WEBVTT 00:00:00.000 --> 00:00:01.943 align:middle line:90% [SQUEAKING] 00:00:01.943 --> 00:00:04.348 align:middle line:90% [RUSTLING] 00:00:04.348 --> 00:00:06.272 align:middle line:90% [CLICKING] 00:00:06.272 --> 00:00:10.420 align:middle line:90% 00:00:10.420 --> 00:00:12.480 align:middle line:90% PROFESSOR: OK, course logistics. 00:00:12.480 --> 00:00:14.880 align:middle line:84% This is actually an MIT course, 15. 00:00:14.880 --> 00:00:18.680 align:middle line:90% 393. 00:00:18.680 --> 00:00:20.480 align:middle line:84% The public website, because we have 00:00:20.480 --> 00:00:24.000 align:middle line:84% people taking the course that are not MIT people, 00:00:24.000 --> 00:00:27.520 align:middle line:90% is nutsandbolts.mit.edu. 00:00:27.520 --> 00:00:30.520 align:middle line:84% If you're registered officially through the MIT 00:00:30.520 --> 00:00:34.560 align:middle line:84% registrar for credit or as a listener, 00:00:34.560 --> 00:00:39.400 align:middle line:84% you should have access to the Canvas site, which 00:00:39.400 --> 00:00:41.040 align:middle line:84% appears at the bottom of the home 00:00:41.040 --> 00:00:43.040 align:middle line:90% page of nutsandbolts.mit.edu. 00:00:43.040 --> 00:00:45.920 align:middle line:90% 00:00:45.920 --> 00:00:48.880 align:middle line:84% The only two requirements-- this is 00:00:48.880 --> 00:00:51.920 align:middle line:90% a three-unit pass/fail course. 00:00:51.920 --> 00:00:55.260 align:middle line:84% Only two requirements-- one is that you attend each session, 00:00:55.260 --> 00:00:57.440 align:middle line:84% and we'd like to do that in person 00:00:57.440 --> 00:01:00.050 align:middle line:84% because of what you just saw, this team-building. 00:01:00.050 --> 00:01:04.810 align:middle line:84% There have been many teams coming out of this course that 00:01:04.810 --> 00:01:08.090 align:middle line:84% entered the $100K competition, and a number of those went 00:01:08.090 --> 00:01:10.890 align:middle line:84% on to become successful companies-- 00:01:10.890 --> 00:01:13.370 align:middle line:84% started right here in this class. 00:01:13.370 --> 00:01:16.610 align:middle line:84% In order to figure out, whether you actually 00:01:16.610 --> 00:01:21.390 align:middle line:84% attended every night there will be a code, an attendance code. 00:01:21.390 --> 00:01:26.250 align:middle line:84% You'll see them on the doors there on blackboard. 00:01:26.250 --> 00:01:30.530 align:middle line:84% You go to the Canvas website, and under Assignments there 00:01:30.530 --> 00:01:31.950 align:middle line:90% will be a quiz. 00:01:31.950 --> 00:01:33.870 align:middle line:84% And you pick which of the four answers 00:01:33.870 --> 00:01:36.610 align:middle line:90% there is the attendance code. 00:01:36.610 --> 00:01:41.010 align:middle line:84% That will appear, I think, right around 9:00 every night. 00:01:41.010 --> 00:01:44.290 align:middle line:90% So that's that. 00:01:44.290 --> 00:01:48.650 align:middle line:84% A written requirement-- either an executive summary or a pitch 00:01:48.650 --> 00:01:54.210 align:middle line:84% deck is a requirement for the course. 00:01:54.210 --> 00:01:57.690 align:middle line:84% We'd like this to be done by teams 00:01:57.690 --> 00:02:01.050 align:middle line:84% for two very important reasons, the first of which 00:02:01.050 --> 00:02:02.570 align:middle line:90% isn't the most important. 00:02:02.570 --> 00:02:06.350 align:middle line:84% But if everyone did a separate written requirement, 00:02:06.350 --> 00:02:08.630 align:middle line:84% I'd have to look at a whole bunch. 00:02:08.630 --> 00:02:11.970 align:middle line:84% If you do it as teams, I don't have to look at as many. 00:02:11.970 --> 00:02:13.268 align:middle line:90% That's just a personal thing. 00:02:13.268 --> 00:02:14.810 align:middle line:84% The more important thing is it's been 00:02:14.810 --> 00:02:18.650 align:middle line:84% shown that teams have a higher probability of success 00:02:18.650 --> 00:02:21.090 align:middle line:84% than individual sole entrepreneurs. 00:02:21.090 --> 00:02:24.970 align:middle line:84% So here's a chance to try out team-building and team 00:02:24.970 --> 00:02:25.830 align:middle line:90% logistics. 00:02:25.830 --> 00:02:29.150 align:middle line:84% So we would like you to form teams if possible. 00:02:29.150 --> 00:02:31.930 align:middle line:90% 00:02:31.930 --> 00:02:36.630 align:middle line:84% The written requirement is due Friday, January 31. 00:02:36.630 --> 00:02:41.170 align:middle line:84% If you're on Canvas, you'll see that as the assignment. 00:02:41.170 --> 00:02:43.530 align:middle line:84% The team efforts-- there's a Google Sheet 00:02:43.530 --> 00:02:47.610 align:middle line:84% where if you want to go in and put your name 00:02:47.610 --> 00:02:49.730 align:middle line:84% and what you're interested in, that 00:02:49.730 --> 00:02:52.250 align:middle line:90% can foster some team-building. 00:02:52.250 --> 00:02:59.660 align:middle line:84% And we'd like you to try to do that by the 25th, this week. 00:02:59.660 --> 00:03:03.040 align:middle line:84% And so if you're having trouble finding a team, 00:03:03.040 --> 00:03:06.320 align:middle line:84% then we can work with you in the TAs to figure that out. 00:03:06.320 --> 00:03:08.940 align:middle line:90% 00:03:08.940 --> 00:03:12.300 align:middle line:84% Because we've compressed nuts and bolts into the last two 00:03:12.300 --> 00:03:15.060 align:middle line:84% weeks of independent activity period, 00:03:15.060 --> 00:03:17.780 align:middle line:84% the grades do have to get in within a couple of days 00:03:17.780 --> 00:03:19.340 align:middle line:90% after the end. 00:03:19.340 --> 00:03:23.060 align:middle line:84% So we'll be focusing on those and giving you feedback. 00:03:23.060 --> 00:03:25.680 align:middle line:84% For people that are taking the course as a listener, 00:03:25.680 --> 00:03:27.760 align:middle line:84% either formally or just listening 00:03:27.760 --> 00:03:29.940 align:middle line:84% who would like to submit something, 00:03:29.940 --> 00:03:33.900 align:middle line:84% we'll figure out how to have you email that to us. 00:03:33.900 --> 00:03:35.565 align:middle line:84% The written requirements for those 00:03:35.565 --> 00:03:36.940 align:middle line:84% taking the course for credit will 00:03:36.940 --> 00:03:41.540 align:middle line:84% be submitted through an assignment at Canvas. 00:03:41.540 --> 00:03:44.140 align:middle line:84% For those that are not taking it for credit 00:03:44.140 --> 00:03:46.900 align:middle line:84% who want some feedback, we'll first get the grades in, 00:03:46.900 --> 00:03:50.660 align:middle line:84% and then we'll turn and give you some feedback. 00:03:50.660 --> 00:03:54.020 align:middle line:84% So that's I think all of the basic logistics. 00:03:54.020 --> 00:03:57.510 align:middle line:90% Are there any questions? 00:03:57.510 --> 00:04:00.250 align:middle line:84% OK, obviously, if you have any particular questions, 00:04:00.250 --> 00:04:03.710 align:middle line:84% you can talk to me separately or the TAs. 00:04:03.710 --> 00:04:07.630 align:middle line:84% So for the second part of this evening, 00:04:07.630 --> 00:04:13.030 align:middle line:90% we're going to have Bob Jones-- 00:04:13.030 --> 00:04:14.970 align:middle line:90% Finding Your Customer. 00:04:14.970 --> 00:04:18.390 align:middle line:90% [APPLAUSE] 00:04:18.390 --> 00:04:22.670 align:middle line:84% Now, Bob and I were in a one year, 00:04:22.670 --> 00:04:28.770 align:middle line:84% 12-month Master's of Science and Management program at Sloan. 00:04:28.770 --> 00:04:31.070 align:middle line:84% That's like an MBA with a thesis. 00:04:31.070 --> 00:04:33.850 align:middle line:84% We did the first year in three months over the summer, 00:04:33.850 --> 00:04:38.590 align:middle line:84% going 5 and 1/2 days a week, and then we had to write a thesis. 00:04:38.590 --> 00:04:42.270 align:middle line:84% Needless to say, it was a pretty high-intense environment. 00:04:42.270 --> 00:04:47.350 align:middle line:84% And Bob came up with the concept of economics, the consumption 00:04:47.350 --> 00:04:47.970 align:middle line:90% function. 00:04:47.970 --> 00:04:51.150 align:middle line:84% So Bob is the founder of the consumption function. 00:04:51.150 --> 00:04:54.310 align:middle line:84% Maybe he can expound upon that when he steps up. 00:04:54.310 --> 00:04:59.590 align:middle line:84% He's also a blues guitarist, and there's his website. 00:04:59.590 --> 00:05:01.930 align:middle line:84% I think you have a gig coming up. 00:05:01.930 --> 00:05:03.567 align:middle line:90% I got an email yesterday. 00:05:03.567 --> 00:05:04.650 align:middle line:90% BOB JONES: Thursday night. 00:05:04.650 --> 00:05:05.733 align:middle line:90% PROFESSOR: Thursday night. 00:05:05.733 --> 00:05:08.042 align:middle line:84% Oh, well, they can't go, but maybe I will. 00:05:08.042 --> 00:05:09.250 align:middle line:90% BOB JONES: It's at a brewery. 00:05:09.250 --> 00:05:10.270 align:middle line:90% PROFESSOR: At a brewery. 00:05:10.270 --> 00:05:11.370 align:middle line:90% BOB JONES: Kind of makes sense. 00:05:11.370 --> 00:05:12.787 align:middle line:84% PROFESSOR: So what I'm going to do 00:05:12.787 --> 00:05:14.967 align:middle line:84% is switch over and introduce Bob. 00:05:14.967 --> 00:05:16.550 align:middle line:84% You want to start introducing yourself 00:05:16.550 --> 00:05:19.890 align:middle line:84% while I get your slides teed up here. 00:05:19.890 --> 00:05:24.070 align:middle line:90% 00:05:24.070 --> 00:05:25.870 align:middle line:90% There you go. 00:05:25.870 --> 00:05:28.735 align:middle line:90% I give you Bob Jones. 00:05:28.735 --> 00:05:29.610 align:middle line:90% BOB JONES: Thank you. 00:05:29.610 --> 00:05:32.320 align:middle line:90% [APPLAUSE] 00:05:32.320 --> 00:05:33.690 align:middle line:90% Oh, you're applauding already. 00:05:33.690 --> 00:05:35.250 align:middle line:90% I'll just quit right now. 00:05:35.250 --> 00:05:38.070 align:middle line:90% 00:05:38.070 --> 00:05:40.430 align:middle line:90% Thank you. 00:05:40.430 --> 00:05:45.910 align:middle line:84% I have this old fashioned, quaint notion 00:05:45.910 --> 00:05:49.570 align:middle line:84% that if I'm going to ask you to give me your attention for 90 00:05:49.570 --> 00:05:54.200 align:middle line:84% minutes, I ought to give you back something in return that's 00:05:54.200 --> 00:05:55.480 align:middle line:90% worthwhile-- 00:05:55.480 --> 00:05:59.400 align:middle line:84% justifies that 90-minute investment on your part. 00:05:59.400 --> 00:06:04.360 align:middle line:84% And there's really two questions that I need answered in order 00:06:04.360 --> 00:06:06.040 align:middle line:90% to do that well. 00:06:06.040 --> 00:06:07.980 align:middle line:84% and the first one is who are you. 00:06:07.980 --> 00:06:11.520 align:middle line:84% And the second one is, what do you want? 00:06:11.520 --> 00:06:13.880 align:middle line:90% And thanks, Joe. 00:06:13.880 --> 00:06:17.240 align:middle line:84% We've got a lot of statistics as to who you are, 00:06:17.240 --> 00:06:19.160 align:middle line:84% but I don't have a real good answer 00:06:19.160 --> 00:06:20.940 align:middle line:90% as to what is it you want. 00:06:20.940 --> 00:06:24.080 align:middle line:84% So let me poll a few of you and ask a couple 00:06:24.080 --> 00:06:25.820 align:middle line:90% of open-ended questions. 00:06:25.820 --> 00:06:30.200 align:middle line:84% How many of you are currently working on a startup that's 00:06:30.200 --> 00:06:31.920 align:middle line:90% beyond your first one? 00:06:31.920 --> 00:06:34.400 align:middle line:84% Your first one's already behind you. 00:06:34.400 --> 00:06:36.480 align:middle line:84% OK, so you guys are 10 years older 00:06:36.480 --> 00:06:39.680 align:middle line:90% than you were two years ago. 00:06:39.680 --> 00:06:45.280 align:middle line:84% How many of you are engaged in your first startup right now? 00:06:45.280 --> 00:06:50.480 align:middle line:90% OK, medication is available. 00:06:50.480 --> 00:06:54.290 align:middle line:84% And how many of you are in this course because you're actually 00:06:54.290 --> 00:06:57.470 align:middle line:84% thinking seriously of doing this when you graduate? 00:06:57.470 --> 00:07:01.090 align:middle line:90% 00:07:01.090 --> 00:07:02.410 align:middle line:90% All right. 00:07:02.410 --> 00:07:07.430 align:middle line:84% Well, that leaves a whole bunch of you that are unaccounted for. 00:07:07.430 --> 00:07:10.850 align:middle line:90% Are you exploring? 00:07:10.850 --> 00:07:13.470 align:middle line:84% I know when I was here and we had IAP, 00:07:13.470 --> 00:07:15.690 align:middle line:90% I took springboard diving. 00:07:15.690 --> 00:07:18.090 align:middle line:84% So I spent four weeks at the MIT pool 00:07:18.090 --> 00:07:20.530 align:middle line:90% shivering up on the high board. 00:07:20.530 --> 00:07:24.170 align:middle line:84% It was utterly unacademic, completely awesome, 00:07:24.170 --> 00:07:26.010 align:middle line:90% and purely exploratory. 00:07:26.010 --> 00:07:30.850 align:middle line:84% So are some of you in here for that, just checking it out? 00:07:30.850 --> 00:07:32.330 align:middle line:90% Yeah, OK. 00:07:32.330 --> 00:07:33.630 align:middle line:90% Well, that helps a lot. 00:07:33.630 --> 00:07:36.810 align:middle line:90% Thank you. 00:07:36.810 --> 00:07:38.530 align:middle line:84% Then I think we've answered that. 00:07:38.530 --> 00:07:40.430 align:middle line:84% There are some lots of good reasons, 00:07:40.430 --> 00:07:42.050 align:middle line:90% and you've given good reasons. 00:07:42.050 --> 00:07:44.110 align:middle line:84% There are one or two bad reasons, 00:07:44.110 --> 00:07:47.850 align:middle line:84% like I hope that Joe will give me the magic word-- 00:07:47.850 --> 00:07:51.880 align:middle line:84% shazam-- that will cause me to have a billion-dollar business. 00:07:51.880 --> 00:07:54.100 align:middle line:84% And then I'll sail my yacht to St. 00:07:54.100 --> 00:07:56.580 align:middle line:90% Barts next year for New Year's. 00:07:56.580 --> 00:07:59.120 align:middle line:84% If you know how to do that, you've been holding out on me. 00:07:59.120 --> 00:08:01.660 align:middle line:90% 00:08:01.660 --> 00:08:04.060 align:middle line:90% A couple words on my background. 00:08:04.060 --> 00:08:10.740 align:middle line:84% I ended up starting four startups 00:08:10.740 --> 00:08:15.300 align:middle line:84% with a bunch of docs out of Harvard Med School. 00:08:15.300 --> 00:08:18.280 align:middle line:84% I broke down and wrote a book when I got done with all that. 00:08:18.280 --> 00:08:21.620 align:middle line:90% It's on Amazon-- 00:08:21.620 --> 00:08:25.340 align:middle line:84% How to Avoid Failing in the Crucial First Two Years-- a lot 00:08:25.340 --> 00:08:27.500 align:middle line:90% of sobering lessons. 00:08:27.500 --> 00:08:29.580 align:middle line:84% I took a break between startup number three 00:08:29.580 --> 00:08:31.780 align:middle line:84% and startup number four because I 00:08:31.780 --> 00:08:36.380 align:middle line:84% was recruited to become CEO of a company publicly traded in Hong 00:08:36.380 --> 00:08:39.600 align:middle line:90% Kong, and it was a turnaround. 00:08:39.600 --> 00:08:42.260 align:middle line:84% Do you guys know what that means? 00:08:42.260 --> 00:08:44.340 align:middle line:84% It means it was a dreadful mess, and it had been 00:08:44.340 --> 00:08:46.120 align:middle line:90% losing money for a long time. 00:08:46.120 --> 00:08:49.540 align:middle line:84% And I was the person they brought in to fix it, 00:08:49.540 --> 00:08:53.140 align:middle line:84% was completely flummoxed by how many things were wrong. 00:08:53.140 --> 00:08:55.020 align:middle line:84% And the executive search guy says, 00:08:55.020 --> 00:08:57.260 align:middle line:84% you need somebody who's not afraid of a blank sheet 00:08:57.260 --> 00:08:58.900 align:middle line:90% of paper. 00:08:58.900 --> 00:09:00.780 align:middle line:90% I got just the guy. 00:09:00.780 --> 00:09:02.600 align:middle line:90% So it was not innovative. 00:09:02.600 --> 00:09:03.960 align:middle line:90% It was not glamorous. 00:09:03.960 --> 00:09:08.080 align:middle line:84% I had to fire 75 people, but I fixed it. 00:09:08.080 --> 00:09:10.740 align:middle line:84% And then I went back to entrepreneurship. 00:09:10.740 --> 00:09:12.620 align:middle line:90% I've had a couple normal jobs. 00:09:12.620 --> 00:09:15.140 align:middle line:90% I went to a couple of schools. 00:09:15.140 --> 00:09:17.600 align:middle line:90% As Joe mentioned-- excuse me-- 00:09:17.600 --> 00:09:20.500 align:middle line:90% I am a working musician. 00:09:20.500 --> 00:09:22.020 align:middle line:90% Played last Thursday. 00:09:22.020 --> 00:09:24.060 align:middle line:90% Played Saturday. 00:09:24.060 --> 00:09:25.760 align:middle line:90% Playing this coming Thursday. 00:09:25.760 --> 00:09:27.580 align:middle line:84% And I do a fair amount of volunteer work 00:09:27.580 --> 00:09:32.140 align:middle line:84% in homeless shelters, usually as a musician. 00:09:32.140 --> 00:09:35.020 align:middle line:84% That one and the bottom right is a big homeless shelter 00:09:35.020 --> 00:09:38.660 align:middle line:90% in Quincy Thanksgiving Day. 00:09:38.660 --> 00:09:40.720 align:middle line:84% And I had called him up in advance and said, 00:09:40.720 --> 00:09:43.060 align:middle line:84% do you guys need like a really nerdy guitar player 00:09:43.060 --> 00:09:45.700 align:middle line:84% to sit in the corner and play nonviolent music 00:09:45.700 --> 00:09:47.430 align:middle line:90% while you feed your guests? 00:09:47.430 --> 00:09:49.610 align:middle line:84% And they said, well, that's exactly the description. 00:09:49.610 --> 00:09:51.170 align:middle line:84% Are you a really nerdy guitarist? 00:09:51.170 --> 00:09:53.030 align:middle line:90% I said oh, yes. 00:09:53.030 --> 00:09:55.230 align:middle line:90% This was five or six years ago. 00:09:55.230 --> 00:09:58.390 align:middle line:84% This particular day they fed 1,000 people. 00:09:58.390 --> 00:10:00.590 align:middle line:84% I took the picture before anybody came in the room 00:10:00.590 --> 00:10:02.430 align:middle line:90% for privacy reasons, et cetera. 