customers. The online customers that we will be targeting are small and large business owners that are searching for optimization software for their business. The online will not only help with the brand recognition of our software but it will help to train merchandisers about our software, and it will help our customers to understand who we are. This will be an easy way for people to buy our software. People spend 2 hours on average on their phone and we will be able to reach business owners through google or social media. Our second way to reach out to customers would be through word of mouth. We plan to market to large corporations and it will have a trickle-down process to smaller companies. This could apply to restaurants or to retail clothing stores. These corporate stores have many entities that fall underneath them.
How do you create end user demand?
We create end-user demand through a user-friendly interface, competitive pricing of inventory, decrease theft, and to potentially increase sales potential. We will create a demand for our product because it will become the standard for all retail stores to use the trajectory forecasting model. The end users are our main market any time we can add more to our product while keeping it simple the better. Some ideas that we have come up with is to automatically update based on the current layout of the store and instead of taking pictures of each product just do a 3D rendering.
How is demand creation different for your different channels?
Currently, we only plan on using one channel and educated the Corporate visual merchandisers. For a marketing, there may be a certification process of using our program. A universal certification course can be offered to students and current visual merchandisers to adopt the program.
Evangelism vs. existing need or category?
We are attacking an existing market since retail industries are all using software to organize their products. These products are known as planograms. However, our approach is to be able to create an efficient planogram process in order to save time and money. In addition, bigger retail stores also look into loss technology through the flow technology.
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Section 3: Update
1. This is what we thought:
a. Event planning: We thought there might be potential for event planners to use a occupancy style map of their venues to find the high traffic areas and to give a trajectory of where humans might go based on the layout of the tables/furniture. Giving them the solution of labyrinth would help them to better organize their event which will in turn help to fit more vendors and customers in the space.
b. Architecture: We thought there was going to be a need test out the blueprint technologies that they were creating in CAD design or any other 3D modeling program. Labyrinth would be able to provide potential high traffic areas which would address safety of a space along with efficiency of a space. We thought this would help large architecture firms who tend to work with large client spaces.
c. Product Placement: We thought there was a need to see what shelfs have the most importance due to the fact of traffic of a certain product. Also we want to see how new products can affect the traffic of a human. And to see if a new product can affect the demand of an existing product in a negative connotation, potentially reducing sales. This is also called shelf cannibalization.
2. This is what we did:
a. Event Planners: Our first step was to interview event planners to see what current software they used to predict the occupancy of their venue. Our current prospects are NRG Center, George R Brown and other event planners for large scale events. A vertical step that we took to interviewing was to do online research to see how large of a market was event planning. After doing necessary research to see that this could be a viable market we needed to find a scalable amount of customers that would buy our product.
b. Architecture: In order to prove that we could help architects with the testing capabilities we had to interview them. So we went out and talked to a small architecture firm that said that they rarely work on large scale projects and they hardly use 3d modeling software’s. Which in turn told us that they hardly test their projects. We were told that larger architecture firms might be better. After talking to a industry professional we went to the college of architecture and spoke to the librarian who informed us of some large architecture corporations in Houston. With that information and the contacts gathered by our public relations team, we were able to make a few calls to architecture firms as well as a construction firm.
c. Product Placement: This is a fairly new market that we are moving into. We are planning on doing extensive research on the market and to find customers who might use this technology or would need capabilities of product placement tracking.
3. This is what we learned:
a. Event Planners: We found a few programs that assist in event planning such as layout design, service planning, and scheduling. Some programs like All Seated would simulate a 2D model of the event location to increase efficiency of the space so you can fit more people at the event. We are thinking more corporate style events at NRG like Offshore Technology Conference. Our product would use this 2D modeling technology and import it into a 3D model to be able to plan the space more efficiently. Once we have it in our technology we would use mass motion software to be able to show how all of the people would fit in the space. This is a competitive advantage due to the fact that we could predict how to rearrange the space before letting people into the event therefore being able to sell more tickets to the event.
b. Architecture: We’ve learned that we may be stepping into a market that’s already saturated with alternative options with the same features as our product. We’ve also learned that there are multiple steps to an architectural project and that there is a demand for programs that can predict and project human movement as well as fluid movement throughout an environment. This enables designers to better understand the safety of a build as well as the overall design. However, the ones who are using these programs tend to be consultants who are contracted out to help with these predictions. Furthermore, there is already an existing market of programs that help with the prediction of human and fluid movement throughout a space. Since our product lacks a strong enough sustainable competitive advantage over these competitors, we may have to rethink if targeting this customer segment is the right choice.
c. Product Placement: We learned two main points. First was a planogram which is “a 2D organizational diagram or model that indicates the placement of retail products on shelves in order to maximize sales.” An example of a planogram is Smartdraw, or Relex. Labyrinth would use the planogram to be a bank of merchandise to put into the 3D model e-commerce shop so you can better visualize your space with the merchandise. The second point we learned was mockshop which is 3D model e-commerce shop that gives you a visual of your real estate to increase sales potential. An example of this is Visualretailing.com. Labyrinth would also utilize mockshop as a quicker solution to the current 3D modeling software CAD. Our product would include both of these things along with our current trajectory forecasting of human behavior. We would be able to compete because our competitive advantage is trajectory forecasting.
