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? Or yours?
For most companies, fast-growing or otherwise, the early
funding comes 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, John Mullins
identifies five novel approaches that scrappy and innovative
21st century entrepreneurs have ingeniously adapted from
their predecessors like Dell, Gates, and the Zieglers:
• Matchmaker models (for example, the US companies Airbnb
and DogVacay)
• Pay-in-advance models (the USA’s Threadless, India’s Via
and Loot)
• Subscription models (India’s TutorVista, the USA’s
H.Bloom)
• Scarcity models (Spain’s Zara, France’s Vente Privée, the
USA’s Gilt Groupe)
• Service-to-product models (Denmark’s GoViral, Puerto
Rico’s Rock Solid).
Drawing on more than two years of in-depth research into the
customer-funded phenomenon, and through the captivating
stories of these and other companies from around the world,
John Mullins brings to life the five models and identifies
the questions that angel or other investors will - and
should! - ask, and he addresses 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, a corporate
leader seeking to grow an established company, or an angel
investor, mentor, or business accelerator or incubator
professional who supports high-potential entrepreneurial
ventures, this book offers the most sure-footed path to
starting, financing, or growing your business or those you
support.
When he’s not out in the world learning from
or working with entrepreneurs and those who invest in them,
John Mullins divides his time between London, the most
captivating and liveable big city in the world, and the much
smaller and more intimate city of Golden, Colorado, nestled
at the edge of the foothills of the Rocky Mountains. A
former entrepreneur and now an award-winning professor at
London Business School, John is the author of two
best-selling books, as well as dozens of case studies of
real-world entrepreneurial companies and more than 40 other
publications.
Now in its fourth edition, John’s first book, The New
Business Road Test: What Entrepreneurs and Executives
Should Do Before Launching a Lean Start-up, has
become the definitive work on assessing entrepreneurial
opportunities. His second book, with noted venture capital
investor Randy Komisar, the critically acclaimed Getting to
Plan B: Breaking Through to a Better Business Model,
provides a field-tested process and framework for helping
entrepreneurs get from their initial ‘Plan A’, which often
doesn’t work, to a more economically viable ‘Plan B’. John
is a sought-after speaker to audiences around the world on
entrepreneurship, on growing one’s business, and on starting
and financing high-potential entrepreneurial ventures.