00:10:02.430 --> 00:10:05.870 align:middle line:90% But anyway, I'm out and about. 00:10:05.870 --> 00:10:11.110 align:middle line:84% So the classic academic paradigm is that the professor 00:10:11.110 --> 00:10:13.950 align:middle line:90% articulates a lofty concept. 00:10:13.950 --> 00:10:16.870 align:middle line:84% And the students write it down and hope one day 00:10:16.870 --> 00:10:17.770 align:middle line:90% to figure it out. 00:10:17.770 --> 00:10:22.470 align:middle line:84% And I have never had any success doing that with entrepreneurs 00:10:22.470 --> 00:10:25.350 align:middle line:90% and prospective entrepreneurs. 00:10:25.350 --> 00:10:30.070 align:middle line:84% The professor might say risk averse mean variance utility 00:10:30.070 --> 00:10:33.670 align:middle line:84% maximization is often cited as an explanation for consumer 00:10:33.670 --> 00:10:37.290 align:middle line:84% behavior, but it implies quadratic utility functions, 00:10:37.290 --> 00:10:39.950 align:middle line:84% which have never been empirically demonstrated. 00:10:39.950 --> 00:10:42.110 align:middle line:84% And everybody writes it down, and nobody's 00:10:42.110 --> 00:10:43.805 align:middle line:84% willing to elbow the person next to him, 00:10:43.805 --> 00:10:46.180 align:middle line:84% say, you have the slightest idea what that guy just said? 00:10:46.180 --> 00:10:47.540 align:middle line:90% No. 00:10:47.540 --> 00:10:50.160 align:middle line:84% So I'm going to go in the opposite direction 00:10:50.160 --> 00:10:54.120 align:middle line:84% and start with some almost trivially simple examples. 00:10:54.120 --> 00:10:56.740 align:middle line:84% And in the course of our 90 minutes, 00:10:56.740 --> 00:10:59.560 align:middle line:84% I will get progressively more complex. 00:10:59.560 --> 00:11:01.440 align:middle line:90% So indulge me for a second. 00:11:01.440 --> 00:11:03.480 align:middle line:84% Let's say I wake up tomorrow morning 00:11:03.480 --> 00:11:09.660 align:middle line:84% and decide I've had enough of this hyperactive, overcharged, 00:11:09.660 --> 00:11:12.400 align:middle line:84% overintellectualized world, and I'm just 00:11:12.400 --> 00:11:15.080 align:middle line:84% going to be a grumpy old guy living in a tiny house 00:11:15.080 --> 00:11:16.140 align:middle line:90% in the Berkshires. 00:11:16.140 --> 00:11:19.600 align:middle line:90% 00:11:19.600 --> 00:11:22.360 align:middle line:84% It's not that crazy an idea, actually. 00:11:22.360 --> 00:11:25.480 align:middle line:84% But I get there, and I think I got to do something. 00:11:25.480 --> 00:11:28.200 align:middle line:84% Maybe I could give guitar lessons. 00:11:28.200 --> 00:11:30.560 align:middle line:90% I'm a pretty good player. 00:11:30.560 --> 00:11:31.960 align:middle line:90% I like to teach. 00:11:31.960 --> 00:11:36.160 align:middle line:84% And I could offer different levels of instruction. 00:11:36.160 --> 00:11:37.980 align:middle line:84% I could start with some beginners. 00:11:37.980 --> 00:11:39.140 align:middle line:90% Here's your basic chords. 00:11:39.140 --> 00:11:40.540 align:middle line:90% Here's how to tune it up. 00:11:40.540 --> 00:11:43.520 align:middle line:84% We get a little more advanced because nobody understands 00:11:43.520 --> 00:11:47.220 align:middle line:84% the groove when they first get going, so how to play in time 00:11:47.220 --> 00:11:47.900 align:middle line:90% and so forth. 00:11:47.900 --> 00:11:50.580 align:middle line:84% And then for those people who are sticking with it, 00:11:50.580 --> 00:11:52.080 align:middle line:84% we could talk a little bit about how 00:11:52.080 --> 00:11:54.580 align:middle line:84% you play a solo in Mixolydian mode 00:11:54.580 --> 00:11:57.980 align:middle line:84% that still sounds like the blues and all of that. 00:11:57.980 --> 00:11:59.400 align:middle line:90% I wouldn't need much. 00:11:59.400 --> 00:12:03.160 align:middle line:84% I'd need a small studio, a couple guitar amps, maybe a bass 00:12:03.160 --> 00:12:06.180 align:middle line:84% amp, maybe something to-- a drum machine or something. 00:12:06.180 --> 00:12:10.080 align:middle line:90% And let's just stop right there. 00:12:10.080 --> 00:12:14.440 align:middle line:84% This is a mistake I have made over and over again. 00:12:14.440 --> 00:12:16.480 align:middle line:90% Do you see it? 00:12:16.480 --> 00:12:17.340 align:middle line:90% It's subtle. 00:12:17.340 --> 00:12:20.020 align:middle line:84% Don't beat yourself up if you don't see it. 00:12:20.020 --> 00:12:24.425 align:middle line:90% 00:12:24.425 --> 00:12:25.800 align:middle line:84% AUDIENCE: You don't know if there 00:12:25.800 --> 00:12:27.625 align:middle line:90% are students there [INAUDIBLE]. 00:12:27.625 --> 00:12:28.500 align:middle line:90% BOB JONES: I'm sorry. 00:12:28.500 --> 00:12:30.600 align:middle line:84% You're going to have to say it a little louder so I can repeat it 00:12:30.600 --> 00:12:31.200 align:middle line:90% for the-- 00:12:31.200 --> 00:12:33.880 align:middle line:84% AUDIENCE: You don't know if there are students there. 00:12:33.880 --> 00:12:36.920 align:middle line:84% BOB JONES: I don't know if there are students there. 00:12:36.920 --> 00:12:40.880 align:middle line:84% Well, that is just one symptom of the problem, 00:12:40.880 --> 00:12:44.210 align:middle line:90% but it's a good answer. 00:12:44.210 --> 00:12:49.310 align:middle line:84% I think that over and over again we address the question, 00:12:49.310 --> 00:12:51.290 align:middle line:90% could I do it? 00:12:51.290 --> 00:12:54.790 align:middle line:84% And we ought to address the question, should I do it? 00:12:54.790 --> 00:12:59.610 align:middle line:90% 00:12:59.610 --> 00:13:03.490 align:middle line:84% And in order to evaluate the question, 00:13:03.490 --> 00:13:06.610 align:middle line:84% should I do it, the single-most important question 00:13:06.610 --> 00:13:11.970 align:middle line:84% you need to eventually answer is, will I make enough money? 00:13:11.970 --> 00:13:16.170 align:middle line:84% Because regardless of the cause, the eventual symptom 00:13:16.170 --> 00:13:19.570 align:middle line:84% that makes most companies go belly up 00:13:19.570 --> 00:13:21.850 align:middle line:84% is they run out of money, or they're 00:13:21.850 --> 00:13:25.050 align:middle line:84% on a path where they will never make any money. 00:13:25.050 --> 00:13:28.350 align:middle line:84% So let's dig just a little bit deeper. 00:13:28.350 --> 00:13:30.310 align:middle line:84% Let's begin at the end of the story. 00:13:30.310 --> 00:13:32.330 align:middle line:90% We want to make enough money. 00:13:32.330 --> 00:13:34.030 align:middle line:90% What do we need to do that? 00:13:34.030 --> 00:13:35.770 align:middle line:90% Well, we need revenues. 00:13:35.770 --> 00:13:38.610 align:middle line:84% Hopefully, they should exceed our costs. 00:13:38.610 --> 00:13:42.980 align:middle line:90% Revenues come from customers. 00:13:42.980 --> 00:13:47.540 align:middle line:84% So we need customers, and we could stop right there. 00:13:47.540 --> 00:13:49.940 align:middle line:84% But obviously, we also need to figure out something 00:13:49.940 --> 00:13:52.700 align:middle line:84% that's broke and come up with a solution 00:13:52.700 --> 00:13:55.620 align:middle line:90% that we think is better. 00:13:55.620 --> 00:13:58.300 align:middle line:84% But let's dig just a little bit deeper. 00:13:58.300 --> 00:14:02.100 align:middle line:84% How much money do we need to make? 00:14:02.100 --> 00:14:06.980 align:middle line:84% And how much is a customer worth? 00:14:06.980 --> 00:14:08.780 align:middle line:84% And I'm not real good at math, but I 00:14:08.780 --> 00:14:10.680 align:middle line:84% think if I divided one by the other, 00:14:10.680 --> 00:14:14.220 align:middle line:84% I could figure out how many customers do I need? 00:14:14.220 --> 00:14:16.320 align:middle line:84% A company needs to make a million dollars. 00:14:16.320 --> 00:14:18.660 align:middle line:90% Each customer is worth $1,000. 00:14:18.660 --> 00:14:20.620 align:middle line:90% I need 1,000 customer. 00:14:20.620 --> 00:14:23.200 align:middle line:84% And then ask the question, how am I going to do that? 00:14:23.200 --> 00:14:26.340 align:middle line:90% 00:14:26.340 --> 00:14:32.180 align:middle line:84% I've seen umptynine ventures waste two years and most 00:14:32.180 --> 00:14:35.140 align:middle line:84% of their life savings because they did not go 00:14:35.140 --> 00:14:39.460 align:middle line:90% through this simple exercise. 00:14:39.460 --> 00:14:43.300 align:middle line:90% So let's dig a little deeper. 00:14:43.300 --> 00:14:46.160 align:middle line:84% Let's ask, in this hypothetical example, 00:14:46.160 --> 00:14:48.380 align:middle line:84% how much money do I need to make? 00:14:48.380 --> 00:14:52.080 align:middle line:84% Well, I'm going to be grumpy and living in the Berkshires. 00:14:52.080 --> 00:14:57.780 align:middle line:84% And so the answer is not much. $5,000 a month, make me happy. 00:14:57.780 --> 00:14:59.720 align:middle line:84% Well, how much is a customer worth? 00:14:59.720 --> 00:15:01.700 align:middle line:84% And I do a little market research, 00:15:01.700 --> 00:15:05.100 align:middle line:84% and I find that they make-- they'll pay $25 an hour, 00:15:05.100 --> 00:15:06.980 align:middle line:90% and they'll come twice a month. 00:15:06.980 --> 00:15:09.420 align:middle line:84% So they're worth $50 bucks a month. 00:15:09.420 --> 00:15:12.060 align:middle line:84% Well, this is looking troubling, because if I divide one 00:15:12.060 --> 00:15:16.300 align:middle line:84% by the other, I need 100 customers 00:15:16.300 --> 00:15:18.280 align:middle line:84% in order to make the amount of money I want. 00:15:18.280 --> 00:15:19.600 align:middle line:90% You were on the right track. 00:15:19.600 --> 00:15:22.180 align:middle line:90% 00:15:22.180 --> 00:15:24.140 align:middle line:90% Well, that's kind of daunting. 00:15:24.140 --> 00:15:28.440 align:middle line:84% I mean, it's nothing for a big organization. 00:15:28.440 --> 00:15:33.080 align:middle line:84% But for a grumpy guy who's just trying to start it from scratch, 00:15:33.080 --> 00:15:34.460 align:middle line:90% it's a lot. 00:15:34.460 --> 00:15:36.800 align:middle line:90% So can I do it? 00:15:36.800 --> 00:15:39.430 align:middle line:90% 00:15:39.430 --> 00:15:41.870 align:middle line:90% This is a cause for reflection. 00:15:41.870 --> 00:15:48.210 align:middle line:84% So if it seems crazy, then I remind you of what Joe said. 00:15:48.210 --> 00:15:49.930 align:middle line:84% Good ideas are all over the place. 00:15:49.930 --> 00:15:52.150 align:middle line:90% It's time for another one. 00:15:52.150 --> 00:15:56.030 align:middle line:84% If I'm still standing, let's dig in a little bit. 00:15:56.030 --> 00:15:58.910 align:middle line:90% So, in fact, let's do that. 00:15:58.910 --> 00:16:00.510 align:middle line:84% Let's start with the basic question, 00:16:00.510 --> 00:16:04.750 align:middle line:84% what broke that I propose to fix, 00:16:04.750 --> 00:16:07.830 align:middle line:84% and who's going to pay me to fix it? 00:16:07.830 --> 00:16:12.510 align:middle line:84% Well, the market I started with, the default market, if you will, 00:16:12.510 --> 00:16:14.710 align:middle line:90% school kids. 00:16:14.710 --> 00:16:17.390 align:middle line:90% Well, what do they want? 00:16:17.390 --> 00:16:19.170 align:middle line:84% Well, a lot of them are just really nerdy, 00:16:19.170 --> 00:16:21.630 align:middle line:84% and they want something to do besides sit in their room 00:16:21.630 --> 00:16:25.630 align:middle line:84% and get yelled at for playing World of Warcraft. 00:16:25.630 --> 00:16:29.130 align:middle line:84% Some of them were guys who say, oh, man, if I played guitar, 00:16:29.130 --> 00:16:30.950 align:middle line:90% I'd meet girls. 00:16:30.950 --> 00:16:34.450 align:middle line:84% Some of them are girls who said, jeez, I'm tall, blonde. 00:16:34.450 --> 00:16:36.150 align:middle line:90% I sing, and I play bass. 00:16:36.150 --> 00:16:38.960 align:middle line:84% I have a million friends on the spot. 00:16:38.960 --> 00:16:41.140 align:middle line:84% Every now and then, if you're lucky, 00:16:41.140 --> 00:16:44.480 align:middle line:84% you actually find somebody who really loves the music, 00:16:44.480 --> 00:16:47.120 align:middle line:90% wants to do it well. 00:16:47.120 --> 00:16:50.500 align:middle line:84% So these are my users, but are they going to pay me? 00:16:50.500 --> 00:16:53.240 align:middle line:90% 00:16:53.240 --> 00:16:55.220 align:middle line:84% Therefore, beyond a certain point, 00:16:55.220 --> 00:16:58.360 align:middle line:84% they're actually not my customers. 00:16:58.360 --> 00:17:00.440 align:middle line:90% So who's going to pay me? 00:17:00.440 --> 00:17:02.560 align:middle line:90% Parents, right? 00:17:02.560 --> 00:17:04.385 align:middle line:90% Well, what's their profile? 00:17:04.385 --> 00:17:05.760 align:middle line:84% They say, well, let's buy the kid 00:17:05.760 --> 00:17:12.760 align:middle line:84% a guitar, spring for some lessons, Watch what happens. 00:17:12.760 --> 00:17:15.920 align:middle line:84% This analysis does not in any way 00:17:15.920 --> 00:17:19.720 align:middle line:84% challenge the market research I did previously. 00:17:19.720 --> 00:17:23.060 align:middle line:84% It's $50 a month per kid, and I need 100 kids. 00:17:23.060 --> 00:17:25.720 align:middle line:90% 00:17:25.720 --> 00:17:26.780 align:middle line:90% So now what? 00:17:26.780 --> 00:17:29.640 align:middle line:90% 00:17:29.640 --> 00:17:34.280 align:middle line:84% Well, I'd say let's erase this and start over. 00:17:34.280 --> 00:17:38.420 align:middle line:84% Are there other people who might be interested in this? 00:17:38.420 --> 00:17:42.400 align:middle line:90% 00:17:42.400 --> 00:17:49.640 align:middle line:84% Well, one possible answer is adults who say, 00:17:49.640 --> 00:17:55.120 align:middle line:84% I used to be cool until I had kids, and my brain's dissolved. 00:17:55.120 --> 00:17:57.260 align:middle line:90% I used to play in a band. 00:17:57.260 --> 00:18:00.040 align:middle line:90% 00:18:00.040 --> 00:18:02.400 align:middle line:90% I used to sing in a group. 00:18:02.400 --> 00:18:04.020 align:middle line:90% Man, I miss that stuff. 00:18:04.020 --> 00:18:07.320 align:middle line:90% 00:18:07.320 --> 00:18:08.880 align:middle line:90% Who would pay me? 00:18:08.880 --> 00:18:10.960 align:middle line:90% Well, those adults. 00:18:10.960 --> 00:18:14.400 align:middle line:84% And if I were to say, well, let's see. 00:18:14.400 --> 00:18:17.400 align:middle line:84% You probably stopped playing about 20 years ago. 00:18:17.400 --> 00:18:21.240 align:middle line:84% And 20 years ago, there was that Santana tune that you 00:18:21.240 --> 00:18:25.240 align:middle line:84% couldn't get away from, "Man it's a hot one." 00:18:25.240 --> 00:18:28.280 align:middle line:84% So if I taught you that tune on Tuesday 00:18:28.280 --> 00:18:32.560 align:middle line:84% night and pulled together an ensemble 00:18:32.560 --> 00:18:37.250 align:middle line:84% so you could play it with other musicians on Thursday night, 00:18:37.250 --> 00:18:42.130 align:middle line:84% I know exactly what you'd be doing on Wednesday night. 00:18:42.130 --> 00:18:44.110 align:middle line:84% By the way, I didn't just make that up. 00:18:44.110 --> 00:18:46.010 align:middle line:90% School of Rock does that-- 00:18:46.010 --> 00:18:48.330 align:middle line:90% hugely successful. 00:18:48.330 --> 00:18:51.290 align:middle line:84% Well, then you might pay $50 an hour 00:18:51.290 --> 00:18:55.050 align:middle line:84% because you're going to walk out of that second session saying, 00:18:55.050 --> 00:18:57.090 align:middle line:90% ah, man, I feel like Godzilla. 00:18:57.090 --> 00:19:01.810 align:middle line:84% I went in there and played my ass off, and it was fun. 00:19:01.810 --> 00:19:05.310 align:middle line:84% And in fact, you might come twice a week. 00:19:05.310 --> 00:19:09.290 align:middle line:90% 00:19:09.290 --> 00:19:12.410 align:middle line:84% So the economics start changing because we changed our customer 00:19:12.410 --> 00:19:14.370 align:middle line:90% profile. 00:19:14.370 --> 00:19:15.930 align:middle line:90% Who else? 00:19:15.930 --> 00:19:18.290 align:middle line:84% Well, this volunteer work that I do 00:19:18.290 --> 00:19:20.810 align:middle line:84% with in these homeless shelters frequently 00:19:20.810 --> 00:19:24.070 align:middle line:84% is with a group of fellow volunteers. 00:19:24.070 --> 00:19:25.190 align:middle line:90% We go in with a bunch. 00:19:25.190 --> 00:19:28.510 align:middle line:84% There's a fairly charismatic front man who leads it. 00:19:28.510 --> 00:19:32.980 align:middle line:84% And as I look them over, I see a lot of gray hair. 00:19:32.980 --> 00:19:36.060 align:middle line:84% And I've asked some of them, why do you do this? 00:19:36.060 --> 00:19:39.400 align:middle line:84% And they say, well, I used to sing a long time ago. 00:19:39.400 --> 00:19:44.040 align:middle line:84% And then Elmer, my husband, he got sick a few years ago, 00:19:44.040 --> 00:19:46.780 align:middle line:90% and then he died. 00:19:46.780 --> 00:19:49.780 align:middle line:90% And I miss it. 00:19:49.780 --> 00:19:51.200 align:middle line:90% I'm staying home all the time. 00:19:51.200 --> 00:19:54.620 align:middle line:84% I can only water my plants for so many hours a week. 00:19:54.620 --> 00:19:56.340 align:middle line:90% I'm lonesome. 00:19:56.340 --> 00:19:58.400 align:middle line:84% I'd love to get back out and socialize. 00:19:58.400 --> 00:20:00.100 align:middle line:84% And if I were fortunate enough to run 00:20:00.100 --> 00:20:03.180 align:middle line:84% across a gentleman who wanted to buy me dinner, 00:20:03.180 --> 00:20:06.700 align:middle line:90% that would be good, too. 00:20:06.700 --> 00:20:12.980 align:middle line:84% So same business model, same format, maybe different music, 00:20:12.980 --> 00:20:17.140 align:middle line:84% but I'm meeting a different set of needs. 