[MUSIC] Okay, welcome back. I hope you got some great take-aways out of those interviews. And I think the one with Eric Miller talking about the granular detail of how they actually built that business in the early years and got those customers to buy. I think there's some great examples there for you. Now to wrap up module three, I want to take a few minutes and do a couple of things. First, I want to say a few words about crowd funding. It's probably on your mind. Second, I want to tee up a few of the critical messages in chapter two and chapter four of the customer funded business for those who are reading along with us. Next, I want to suggest an inspiring book that would be well worth a quick read, and then I want to point out a couple of the key challenges you're probably going to face if you try to get a pay in advance business underway. Then we'll give all of you who are taking this course for credit another assignment. The rest of you who aren't doing it that way will get value, too, I believe. But first, let's talk for a few minutes about the courage it takes to build a customer funded pay in advance business or frankly to be any sort of an entrepreneur. Now, it's easy and safe to think you can make good progress on your start up by surfing the web, writing a business plan, filling out a business model canvas. And while there's some good things to learn that way, the key lessons you're going to learn are the ones you're going to learn by getting out of the building, as Steve Blank says, and getting face to face with prospective customers and others. Now doing that's easy for some kinds of personalities, maybe. But in my first venture I found that quite difficult, and you may, too. It takes courage to ask for the meeting you hope to get. It takes courage to listen to what you may not want to hear. And it certainly takes courage to ask for an order. And eventually, to ask for a check with that order as well. But one thing I've learned over the years is that the best entrepreneurs view the word no as something that's waiting to be turned into a yes. I hope that you'll learn to view it that way as well. That's a lesson I hope you learn from the Thomas Nobel story way back in module one. So let's talk about crowdfunding for a minute. Thanks to the crowdfunding revolution that's happening all over the world today, there's now a more organized way to get customer funding from people you don't know, through crowdfunding, of course. There are in my view, some good things and some bad things about all this. The good things are that number one, lots of money is being raised this way and that's good news for those of you with projects to get funded. More than 200 crowd funding platforms exist in Europe as I speak and there many, many more elsewhere. But many of those platforms only allow you to raise money for a project or a creative idea and most of them don't really let you raise equity in your company. But whatever, it's all pay in advance and, of course, then you have to deliver later. So that's all pretty good news, right? But there's some not so good news as well. Did you know, you have to bring your own crowd for probably something like one-third of the funding you hope to raise. That's a lot of work. Takes a video, a prototype. And it takes time to do all those things, and maybe that time would have been better spent actually meeting real customers and understanding their real needs. So you'll find a more extensive discussion of crowdfunding in chapter one. I encourage you to read it or share it on the discussion board if you like. All right so next, we're not going to talk in this MOOC explicitly about customer funded business chapter two, but the stories in chapter two of the scrappy Mel and Patricia Ziegler, who founded Banana Republic. And the young Michael Dell, also in chapter two, bring to life the kind of mindset you're going to need to be the best you can be as an entrepreneur. Great lessons there. The incredible story of how the Ziegler's got started on Banana Republic is actually truly hilarious. There's also Michael Dell's own 1999 book, "Direct from Dell", where you can read his story. Also, pretty hilarious at times in his own words and I recommend that short read as well. Okay, so what are the challenges you're going to face in undertaking the assignment about what you'll hear in a couple of minutes. Or, frankly, in starting a pay-in-advance business. One is that the B2B customer from whom you may ask for a check, may ask also for equity in your business. I have one word of advice about that, don't. Better give them something else. Maybe a few months of exclusivity or an exclusive in their field of use, one that keeps the rest of the playing field fair game for you. Having them onboard as an owner may turn out to be a problem when you want to sell to their competitors, for example, or sell your business to somebody else later. Another key challenge lies on the supplier side. In addition to getting your customers to pay you in advance you're going to need to convince your suppliers to let you pay them on very good terms, and that means slowly. So, to do that, you'll need the same kind of entrepreneurial ingenuity that the Zieglers of Banana Republic, see chapter two, showed in order to make that happen. So, please be forewarned. Now, let's move onto your assignment for this module three. Here's what you're going to need to do. Since this course is about how to finance your startup without VC, I want you to get started on that path. So if you haven't settled on an idea just yet, you can do this assignment for a friend's new venture idea or maybe one you've just made up. So for that venture, here's what you need to do. Identify five plausible customers in the target market that you hope to serve. In the real world, though, I'd ask you to do about 20 interviews or so, not just five. So feel free to do more. Using the Onconks procedure you learned about in module 2, I'd like you to create a concise interview guide complete with questions that begin with what about, the key phrase in that procedure, that you'll use to do an interview with them. Then do a three-part interview. The first part will be an exploration of their needs. The known and unknown unknowns that you're trying to uncover. The second part will be to tell them your idea and find out their reaction to it. Third, if they seem at all receptive to that idea you may, if it's prudent yet, ask them for a check to fund you to go to the next step. Or you may want to say let's have a follow up meeting and talk in more detail, and at some point you ask for that check, so you can deliver what they need. Then I want you to submit the following in the usual way. Number one, submit the copy of the interview guide that you used. Number two, submit a one pager with the conclusions you've reached about the likelihood these kinds of customers that you've talked to now will buy what you're proposing to sell. And number three, any possible pivots you might have learned you need to make. So there we go, module three is now under our belts. We're nearly half way home in the course. But before we move on to module four, I want to point out, that the pay in advance models, not to mention the other four types, are not just for start ups. If you're already running a business, you can start figuring out now how to get your customers to pay you in advance for at least some of what they buy. Before we sign off, you'll find a closing slide here that will prompt you to think about what we've covered in this module. Then in module four, we're going to dig into subscription models. They've been taking the world by storm in recent years, with some notable successes, and some pretty spectacular failures. You're going to enjoy it. And as usual, we'll have some interviews, too, including the young London VC investor who is one of Europe's rising stars in that industry. If you've now got the book, you might also want to take a look at chapter five and be ready as we go ahead. But meanwhile, Tiffany, who I hope you're getting to know on the discussion board, is going to keep you plugged in, keep things lively there, and keep that story rolling. [MUSIC]
