[MUSIC] Okay, welcome back to Module 6 and it's quite a story, isn't it? That go viral story. I want to do several things here and I think they're important things. Number one, I want to dig more deeply into how to bootstrap your business now that you've heard Claus talk about his experience in doing that. Number two, discuss the likelihood that some of you are probably struggling to get started with what I call an incomplete entrepreneurial team, and what I think you might do about it. Number three, I want to address when you might expect to be able to take some money off the table by bringing in investment. And I want to point out some material in the customer funded business that addresses the very tricky issue of making the transition from a services business to a product business. And of course, as always, there's always one more assignment for you to do, the last one in the course. We're almost done. So, let's get started. In this module, you heard Klaus talk about he and bootstrap their business at the outset. In my view, the combination of bootstrapping on the expense side and seeking customer funding on the revenue side, does three very good things for you at the same time. It minimizes risk, it maximizes the potential rewards, and perhaps most importantly maximizes your freedom too. So, let's talk about risk. One important way to minimize risk is to beg, borrow, or maybe steal the resources you need at the outset instead of buying them. In one of my businesses a long time ago, we borrowed a commercial kitchen to get the business started instead of going to the expensive building one and fitting it out. That's way less risky than buying what you need to execute plan a when what we know is plan b or c or whatever is what's eventually maybe going to work. On the rewards side, let's think about Michael Dell and compare him to Steve Jobs. Dell was customer funded from the get-go. Apple was venture capital backed from the get-go, and while I expect you'd be very happy to have either Michael Dell's or Steve Job's success and fortune ten years from now I have a short quiz for you. Who captured a greater share of the value that his company eventually created? Was it Michael Dell, or was it Steve Jobs? The answer is Michael Dell, hands down. He kept way more of the value in Dell, than Steve Jobs kept in Apple. And the freedom you get from having to answer only to your customers and never to investors, who might have their own agendas, is priceless, I can assure you. And there's one more note about risk. For investors, their risk is spread over a number of deals in their portfolio. They need only one or two winners in a portfolio of 10 or 20 or 30 of 40 deals. One of which may not be you. Your risk however, is concentrated it's all on you, not so good. If you'd like to do some more optional reading now, the best of the books on Bootstrapping in my view is Greg Gianforte's great little book called Bootstrapping your Business. I suggest you read it. Next I want to address a question. It's a question I get all the time. I need someone to build a website, and I need capital for that. Or I need someone to do the selling, as I'm not good at selling. I need capital for that too. Well actually, what people who say such things are really saying, and maybe you've said those things, is that their startup team is incomplete. If there's a set of essential skills or competencies required to get your business up and running, then that set of skills, whatever they are, need to be present on your founding team. You need a partner, not an investor. And investors, these days, at least the smart ones, are unlikely to fund an incomplete management team. Now, a good way to think about the complimentary skills you're going to need to get your particular business started, the one you have in mind. In other words, how to build your founding team is provided in chapter seven of The New Business Road Test. We don't have time to go there in this MOOC but if some of you have already bought that book, you might check out chapter seven and then share what you learn there with the people on the discussion board. I also want to touch briefly on the question of when you can expect to take some money off the table. As you saw in the go viral example when Kennet came in there was considerable value already created. Because the business had plenty of customer attraction. That's the time when you can credibly ask an investor to both invest in the business, and reward you too. Because you've already created value. Before such a point, it's pretty unlikely they will do so. I promised earlier that I'd also tee up some info on the always tricky transition form being a services provider to being a product business. The research that underlies the book gleans some really good insights on the topic, which you'll find in chapter eight. I'll give you one of those tips here. You're probably going to have to iterate to get the product and the pricing just right. Plan a, just as in a start up, is unlikely to work. Okay, so there you go. There is the small matter, however, of the final assignment left. It's the last one in the course, so here you go. I'd like you to find a services business in your community in which the individuals deliver the service but not a retail business, don't study a retail. It could be your business, or it could be someone else's you know. It might be an interior designer who designs fancy homes or whatever. I'd like you to make a list of the main services that that business offers. And then I'd like you to think about which of those offerings might be turned into a product that could be delivered on a stand-alone basis with essentially no service support. Then, I'd like you to identify who the customer would be for that service. Would it be others in the business that service provider is in that is there competitors? Would it be their current customers? Would it be maybe a different customer segment than they have now? And then I'd like you to identify what the ideal product offering would be for that prospective customer. Now you could do that with a real business or if you wish one that you have an idea for. And then I'd like you to repeat it and do the same thing for two more businesses. And then write a short report on which of the three opportunities has the most potential and why you believe that's the case. And submit it as usual. Okay, so there you go. We're done with module six on service to product models. In module seven, we're going to discuss how you might proceed with implementing what you learned in this course in a start up setting. Can you do this in every business, for example? Are there some questions you should ask first? How might today lean startup mindset support what you're going to do. And we'll do another interview with learning base author entrepreneur, Rob Pitts Patrick. But mean while my colleague Tiffany is going to keep stirring up the pot on the discussion boards, so we want to keep you learning from one another. And you'll find a closing slide momentarily to stimulate your thinking on how you might contribute to that discussion. Now Tiffany and I suggest that this would be a good time for those of you who have implemented a customer-funded model in your business or begun to do so to begin sharing lessons of what you've learned with the other people in the group. After that, I look forward to seeing you in Module Seven. I'll see you there shortly. [MUSIC]