00:20:17.140 --> 00:20:24.060 align:middle line:84% And it looks like I could make $400 per month 00:20:24.060 --> 00:20:29.220 align:middle line:84% per customer, which means I only need about a dozen or so. 00:20:29.220 --> 00:20:32.750 align:middle line:84% This looks a lot more feasible to me then 00:20:32.750 --> 00:20:35.990 align:middle line:90% trying to find hundreds. 00:20:35.990 --> 00:20:40.730 align:middle line:84% My point-- I changed my approach to the customer. 00:20:40.730 --> 00:20:44.270 align:middle line:84% I dug in a little bit in terms of what do they need? 00:20:44.270 --> 00:20:46.430 align:middle line:90% What do they want? 00:20:46.430 --> 00:20:48.310 align:middle line:90% Some socializing. 00:20:48.310 --> 00:20:49.930 align:middle line:90% I want to be a little cool. 00:20:49.930 --> 00:20:52.670 align:middle line:90% 00:20:52.670 --> 00:20:54.750 align:middle line:84% I hope you'll find some relevance 00:20:54.750 --> 00:20:58.730 align:middle line:84% to this in the startup work you're about to do, 00:20:58.730 --> 00:21:01.263 align:middle line:90% or are already doing. 00:21:01.263 --> 00:21:02.430 align:middle line:90% Let's ask the next question. 00:21:02.430 --> 00:21:04.930 align:middle line:90% How am I going to find them? 00:21:04.930 --> 00:21:06.930 align:middle line:84% Well, there's a subordinate question, of course. 00:21:06.930 --> 00:21:08.310 align:middle line:90% Who am I looking for? 00:21:08.310 --> 00:21:10.330 align:middle line:84% I used to think I was looking for school kids. 00:21:10.330 --> 00:21:12.870 align:middle line:90% I've changed my mind. 00:21:12.870 --> 00:21:19.070 align:middle line:84% So where do they look for information and connections? 00:21:19.070 --> 00:21:22.600 align:middle line:90% So I'll come back to that. 00:21:22.600 --> 00:21:24.350 align:middle line:84% Here's one of the most important questions 00:21:24.350 --> 00:21:25.890 align:middle line:90% I'm going to ask you tonight. 00:21:25.890 --> 00:21:29.350 align:middle line:90% Who wins if I win? 00:21:29.350 --> 00:21:31.310 align:middle line:90% Who wins if you win? 00:21:31.310 --> 00:21:35.750 align:middle line:84% Who would be thrilled to see me succeed? 00:21:35.750 --> 00:21:36.850 align:middle line:90% What are your thoughts? 00:21:36.850 --> 00:21:40.750 align:middle line:90% 00:21:40.750 --> 00:21:44.310 align:middle line:84% AUDIENCE: Your customers would be. 00:21:44.310 --> 00:21:48.590 align:middle line:90% BOB JONES: OK, my customers. 00:21:48.590 --> 00:21:49.850 align:middle line:90% Let's elaborate on that. 00:21:49.850 --> 00:21:53.670 align:middle line:84% How would my customers help me win? 00:21:53.670 --> 00:21:58.670 align:middle line:84% AUDIENCE: If you can to get 12 customers, then-- 00:21:58.670 --> 00:22:00.250 align:middle line:84% BOB JONES: Bring it a little closer. 00:22:00.250 --> 00:22:02.167 align:middle line:84% AUDIENCE: --then that they talk to each other. 00:22:02.167 --> 00:22:04.150 align:middle line:84% They inform each other, hey, this is fun. 00:22:04.150 --> 00:22:09.190 align:middle line:84% [INAUDIBLE] So they're having fun. 00:22:09.190 --> 00:22:12.450 align:middle line:84% BOB JONES: My customers become my sales force. 00:22:12.450 --> 00:22:15.230 align:middle line:90% 00:22:15.230 --> 00:22:21.198 align:middle line:84% You have a-- we've got we've got a victim-- a volunteer. 00:22:21.198 --> 00:22:22.990 align:middle line:90% AUDIENCE: I think I'm loud. 00:22:22.990 --> 00:22:25.750 align:middle line:84% BOB JONES: Yeah, but the problem is the people out there 00:22:25.750 --> 00:22:29.440 align:middle line:90% in Zoomland won't hear you. 00:22:29.440 --> 00:22:34.080 align:middle line:84% AUDIENCE: My champions who would support me in-- so basically, 00:22:34.080 --> 00:22:35.600 align:middle line:90% like a sales force. 00:22:35.600 --> 00:22:39.000 align:middle line:84% She said the end users, but my champions and people who 00:22:39.000 --> 00:22:41.720 align:middle line:90% are paying, so economic buyers. 00:22:41.720 --> 00:22:42.820 align:middle line:90% BOB JONES: Good. 00:22:42.820 --> 00:22:43.760 align:middle line:90% Good. 00:22:43.760 --> 00:22:46.800 align:middle line:90% Who else? 00:22:46.800 --> 00:22:47.620 align:middle line:90% Behind you. 00:22:47.620 --> 00:22:54.720 align:middle line:90% 00:22:54.720 --> 00:22:58.460 align:middle line:84% AUDIENCE: I'm going to say maybe the government or public safety. 00:22:58.460 --> 00:23:02.320 align:middle line:84% So if you have older singles learning a guitar, 00:23:02.320 --> 00:23:04.980 align:middle line:84% they're not out marauding and rioting in the streets. 00:23:04.980 --> 00:23:07.495 align:middle line:90% [LAUGHTER] 00:23:07.495 --> 00:23:09.120 align:middle line:84% BOB JONES: That's a little harder sell. 00:23:09.120 --> 00:23:11.520 align:middle line:90% [LAUGHTER] 00:23:11.520 --> 00:23:15.000 align:middle line:90% How about music stores? 00:23:15.000 --> 00:23:16.100 align:middle line:90% Let's go back to this. 00:23:16.100 --> 00:23:18.640 align:middle line:84% Let's say that Trevor looks under his bed 00:23:18.640 --> 00:23:22.880 align:middle line:84% and pulls out an old Fender Stratocaster that he 00:23:22.880 --> 00:23:27.000 align:middle line:84% hasn't touched in 10 years, and he plays it a little bit. 00:23:27.000 --> 00:23:32.330 align:middle line:84% And he says, man, I'm really rusty. 00:23:32.330 --> 00:23:35.030 align:middle line:84% And speaking of rusty, these strings are so rusty, 00:23:35.030 --> 00:23:38.410 align:middle line:84% I'm going to need a tetanus shot if I play it much longer. 00:23:38.410 --> 00:23:40.490 align:middle line:84% So I'm going to go to a music store. 00:23:40.490 --> 00:23:43.250 align:middle line:84% And he walks into a music store to buy strings. 00:23:43.250 --> 00:23:45.010 align:middle line:84% And he's looking up at the wall, and he's 00:23:45.010 --> 00:23:47.810 align:middle line:90% seeing all these guitars. 00:23:47.810 --> 00:23:50.090 align:middle line:84% And one of the helpful assistants comes over and says, 00:23:50.090 --> 00:23:51.450 align:middle line:90% you want to try one. 00:23:51.450 --> 00:23:52.730 align:middle line:90% And he says, no. 00:23:52.730 --> 00:23:55.350 align:middle line:84% I don't have any opportunities to play. 00:23:55.350 --> 00:23:57.730 align:middle line:84% And I've lost most of my chops, and I don't know 00:23:57.730 --> 00:23:59.370 align:middle line:90% how I'm going to get better. 00:23:59.370 --> 00:24:01.270 align:middle line:84% And the guy in the music store says, 00:24:01.270 --> 00:24:05.370 align:middle line:90% I got a guy that can help you. 00:24:05.370 --> 00:24:07.210 align:middle line:90% So now we both win. 00:24:07.210 --> 00:24:10.390 align:middle line:84% Because he's going to come to my lessons. 00:24:10.390 --> 00:24:12.970 align:middle line:84% He's going to bring his beat up old guitar. 00:24:12.970 --> 00:24:16.430 align:middle line:84% He's going to listen to my new fancy guitar. 00:24:16.430 --> 00:24:18.710 align:middle line:84% He's going to say, my guitar sounds terrible. 00:24:18.710 --> 00:24:23.370 align:middle line:84% I've got to go back to the music store and buy a good one. 00:24:23.370 --> 00:24:26.130 align:middle line:84% These are obviously analogies that I'm 00:24:26.130 --> 00:24:27.730 align:middle line:90% trying to draw here for you. 00:24:27.730 --> 00:24:30.570 align:middle line:84% But the concept, I hope, makes sense. 00:24:30.570 --> 00:24:34.690 align:middle line:84% And of course, church groups, Facebook groups, meetup. 00:24:34.690 --> 00:24:37.130 align:middle line:84% What we're trying to say is figure out 00:24:37.130 --> 00:24:40.450 align:middle line:84% who wants what you've got and will pay you for it? 00:24:40.450 --> 00:24:42.450 align:middle line:90% Who wins if you win? 00:24:42.450 --> 00:24:44.690 align:middle line:90% How do you find them? 00:24:44.690 --> 00:24:47.570 align:middle line:84% And how can you build collaborations 00:24:47.570 --> 00:24:50.010 align:middle line:90% that are to mutual benefit? 00:24:50.010 --> 00:24:53.510 align:middle line:90% So far, so good? 00:24:53.510 --> 00:24:54.737 align:middle line:90% This one's hypothetical. 00:24:54.737 --> 00:24:56.570 align:middle line:84% I'm not moved to the Berkshires, and I'm not 00:24:56.570 --> 00:24:59.130 align:middle line:90% giving guitar lessons. 00:24:59.130 --> 00:25:02.510 align:middle line:84% But I will say your business might limp along, 00:25:02.510 --> 00:25:05.890 align:middle line:84% but it's not going to prosper until you figure out, 00:25:05.890 --> 00:25:07.890 align:middle line:90% what are you really selling? 00:25:07.890 --> 00:25:13.070 align:middle line:84% So what was I really selling in this guitar lesson example? 00:25:13.070 --> 00:25:14.570 align:middle line:90% AUDIENCE: I heard romance. 00:25:14.570 --> 00:25:15.450 align:middle line:90% BOB JONES: Sorry? 00:25:15.450 --> 00:25:16.533 align:middle line:90% AUDIENCE: I heard romance. 00:25:16.533 --> 00:25:18.130 align:middle line:84% You're selling romance at one point. 00:25:18.130 --> 00:25:21.850 align:middle line:90% BOB JONES: [LAUGHTER] Well, gee. 00:25:21.850 --> 00:25:25.460 align:middle line:90% I'm super fly here. 00:25:25.460 --> 00:25:27.200 align:middle line:90% I'm selling romance. 00:25:27.200 --> 00:25:28.780 align:middle line:90% Well, kind of. 00:25:28.780 --> 00:25:34.028 align:middle line:84% I mean, I'm selling comfort, socialization-- 00:25:34.028 --> 00:25:36.368 align:middle line:90% AUDIENCE: Purpose. 00:25:36.368 --> 00:25:37.730 align:middle line:90% Purpose. 00:25:37.730 --> 00:25:38.480 align:middle line:90% AUDIENCE: Purpose. 00:25:38.480 --> 00:25:39.230 align:middle line:90% AUDIENCE: Purpose. 00:25:39.230 --> 00:25:40.700 align:middle line:90% BOB JONES: Yeah. 00:25:40.700 --> 00:25:45.140 align:middle line:84% Yeah, and collaboration, and I don't know. 00:25:45.140 --> 00:25:50.340 align:middle line:84% How many of you in this room play a musical instrument 00:25:50.340 --> 00:25:53.260 align:middle line:90% in an ensemble, ever? 00:25:53.260 --> 00:25:54.100 align:middle line:90% Yeah? 00:25:54.100 --> 00:25:57.700 align:middle line:90% I mean, it's pretty awesome. 00:25:57.700 --> 00:25:58.900 align:middle line:90% I mean, it's just-- 00:25:58.900 --> 00:26:02.780 align:middle line:90% there's something that happens. 00:26:02.780 --> 00:26:04.780 align:middle line:84% Thursday night last week, I walked 00:26:04.780 --> 00:26:09.100 align:middle line:84% into a place west of here, a room 00:26:09.100 --> 00:26:13.340 align:middle line:84% I had never been in, an audience I had never seen before. 00:26:13.340 --> 00:26:15.860 align:middle line:90% It was a blues jam. 00:26:15.860 --> 00:26:18.580 align:middle line:84% And when the house band finished their gig, 00:26:18.580 --> 00:26:21.380 align:middle line:84% the guitar player came around and talked. 00:26:21.380 --> 00:26:22.540 align:middle line:90% Do you play guitar? 00:26:22.540 --> 00:26:23.040 align:middle line:90% I do. 00:26:23.040 --> 00:26:23.670 align:middle line:90% Do you sing? 00:26:23.670 --> 00:26:24.170 align:middle line:90% I do. 00:26:24.170 --> 00:26:28.950 align:middle line:84% How do you feel about being first up on stage? 00:26:28.950 --> 00:26:32.310 align:middle line:84% Big room, big stage, big lighting system. 00:26:32.310 --> 00:26:35.630 align:middle line:84% If I were prone to stage fright-- 00:26:35.630 --> 00:26:36.570 align:middle line:90% I said, I'm in. 00:26:36.570 --> 00:26:37.390 align:middle line:90% Let's do it. 00:26:37.390 --> 00:26:39.670 align:middle line:84% I had to get up on stage with a couple 00:26:39.670 --> 00:26:45.007 align:middle line:84% people I had never seen before and perform for an audience. 00:26:45.007 --> 00:26:47.090 align:middle line:84% So I said, do you have people for me to play with? 00:26:47.090 --> 00:26:48.507 align:middle line:84% He said, yeah, I got [VOCALIZING]. 00:26:48.507 --> 00:26:50.310 align:middle line:90% I said, are they any good? 00:26:50.310 --> 00:26:51.350 align:middle line:90% He said, yeah. 00:26:51.350 --> 00:26:52.870 align:middle line:90% I said, let's do it. 00:26:52.870 --> 00:26:54.030 align:middle line:90% They were good. 00:26:54.030 --> 00:26:55.550 align:middle line:90% Magic happened. 00:26:55.550 --> 00:26:57.110 align:middle line:90% Magic happened. 00:26:57.110 --> 00:26:58.150 align:middle line:90% I mean, it was just-- 00:26:58.150 --> 00:26:58.650 align:middle line:90% [VOCALIZING] 00:26:58.650 --> 00:27:03.270 align:middle line:84% So to some extent, what I'm selling 00:27:03.270 --> 00:27:07.910 align:middle line:84% is the excitement that you get when that collaboration happens. 00:27:07.910 --> 00:27:11.370 align:middle line:84% But also, I'm getting you out of your house, et cetera. 00:27:11.370 --> 00:27:14.570 align:middle line:84% So I'm selling some social component as well, 00:27:14.570 --> 00:27:16.870 align:middle line:90% and people are paying for it. 00:27:16.870 --> 00:27:20.550 align:middle line:84% How will I find them, and how will I make money? 00:27:20.550 --> 00:27:23.990 align:middle line:90% Very basic. 00:27:23.990 --> 00:27:25.570 align:middle line:90% Very important. 00:27:25.570 --> 00:27:29.260 align:middle line:90% 00:27:29.260 --> 00:27:33.450 align:middle line:84% So some questions you should ask regarding your venture, 00:27:33.450 --> 00:27:36.370 align:middle line:84% and I'm going to repeat what Joe said. 00:27:36.370 --> 00:27:37.570 align:middle line:90% The questions are easy. 00:27:37.570 --> 00:27:39.270 align:middle line:90% The answers are not. 00:27:39.270 --> 00:27:42.490 align:middle line:84% But you will drive right into a pothole, 00:27:42.490 --> 00:27:44.470 align:middle line:84% you will disappear into a black hole, 00:27:44.470 --> 00:27:47.250 align:middle line:84% if you don't at least address some of these things. 00:27:47.250 --> 00:27:50.190 align:middle line:90% What's broke that you fix? 00:27:50.190 --> 00:27:56.230 align:middle line:84% Who specifically actually wants a solution? 00:27:56.230 --> 00:27:58.790 align:middle line:90% Are there enough of them? 00:27:58.790 --> 00:28:03.290 align:middle line:84% I ran into one outfit that was trying to build a business, 00:28:03.290 --> 00:28:06.550 align:middle line:84% and they had a solution that about 12 people in North America 00:28:06.550 --> 00:28:08.710 align:middle line:90% would have paid for. 00:28:08.710 --> 00:28:10.790 align:middle line:90% It just wasn't enough. 00:28:10.790 --> 00:28:14.790 align:middle line:84% So will they spend money to solve their problem? 00:28:14.790 --> 00:28:17.730 align:middle line:84% Well, I like working with startups. 00:28:17.730 --> 00:28:19.390 align:middle line:84% They won't spend any money to solve 00:28:19.390 --> 00:28:21.420 align:middle line:90% their problems for two reasons. 00:28:21.420 --> 00:28:23.240 align:middle line:84% One, founders think they know everything. 00:28:23.240 --> 00:28:24.960 align:middle line:84% And two, they don't have any money. 00:28:24.960 --> 00:28:29.200 align:middle line:90% So terrible audience. 00:28:29.200 --> 00:28:31.920 align:middle line:84% How do I find them and let them know about us? 00:28:31.920 --> 00:28:34.960 align:middle line:84% How are they solving their problem now? 00:28:34.960 --> 00:28:38.720 align:middle line:84% And why will they think my solution is compellingly better 00:28:38.720 --> 00:28:41.800 align:middle line:90% than the alternatives? 00:28:41.800 --> 00:28:43.012 align:middle line:90% And who's going to pay me? 00:28:43.012 --> 00:28:44.220 align:middle line:90% Remember, it wasn't the kids. 00:28:44.220 --> 00:28:45.470 align:middle line:90% It was the parents, et cetera. 00:28:45.470 --> 00:28:46.580 align:middle line:90% Who's going to pay me? 00:28:46.580 --> 00:28:49.360 align:middle line:90% 00:28:49.360 --> 00:28:51.020 align:middle line:90% One slide on raising capital. 00:28:51.020 --> 00:28:54.280 align:middle line:84% We'll talk more about this next Tuesday night. 00:28:54.280 --> 00:28:59.600 align:middle line:84% As Joe said, most investors lose most of their money. 00:28:59.600 --> 00:29:04.500 align:middle line:84% And so they come along and they say, 00:29:04.500 --> 00:29:10.280 align:middle line:84% well, you 10 people here in the fourth row 00:29:10.280 --> 00:29:15.200 align:middle line:90% back, you all have ideas. 00:29:15.200 --> 00:29:19.290 align:middle line:84% Statistically speaking, nine of you are going to fail. 00:29:19.290 --> 00:29:21.210 align:middle line:90% Now, you're here at MIT. 00:29:21.210 --> 00:29:25.170 align:middle line:84% You're probably twice as smart as most people. 00:29:25.170 --> 00:29:27.230 align:middle line:84% So maybe only eight of you will fail. 00:29:27.230 --> 00:29:30.730 align:middle line:90% [LAUGHS] Still pretty bad odds. 00:29:30.730 --> 00:29:34.450 align:middle line:84% So I'm trying to figure out, where do I put my money? 00:29:34.450 --> 00:29:39.170 align:middle line:84% Well, there's only one non-negotiable requirement. 00:29:39.170 --> 00:29:43.370 align:middle line:90% You have to have customers. 00:29:43.370 --> 00:29:46.650 align:middle line:84% You cannot negotiate away from that. 00:29:46.650 --> 00:29:48.850 align:middle line:90% You don't have to be smart. 00:29:48.850 --> 00:29:50.350 align:middle line:90% You don't have to have money. 00:29:50.350 --> 00:29:52.810 align:middle line:84% You don't have to be good-looking. 00:29:52.810 --> 00:29:56.170 align:middle line:84% If you have customers, people will think you're smart. 00:29:56.170 --> 00:29:57.643 align:middle line:90% You will make money. 00:29:57.643 --> 00:29:59.310 align:middle line:84% And of course, if you make enough money, 00:29:59.310 --> 00:30:00.893 align:middle line:84% people will think you're good-looking. 00:30:00.893 --> 00:30:03.490 align:middle line:90% [LAUGHTER] 00:30:03.490 --> 00:30:05.570 align:middle line:90% Sorry, that was a joke. 00:30:05.570 --> 00:30:08.850 align:middle line:90% So, do you have any? 00:30:08.850 --> 00:30:10.840 align:middle line:90% Do you even know you need them? 00:30:10.840 --> 00:30:12.090 align:middle line:90% How are you going to get them? 00:30:12.090 --> 00:30:14.170 align:middle line:90% All of those questions. 00:30:14.170 --> 00:30:20.810 align:middle line:84% So most investors want to know the answer to two questions. 