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Section 4: What we learned
The algorithm is proven to be a crowd simulation technology that can run in real time in a program offline. We ran value proposition maps with three potential segments: Architecture, Event Planning, and Product Placement.
For Architecture, commercial design allows our technology to help design for efficient and safe floorplans. Our technology will also allow us to help event planners work on large-scaled events. Types of events such as trade shows, conventions, and conferences require spatial planning for the large number of people. They may also manage and provide staff to operate the facilities in which these events take place. This industry does not include establishments that organize, promote or manage live performing arts, sports events or festivals; these services are classified under the Concert and Event Promotion industry. Our product could improve the lives of conference planners by giving them a tool that allows them to virtually see the conference ahead of time. Once the 3D model is complete they can map out where everything goes and decide the best possible flow of the room. By knowing what spot will garner the most traffic they can charge a premium price on those spots.
Lastly with product placement, there is a specific target user, a Visual Retail Merchandiser. These people use Planograms programs which are currently used to map out shelf design. Our algorithm would be an add on to help visual merchandisers understand the flow of a retail store in order to maximize sales. This technology would be able to help gain sales because it determines the flow of people’s
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Section 3: Customer Fit
Architecture:
Gain Fit - Makes sharing the vision easier by providing reason behind design decisions
Pain Fit - Projects traffic count within an area to help create more efficient environment
Event Planning:
Gain Fit - Optimize the ease and efficiency of roaming large events that hosts many poeple
Pain Fit - Controlling traffic flow and inefficiency in events designed to host many people
Product Placement:
Gain Fit- Creates an efficient floor plan that maximizes view time per product in retail stores
Pain Fit - Increases sales potential for all products within a store
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Current
Hypothesis per customer segment:
Architecture- Within this industry Labyrinth will act as a plugin for computer-aided design and similar tech. Labyrinth will help aid architects make their 2 dimensional designs more efficient by predicting traffic flow within the given 2 dimensional environment drafted by the architect. By predicting traffic flow Labyrinth will save the end user time by creating an efficient environment and it will make an environment safer in the case an emergency occurs.
Safety and facilities- If the algorithm is implemented by fire marshals and safety officials, then they will be able to reduce the number of man hours needed to evaluate a space, thus reducing insurance expenses and increasing ability to allocate efforts elsewhere.
Event planning- Within this industry Labyrinth will model and service pop up events that sell plots of land at their events, like the rodeo or the OTC, by running our algorithm to project traffic flow. This information will enable us to create a price structure for different plots of land at the events. This will enable event planners appropriately price their land to sell to vendors.

Key assumptions and associated hypotheses:
Architecture- We thought the problem was that the safety and time of people was being compromised because of the inefficient design of buildings. We realized that this problem does not affect residential houses which is a huge market. This is because both architects and homeowners prefer aesthetics over efficiency. However, on a commercial level, inefficient buildings still pose a large issue.
Safety and facilities- The problem in this industry is disaster prevention. A lot of buildings don’t necessarily know how the traffic flow in their facilities exist. We believed that if we gave building managers this information they would be able to map out the safest routes to take incase of an emergency. Based on our current research this problem exists within most buildings in major cities.
Event planning- Most event planners just assume the value of a booth or spot they sell to vendors. For example at OTC or Offshore Technology Conference they have to rearrange the tables everyday based on the flow of people and the fire marshal speculations. Our algorithm can solve this problem by showing the planners the 3D model of the space with the tables or furniture and how the flow of people will react to the space. This will in turn tell us which spots will be most visited during the event and will help them create a more accurate pricing model for selling certain spots at the event.
People we interviewed:
Jarad Jard - President Of Metro National
Dana Diamond - VP Of Sales At Metro National
Jonathan Avila - Virtual Reality Consultant
Yosias Kassaye/James Ball - Undergraduate Engineer
Clint Johnson - Residential Interior Designer at Newberry Architecture
What we’ve we learned:
From the discussions we’ve had with industry professionals within our different customer segments, we were able to identify common practices and pains within each industry. We’ve discovered that our technology may not be a necessity within industries like residential architecture and design simply because the design processes are based more on artistic preference than calculations. Therefore, we should focus more on industries that make decisions based off of quantitative reasoning. This pointed us toward the world of virtual reality, safety and facilities, and commercial architecture and design. We’ve learned that our technology can be incorporated into disaster prevention planning through virtual reality as well as AutoCAD. Furthermore, we’ve been advised to start predotyping our product during large events, like the rodeo or the redesigning of the Valenti School of Communications, in order to gain credibility behind our work.
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History
Shishir Shah was part of an ongoing research project on campus that was focused on human behavior and security. There was a core problem with distributed cameras on campus since not enough cameras were set to identifying one subject in a frame to another. Shah started to question on how to improve the problem of re-identifying a person which resulted in the person RE-Identification use Geometry Constrained Human trajectory modeling algorithm.
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Current Status of the IP
Our algorithm currently does not have patent protection because it is not completely finalized on its features. Our current business strategy is to continue researching potential applications for the algorithm and plan to patent whatever product/process it leads to.
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Value Proposition
Our Trajectory Forecasting algorithm helps architects and urban designers create the most efficient and effective floor plan in order to save time and money
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