A business plan to provide diabetics with a better way to manage their disease by using smart phone technology won Washington and Lee University's third annual Business Plan Competition.
Members of the winning team, all 2013 graduates, were John (Jack) Apgar, an economics major from Lexington, Clark Jernigan, a double major in accounting and business administration from Greenville, S.C., Drew Martin, a business administration major with a minor in creative writing from Midlothian, Va. and Stephen Stites, a business administration major from Richmond.
Washington and Lee alumni, faculty, parents and students chose the winning proposal from among the five finalists. The Business Plan Competition is part of the capstone course in W&L's Entrepreneurship Program, which began in 2009.
"The plan stood out for the judges," said Jeffrey P. Shay, the Johnson Professor of Entrepreneurship and Leadership. "It was thoroughly researched and came from a real problem one of the students observed."
The WatchDog Diabetes Management plan arose from the experience of Stites who worked alongside a diabetic last summer. "Every day before lunch he would have to take his blood sugar levels using a big bulky kit with a glucometer about the size of a walkie-talkie and then write down the reading and any notes in a physical log book," recalled Stites. "It was a very inconvenient process."
The team's business plan noted that 44 percent of diabetics cite managing their blood glucose levels as their biggest challenge and 30 percent say that their current method of doing so is unsatisfactory. And 87 percent said they would be willing to spend $50 for a smartphone integrated solution.
Approximately 25.6 million Americans suffer from diabetes. The market for diabetes management products is $16 billion and is expected to triple by 2018. Simultaneously, more than 114 million people use smartphones, of which approximately 12 million are diabetics.
The WatchDog system reduces the glucometer to the size of a quarter which plugs directly into the headphone jack of any smartphone—a characteristic their competition lacks—and transfers blood glucose readings to an integrated smartphone app. "This makes it the first truly mobile diabetes management solution and nobody has a kit this small," Martin explained in his presentation to the judges.
The app allows users to log and read their blood sugar levels as well as make notes and look at trends and graphs of their readings. The app also provides encouragement by sending a congratulatory message if, for example, they keep their blood sugar levels under control for a full week.
Diabetics can also share their data by sending their blood sugar readings directly to their physician and receive reminders about doctor appointments or to check their levels. Finally, users can connect to a supportive community of diabetics through the website DogPark, where they can share data, recipes, fitness programs and troubleshooting tips.
WatchDog employs a "captive pricing model" similar to the printer industry that makes more revenue from selling printer ink than printers. A diabetic goes through a pack of approximately 50 test strips a month. While it costs only 10 cents to manufacture the strips, they sell for 76 cents to retailers. Given this extremely high margin, the team expects test strip revenue to outpace glucometer revenue by the second month.
"We're definitely surprised that we're the first to think of this exact idea," said Martin. "One of the judges actually asked us why a company such as Johnson and Johnson or Pfizer hasn't done this yet."
"Quite frankly, if the students of the winning team didn't have jobs already, WatchDog is a very executable business plan," said Shay, noting that the plan received an honorable mention at Virginia's first Governor's Business Challenge as the "Most Significant Market Disruptor" (tied).
"The judges and I continue to be amazed at the creativity of the ideas that the students are coming up with and the sophisticated level at which they are researching, writing and presenting their plans," Shay added.
While the members of the WatchDog team shared the $1,000 first prize, second place went to GreenSpark, a smart phone app to reduce use of vampire current consumption. Hitched, a do-it-yourself wedding store, was third and Touch and Go, a mobile app for a biometric fingerprint scanner to access hotel rooms was fourth. sQRibe, utilizing QR (Quick-Response) codes to promote events, came in fifth.
Teams presented their business plans to panels of W&L alumni at the end of the fall and winter terms. The alumni panel selected five finalists which were featured on a website that included executive summaries along with videos of each team's presentation, and the site invited members of the W&L community to vote.