00:30:20.810 --> 00:30:24.730 align:middle line:84% How will you make money, and how will I make money? 00:30:24.730 --> 00:30:27.350 align:middle line:84% And if I don't get a good answer from you for question one, 00:30:27.350 --> 00:30:30.650 align:middle line:84% how will you make money, there's no point in asking the second 00:30:30.650 --> 00:30:33.650 align:middle line:84% question because I don't have a prayer of making money if you 00:30:33.650 --> 00:30:34.150 align:middle line:90% don't. 00:30:34.150 --> 00:30:36.730 align:middle line:90% 00:30:36.730 --> 00:30:39.810 align:middle line:90% Enough of the abstract. 00:30:39.810 --> 00:30:45.970 align:middle line:84% Here's an example of something that I launched some years ago. 00:30:45.970 --> 00:30:49.890 align:middle line:84% I was in California, Orange County, 00:30:49.890 --> 00:30:53.010 align:middle line:84% where there is less than meets the eye. 00:30:53.010 --> 00:30:55.450 align:middle line:84% And I was running the clinical nutrition division 00:30:55.450 --> 00:30:57.250 align:middle line:90% of this medical company. 00:30:57.250 --> 00:31:04.350 align:middle line:84% We made IV fluids that we would sell to intensive care units. 00:31:04.350 --> 00:31:08.250 align:middle line:84% We'd make a liter of fluid for about $3. 00:31:08.250 --> 00:31:11.370 align:middle line:90% We'd sell it for $70. 00:31:11.370 --> 00:31:15.450 align:middle line:90% Pretty high-margin business. 00:31:15.450 --> 00:31:17.940 align:middle line:84% The company had been doing $200 million a year 00:31:17.940 --> 00:31:19.800 align:middle line:84% in revenue for 12 straight years. 00:31:19.800 --> 00:31:23.420 align:middle line:84% An entrepreneur came along, took them private in 00:31:23.420 --> 00:31:26.260 align:middle line:84% a leveraged buyout, Alex Brown and Company. 00:31:26.260 --> 00:31:27.760 align:middle line:90% Fired the senior managers. 00:31:27.760 --> 00:31:30.860 align:middle line:84% Brought in a bunch of people with a little more energy 00:31:30.860 --> 00:31:32.720 align:middle line:84% and said, here's a little stock for you. 00:31:32.720 --> 00:31:36.460 align:middle line:84% Here's a little stock for you and for you, et cetera. 00:31:36.460 --> 00:31:37.920 align:middle line:90% We're all owners now. 00:31:37.920 --> 00:31:43.860 align:middle line:84% I want to kick this up 50% in three years and take it public. 00:31:43.860 --> 00:31:45.960 align:middle line:90% And then you can buy a boat. 00:31:45.960 --> 00:31:47.140 align:middle line:90% You can buy a house. 00:31:47.140 --> 00:31:52.340 align:middle line:84% You can buy that year-long vacation, et cetera. 00:31:52.340 --> 00:31:54.580 align:middle line:90% Quite motivating. 00:31:54.580 --> 00:31:59.380 align:middle line:84% And I was running the division that made more than 100% 00:31:59.380 --> 00:32:01.900 align:middle line:84% of the gross profit for the company. 00:32:01.900 --> 00:32:06.580 align:middle line:84% But there were changes coming in the marketplace-- managed 00:32:06.580 --> 00:32:11.380 align:middle line:90% care, HMOs, et cetera. 00:32:11.380 --> 00:32:14.630 align:middle line:84% Looked like it was going to pull the rug out from under my highly 00:32:14.630 --> 00:32:16.510 align:middle line:90% profitable business. 00:32:16.510 --> 00:32:18.870 align:middle line:84% So I went out in the marketplace and lifted the lids 00:32:18.870 --> 00:32:21.070 align:middle line:84% on the garbage cans and found what 00:32:21.070 --> 00:32:23.430 align:middle line:90% I thought was an opportunity. 00:32:23.430 --> 00:32:29.230 align:middle line:84% I found that nobody was doing it. 00:32:29.230 --> 00:32:31.250 align:middle line:84% That, by the way, should be a red flag. 00:32:31.250 --> 00:32:34.750 align:middle line:90% 00:32:34.750 --> 00:32:36.870 align:middle line:90% So here's the background. 00:32:36.870 --> 00:32:39.510 align:middle line:84% It was in the kidney dialysis field. 00:32:39.510 --> 00:32:44.390 align:middle line:84% And at the time, there were 400,000 patients in the country 00:32:44.390 --> 00:32:48.650 align:middle line:84% who were lining up to have dialysis treatments, 00:32:48.650 --> 00:32:50.710 align:middle line:90% usually three times a week. 00:32:50.710 --> 00:32:54.570 align:middle line:84% And tragically, the market was growing rapidly. 00:32:54.570 --> 00:32:57.170 align:middle line:84% But if you were getting dialysis, 00:32:57.170 --> 00:33:00.870 align:middle line:84% you were going to one of the 2,300 dialysis centers 00:33:00.870 --> 00:33:03.710 align:middle line:84% in the country, all of which were listed in a federal 00:33:03.710 --> 00:33:05.070 align:middle line:90% document. 00:33:05.070 --> 00:33:08.710 align:middle line:90% So I could find you. 00:33:08.710 --> 00:33:13.390 align:middle line:84% Physiologically, one of the important things your kidneys do 00:33:13.390 --> 00:33:15.760 align:middle line:90% is help you eliminate fluids. 00:33:15.760 --> 00:33:19.540 align:middle line:84% And if they don't work, you don't eliminate the fluids. 00:33:19.540 --> 00:33:22.080 align:middle line:84% And so you end up gaining 8 to 12 pounds 00:33:22.080 --> 00:33:24.080 align:middle line:90% between Monday and Wednesday. 00:33:24.080 --> 00:33:26.760 align:middle line:84% Part of what dialysis does, besides cleaning out 00:33:26.760 --> 00:33:30.840 align:middle line:84% the impurities, is brings out the extra fluid. 00:33:30.840 --> 00:33:34.220 align:middle line:84% And due to other things that your kidneys do, 00:33:34.220 --> 00:33:37.520 align:middle line:84% you frequently are malnourished, at least clinically. 00:33:37.520 --> 00:33:43.740 align:middle line:84% And the usual answer was to give you a nutrition supplement. 00:33:43.740 --> 00:33:45.680 align:middle line:90% Think Insure or Boost. 00:33:45.680 --> 00:33:48.680 align:middle line:90% They're all liquids. 00:33:48.680 --> 00:33:51.340 align:middle line:84% Well, call me silly, but I looked at that and said, 00:33:51.340 --> 00:33:54.600 align:middle line:84% there's something wrong with this picture. 00:33:54.600 --> 00:33:59.200 align:middle line:84% So we formulated a nutrition supplement 00:33:59.200 --> 00:34:01.400 align:middle line:84% that was high in what you needed and low in what 00:34:01.400 --> 00:34:04.100 align:middle line:84% you shouldn't have, and it didn't have any fluids. 00:34:04.100 --> 00:34:06.760 align:middle line:90% 00:34:06.760 --> 00:34:09.940 align:middle line:84% Essentially, candy bar, but it wasn't candy. 00:34:09.940 --> 00:34:12.480 align:middle line:90% We called it Regain. 00:34:12.480 --> 00:34:15.320 align:middle line:84% So there was an obvious question. 00:34:15.320 --> 00:34:17.960 align:middle line:90% Does it work? 00:34:17.960 --> 00:34:20.360 align:middle line:84% And though we were not required to do 00:34:20.360 --> 00:34:24.679 align:middle line:84% clinical trials, as an ethical business, we did one. 00:34:24.679 --> 00:34:29.880 align:middle line:84% And we got it published in a prestigious peer-reviewed 00:34:29.880 --> 00:34:32.020 align:middle line:84% journal, which is the gold standard. 00:34:32.020 --> 00:34:36.480 align:middle line:90% 00:34:36.480 --> 00:34:40.000 align:middle line:84% And the bottom line, it did work. 00:34:40.000 --> 00:34:42.280 align:middle line:84% It changed the blood chemistries, 00:34:42.280 --> 00:34:44.840 align:middle line:84% and it extended the lives of the patients. 00:34:44.840 --> 00:34:48.280 align:middle line:84% We said, well, let's do a little market research. 00:34:48.280 --> 00:34:51.120 align:middle line:84% We know these patients see doctors about their dialysis 00:34:51.120 --> 00:34:51.980 align:middle line:90% regimens. 00:34:51.980 --> 00:34:55.560 align:middle line:84% They see dietitians about their nutritional requirements. 00:34:55.560 --> 00:34:58.020 align:middle line:84% We know that they're opinion leaders in this business. 00:34:58.020 --> 00:35:00.880 align:middle line:84% Let's just go ask them, what do you think? 00:35:00.880 --> 00:35:04.280 align:middle line:90% Would you recommend it? 00:35:04.280 --> 00:35:07.680 align:middle line:90% The answers were, yeah. 00:35:07.680 --> 00:35:11.250 align:middle line:84% Said, well, for how many of your patients would you recommend it? 00:35:11.250 --> 00:35:15.050 align:middle line:90% And they said all of them. 00:35:15.050 --> 00:35:18.450 align:middle line:84% How many days a week would you recommend that they take it for? 00:35:18.450 --> 00:35:20.170 align:middle line:90% Seven. 00:35:20.170 --> 00:35:22.010 align:middle line:90% Really? 00:35:22.010 --> 00:35:24.718 align:middle line:84% How do you think it stacks up against the competition? 00:35:24.718 --> 00:35:26.510 align:middle line:84% They said, well, you really don't have any. 00:35:26.510 --> 00:35:29.010 align:middle line:90% Everybody else has got liquids. 00:35:29.010 --> 00:35:30.970 align:middle line:90% You don't. 00:35:30.970 --> 00:35:34.130 align:middle line:84% Well, how do you feel about $3 a bar? 00:35:34.130 --> 00:35:37.650 align:middle line:90% It sounds good to me. 00:35:37.650 --> 00:35:39.530 align:middle line:90% We said, jeez. 00:35:39.530 --> 00:35:41.690 align:middle line:84% Did a little arithmetic, said I think 00:35:41.690 --> 00:35:45.450 align:middle line:84% we just replaced the business we were worried about losing. 00:35:45.450 --> 00:35:48.230 align:middle line:84% So we did our market projections. 00:35:48.230 --> 00:35:50.770 align:middle line:84% We brought in the photographers and did the beauty shots 00:35:50.770 --> 00:35:51.630 align:middle line:90% of the product. 00:35:51.630 --> 00:35:54.210 align:middle line:84% We pulled together a commission plan, 00:35:54.210 --> 00:35:58.310 align:middle line:84% took it into the marketplace, and it was an absolute disaster. 00:35:58.310 --> 00:36:03.010 align:middle line:90% 00:36:03.010 --> 00:36:07.130 align:middle line:84% Came in at less than 10% of the forecast each month. 00:36:07.130 --> 00:36:12.800 align:middle line:84% So if the forecast was $400,000 for the month, $35,000. 00:36:12.800 --> 00:36:16.240 align:middle line:90% [WHISTLES] 00:36:16.240 --> 00:36:21.020 align:middle line:90% So what did I do wrong? 00:36:21.020 --> 00:36:23.580 align:middle line:84% Here's where those of you holding the wireless microphones 00:36:23.580 --> 00:36:24.440 align:middle line:90% might get busy. 00:36:24.440 --> 00:36:26.540 align:middle line:90% What did I do wrong? 00:36:26.540 --> 00:36:30.060 align:middle line:84% This, by the way, did ruin a year of my life. 00:36:30.060 --> 00:36:31.300 align:middle line:90% I'll elaborate on it. 00:36:31.300 --> 00:36:32.620 align:middle line:90% Yes? 00:36:32.620 --> 00:36:35.020 align:middle line:90% AUDIENCE: Did it taste bad? 00:36:35.020 --> 00:36:38.580 align:middle line:90% BOB JONES: Did it taste bad? 00:36:38.580 --> 00:36:43.020 align:middle line:84% Well, we thought it tasted pretty good. 00:36:43.020 --> 00:36:44.200 align:middle line:90% That's a good question. 00:36:44.200 --> 00:36:48.340 align:middle line:84% It turns out when your kidneys fail, your palate shifts. 00:36:48.340 --> 00:36:52.540 align:middle line:84% And protein, of which there was a great deal in this product, 00:36:52.540 --> 00:36:56.140 align:middle line:90% tastes like spoiled meat. 00:36:56.140 --> 00:37:00.340 align:middle line:84% So we asked the wrong people, how does it taste? 00:37:00.340 --> 00:37:01.960 align:middle line:90% But that was only part of it. 00:37:01.960 --> 00:37:03.400 align:middle line:90% What else did we do wrong? 00:37:03.400 --> 00:37:07.927 align:middle line:90% 00:37:07.927 --> 00:37:08.760 align:middle line:90% Well, come on, guys. 00:37:08.760 --> 00:37:11.320 align:middle line:84% My pedigree isn't terribly different from yours. 00:37:11.320 --> 00:37:14.380 align:middle line:84% I have some claims to at least a few functioning brain 00:37:14.380 --> 00:37:16.640 align:middle line:90% cells and some experience. 00:37:16.640 --> 00:37:20.580 align:middle line:84% And I worked very hard on this and fell flat on my face. 00:37:20.580 --> 00:37:23.980 align:middle line:84% There should be a lesson here for possibly you. 00:37:23.980 --> 00:37:25.360 align:middle line:90% What did I do wrong? 00:37:25.360 --> 00:37:27.500 align:middle line:84% AUDIENCE: Not talking to the customers. 00:37:27.500 --> 00:37:28.860 align:middle line:90% BOB JONES: Oh. 00:37:28.860 --> 00:37:31.400 align:middle line:84% I'm going to repeat that since you don't have a microphone. 00:37:31.400 --> 00:37:33.832 align:middle line:84% She said, not talking to the customers. 00:37:33.832 --> 00:37:35.540 align:middle line:84% You want to elaborate on that, or did you 00:37:35.540 --> 00:37:36.680 align:middle line:90% have a different answer? 00:37:36.680 --> 00:37:39.222 align:middle line:84% AUDIENCE: I was going to say you didn't talk to the patients. 00:37:39.222 --> 00:37:42.980 align:middle line:84% BOB JONES: We did not talk to the patients. 00:37:42.980 --> 00:37:45.380 align:middle line:90% Well, let's elaborate on that. 00:37:45.380 --> 00:37:48.700 align:middle line:84% You guys hacked into my computer, didn't you? 00:37:48.700 --> 00:37:52.100 align:middle line:84% We surveyed the clinicians, but the patients 00:37:52.100 --> 00:37:54.860 align:middle line:84% were buying this with their own money. 00:37:54.860 --> 00:37:56.400 align:middle line:90% We didn't survey them. 00:37:56.400 --> 00:37:57.560 align:middle line:90% Clinicians don't buy it. 00:37:57.560 --> 00:37:59.420 align:middle line:90% They don't eat it. 00:37:59.420 --> 00:38:03.440 align:middle line:84% When we did finally talk to the patients, they didn't want it, 00:38:03.440 --> 00:38:05.460 align:middle line:90% and they couldn't afford it. 00:38:05.460 --> 00:38:07.750 align:middle line:84% Couldn't afford it, we kind of understood. 00:38:07.750 --> 00:38:10.900 align:middle line:84% Because if you're tethered to a machine for three or four 00:38:10.900 --> 00:38:13.790 align:middle line:84% hours at a time, a couple times a week, 00:38:13.790 --> 00:38:16.632 align:middle line:84% some well-intended social worker is going to come along and say, 00:38:16.632 --> 00:38:18.590 align:middle line:84% well, I'm going to get you on public assistance 00:38:18.590 --> 00:38:20.770 align:middle line:84% because you can't hold down a job with this. 00:38:20.770 --> 00:38:22.070 align:middle line:90% Now you're broke. 00:38:22.070 --> 00:38:26.430 align:middle line:84% But why on Earth would they not want it? 00:38:26.430 --> 00:38:28.990 align:middle line:84% Because we had clear clinical evidence 00:38:28.990 --> 00:38:33.150 align:middle line:90% that it improved your health. 00:38:33.150 --> 00:38:37.195 align:middle line:84% Well, the answer that we should have-- 00:38:37.195 --> 00:38:39.070 align:middle line:84% I'm sorry-- the question we should have asked 00:38:39.070 --> 00:38:44.730 align:middle line:84% was, who gets kidney failure, our customer base. 00:38:44.730 --> 00:38:48.230 align:middle line:84% 33% of them get there from a lifetime 00:38:48.230 --> 00:38:50.910 align:middle line:90% of mismanaging their diabetes. 00:38:50.910 --> 00:38:54.910 align:middle line:84% 44% of them get there from a lifetime of mismanaging 00:38:54.910 --> 00:38:56.630 align:middle line:90% their high blood pressure. 00:38:56.630 --> 00:39:00.510 align:middle line:84% So 3/4 of my target customers had never taken care 00:39:00.510 --> 00:39:01.990 align:middle line:90% of themselves. 00:39:01.990 --> 00:39:04.070 align:middle line:90% They weren't going to start now. 00:39:04.070 --> 00:39:08.040 align:middle line:84% And if they had $5, it would go toward beer and cigarettes. 00:39:08.040 --> 00:39:11.560 align:middle line:90% Not my product. 00:39:11.560 --> 00:39:14.400 align:middle line:90% There was one other problem. 00:39:14.400 --> 00:39:17.920 align:middle line:84% They had to find someplace to buy it, 00:39:17.920 --> 00:39:22.240 align:middle line:84% and we had been selling to hospitals. 00:39:22.240 --> 00:39:26.920 align:middle line:84% And we failed to figure out that the retailers were also 00:39:26.920 --> 00:39:29.800 align:middle line:90% our customers. 00:39:29.800 --> 00:39:36.000 align:middle line:84% So have you ever walked in and watched a pharmacist at work 00:39:36.000 --> 00:39:38.360 align:middle line:90% when their phone rings? 00:39:38.360 --> 00:39:44.320 align:middle line:84% It's usually something like this. 00:39:44.320 --> 00:39:47.160 align:middle line:90% Pharmacy. 00:39:47.160 --> 00:39:52.600 align:middle line:84% You have about 12 seconds to capture their attention. 00:39:52.600 --> 00:39:55.880 align:middle line:84% And if you ever want to see a pharmacy manager 00:39:55.880 --> 00:40:01.320 align:middle line:84% bust out laughing, say, I have a product you've never 00:40:01.320 --> 00:40:05.420 align:middle line:84% heard of from a company you've never done business with, 00:40:05.420 --> 00:40:08.580 align:middle line:84% and it's for sale for a group of patients who don't want it. 00:40:08.580 --> 00:40:12.000 align:middle line:90% But I'd like you to carry it. 00:40:12.000 --> 00:40:14.800 align:middle line:84% The short answer is, fat chance, Bob. 00:40:14.800 --> 00:40:17.320 align:middle line:90% And I didn't know this. 00:40:17.320 --> 00:40:21.440 align:middle line:84% And one day one of these guys took pity on my poor self, 00:40:21.440 --> 00:40:23.960 align:middle line:84% and he hauled me out into the aisle, 00:40:23.960 --> 00:40:30.000 align:middle line:84% and he said, Bob, we essentially have linear shelf space. 00:40:30.000 --> 00:40:37.600 align:middle line:84% And on this foot of linear shelf space, I carry Crest toothpaste. 00:40:37.600 --> 00:40:39.880 align:middle line:84% And I have pretty sophisticated algorithms 00:40:39.880 --> 00:40:42.920 align:middle line:84% that are going to tell me how many dollars in revenue 00:40:42.920 --> 00:40:46.840 align:middle line:84% I'm going to get each month from this foot of shelf space. 00:40:46.840 --> 00:40:52.400 align:middle line:84% Now, if I clear their product off and put your product on, 00:40:52.400 --> 00:40:57.200 align:middle line:84% I can't think of any reason why I ought to lose money. 00:40:57.200 --> 00:41:01.080 align:middle line:90% So get out your checkbook. 