BUSINESS MODEL INNOVATION

Fieldwork evidence – Product

To date TreeOTek sold almost 600 units of air monitors/purifiers. Products from generation 1 went through 2-year-warranty with very low rate of failure (<2%). 93% of the users are quite pleased with the products’ operations.

Fieldwork evidence – Economic value for customers

The awareness of air quality is still low in Vietnam. The total quantity of air purifiers sold to date is just slightly above 100,000, i.e., 0.1% of the population. According to our survey, 90% interviewed users did not know that the HEPA filters in their air purifiers must have been replaced regularly, which means, only 0.01% of the population are actually protected to some extent. 100% users confirmed that they would have selected an air purifier with no need to replace filter just like TreeOTek’s products.

With roughly 100 million population without a dominant trademark in air purifiers, the chance for TreeOTek to obtain 15% market share in Vietnam is not low. We also conducted survey in countries like Thailand and Australia and found out that the situation is not so much different. With the ongoing talks we are having with the potential partners in those countries. TreeOTek believes that the products will be delivered there by the end of 2024.

Fieldwork Evidence – Social Impacts

One of our customer, Mr. Thanh Son Nguyen, is the owner of 4 big stone production factories (HASTONE). Now in the neighborhood of retirement age, he cares so much about living quality and TreeOTek’s products became his reference for almost every matters related to hygiene and better living.

TreeOTek also organized classes for kids to come and learn about air pollution and the sustainable way to deal with it. The kids will see how TreeOTek realizes its experiments, testing and have a chance to assemble and bring home simplified copies of TreeOTek’s products. They are all fascinated with these experience and understand more about the concerned matters.

Fieldwork Evidence – Feasibility

Before the startup establishment, the founders of TreeOTek have been colleagues and friends for more than 10 years throughout various offshore investments executed by Viettel, the biggest global telecom corporation based in Vietnam. Each of the founders covers a specific areas, namely technology, governance, operation and sales & marketing and altogether we are confident in a “Go Global Plan”. The team was supplemented with the angel investor – a financial specialist in 2023 and a strategy advisor with very high profile in technology sector in Vietnam.

Fieldwork Evidence – Profitability

TreeOTek accumulated a total revenue of USD 150,000 in 18 months after the commercial launching and expecting a booming year in 2024 with new markets and projects. An USD 5 million deal is being negotiated for a variant products to be customized for specific use, which will ensure TreeOTek surpass break-even point in early 2025.

Fieldwork Evidence – ESG integration

As stated in the pitch, the products of TreeOTek contain many environmental values themselves. We are an active member of Social Impact Business networks in Vietnam and is committed to creating jobs for the minorities, building public works for the society such as open air treatment tower, aquarium (in concept).

Fieldwork Evidence – Learning Curve

Many lessons have been withdrawn from the year 2021 when TreeOTek first launched the products, among which,

1. the All-in-One design in generation 1 cannot cater for all demands because many people just care about purification, not the fancy and costly IoT technology. Therefore, in generation 2, TreeOTek split the all-in-one product into 2 separate ones: the air monitor HeliOS and the air purifier Luna. These 2, together with the all-in-one product in generation 1 constitute iconic products of the Company and help covering a much wider range of potential customers.
2. When TreeOTek first set up the production line, transferring the living plants from soil cultivation into hydroponic cultivation inside the air purifiers is reserved inhouse, which rendered the company’s operation imbalanced and redundant. As from 2022, the cultivation has been outsourced to several plant nurseries and farming households and TreeOTek structures becomes lean and much more efficient.
3. The first distribution channel TreeOTek accessed was the system of conventional appliance stores. It was a total failure as the staff there will immediately oriented interested customers to other brands so as to avoid further consultation. TreeOTek then decided to switch to the channels of architects, home designers, etc and this proved to be more successful immediately.