The Customer-Funded Business: Start, Finance, or Grow Your Company with Your Customers' Cash.pdf
Who needs investors? More than two generations ago, the venture capital community - VCs, business angels, incubators and others - convinced the entrepreneurial world that writing business plans and raising venture capital constituted the twin centerpieces of entrepreneurial endeavor. They did so for good reasons: the sometimes astonishing returns they've delivered to their investors and the astonishingly large companies that their ecosystem has created. But the vast majority of fast-growing companies never take any venture capital. So where does the money come from to start and grow their companies? From a much more agreeable and hospitable source, their customers. That's exactly what Michael Dell, Bill Gates and Banana Republic's Mel and Patricia Ziegler did to get their companies up and running and turn them into iconic brands. In The Customer Funded Business , best-selling author John Mullins uncovers five novel approaches that scrappy and innovative 21st century entrepreneurs working in companies large and small have ingeniously adapted from their predecessors like Dell, Gates, and the Zieglers: Matchmaker models (Airbnb) Pay-in-advance models (Threadless) Subscription models (TutorVista) Scarcity models (Vente Privee) Service-to-product models (GoViral) Through the captivating stories of these and other inspiring companies from around the world, Mullins brings to life the five models and identifies the questions that angel or other investors will - and should! - ask of entrepreneurs or corporate innovators seeking to apply them. Drawing on in-depth interviews with entrepreneurs and investors who have actually put these models to use, Mullins goes on to address the key implementation issues that characterize each of the models: when to apply them, how best to apply them, and the pitfalls to watch out for. Whether you're an aspiring entrepreneur lacking the start-up capital you need, an early-stage entrepreneur trying to get your cash-starved venture into take-off mode, an intrapreneur seeking funding within an established company, or an angel investor or mentor who supports high-potential ventures, this book offers the most sure-footed path to starting, financing, or growing your venture. John Mullins is the author of The New Business Road Test and, with Randy Komisar, the widely acclaimed Getting to Plan B .
Why this book? Save your house! The problem: Limelight stolen The solution: The customer-funded business -- an idea whose time has come Who should read this book? Why John Mullins? Why now? In 60 seconds or less: the elevator pitch Chapter 1 Craving crowdfunding? Pandering to VCs? Groveling to your CFO? The magic of traction and the customer-funded revolution A Customer-funded Model Customer Funding: The Vermas Are Not Alone Chapter 2 The Problem: Financing Your Start-Up A Solution: The Magic of Traction Customer-funded Models: The Five Types What Customer-Funded Models Have in Common Craving Crowdfunding? What This Book Is -- And What it's Not Raising Capital Too Early: The Drawbacks Explained An Even Bigger Drawback, Bad Odds! So, Why Now? Is a Customer-Funded Revolution at Hand? Is Customer Funding the Right Approach for Every Venture? When Customer Funding Goes Wrong The Vermas: The Rest of the Story What Angel Investors Will Want to Know -- and Will Ask The Road Ahead Chapter 3 Buyers and sellers, but not your goods: Matchmaker models From Airbeds on the Floor to Silicon Valley Darling: Airbnb Matchmaking Works for Dogs, Too: DogVacay A Missed Opportunity for a Customer-Funded Matchmaker Model: Profounder What Angel Investors Will Want to Know -- And Will Ask A Question for Your Angel Investor: Can They Follow Their Money and Lead You to More? Making Matchmaker Models Work Chapter 4: Ask for the Cash: Pay-in-advance models From a T-Shirt Design Competition to Crowdsourcing Poster-Child: Threadless Bringing India's Mom-and-Pop Travel Agents into the 21 st Century: Via.com Loot Stores: From Small Consignment Retailer to 155 Stores -- and Back Again! What Angel Investors Will Want to Know -- And Will Ask Making Pay-in-Advance Models Work: Ask for the Cash, and Good Terms, too! Chapter 5 Recurring revenue: Subscription and SaaS models Subscription Models for Software: SaaS Educating the World from India: TutorVista Petals for the People: Two Start-Ups Come Together When Subscription Models Fail What Angel Investors Will Want to Know -- And Will Ask Making Subscription and SaaS Models Work: Final Lessons Chapter 6 Sell less, earn more: Scarcity and flash sales models Vente Privee Invents the Flash Sales Model Gilt Groupe: Large, Capital Efficient, and Growing, but Profitable? Totsy and Zulily: Flash Sales for Little Kids' Moms Lot18: Flash Sales for Wine Flash Sales: A Difficult Game What Angel Investors Will Want to Know -- And Will Ask Making Scarcity Models Work: Three Final Lessons Chapter 7 Build it for one, then sell it to all: Service-to-product models From Services to Products at Microsoft GoViral Goes Viral From Typewriters and Carbon Paper to SaaS: Rock Solid How Else Might You Scale Your Services Business? QuEST Global Services What Angel Investors Will Want to Know -- And Will Ask Making Service-to-Product Models Work Chapter 8 Make it happen: Put a customer-funded model to work in your business Not Only for Start-Ups: What Should I Do Now ? Implementation: The When, the How, and the Likely Pitfalls of Each of the Five Models Points of Departure for Your Customer-Funded Journey So, What Are You Waiting For? Bon Voyage! About the Research Acknowledgments About the Author