00:41:01.080 --> 00:41:07.310 align:middle line:84% This is called slotting fees, is you buy a slot on your shelf. 00:41:07.310 --> 00:41:09.670 align:middle line:90% You might call it extortion. 00:41:09.670 --> 00:41:12.850 align:middle line:90% 00:41:12.850 --> 00:41:14.850 align:middle line:90% Those fees are onerous. 00:41:14.850 --> 00:41:18.070 align:middle line:84% When we were doing this some years ago for CVS, 00:41:18.070 --> 00:41:24.190 align:middle line:84% it was $1 million a quarter, for starters. 00:41:24.190 --> 00:41:25.790 align:middle line:90% It was a guaranteed sale. 00:41:25.790 --> 00:41:28.370 align:middle line:84% That means if it didn't sell, they'd send it back to you 00:41:28.370 --> 00:41:29.810 align:middle line:90% for full refund. 00:41:29.810 --> 00:41:34.250 align:middle line:84% Plus, you had to fill every store in their chain 00:41:34.250 --> 00:41:38.530 align:middle line:84% with two samples of each SKU, Stock Keeping Unit, 00:41:38.530 --> 00:41:41.930 align:middle line:90% that they had. 00:41:41.930 --> 00:41:43.770 align:middle line:90% You have a question? 00:41:43.770 --> 00:41:44.430 align:middle line:90% All right. 00:41:44.430 --> 00:41:49.723 align:middle line:84% AUDIENCE: That was not included in your price of your product? 00:41:49.723 --> 00:41:51.390 align:middle line:84% BOB JONES: Take this man the microphone. 00:41:51.390 --> 00:41:54.890 align:middle line:84% I think the audience needs to hear this question. 00:41:54.890 --> 00:41:55.790 align:middle line:90% Go ahead, sir. 00:41:55.790 --> 00:41:57.415 align:middle line:84% AUDIENCE: I guess that was not included 00:41:57.415 --> 00:41:58.970 align:middle line:90% in the price of your product. 00:41:58.970 --> 00:42:03.800 align:middle line:84% BOB JONES: [LAUGHS] Well, you're right. 00:42:03.800 --> 00:42:06.360 align:middle line:84% In fact, I was completely clueless about this. 00:42:06.360 --> 00:42:08.100 align:middle line:84% The distribution channel I was used to 00:42:08.100 --> 00:42:10.040 align:middle line:84% was selling into hospital pharmacy-- 00:42:10.040 --> 00:42:14.360 align:middle line:84% I'm sorry-- into hospitals who had their own formulary, 00:42:14.360 --> 00:42:18.000 align:middle line:84% and there was a whole tap dance you had to do to get into that. 00:42:18.000 --> 00:42:20.460 align:middle line:84% But retail pharmacies was a distribution channel 00:42:20.460 --> 00:42:23.020 align:middle line:90% I knew nothing about. 00:42:23.020 --> 00:42:26.380 align:middle line:90% So we said, oh, my. 00:42:26.380 --> 00:42:28.260 align:middle line:84% Well, we were on track to show Wall Street 00:42:28.260 --> 00:42:31.100 align:middle line:84% we were a good candidate for a public offering, 00:42:31.100 --> 00:42:34.520 align:middle line:84% and if we succeeded in going public, 00:42:34.520 --> 00:42:37.620 align:middle line:84% all that stock that the owner handed out 00:42:37.620 --> 00:42:39.180 align:middle line:90% would be worth something. 00:42:39.180 --> 00:42:44.300 align:middle line:84% My shortfall put that IPO at risk. 00:42:44.300 --> 00:42:49.780 align:middle line:84% That meant I was not that popular, 00:42:49.780 --> 00:42:52.340 align:middle line:90% and it just kept going on. 00:42:52.340 --> 00:42:55.060 align:middle line:84% And I would have to report my results. 00:42:55.060 --> 00:42:58.580 align:middle line:84% And there are a few places in the country where 00:42:58.580 --> 00:43:00.600 align:middle line:90% you can fail with the venture. 00:43:00.600 --> 00:43:02.660 align:middle line:84% And people say, oh, yeah, I screwed up my first 00:43:02.660 --> 00:43:03.240 align:middle line:90% two or three. 00:43:03.240 --> 00:43:04.500 align:middle line:90% Come on in. 00:43:04.500 --> 00:43:07.460 align:middle line:90% But there's only a few. 00:43:07.460 --> 00:43:12.980 align:middle line:84% Most places in the country, they think if your venture failed, 00:43:12.980 --> 00:43:14.580 align:middle line:90% you are a failure. 00:43:14.580 --> 00:43:18.460 align:middle line:84% And by the way, failure is probably contagious. 00:43:18.460 --> 00:43:20.100 align:middle line:84% And if I spend time with you, I'll 00:43:20.100 --> 00:43:24.220 align:middle line:84% probably catch the failure bug, and I'll be a failure, too. 00:43:24.220 --> 00:43:27.300 align:middle line:90% So stay away from me. 00:43:27.300 --> 00:43:29.360 align:middle line:90% It was a lonely time. 00:43:29.360 --> 00:43:31.020 align:middle line:90% I'm not trying to make you weep. 00:43:31.020 --> 00:43:34.220 align:middle line:84% I'm trying to say that the consequences of me not thinking 00:43:34.220 --> 00:43:38.400 align:middle line:84% this through just got worse and worse, 00:43:38.400 --> 00:43:40.100 align:middle line:90% went on for an entire year. 00:43:40.100 --> 00:43:42.820 align:middle line:90% Painful lesson. 00:43:42.820 --> 00:43:45.840 align:middle line:84% So we learned about inside sales. 00:43:45.840 --> 00:43:49.420 align:middle line:84% We managed to find a way to get to the 25% of people 00:43:49.420 --> 00:43:54.700 align:middle line:84% who did not develop kidney failure through self-neglect. 00:43:54.700 --> 00:43:57.700 align:middle line:84% And we eventually found an outfit that catered specifically 00:43:57.700 --> 00:43:59.290 align:middle line:90% to that 25%. 00:43:59.290 --> 00:44:00.730 align:middle line:90% We had a clinical trial. 00:44:00.730 --> 00:44:03.530 align:middle line:84% We were the crown jewel in their modest collection. 00:44:03.530 --> 00:44:04.410 align:middle line:90% We sold it. 00:44:04.410 --> 00:44:06.390 align:middle line:84% We got out of it for about $1 more 00:44:06.390 --> 00:44:09.090 align:middle line:84% than we had spent in the business. 00:44:09.090 --> 00:44:12.790 align:middle line:84% And thankfully, I overachieved in my other responsibilities. 00:44:12.790 --> 00:44:15.270 align:middle line:84% And the company went public, and the stock turned out 00:44:15.270 --> 00:44:17.910 align:middle line:90% to be worth something. 00:44:17.910 --> 00:44:19.930 align:middle line:90% But it was just an awful year. 00:44:19.930 --> 00:44:23.310 align:middle line:90% 00:44:23.310 --> 00:44:27.510 align:middle line:84% So just to show you or to demonstrate, I suppose, 00:44:27.510 --> 00:44:32.190 align:middle line:84% that entrepreneurship is a form of mental illness, 00:44:32.190 --> 00:44:34.610 align:middle line:84% I went off and did two more of these things, 00:44:34.610 --> 00:44:36.410 align:middle line:84% and they did a little bit better. 00:44:36.410 --> 00:44:40.110 align:middle line:84% And at some point, I got the attention 00:44:40.110 --> 00:44:46.250 align:middle line:84% of the docs who started the nutrition division at Harvard, 00:44:46.250 --> 00:44:49.150 align:middle line:90% even though I was in California. 00:44:49.150 --> 00:44:53.110 align:middle line:84% And one day they called me up, and they asked me 00:44:53.110 --> 00:44:55.750 align:middle line:84% if I'd like to start a company with them. 00:44:55.750 --> 00:44:57.220 align:middle line:90% I said, no, absolutely not. 00:44:57.220 --> 00:44:59.160 align:middle line:84% There's nobody worse to start a company 00:44:59.160 --> 00:45:01.000 align:middle line:90% with than a bunch of doctors. 00:45:01.000 --> 00:45:02.463 align:middle line:84% And the smart doctors are the worst 00:45:02.463 --> 00:45:03.880 align:middle line:84% because they think because they're 00:45:03.880 --> 00:45:04.960 align:middle line:84% really good at something, they're 00:45:04.960 --> 00:45:06.140 align:middle line:90% really good at everything. 00:45:06.140 --> 00:45:07.020 align:middle line:90% So I love you guys. 00:45:07.020 --> 00:45:09.900 align:middle line:84% I'll meet you in San Antonio at the conference a couple weeks. 00:45:09.900 --> 00:45:10.660 align:middle line:90% Wear your jeans. 00:45:10.660 --> 00:45:12.260 align:middle line:84% I'll buy you a taco and a tequila, 00:45:12.260 --> 00:45:15.710 align:middle line:84% but I'm not starting a company with you. 00:45:15.710 --> 00:45:19.840 align:middle line:84% They said, well, Bob, you need to be less ambiguous 00:45:19.840 --> 00:45:22.360 align:middle line:90% and tell us what you think. 00:45:22.360 --> 00:45:24.320 align:middle line:84% Six months later, they call me back and said, 00:45:24.320 --> 00:45:29.200 align:middle line:84% we've raised some capital contingent on finding a CEO. 00:45:29.200 --> 00:45:31.620 align:middle line:84% Would you come to Boston, meet our investors? 00:45:31.620 --> 00:45:34.120 align:middle line:90% Long story short, we did it. 00:45:34.120 --> 00:45:41.540 align:middle line:84% So we selected diabetes as the field we would go into. 00:45:41.540 --> 00:45:46.520 align:middle line:84% How many of you know someone who has diabetes? 00:45:46.520 --> 00:45:49.080 align:middle line:90% It's everywhere. 00:45:49.080 --> 00:45:53.240 align:middle line:84% Well, at the time, there were 10 million people 00:45:53.240 --> 00:45:55.530 align:middle line:90% who had been diagnosed. 00:45:55.530 --> 00:45:58.510 align:middle line:84% And the prevailing wisdom was that if you have it, 00:45:58.510 --> 00:46:01.250 align:middle line:84% you can manage it, but it'll never go away. 00:46:01.250 --> 00:46:04.010 align:middle line:84% There's some evidence these days that, in fact, 00:46:04.010 --> 00:46:06.710 align:middle line:84% if you take some drastic steps, you can reverse it. 00:46:06.710 --> 00:46:09.130 align:middle line:84% But at the time, this was the belief. 00:46:09.130 --> 00:46:12.090 align:middle line:84% And the goal of managing your blood glucose 00:46:12.090 --> 00:46:15.110 align:middle line:84% was to keep it from not fluctuating wildly. 00:46:15.110 --> 00:46:17.330 align:middle line:84% So you wanted to restrict the bandwidth. 00:46:17.330 --> 00:46:20.610 align:middle line:84% And at that time, 4 million people 00:46:20.610 --> 00:46:23.850 align:middle line:84% used insulin to lower their blood sugar. 00:46:23.850 --> 00:46:30.170 align:middle line:84% And if they did it wrong, all 4 million of those people 00:46:30.170 --> 00:46:34.010 align:middle line:84% were at risk of their blood sugar going too low. 00:46:34.010 --> 00:46:36.050 align:middle line:90% So what happens in that case? 00:46:36.050 --> 00:46:40.090 align:middle line:84% Well, the stuff that gets the publicity 00:46:40.090 --> 00:46:43.890 align:middle line:84% comes from having blood glucose that's too high. 00:46:43.890 --> 00:46:46.810 align:middle line:84% And it's the major cause of blindness, 00:46:46.810 --> 00:46:50.890 align:middle line:84% kidney failure, and peripheral neuropathy, which 00:46:50.890 --> 00:46:53.610 align:middle line:90% means they amputate your feet. 00:46:53.610 --> 00:46:55.690 align:middle line:90% Bad. 00:46:55.690 --> 00:46:58.130 align:middle line:84% But the other side of that coin is 00:46:58.130 --> 00:47:02.370 align:middle line:84% if your blood glucose goes too low and you faint. 00:47:02.370 --> 00:47:08.250 align:middle line:84% So if you're stuck in rush hour traffic, that's bad. 00:47:08.250 --> 00:47:13.650 align:middle line:84% The real issue is what happens at night. 00:47:13.650 --> 00:47:20.450 align:middle line:84% Because people who tightly control 00:47:20.450 --> 00:47:22.730 align:middle line:84% their insulin and their blood glucose 00:47:22.730 --> 00:47:25.910 align:middle line:84% usually eat three small meals a day, 00:47:25.910 --> 00:47:29.490 align:middle line:84% eat three small snacks a day, regular small injections 00:47:29.490 --> 00:47:33.465 align:middle line:84% of insulin, and it keeps that bandwidth pretty moderated. 00:47:33.465 --> 00:47:36.090 align:middle line:84% But at night, nobody's going to wake themselves up two or three 00:47:36.090 --> 00:47:38.310 align:middle line:84% times in the course of the evening, eat a snack, 00:47:38.310 --> 00:47:40.970 align:middle line:84% inject some insulin, and go back to bed. 00:47:40.970 --> 00:47:44.570 align:middle line:84% So the system breaks down because what usually happens 00:47:44.570 --> 00:47:48.110 align:middle line:84% is they eat a big nighttime snack, big bolus of insulin, 00:47:48.110 --> 00:47:50.430 align:middle line:84% and hope that the two will titrate through the evening. 00:47:50.430 --> 00:47:56.540 align:middle line:84% And it doesn't work because the food all turns into glucose 00:47:56.540 --> 00:47:57.560 align:middle line:90% at the same time. 00:47:57.560 --> 00:48:02.940 align:middle line:84% The spike is higher, but the horizontal axis is no wider. 00:48:02.940 --> 00:48:07.020 align:middle line:84% Translation-- at 2:00 in the morning, the food has run out, 00:48:07.020 --> 00:48:08.760 align:middle line:84% and the insulin is still working. 00:48:08.760 --> 00:48:11.860 align:middle line:84% And that zone between 2:00 AM and 6:00 AM is when 00:48:11.860 --> 00:48:17.900 align:middle line:84% you're at risk of slipping from being hypoglycemic and asleep 00:48:17.900 --> 00:48:21.540 align:middle line:90% to slipping into a coma. 00:48:21.540 --> 00:48:28.060 align:middle line:84% So who can tell us what a focus group is? 00:48:28.060 --> 00:48:29.880 align:middle line:84% You guys know what focus groups are? 00:48:29.880 --> 00:48:32.933 align:middle line:90% 00:48:32.933 --> 00:48:34.600 align:middle line:84% Well, I'll give you the quick and dirty. 00:48:34.600 --> 00:48:36.267 align:middle line:84% You assembled a bunch of people that you 00:48:36.267 --> 00:48:38.360 align:middle line:84% think are representative of your customers. 00:48:38.360 --> 00:48:40.980 align:middle line:84% You put them in a room with a professional moderator. 00:48:40.980 --> 00:48:43.300 align:middle line:90% You sit behind a one-way glass. 00:48:43.300 --> 00:48:46.820 align:middle line:84% Moderator asks some questions as to what do you think of this, 00:48:46.820 --> 00:48:49.340 align:middle line:84% and how much would you pay for it, et cetera. 00:48:49.340 --> 00:48:52.750 align:middle line:84% And after three or four of these, I had a temper tantrum 00:48:52.750 --> 00:48:56.430 align:middle line:84% and came out from the other side of the-- and I said, 00:48:56.430 --> 00:48:58.950 align:middle line:84% you've spent 45 minutes listening to the science 00:48:58.950 --> 00:49:00.090 align:middle line:90% behind this product. 00:49:00.090 --> 00:49:03.430 align:middle line:84% Tell me, is there something that you really are afraid of? 00:49:03.430 --> 00:49:05.610 align:middle line:84% I'm done with the intellectual stuff. 00:49:05.610 --> 00:49:07.190 align:middle line:90% Let's talk emotions. 00:49:07.190 --> 00:49:08.870 align:middle line:90% And they said, yeah. 00:49:08.870 --> 00:49:11.630 align:middle line:84% I don't sleep in a bed anymore because I'm 00:49:11.630 --> 00:49:15.630 align:middle line:84% afraid if I get too comfortable, I will never wake up. 00:49:15.630 --> 00:49:18.850 align:middle line:84% So that recliner in my living room, that's where I sleep. 00:49:18.850 --> 00:49:23.070 align:middle line:84% I'm afraid I will die in my sleep. 00:49:23.070 --> 00:49:26.110 align:middle line:90% Well, that's gripping. 00:49:26.110 --> 00:49:32.390 align:middle line:84% So we invented a product which turned into glucose 00:49:32.390 --> 00:49:34.190 align:middle line:84% at different rates, the components. 00:49:34.190 --> 00:49:35.630 align:middle line:90% Lasts all night long. 00:49:35.630 --> 00:49:39.050 align:middle line:84% Being marketers at heart, we called it timed-release glucose. 00:49:39.050 --> 00:49:42.310 align:middle line:90% 00:49:42.310 --> 00:49:44.830 align:middle line:90% This time it did taste good. 00:49:44.830 --> 00:49:46.710 align:middle line:90% Thank you for that question. 00:49:46.710 --> 00:49:49.670 align:middle line:90% We gave it a nonmedical name. 00:49:49.670 --> 00:49:52.550 align:middle line:90% Why did we do that? 00:49:52.550 --> 00:49:53.650 align:middle line:90% This is important. 00:49:53.650 --> 00:49:56.590 align:middle line:90% 00:49:56.590 --> 00:50:00.110 align:middle line:84% I was working hard with the FTC to be 00:50:00.110 --> 00:50:02.870 align:middle line:84% able to say, this is for people with diabetes 00:50:02.870 --> 00:50:07.750 align:middle line:84% and put that on the label, until I learned that that 00:50:07.750 --> 00:50:09.830 align:middle line:90% would have killed my business. 00:50:09.830 --> 00:50:10.610 align:middle line:90% Tell me why. 00:50:10.610 --> 00:50:13.350 align:middle line:90% 00:50:13.350 --> 00:50:20.990 align:middle line:90% AUDIENCE: [INAUDIBLE] truth. 00:50:20.990 --> 00:50:25.670 align:middle line:84% BOB JONES: Well, actually, that's a pretty good answer. 00:50:25.670 --> 00:50:26.810 align:middle line:90% I'll come back to it. 00:50:26.810 --> 00:50:27.830 align:middle line:90% Yes, sir. 00:50:27.830 --> 00:50:30.190 align:middle line:84% AUDIENCE: If you classify it as a medication, 00:50:30.190 --> 00:50:31.190 align:middle line:90% you would probably not-- 00:50:31.190 --> 00:50:34.007 align:middle line:90% 00:50:34.007 --> 00:50:35.090 align:middle line:90% BOB JONES: Say that again. 00:50:35.090 --> 00:50:37.410 align:middle line:84% AUDIENCE: If you classify it as a medication, 00:50:37.410 --> 00:50:39.630 align:middle line:84% you would probably not be able to stock it 00:50:39.630 --> 00:50:44.723 align:middle line:84% in as many retailers or certain types of retailers. 00:50:44.723 --> 00:50:45.390 align:middle line:90% BOB JONES: Yeah. 00:50:45.390 --> 00:50:46.630 align:middle line:90% Yeah. 00:50:46.630 --> 00:50:48.960 align:middle line:90% We're getting warm. 00:50:48.960 --> 00:50:50.080 align:middle line:90% Got one more. 00:50:50.080 --> 00:50:50.920 align:middle line:90% Thank you, Janet. 00:50:50.920 --> 00:50:53.820 align:middle line:84% AUDIENCE: There would be markets for [INAUDIBLE]. 00:50:53.820 --> 00:50:59.530 align:middle line:90% 00:50:59.530 --> 00:51:02.080 align:middle line:84% BOB JONES: OK, you're missing a target here. 00:51:02.080 --> 00:51:05.320 align:middle line:90% We're talking about consumers. 00:51:05.320 --> 00:51:06.200 align:middle line:90% Try? 00:51:06.200 --> 00:51:08.880 align:middle line:84% AUDIENCE: My point would be like, why would you limit it 00:51:08.880 --> 00:51:13.250 align:middle line:84% to your customer base if you could have access 00:51:13.250 --> 00:51:15.238 align:middle line:90% to the full market? 