Build your business first, with the help of your customers. After that, you can apply for external funding – but only if you need it, of course. John Mullin’s message sounds simple, but it actually goes against the prevailing entrepreneurial logic:
“The common perception is that you have to come up with a great idea, write a business plan, get angel or venture capital funding, implement the plan and – voilà! – get rich. But this is almost never the case in reality. In fact, most successful companies never raise external capital,” says John Mullins, London Business School.
During his Estrad lecture, he shows how companies like Microsoft, Dell and Banana Republic have engaged customers to thank for their growth. Early customers can provide both seed capital and growth money. In addition, they show potential investors that there is indeed market interest in what the company wants to sell.
Mullins presents five concrete models of customer financing, tested in companies such as Airbnb, Threadless and GoViral. He also discusses how incubators, mentors and business angels can push entrepreneurs to approach customers directly.
The lecture is based on John Mullin’s latest book entitled “The Customer-Funded Business: Start, Finance, or Grow Your Company with Your Customers’ Cash” (Wiley, 2014).
Please note that the lecture will be conducted in English!