00:51:15.238 --> 00:51:16.780 align:middle line:84% BOB JONES: I'm looking at, the clock. 00:51:16.780 --> 00:51:18.338 align:middle line:84% So I'm going to save some time here. 00:51:18.338 --> 00:51:19.880 align:middle line:84% You want to try it, as long as you're 00:51:19.880 --> 00:51:21.840 align:middle line:84% next to the man with the microphone? 00:51:21.840 --> 00:51:24.060 align:middle line:90% Go closer. 00:51:24.060 --> 00:51:27.160 align:middle line:84% AUDIENCE: [INAUDIBLE] for the consumer 00:51:27.160 --> 00:51:31.420 align:middle line:84% when purchasing the product versus and buying the medicine. 00:51:31.420 --> 00:51:35.680 align:middle line:90% 00:51:35.680 --> 00:51:37.760 align:middle line:90% BOB JONES: The short answer. 00:51:37.760 --> 00:51:43.240 align:middle line:84% They said, Bob, it's nobody's business that I have diabetes. 00:51:43.240 --> 00:51:44.580 align:middle line:90% I'm not a diabetic. 00:51:44.580 --> 00:51:46.040 align:middle line:90% I'm a banker. 00:51:46.040 --> 00:51:47.410 align:middle line:90% I'm a lawyer. 00:51:47.410 --> 00:51:50.050 align:middle line:90% I'm an entrepreneur. 00:51:50.050 --> 00:51:51.670 align:middle line:90% It's nobody's business. 00:51:51.670 --> 00:51:54.370 align:middle line:90% You have migraines. 00:51:54.370 --> 00:51:56.630 align:middle line:84% Your elbows hurt when you get up in the morning. 00:51:56.630 --> 00:51:57.530 align:middle line:90% Who cares? 00:51:57.530 --> 00:51:59.410 align:middle line:90% It's nobody's business. 00:51:59.410 --> 00:52:02.350 align:middle line:84% And if I pull out something that looks like medicine, 00:52:02.350 --> 00:52:03.910 align:middle line:90% that's for people who are sick. 00:52:03.910 --> 00:52:05.170 align:middle line:90% I'm not sick. 00:52:05.170 --> 00:52:07.490 align:middle line:90% I'm an active professional. 00:52:07.490 --> 00:52:10.050 align:middle line:84% And if I have to pull it out in a meeting that's 00:52:10.050 --> 00:52:12.390 align:middle line:84% gone on too long and I've missed a meal, 00:52:12.390 --> 00:52:15.370 align:middle line:84% and I'm starting to feel a little woozy, 00:52:15.370 --> 00:52:18.170 align:middle line:84% I don't want them thinking I'm medicating because then they 00:52:18.170 --> 00:52:20.210 align:middle line:90% will think I am frail. 00:52:20.210 --> 00:52:24.730 align:middle line:84% And that is a career-limiting move. 00:52:24.730 --> 00:52:26.757 align:middle line:84% I said, well, what should it look like? 00:52:26.757 --> 00:52:29.090 align:middle line:84% He said, make it look like something that, I don't know, 00:52:29.090 --> 00:52:32.370 align:middle line:90% an elite athlete would consume. 00:52:32.370 --> 00:52:34.330 align:middle line:90% Maybe marathon runners. 00:52:34.330 --> 00:52:37.250 align:middle line:84% I said, timed-release release glucose. 00:52:37.250 --> 00:52:39.130 align:middle line:84% And in fact, we did end up selling some 00:52:39.130 --> 00:52:41.330 align:middle line:84% to marathon runners who said, I'm 00:52:41.330 --> 00:52:42.710 align:middle line:84% out there running for four hours. 00:52:42.710 --> 00:52:45.450 align:middle line:84% I could use some timed-release glucose. 00:52:45.450 --> 00:52:48.730 align:middle line:84% So this turned out to be important. 00:52:48.730 --> 00:52:52.610 align:middle line:84% There's a lesson out of this, which I will come to 00:52:52.610 --> 00:52:56.130 align:middle line:84% in a couple of minutes, as to the importance 00:52:56.130 --> 00:52:58.650 align:middle line:84% of actually talking to the people who 00:52:58.650 --> 00:53:01.130 align:middle line:90% are going to buy your product. 00:53:01.130 --> 00:53:05.690 align:middle line:84% So stop with the social media beyond a certain point. 00:53:05.690 --> 00:53:11.010 align:middle line:84% So we engaged this time not only clinicians, but also 00:53:11.010 --> 00:53:15.810 align:middle line:84% parents and patients in formulating the product. 00:53:15.810 --> 00:53:19.050 align:middle line:84% We discovered that it should be 100 calories 00:53:19.050 --> 00:53:23.870 align:middle line:84% with little striations, so that if you had a small child, 00:53:23.870 --> 00:53:25.990 align:middle line:84% you'd give them 50 calories worth. 00:53:25.990 --> 00:53:29.590 align:middle line:84% And if you had a large grown-up and they needed 150, 00:53:29.590 --> 00:53:31.530 align:middle line:84% it could be 1 and 1/2 bars, et cetera. 00:53:31.530 --> 00:53:34.530 align:middle line:90% We made it convenient. 00:53:34.530 --> 00:53:36.050 align:middle line:90% We talked to them. 00:53:36.050 --> 00:53:39.310 align:middle line:84% We said-- this was actually kind of fun. 00:53:39.310 --> 00:53:43.270 align:middle line:84% In one of these focus groups, we said, 00:53:43.270 --> 00:53:45.940 align:middle line:84% we've put paper and pencils in front of you. 00:53:45.940 --> 00:53:49.380 align:middle line:84% Write down-- don't say it because I 00:53:49.380 --> 00:53:52.500 align:middle line:90% don't want you influencing him. 00:53:52.500 --> 00:53:54.900 align:middle line:84% Write down where you would expect 00:53:54.900 --> 00:53:57.460 align:middle line:84% to buy a product like this and how much 00:53:57.460 --> 00:53:59.280 align:middle line:90% you would expect to pay for it. 00:53:59.280 --> 00:54:03.940 align:middle line:90% 00:54:03.940 --> 00:54:10.220 align:middle line:84% Two piles-- grocery store, $0.49. 00:54:10.220 --> 00:54:13.140 align:middle line:90% Pharmacy, dollar and a quarter. 00:54:13.140 --> 00:54:15.820 align:middle line:84% $0.49 cents, dollar and a quarter-- 00:54:15.820 --> 00:54:17.140 align:middle line:90% same product. 00:54:17.140 --> 00:54:20.980 align:middle line:84% Distribution channel influenced the customer's perspective 00:54:20.980 --> 00:54:23.580 align:middle line:90% of the value. 00:54:23.580 --> 00:54:24.640 align:middle line:90% Said well, call me silly. 00:54:24.640 --> 00:54:36.420 align:middle line:84% I like pharmacies, despite all that stuff about slotting fees. 00:54:36.420 --> 00:54:39.180 align:middle line:84% We found an ad agency that knew the field. 00:54:39.180 --> 00:54:41.280 align:middle line:84% We produced ads that were better, 00:54:41.280 --> 00:54:43.390 align:middle line:84% and we started running those ads. 00:54:43.390 --> 00:54:46.890 align:middle line:84% And we started getting 100 calls a day. 00:54:46.890 --> 00:54:49.383 align:middle line:84% We were over at 238 Main Street, by the way, 00:54:49.383 --> 00:54:51.050 align:middle line:84% with about two or three other companies. 00:54:51.050 --> 00:54:53.070 align:middle line:90% You remember those days. 00:54:53.070 --> 00:54:57.190 align:middle line:84% So at 100 calls a day, we said, jeez, we need more phones. 00:54:57.190 --> 00:55:01.910 align:middle line:84% 200 calls a day, we started going out into Kendall Square 00:55:01.910 --> 00:55:06.270 align:middle line:84% and saying, may I see your wrist, please? 00:55:06.270 --> 00:55:06.770 align:middle line:90% OK. 00:55:06.770 --> 00:55:07.530 align:middle line:90% You have a pulse. 00:55:07.530 --> 00:55:08.610 align:middle line:90% Would you a job? 00:55:08.610 --> 00:55:10.870 align:middle line:90% [LAUGHTER] 00:55:10.870 --> 00:55:13.303 align:middle line:84% I mean, it wasn't quite that bad, but darn near. 00:55:13.303 --> 00:55:15.470 align:middle line:84% We said, well, there's more geniuses per square foot 00:55:15.470 --> 00:55:16.770 align:middle line:90% here than most places. 00:55:16.770 --> 00:55:19.630 align:middle line:84% We can get people to answer the phone and talk to customers. 00:55:19.630 --> 00:55:22.090 align:middle line:90% 300 calls a day, we said, God. 00:55:22.090 --> 00:55:25.350 align:middle line:84% We've got to upgrade our database. 00:55:25.350 --> 00:55:31.090 align:middle line:84% 500 calls a day, we said, I think we're on to something. 00:55:31.090 --> 00:55:33.390 align:middle line:90% I think we have found a need. 00:55:33.390 --> 00:55:35.750 align:middle line:84% We brought in an inside sales force. 00:55:35.750 --> 00:55:37.730 align:middle line:84% And to skip to the end of the story, 00:55:37.730 --> 00:55:41.070 align:middle line:84% we ended up in every major pharmacy chain in the country 00:55:41.070 --> 00:55:46.350 align:middle line:84% and paid zero in slotting fees, which 00:55:46.350 --> 00:55:48.190 align:middle line:90% had never been done before. 00:55:48.190 --> 00:55:49.950 align:middle line:84% And so if you dig deeply, you will 00:55:49.950 --> 00:55:53.710 align:middle line:84% find that we are an obscure Harvard Business School case 00:55:53.710 --> 00:55:56.470 align:middle line:84% study because nobody had done this. 00:55:56.470 --> 00:55:59.910 align:middle line:90% 00:55:59.910 --> 00:56:03.030 align:middle line:84% The lesson-- understanding our customers 00:56:03.030 --> 00:56:05.470 align:middle line:84% helped us invent a better product 00:56:05.470 --> 00:56:09.750 align:middle line:90% and build a successful business. 00:56:09.750 --> 00:56:15.070 align:middle line:84% So I think there's some magic in how we actually 00:56:15.070 --> 00:56:19.430 align:middle line:84% reached our customers, and it's worth a little bit of a dive. 00:56:19.430 --> 00:56:23.430 align:middle line:84% The title of this course is not the theory of new ventures. 00:56:23.430 --> 00:56:26.350 align:middle line:84% It's the nuts and bolts of new ventures. 00:56:26.350 --> 00:56:28.490 align:middle line:84% So let's look at the nuts and bolts. 00:56:28.490 --> 00:56:32.090 align:middle line:90% 00:56:32.090 --> 00:56:35.470 align:middle line:90% We said, well, let's be honest. 00:56:35.470 --> 00:56:37.790 align:middle line:84% A fair number of people who have diabetes 00:56:37.790 --> 00:56:42.600 align:middle line:84% do not take care of themselves and don't spend money 00:56:42.600 --> 00:56:44.560 align:middle line:90% to take care of themselves. 00:56:44.560 --> 00:56:48.460 align:middle line:84% And it's a waste of our time and effort to try and convert them. 00:56:48.460 --> 00:56:51.640 align:middle line:84% How do we find the ones who are spending money 00:56:51.640 --> 00:56:53.500 align:middle line:90% to take care of themselves? 00:56:53.500 --> 00:56:56.560 align:middle line:84% And the answer is there's a credentialed medical 00:56:56.560 --> 00:57:00.020 align:middle line:84% professional out there called a certified diabetes educator. 00:57:00.020 --> 00:57:02.280 align:middle line:84% This is something that you pick up usually 00:57:02.280 --> 00:57:06.240 align:middle line:84% after being a pharmacist or a dietitian. 00:57:06.240 --> 00:57:09.520 align:middle line:84% They accumulate around the major Metropolitan areas. 00:57:09.520 --> 00:57:11.280 align:middle line:90% They have an association. 00:57:11.280 --> 00:57:14.160 align:middle line:84% Surprisingly enough, it's called the American Association 00:57:14.160 --> 00:57:15.960 align:middle line:90% of Diabetes Educators. 00:57:15.960 --> 00:57:19.500 align:middle line:84% You go on that association site, and you click the tab, 00:57:19.500 --> 00:57:22.200 align:middle line:90% locate a CDE. 00:57:22.200 --> 00:57:27.640 align:middle line:84% And you type in 02478 or whatever and the zip code, 00:57:27.640 --> 00:57:30.060 align:middle line:84% and out comes a list with all the contact data. 00:57:30.060 --> 00:57:32.480 align:middle line:90% So we could find them. 00:57:32.480 --> 00:57:34.240 align:middle line:90% And so, well, how about that? 00:57:34.240 --> 00:57:36.880 align:middle line:84% What do they worry about, and how can we 00:57:36.880 --> 00:57:39.810 align:middle line:90% help them address their worries? 00:57:39.810 --> 00:57:41.570 align:middle line:90% Hold that thought. 00:57:41.570 --> 00:57:46.770 align:middle line:84% But eventually, we had several thousand highly credentialed 00:57:46.770 --> 00:57:48.850 align:middle line:84% health care professionals working 00:57:48.850 --> 00:57:52.730 align:middle line:90% as our sales force for free. 00:57:52.730 --> 00:57:55.770 align:middle line:90% Not a bad stunt. 00:57:55.770 --> 00:58:01.370 align:middle line:84% So back to who wins if you win, and who would want you to win? 00:58:01.370 --> 00:58:07.130 align:middle line:90% So-- oops, sorry. 00:58:07.130 --> 00:58:11.270 align:middle line:84% About 12,000 of these educators were members of the AADE. 00:58:11.270 --> 00:58:17.290 align:middle line:90% 00:58:17.290 --> 00:58:20.270 align:middle line:84% Most of them would have a meeting one Saturday a month, 00:58:20.270 --> 00:58:22.890 align:middle line:90% Saturday morning, 9:00 to noon. 00:58:22.890 --> 00:58:25.050 align:middle line:84% They would bring in all their patients. 00:58:25.050 --> 00:58:27.210 align:middle line:84% They'd talk about new developments. 00:58:27.210 --> 00:58:29.650 align:middle line:84% Sometimes they'd have samples to pass out. 00:58:29.650 --> 00:58:32.470 align:middle line:84% They'd say, congratulations, you're doing great. 00:58:32.470 --> 00:58:33.705 align:middle line:90% Gee, you better be careful. 00:58:33.705 --> 00:58:34.830 align:middle line:90% You're starting to slip up. 00:58:34.830 --> 00:58:35.790 align:middle line:90% You're at risk. 00:58:35.790 --> 00:58:37.620 align:middle line:90% And they'd bring everybody in. 00:58:37.620 --> 00:58:40.340 align:middle line:84% Everybody who ever has a job like that 00:58:40.340 --> 00:58:43.340 align:middle line:90% is always starved for content. 00:58:43.340 --> 00:58:46.900 align:middle line:84% What are we going to talk about for the next meeting? 00:58:46.900 --> 00:58:49.260 align:middle line:90% But we called them up. 00:58:49.260 --> 00:58:51.100 align:middle line:84% And we said, what's your greatest 00:58:51.100 --> 00:58:54.500 align:middle line:90% professional frustration? 00:58:54.500 --> 00:58:55.640 align:middle line:90% And their answer-- 00:58:55.640 --> 00:59:01.180 align:middle line:90% 00:59:01.180 --> 00:59:02.980 align:middle line:90% This is not promising. 00:59:02.980 --> 00:59:03.560 align:middle line:90% Yes, sir. 00:59:03.560 --> 00:59:05.903 align:middle line:90% 00:59:05.903 --> 00:59:07.820 align:middle line:84% AUDIENCE: I imagine they got pretty frustrated 00:59:07.820 --> 00:59:10.440 align:middle line:84% with their patients if they're not taking care of themselves. 00:59:10.440 --> 00:59:13.780 align:middle line:84% So maybe there's a solution out there and they'd be interested. 00:59:13.780 --> 00:59:17.120 align:middle line:84% BOB JONES: I tell them what to do, and they don't do it. 00:59:17.120 --> 00:59:19.980 align:middle line:90% 00:59:19.980 --> 00:59:23.740 align:middle line:84% The medical term for which is patient compliance. 00:59:23.740 --> 00:59:26.560 align:middle line:84% I tell them what to do, and they don't do it. 00:59:26.560 --> 00:59:28.860 align:middle line:84% That's my biggest-- never said a word about I 00:59:28.860 --> 00:59:30.280 align:middle line:90% don't make enough money. 00:59:30.280 --> 00:59:34.500 align:middle line:84% My husband doesn't understand me, any of that stuff. 00:59:34.500 --> 00:59:37.280 align:middle line:84% I tell them what to do, and they don't do it. 00:59:37.280 --> 00:59:41.100 align:middle line:84% And we said, well, what if we told you 00:59:41.100 --> 00:59:44.140 align:middle line:84% we had something invented by a bunch of snotty doctors 00:59:44.140 --> 00:59:45.940 align:middle line:90% at Harvard Med school? 00:59:45.940 --> 00:59:49.300 align:middle line:90% That's probably redundant. 00:59:49.300 --> 00:59:50.320 align:middle line:90% It tastes great. 00:59:50.320 --> 00:59:51.280 align:middle line:90% It works great. 00:59:51.280 --> 00:59:56.000 align:middle line:84% And your patients will thank you for telling them about it. 00:59:56.000 --> 00:59:57.860 align:middle line:90% How would you feel about that? 00:59:57.860 --> 00:59:58.960 align:middle line:90% And they said oh, my God. 00:59:58.960 --> 01:00:02.020 align:middle line:90% I'd shout it from the rooftops. 01:00:02.020 --> 01:00:07.780 align:middle line:84% So we ended up with a high-quality sales force 01:00:07.780 --> 01:00:08.940 align:middle line:90% for free. 01:00:08.940 --> 01:00:12.180 align:middle line:84% Now, these people would have been 01:00:12.180 --> 01:00:16.020 align:middle line:84% insulted if we had offered to pay them 01:00:16.020 --> 01:00:20.100 align:middle line:90% because they're healers. 01:00:20.100 --> 01:00:22.180 align:middle line:84% What we did was we gave them what 01:00:22.180 --> 01:00:27.460 align:middle line:84% they wanted, which was something that their patients would 01:00:27.460 --> 01:00:29.300 align:middle line:90% comply with. 01:00:29.300 --> 01:00:32.980 align:middle line:90% And so we said, hmm. 01:00:32.980 --> 01:00:34.750 align:middle line:84% Is there any chance that you might 01:00:34.750 --> 01:00:36.830 align:middle line:84% call the pharmacists on our behalf 01:00:36.830 --> 01:00:39.390 align:middle line:84% and get them to stock our product? 01:00:39.390 --> 01:00:40.950 align:middle line:90% And they said, are you kidding? 01:00:40.950 --> 01:00:44.230 align:middle line:84% I sent a lot of patients to that bozo. 01:00:44.230 --> 01:00:48.390 align:middle line:84% If I like your stuff, you got a deal. 01:00:48.390 --> 01:00:51.030 align:middle line:84% We said, well, maybe the pharmacist 01:00:51.030 --> 01:00:53.510 align:middle line:90% wouldn't mention slotting fees. 01:00:53.510 --> 01:00:56.630 align:middle line:84% OK, quick word about the importance of people 01:00:56.630 --> 01:01:01.550 align:middle line:84% with diabetes to retail pharmacists. 01:01:01.550 --> 01:01:05.630 align:middle line:84% You and I go to our pharmacy, and we buy 01:01:05.630 --> 01:01:08.390 align:middle line:90% toothpaste and a greeting card. 01:01:08.390 --> 01:01:10.590 align:middle line:84% But if we have diabetes, we also buy 01:01:10.590 --> 01:01:15.590 align:middle line:84% insulin, blood glucose monitors, testing strips, et cetera. 01:01:15.590 --> 01:01:18.070 align:middle line:84% We are worth way more than the ones who 01:01:18.070 --> 01:01:19.950 align:middle line:90% are normal retail consumers. 01:01:19.950 --> 01:01:24.910 align:middle line:90% These are high-value customers. 01:01:24.910 --> 01:01:28.390 align:middle line:90% So hold that thought. 01:01:28.390 --> 01:01:31.350 align:middle line:84% So our initial sales model was our sales 01:01:31.350 --> 01:01:33.210 align:middle line:90% force would call the educators. 01:01:33.210 --> 01:01:35.180 align:middle line:84% The educators would talk to the patients. 01:01:35.180 --> 01:01:38.440 align:middle line:84% Patients would buy it from us for a while. 01:01:38.440 --> 01:01:41.440 align:middle line:84% We made no money on this because we were shipping it out 01:01:41.440 --> 01:01:42.680 align:middle line:90% of our office. 01:01:42.680 --> 01:01:43.720 align:middle line:90% I didn't care. 01:01:43.720 --> 01:01:48.000 align:middle line:84% What I wanted to know was how often did they reorder it, 01:01:48.000 --> 01:01:52.960 align:middle line:84% and therefore could I impute usage rates? 01:01:52.960 --> 01:01:56.040 align:middle line:84% But we knew that if we could get to the retailers, 01:01:56.040 --> 01:01:58.540 align:middle line:84% if the educators would call the retailer, 01:01:58.540 --> 01:02:01.480 align:middle line:84% and then the patient would go to the retailer, 01:02:01.480 --> 01:02:05.140 align:middle line:84% and then we'd call the retailer, we'd make more money. 01:02:05.140 --> 01:02:07.680 align:middle line:90% 01:02:07.680 --> 01:02:12.220 align:middle line:84% So we changed the definition of our customer. 01:02:12.220 --> 01:02:15.680 align:middle line:90% 01:02:15.680 --> 01:02:16.980 align:middle line:90% So how did we do that? 01:02:16.980 --> 01:02:18.500 align:middle line:90% Well, we got all these calls. 01:02:18.500 --> 01:02:19.540 align:middle line:90% We ran these ads. 01:02:19.540 --> 01:02:22.880 align:middle line:84% We made a mistake in one of the ads and said something about, 01:02:22.880 --> 01:02:25.360 align:middle line:84% it tastes a lot like a fudge brownie. 01:02:25.360 --> 01:02:28.400 align:middle line:84% And call this number, and you'll get a free sample. 01:02:28.400 --> 01:02:31.260 align:middle line:84% And somehow that got on the list that said, 01:02:31.260 --> 01:02:35.400 align:middle line:84% these guys are giving away free fudge brownies. 01:02:35.400 --> 01:02:37.160 align:middle line:84% So we got a deluge of phone calls 01:02:37.160 --> 01:02:39.820 align:middle line:84% from people who were totally inappropriate to us. 01:02:39.820 --> 01:02:42.240 align:middle line:84% So we asked some qualifying questions 01:02:42.240 --> 01:02:44.540 align:middle line:84% like, tell us the brand of insulin you're using. 01:02:44.540 --> 01:02:46.200 align:middle line:90% And if they said, huh? 01:02:46.200 --> 01:02:47.780 align:middle line:84% We said, sorry, we're not for you. 01:02:47.780 --> 01:02:51.420 align:middle line:84% But qualifying questions, we got the right answer. 01:02:51.420 --> 01:02:52.092 align:middle line:90% We'd say, great. 01:02:52.092 --> 01:02:53.300 align:middle line:90% We'll send you a free sample. 01:02:53.300 --> 01:02:56.280 align:middle line:90% We'd send them a week's supply. 01:02:56.280 --> 01:02:57.560 align:middle line:90% We'd call them up. 01:02:57.560 --> 01:02:58.287 align:middle line:90% Did you get it? 01:02:58.287 --> 01:03:00.620 align:middle line:84% Because just because we sent it doesn't mean you got it. 01:03:00.620 --> 01:03:02.320 align:middle line:90% So did you get it? 01:03:02.320 --> 01:03:04.400 align:middle line:90% Yep. 01:03:04.400 --> 01:03:05.900 align:middle line:84% Here's a marketing question for you. 01:03:05.900 --> 01:03:09.000 align:middle line:84% Who knows what the difference between an open-ended question 01:03:09.000 --> 01:03:13.480 align:middle line:90% and a closed-ended question is? 01:03:13.480 --> 01:03:14.160 align:middle line:90% Yeah? 01:03:14.160 --> 01:03:14.660 align:middle line:90% Great. 01:03:14.660 --> 01:03:16.274 align:middle line:90% Thank you. 01:03:16.274 --> 01:03:17.696 align:middle line:84% AUDIENCE: A closed-ended question 01:03:17.696 --> 01:03:22.320 align:middle line:90% can be answered yes or no. 01:03:22.320 --> 01:03:27.520 align:middle line:84% BOB JONES: Closed-ended question can be answered yes or no. 01:03:27.520 --> 01:03:30.490 align:middle line:84% So our sales force learned very quickly 01:03:30.490 --> 01:03:34.650 align:middle line:84% that if they said, did you like it, and they said, no. 01:03:34.650 --> 01:03:37.330 align:middle line:84% It's like, well, where do you go from here? 01:03:37.330 --> 01:03:41.462 align:middle line:84% An open-ended question is, well, what did you think? 01:03:41.462 --> 01:03:45.170 align:middle line:84% And they'd say, well, I didn't really like the taste that much. 01:03:45.170 --> 01:03:45.990 align:middle line:90% You'd say, OK. 01:03:45.990 --> 01:03:46.850 align:middle line:90% What else? 01:03:46.850 --> 01:03:48.530 align:middle line:90% Well, it worked great. 01:03:48.530 --> 01:03:49.330 align:middle line:90% OK. 01:03:49.330 --> 01:03:50.370 align:middle line:90% What else? 01:03:50.370 --> 01:03:53.210 align:middle line:90% I'd like to order some more. 01:03:53.210 --> 01:03:58.250 align:middle line:84% Open-ended questions, so we asked them. 01:03:58.250 --> 01:03:59.950 align:middle line:84% And we'd say, well, for a limited time, 01:03:59.950 --> 01:04:01.670 align:middle line:90% we'll pay for the shipping. 01:04:01.670 --> 01:04:03.490 align:middle line:90% I lost my shorts doing this-- 01:04:03.490 --> 01:04:05.730 align:middle line:90% that's a technical term-- 01:04:05.730 --> 01:04:08.530 align:middle line:84% doing this, but I wanted the information. 01:04:08.530 --> 01:04:09.870 align:middle line:90% So would you care to reorder? 01:04:09.870 --> 01:04:11.170 align:middle line:90% Yes, indeed. 01:04:11.170 --> 01:04:15.210 align:middle line:90% And aren't you about out? 01:04:15.210 --> 01:04:21.410 align:middle line:84% And then one day we said, we're done with the free shipping. 01:04:21.410 --> 01:04:24.370 align:middle line:84% You can either pay the shipping, which is expensive, 01:04:24.370 --> 01:04:26.890 align:middle line:84% or it might be more convenient for you to buy it 01:04:26.890 --> 01:04:30.380 align:middle line:90% where you buy your insulin. 01:04:30.380 --> 01:04:32.060 align:middle line:90% Where would that be? 01:04:32.060 --> 01:04:35.420 align:middle line:84% And they'd say, well, that's Janet's Pharmacy. 01:04:35.420 --> 01:04:35.960 align:middle line:90% Well, gosh. 01:04:35.960 --> 01:04:37.600 align:middle line:90% Do you mind if I call Janet? 01:04:37.600 --> 01:04:38.660 align:middle line:90% No. 01:04:38.660 --> 01:04:39.660 align:middle line:90% No. 01:04:39.660 --> 01:04:40.640 align:middle line:90% This is Mabel. 01:04:40.640 --> 01:04:44.240 align:middle line:84% Tell them Mabel's been buying from her for 27 years. 01:04:44.240 --> 01:04:46.560 align:middle line:84% And I'm coming in, and I want to buy this product. 01:04:46.560 --> 01:04:49.860 align:middle line:84% And if she doesn't have it, by God, I'm going to be mad. 01:04:49.860 --> 01:04:51.940 align:middle line:90% OK, Mabel. 01:04:51.940 --> 01:04:55.500 align:middle line:90% So remember the 12 seconds? 01:04:55.500 --> 01:04:57.020 align:middle line:90% Pharmacy? 01:04:57.020 --> 01:04:58.780 align:middle line:84% I'd say we have a diabetes product 01:04:58.780 --> 01:05:00.720 align:middle line:84% that your patients have been asking for, 01:05:00.720 --> 01:05:01.880 align:middle line:90% and you don't carry it. 01:05:01.880 --> 01:05:04.840 align:middle line:90% I'm calling to fix that. 01:05:04.840 --> 01:05:05.340 align:middle line:90% What? 01:05:05.340 --> 01:05:07.900 align:middle line:90% Who is this? 01:05:07.900 --> 01:05:11.620 align:middle line:84% So permission to continue in sales parlance. 01:05:11.620 --> 01:05:13.300 align:middle line:84% So we'd walk them through the story. 01:05:13.300 --> 01:05:17.260 align:middle line:84% And they would say, well, I can't do something like this 01:05:17.260 --> 01:05:18.980 align:middle line:90% without corporate approval. 01:05:18.980 --> 01:05:21.860 align:middle line:90% We're a Walgreens. 01:05:21.860 --> 01:05:24.110 align:middle line:90% I say, I know. 01:05:24.110 --> 01:05:26.820 align:middle line:84% But I'm betting there's a number below which 01:05:26.820 --> 01:05:30.160 align:middle line:84% you can buy without corporate approval, 01:05:30.160 --> 01:05:32.420 align:middle line:90% and I'm guessing it's $100. 01:05:32.420 --> 01:05:33.040 align:middle line:90% Well, yeah. 01:05:33.040 --> 01:05:33.760 align:middle line:90% That's right. 01:05:33.760 --> 01:05:38.280 align:middle line:84% Well, you'll be pleased to know that our starter kit is 99.95. 01:05:38.280 --> 01:05:43.480 align:middle line:84% [LAUGHTER] And by the way, if it doesn't sell, 01:05:43.480 --> 01:05:45.740 align:middle line:84% you don't have to ship it back to us. 01:05:45.740 --> 01:05:48.020 align:middle line:90% We'll take your word for it. 01:05:48.020 --> 01:05:49.200 align:middle line:90% Throw it in the trash. 01:05:49.200 --> 01:05:50.520 align:middle line:90% We'll send you a refund. 01:05:50.520 --> 01:05:54.060 align:middle line:90% This is no risk. 01:05:54.060 --> 01:05:59.780 align:middle line:84% And they'd say, OK, I'll need a purchase order. 01:05:59.780 --> 01:06:01.460 align:middle line:90% And we'd ship it. 01:06:01.460 --> 01:06:05.260 align:middle line:84% And we'd call them up a few days later. 01:06:05.260 --> 01:06:08.860 align:middle line:84% But first we would call our customers 01:06:08.860 --> 01:06:10.800 align:middle line:84% and say Janet's stocking and the product. 01:06:10.800 --> 01:06:13.100 align:middle line:90% Go in there and get it. 01:06:13.100 --> 01:06:14.360 align:middle line:90% Then we'd call the pharmacy. 01:06:14.360 --> 01:06:16.700 align:middle line:84% We'd call Janet and say, Janet, I'm 01:06:16.700 --> 01:06:19.460 align:middle line:84% just checking to make sure you got that stuff. 01:06:19.460 --> 01:06:21.980 align:middle line:84% And she'd say, well, hold on, let me check. 01:06:21.980 --> 01:06:22.720 align:middle line:90% Oh, my God. 01:06:22.720 --> 01:06:24.780 align:middle line:90% It's already sold out. 01:06:24.780 --> 01:06:27.790 align:middle line:90% I say, well, imagine that. 01:06:27.790 --> 01:06:31.750 align:middle line:90% Wouldn't you like a reorder? 01:06:31.750 --> 01:06:36.750 align:middle line:84% Well, pretty soon, we ended up at corporate headquarters 01:06:36.750 --> 01:06:39.150 align:middle line:84% saying, I got half a dozen of these pharmacies 01:06:39.150 --> 01:06:40.250 align:middle line:90% buying this stuff. 01:06:40.250 --> 01:06:42.070 align:middle line:90% Who are you guys? 01:06:42.070 --> 01:06:46.630 align:middle line:84% Nobody ever mentioned slotting fees. 01:06:46.630 --> 01:06:50.090 align:middle line:84% Because what I did was buy a bunch of customers 01:06:50.090 --> 01:06:53.050 align:middle line:84% and sold the customers to the retailers. 01:06:53.050 --> 01:07:02.510 align:middle line:90% 01:07:02.510 --> 01:07:04.550 align:middle line:90% Next step. 01:07:04.550 --> 01:07:07.926 align:middle line:90% Who knows what an SKU is? 01:07:07.926 --> 01:07:09.390 align:middle line:90% AUDIENCE: Stock-keeping unit. 01:07:09.390 --> 01:07:12.350 align:middle line:90% BOB JONES: Stock-keeping unit. 01:07:12.350 --> 01:07:16.510 align:middle line:84% So if you walk into a CVS, and you look at all the things that 01:07:16.510 --> 01:07:23.590 align:middle line:84% are lined up, they have about 8,000 SKUs in the average CVS. 01:07:23.590 --> 01:07:27.640 align:middle line:90% They do not want 8,000 invoices. 01:07:27.640 --> 01:07:31.320 align:middle line:84% So they go through a wholesaler who buys all this stuff, 01:07:31.320 --> 01:07:33.600 align:middle line:84% puts them in a big Tupperware container, 01:07:33.600 --> 01:07:38.380 align:middle line:84% shows up in a big truck at 11:00 at night, stocks the shelves, 01:07:38.380 --> 01:07:41.560 align:middle line:90% sends them one invoice. 01:07:41.560 --> 01:07:43.880 align:middle line:90% That's what wholesalers do. 01:07:43.880 --> 01:07:47.520 align:middle line:84% And we said, you know, if we could 01:07:47.520 --> 01:07:51.740 align:middle line:84% get into wholesalers, my goodness, 01:07:51.740 --> 01:07:54.890 align:middle line:90% we'd make a lot of money. 01:07:54.890 --> 01:08:00.240 align:middle line:84% Might be time to change our customer definition again. 01:08:00.240 --> 01:08:04.800 align:middle line:90% So how do we do that? 01:08:04.800 --> 01:08:09.680 align:middle line:84% Well, if you think a pharmacy manager doesn't care that much 01:08:09.680 --> 01:08:11.800 align:middle line:84% about the health of his customers, 01:08:11.800 --> 01:08:15.840 align:middle line:84% wait until you talk to a wholesaler. 01:08:15.840 --> 01:08:19.160 align:middle line:84% So we pulled off a bit of a stunt. 01:08:19.160 --> 01:08:21.200 align:middle line:84% We signed up to go to a trade show 01:08:21.200 --> 01:08:24.960 align:middle line:84% in New Orleans that was going to be attended largely 01:08:24.960 --> 01:08:28.560 align:middle line:90% by consumers who had diabetes. 01:08:28.560 --> 01:08:32.399 align:middle line:84% And I said, find me the 25 pharmacies that 01:08:32.399 --> 01:08:37.279 align:middle line:84% are closest geographically to the convention center. 01:08:37.279 --> 01:08:39.580 align:middle line:84% And we called each of them up, and said, 01:08:39.580 --> 01:08:41.240 align:middle line:84% we're going to be in the convention 01:08:41.240 --> 01:08:42.817 align:middle line:90% center for these three days. 01:08:42.817 --> 01:08:44.359 align:middle line:84% We're going to be handing out samples 01:08:44.359 --> 01:08:48.200 align:middle line:84% of a product that's for your patients with diabetes. 01:08:48.200 --> 01:08:52.920 align:middle line:84% And our track record is that people like it. 01:08:52.920 --> 01:08:54.037 align:middle line:90% They buy it a lot. 01:08:54.037 --> 01:08:56.120 align:middle line:84% And they're going to want to come buy it from you, 01:08:56.120 --> 01:08:57.760 align:middle line:90% and you don't have it. 01:08:57.760 --> 01:08:59.420 align:middle line:84% I don't want you to be embarrassed. 01:08:59.420 --> 01:09:01.859 align:middle line:84% I don't want our new friends to be frustrated. 01:09:01.859 --> 01:09:04.319 align:middle line:90% I'd like to send you this stuff. 01:09:04.319 --> 01:09:08.080 align:middle line:90% And they said, OK. 01:09:08.080 --> 01:09:13.760 align:middle line:84% Then I called the wholesalers and said, you don't know me, 01:09:13.760 --> 01:09:18.399 align:middle line:84% but I've just sent our product to 25 of your pharmacies 01:09:18.399 --> 01:09:19.979 align:middle line:90% at no cost to you. 01:09:19.979 --> 01:09:22.140 align:middle line:84% And in fact, I'm going to make it better than that. 01:09:22.140 --> 01:09:26.450 align:middle line:84% Your margin is usually about this much per six-pack. 01:09:26.450 --> 01:09:30.370 align:middle line:84% I'm going to send that money to you. 01:09:30.370 --> 01:09:34.750 align:middle line:84% What I want is to be in your system, 01:09:34.750 --> 01:09:38.810 align:middle line:84% so that when these 25 pharmacies decide it's time to reorder, 01:09:38.810 --> 01:09:41.609 align:middle line:84% I can say, McKesson's got your stuff. 01:09:41.609 --> 01:09:45.170 align:middle line:90% We're in McKesson's system. 01:09:45.170 --> 01:09:47.609 align:middle line:90% They said, well, OK. 01:09:47.609 --> 01:09:48.710 align:middle line:90% So I do nothing. 01:09:48.710 --> 01:09:51.550 align:middle line:84% You send me a check, and all I do is put it in the system. 01:09:51.550 --> 01:09:52.510 align:middle line:90% I said, deal. 01:09:52.510 --> 01:09:53.290 align:middle line:90% That's it. 01:09:53.290 --> 01:09:54.150 align:middle line:90% OK, you're on. 01:09:54.150 --> 01:09:54.650 align:middle line:90% Boom. 01:09:54.650 --> 01:09:58.130 align:middle line:90% We're in the wholesalers. 01:09:58.130 --> 01:09:59.670 align:middle line:90% One more quick anecdote. 01:09:59.670 --> 01:10:02.250 align:middle line:90% 01:10:02.250 --> 01:10:05.210 align:middle line:84% You guys know what a planogram is? 01:10:05.210 --> 01:10:08.170 align:middle line:90% Normal people don't know this. 01:10:08.170 --> 01:10:12.650 align:middle line:84% You ever notice when you walk into a Walgreens or CVS, 01:10:12.650 --> 01:10:15.930 align:middle line:84% that just about every store has the same arrangement? 01:10:15.930 --> 01:10:19.930 align:middle line:84% They have the really cheap toothpaste down here, 01:10:19.930 --> 01:10:23.460 align:middle line:84% and the more expensive stuff at eye level. 01:10:23.460 --> 01:10:26.620 align:middle line:84% There are a lot of very sophisticated algorithms 01:10:26.620 --> 01:10:30.420 align:middle line:84% that go into planning that shelf space utilization. 01:10:30.420 --> 01:10:33.300 align:middle line:84% If you ever have the misfortune to go to Bentonville 01:10:33.300 --> 01:10:39.920 align:middle line:84% and deal with Walmart, their test kitchens, if you will, 01:10:39.920 --> 01:10:42.540 align:middle line:84% for planograms, it's like a whole block. 01:10:42.540 --> 01:10:45.220 align:middle line:90% I mean, it's a big deal. 01:10:45.220 --> 01:10:49.700 align:middle line:84% One day we got a letter with a stamp on it 01:10:49.700 --> 01:10:54.660 align:middle line:84% from a major retail chain headquartered in Florida. 01:10:54.660 --> 01:10:58.540 align:middle line:84% And they said, if you want to be in our planogram for the coming 01:10:58.540 --> 01:11:04.820 align:middle line:84% year, come to this meeting in Clearwater on either of these 01:11:04.820 --> 01:11:07.320 align:middle line:84% two dates for a 15-minute meeting. 01:11:07.320 --> 01:11:12.020 align:middle line:90% 01:11:12.020 --> 01:11:12.960 align:middle line:90% So I called around. 01:11:12.960 --> 01:11:14.320 align:middle line:90% I said, what's up with this? 01:11:14.320 --> 01:11:17.340 align:middle line:90% 01:11:17.340 --> 01:11:19.270 align:middle line:84% And they said, well, the guy you're 01:11:19.270 --> 01:11:23.390 align:middle line:84% going to meet with has a job that you don't ever want. 01:11:23.390 --> 01:11:27.670 align:middle line:84% He's got to sit there for an entire week listening to 1 01:11:27.670 --> 01:11:31.310 align:middle line:84% 15-minute presentation after another from people who are 01:11:31.310 --> 01:11:36.470 align:middle line:84% practically foaming at the mouth to get on his shelves. 01:11:36.470 --> 01:11:37.610 align:middle line:90% I said, oh, God. 01:11:37.610 --> 01:11:39.330 align:middle line:90% How is he evaluated? 01:11:39.330 --> 01:11:42.470 align:middle line:84% Well, he's evaluated on how much slotting fees 01:11:42.470 --> 01:11:46.810 align:middle line:84% he can extort from each of these vendors that are coming in. 01:11:46.810 --> 01:11:50.870 align:middle line:84% How much will you pay me to be on these shelves? 01:11:50.870 --> 01:11:53.230 align:middle line:84% I thought, well, this isn't actually a decision for us 01:11:53.230 --> 01:11:55.830 align:middle line:90% because we don't have any money. 01:11:55.830 --> 01:11:58.070 align:middle line:90% But I'm feeling pugnacious. 01:11:58.070 --> 01:12:01.430 align:middle line:90% Let's go to the meeting. 01:12:01.430 --> 01:12:04.493 align:middle line:84% Well, the lobby looked like Cirque Du Soleil. 01:12:04.493 --> 01:12:05.910 align:middle line:84% I mean, there were people in there 01:12:05.910 --> 01:12:09.730 align:middle line:84% with these mocked-up end caps, and people coming in saying, 01:12:09.730 --> 01:12:12.370 align:middle line:84% I'll pick up your dry cleaning for the rest of your life. 01:12:12.370 --> 01:12:13.977 align:middle line:90% I mean, whatever it takes. 01:12:13.977 --> 01:12:15.810 align:middle line:84% And we're just sitting there, the two of us. 01:12:15.810 --> 01:12:19.030 align:middle line:90% We had a briefcase. 01:12:19.030 --> 01:12:26.110 align:middle line:84% So when our time came, we sat down opposite Jeff. 01:12:26.110 --> 01:12:28.710 align:middle line:84% And we said, Jeff, this isn't going to be like any other 01:12:28.710 --> 01:12:30.603 align:middle line:84% 15-minute meeting you have this week, 01:12:30.603 --> 01:12:33.270 align:middle line:84% because we don't have any money, and we're not going to give you 01:12:33.270 --> 01:12:33.930 align:middle line:90% a dime. 01:12:33.930 --> 01:12:36.470 align:middle line:90% 01:12:36.470 --> 01:12:37.990 align:middle line:84% But we're going to take five minutes 01:12:37.990 --> 01:12:39.750 align:middle line:84% and tell you who we are, five minutes 01:12:39.750 --> 01:12:41.990 align:middle line:84% and tell you why the product is really good, 01:12:41.990 --> 01:12:47.270 align:middle line:84% and five minutes telling you why you want us anyway. 01:12:47.270 --> 01:12:56.310 align:middle line:84% Jeff said, well, it's been kind of a hard week. 01:12:56.310 --> 01:12:58.790 align:middle line:90% It's your 15 minutes, sport. 01:12:58.790 --> 01:13:04.350 align:middle line:84% Knock yourself out, [LAUGHS] literally. 01:13:04.350 --> 01:13:08.130 align:middle line:84% So the first five minutes and the second five minutes, 01:13:08.130 --> 01:13:12.630 align:middle line:84% we did all this stuff about how smart and fabulous we are, 01:13:12.630 --> 01:13:16.270 align:middle line:84% and how wonderful and fabulous our product was. 01:13:16.270 --> 01:13:19.040 align:middle line:84% And for the last five minutes, we opened the briefcase, 01:13:19.040 --> 01:13:22.000 align:middle line:84% and we started pulling out printouts. 01:13:22.000 --> 01:13:25.040 align:middle line:84% We said, these are the customers that we've 01:13:25.040 --> 01:13:29.840 align:middle line:84% been selling our product to in the states 01:13:29.840 --> 01:13:33.040 align:middle line:90% where you have pharmacies. 01:13:33.040 --> 01:13:35.920 align:middle line:90% There's 10,000 of them-- 01:13:35.920 --> 01:13:40.200 align:middle line:90% 10,000 customers with diabetes. 01:13:40.200 --> 01:13:42.940 align:middle line:84% And we're tired of being in the shipping business, 01:13:42.940 --> 01:13:45.400 align:middle line:90% so we're getting out of it. 01:13:45.400 --> 01:13:50.080 align:middle line:84% And all of these customers have one question. 01:13:50.080 --> 01:13:54.840 align:middle line:84% Which pharmacy can I go to to buy your product? 01:13:54.840 --> 01:13:59.340 align:middle line:84% So, Jeff, how would you like us to answer their question? 01:13:59.340 --> 01:14:06.480 align:middle line:90% 01:14:06.480 --> 01:14:08.680 align:middle line:84% Now, it takes a lot of self-discipline 01:14:08.680 --> 01:14:13.160 align:middle line:84% to not say anything after you do something like that. 01:14:13.160 --> 01:14:16.210 align:middle line:84% There's kind of a rule of thumb in negotiating 01:14:16.210 --> 01:14:19.970 align:middle line:84% that the next person who speaks loses. 01:14:19.970 --> 01:14:26.970 align:middle line:84% So we pulled out the duct tape for a minute. 01:14:26.970 --> 01:14:31.690 align:middle line:84% And if you don't think that's a long time, hold your breath. 01:14:31.690 --> 01:14:36.570 align:middle line:84% The end of the minute, he said, all right, you're in. 01:14:36.570 --> 01:14:39.610 align:middle line:90% Big dinner for us that night. 01:14:39.610 --> 01:14:44.930 align:middle line:90% So what we had-- 01:14:44.930 --> 01:14:45.830 align:middle line:90% customers. 01:14:45.830 --> 01:14:49.050 align:middle line:90% 01:14:49.050 --> 01:14:53.330 align:middle line:84% So we had an impressive growth in sales. 01:14:53.330 --> 01:14:57.330 align:middle line:84% Monsanto, at one point, when they were in the food business 01:14:57.330 --> 01:14:59.490 align:middle line:84% and not in the pesticide business, 01:14:59.490 --> 01:15:02.210 align:middle line:84% did an exhaustive survey and found 01:15:02.210 --> 01:15:09.090 align:middle line:84% that our reuse rate was slightly over 300 occasions per year. 01:15:09.090 --> 01:15:11.870 align:middle line:84% Most consumer products company, people who make cereals, 01:15:11.870 --> 01:15:15.610 align:middle line:84% they will swoon if you use their stuff once a week. 01:15:15.610 --> 01:15:20.250 align:middle line:84% So these reorder numbers were astonishing. 01:15:20.250 --> 01:15:22.490 align:middle line:90% We got a lot of publicity. 01:15:22.490 --> 01:15:25.770 align:middle line:84% We ended up selling the company to a billion dollar 01:15:25.770 --> 01:15:30.930 align:middle line:84% pharmaceutical firm in Costa Mesa, California. 01:15:30.930 --> 01:15:33.210 align:middle line:90% Could have been worse. 01:15:33.210 --> 01:15:38.770 align:middle line:84% So some of these experiences were painful. 01:15:38.770 --> 01:15:40.570 align:middle line:90% I've learned some lessons. 01:15:40.570 --> 01:15:42.910 align:middle line:84% I'm sure there's some things-- like Joe said, 01:15:42.910 --> 01:15:45.870 align:middle line:84% sometimes the problems come dressed in different clothes. 01:15:45.870 --> 01:15:48.770 align:middle line:84% You don't always recognize them when you see them again. 01:15:48.770 --> 01:15:53.330 align:middle line:84% Help me out here because I am still in the game. 01:15:53.330 --> 01:15:56.450 align:middle line:84% What should I have learned from these experiences 01:15:56.450 --> 01:15:58.990 align:middle line:84% to help me build my next business? 01:15:58.990 --> 01:16:03.490 align:middle line:90% 01:16:03.490 --> 01:16:04.970 align:middle line:90% We need a microphone. 01:16:04.970 --> 01:16:07.810 align:middle line:90% Mumbling won't do at this point. 01:16:07.810 --> 01:16:09.730 align:middle line:84% AUDIENCE: Talk to your customers. 01:16:09.730 --> 01:16:11.230 align:middle line:84% BOB JONES: Talk to your customers. 01:16:11.230 --> 01:16:12.540 align:middle line:90% Well, that's a good one. 01:16:12.540 --> 01:16:18.060 align:middle line:90% 01:16:18.060 --> 01:16:21.160 align:middle line:84% AUDIENCE: Be open to redefine who your customer is. 01:16:21.160 --> 01:16:22.020 align:middle line:90% BOB JONES: Oh, yeah. 01:16:22.020 --> 01:16:24.780 align:middle line:84% As your business evolves, your customer definition 01:16:24.780 --> 01:16:26.200 align:middle line:90% may need to evolve. 01:16:26.200 --> 01:16:26.960 align:middle line:90% That's a good one. 01:16:26.960 --> 01:16:29.620 align:middle line:90% Thank you. 01:16:29.620 --> 01:16:31.800 align:middle line:84% I was wondering when you guys were going to wake up. 01:16:31.800 --> 01:16:34.740 align:middle line:84% I saw you getting a little glassy-eyed up there. 01:16:34.740 --> 01:16:37.223 align:middle line:84% AUDIENCE: Avoid slotting fees at all cost. 01:16:37.223 --> 01:16:38.640 align:middle line:84% BOB JONES: Avoid who at all times? 01:16:38.640 --> 01:16:41.820 align:middle line:84% AUDIENCE: Slotting fees at all cost. 01:16:41.820 --> 01:16:42.700 align:middle line:90% BOB JONES: Yes. 01:16:42.700 --> 01:16:44.620 align:middle line:84% Slotting fees are less ubiquitous 01:16:44.620 --> 01:16:48.300 align:middle line:84% than they were because Amazon is kind come along, 01:16:48.300 --> 01:16:52.300 align:middle line:84% and you can say-- by the way, getting into Amazon is not easy. 01:16:52.300 --> 01:16:54.800 align:middle line:84% I mean, for all that they're wonderful to buy from, 01:16:54.800 --> 01:16:57.380 align:middle line:90% they're terrible to sell to. 01:16:57.380 --> 01:16:59.860 align:middle line:84% They classified one nutrition product 01:16:59.860 --> 01:17:03.340 align:middle line:84% that I launched as a hazardous material and started sending it. 01:17:03.340 --> 01:17:08.240 align:middle line:84% Anyway, different story, but incredibly messed up. 01:17:08.240 --> 01:17:08.960 align:middle line:90% What else? 01:17:08.960 --> 01:17:13.430 align:middle line:90% 01:17:13.430 --> 01:17:16.870 align:middle line:84% AUDIENCE: Be willing to lose some of the profits in order 01:17:16.870 --> 01:17:23.470 align:middle line:90% to [INAUDIBLE] products. 01:17:23.470 --> 01:17:24.890 align:middle line:90% BOB JONES: Let me rephrase that. 01:17:24.890 --> 01:17:27.190 align:middle line:84% In the early days, it might be worthwhile 01:17:27.190 --> 01:17:29.430 align:middle line:84% reinvesting some of your earnings 01:17:29.430 --> 01:17:32.990 align:middle line:84% into additional market and customer knowledge. 01:17:32.990 --> 01:17:34.710 align:middle line:90% Fair enough? 01:17:34.710 --> 01:17:36.350 align:middle line:90% Yes, sir. 01:17:36.350 --> 01:17:39.950 align:middle line:84% AUDIENCE: Understand all possible distribution routes 01:17:39.950 --> 01:17:43.450 align:middle line:84% between you and the end user ahead of time, 01:17:43.450 --> 01:17:45.990 align:middle line:90% and do your homework. 01:17:45.990 --> 01:17:46.830 align:middle line:90% BOB JONES: Yeah. 01:17:46.830 --> 01:17:50.430 align:middle line:84% Distribution affects your ability to grow a company. 01:17:50.430 --> 01:17:55.230 align:middle line:84% It's rarely thought about in the early days. 01:17:55.230 --> 01:17:57.790 align:middle line:90% Let me offer a couple. 01:17:57.790 --> 01:17:59.750 align:middle line:84% Figure out what they're really buying. 01:17:59.750 --> 01:18:02.550 align:middle line:84% So think about that a little bit. 01:18:02.550 --> 01:18:08.350 align:middle line:84% If you think your AI-enhanced whatever it is you're working on 01:18:08.350 --> 01:18:12.870 align:middle line:84% is for everyone, I'm here to tell you, no, it's for no one. 01:18:12.870 --> 01:18:14.930 align:middle line:90% You have to have positioning. 01:18:14.930 --> 01:18:17.030 align:middle line:90% You have to be specific. 01:18:17.030 --> 01:18:20.310 align:middle line:84% People make jokes about you can't sell air. 01:18:20.310 --> 01:18:21.630 align:middle line:90% Well, yeah, you can. 01:18:21.630 --> 01:18:26.190 align:middle line:84% If they're scuba divers out there, they'll pay for air. 01:18:26.190 --> 01:18:27.470 align:middle line:90% Do you own a car? 01:18:27.470 --> 01:18:29.070 align:middle line:90% Does it have tires? 01:18:29.070 --> 01:18:31.610 align:middle line:84% Do you ever have to go throw quarters in that machine? 01:18:31.610 --> 01:18:34.950 align:middle line:90% And you've just bought air. 01:18:34.950 --> 01:18:36.970 align:middle line:90% Positioning-- everything. 01:18:36.970 --> 01:18:40.190 align:middle line:90% 01:18:40.190 --> 01:18:43.450 align:middle line:84% Nobody needs your product or service. 01:18:43.450 --> 01:18:46.190 align:middle line:90% Please don't burst into tears. 01:18:46.190 --> 01:18:49.270 align:middle line:84% I don't actually need these glasses. 01:18:49.270 --> 01:18:55.430 align:middle line:84% What I need is to see better, so I hired glasses. 01:18:55.430 --> 01:18:57.730 align:middle line:84% Some of you hired contact lenses. 01:18:57.730 --> 01:19:00.510 align:middle line:84% And I bet some of you know somebody who hired the LASIK 01:19:00.510 --> 01:19:03.590 align:middle line:90% surgeon to do that little deal. 01:19:03.590 --> 01:19:06.710 align:middle line:84% All of us want the same thing, which is to see better. 01:19:06.710 --> 01:19:10.200 align:middle line:84% But we don't specifically want the product, 01:19:10.200 --> 01:19:12.940 align:middle line:84% and nobody specifically wants your product. 01:19:12.940 --> 01:19:14.180 align:middle line:90% They want the benefits. 01:19:14.180 --> 01:19:18.360 align:middle line:90% 01:19:18.360 --> 01:19:20.260 align:middle line:90% What's market segmentation? 01:19:20.260 --> 01:19:22.880 align:middle line:90% 01:19:22.880 --> 01:19:24.640 align:middle line:90% I heard you. 01:19:24.640 --> 01:19:26.240 align:middle line:90% Do you have an answer? 01:19:26.240 --> 01:19:26.920 align:middle line:90% No? 01:19:26.920 --> 01:19:29.000 align:middle line:90% OK. 01:19:29.000 --> 01:19:33.860 align:middle line:84% It's customary in the consumer world and less common, 01:19:33.860 --> 01:19:36.980 align:middle line:84% but still everywhere else, to say, well, 01:19:36.980 --> 01:19:38.940 align:middle line:84% if we're not going to chase everybody, 01:19:38.940 --> 01:19:42.320 align:middle line:84% let's divide the market up into segments. 01:19:42.320 --> 01:19:44.420 align:middle line:84% What do you think are the usual segments? 01:19:44.420 --> 01:19:49.810 align:middle line:90% 01:19:49.810 --> 01:19:52.400 align:middle line:90% AUDIENCE: [INAUDIBLE]. 01:19:52.400 --> 01:19:56.430 align:middle line:84% BOB JONES: Closed captioning for the hearing impaired. 01:19:56.430 --> 01:20:03.200 align:middle line:84% AUDIENCE: [INAUDIBLE] in those subcategories of customers that 01:20:03.200 --> 01:20:05.560 align:middle line:90% are in industries [INAUDIBLE]. 01:20:05.560 --> 01:20:09.625 align:middle line:90% 01:20:09.625 --> 01:20:10.250 align:middle line:90% BOB JONES: And? 01:20:10.250 --> 01:20:11.690 align:middle line:90% Thank you. 01:20:11.690 --> 01:20:13.560 align:middle line:90% And? 01:20:13.560 --> 01:20:18.930 align:middle line:84% AUDIENCE: [INAUDIBLE] people who know what the product is 01:20:18.930 --> 01:20:24.290 align:middle line:84% in marketing, that is [INAUDIBLE] 01:20:24.290 --> 01:20:27.490 align:middle line:84% want to test the product as soon as possible [INAUDIBLE]? 01:20:27.490 --> 01:20:30.610 align:middle line:84% BOB JONES: Well, sometimes people segment by geography. 01:20:30.610 --> 01:20:31.810 align:middle line:90% That's right. 01:20:31.810 --> 01:20:37.390 align:middle line:84% I sell surfboards for people who ride really big waves, 01:20:37.390 --> 01:20:44.010 align:middle line:84% and the really big waves are in Portugal, for example. 01:20:44.010 --> 01:20:46.130 align:middle line:84% Most common ways of segmenting a market 01:20:46.130 --> 01:20:50.870 align:middle line:84% are by income and frequently by gender. 01:20:50.870 --> 01:20:54.170 align:middle line:84% And so it's not uncommon at all to say, 01:20:54.170 --> 01:20:58.910 align:middle line:84% we want women shoppers in households that earn between 01:20:58.910 --> 01:21:02.050 align:middle line:84% $60,000 and $90,000 a year because they think 01:21:02.050 --> 01:21:04.730 align:middle line:84% that's a target-rich environment. 01:21:04.730 --> 01:21:11.450 align:middle line:84% I will argue that for you as entrepreneurs, that's wrong. 01:21:11.450 --> 01:21:14.490 align:middle line:84% This is not the Oracle speaking, but it's my opinion, 01:21:14.490 --> 01:21:16.330 align:middle line:84% that really what you need to do is 01:21:16.330 --> 01:21:22.330 align:middle line:84% segment by who is most motivated to spend money on your product. 01:21:22.330 --> 01:21:24.490 align:middle line:84% So let's say you and I have invented 01:21:24.490 --> 01:21:29.850 align:middle line:84% something that helps people not have their second heart attack. 01:21:29.850 --> 01:21:32.520 align:middle line:84% So if you had your first heart attack 01:21:32.520 --> 01:21:34.770 align:middle line:84% and you live through it, because if you didn't, you're 01:21:34.770 --> 01:21:38.430 align:middle line:84% not our customer, you're feeling the pain right now. 01:21:38.430 --> 01:21:41.210 align:middle line:84% You say, I don't ever want to do that again. 01:21:41.210 --> 01:21:46.370 align:middle line:84% You're at the top of the motivation pile. 01:21:46.370 --> 01:21:50.050 align:middle line:84% If I'm your brother, I end up thinking, jeez. 01:21:50.050 --> 01:21:54.730 align:middle line:84% We kind of have the same DNA, and I should be paying attention 01:21:54.730 --> 01:21:55.430 align:middle line:90% to this. 01:21:55.430 --> 01:21:58.970 align:middle line:90% Maybe I should look at this. 01:21:58.970 --> 01:22:01.130 align:middle line:84% It might be people down the street saying, 01:22:01.130 --> 01:22:03.130 align:middle line:84% we all eat in the same place, and we're 01:22:03.130 --> 01:22:07.320 align:middle line:84% part of the same pickleball club or whatever it is. 01:22:07.320 --> 01:22:09.500 align:middle line:90% We'll pay attention. 01:22:09.500 --> 01:22:12.660 align:middle line:84% Many marketers are seduced by this big block 01:22:12.660 --> 01:22:15.140 align:middle line:84% down here because they say it's just dumb not to go 01:22:15.140 --> 01:22:16.700 align:middle line:90% where all the business is. 01:22:16.700 --> 01:22:18.820 align:middle line:90% My reaction is nuh-uh. 01:22:18.820 --> 01:22:21.180 align:middle line:90% That's a graveyard. 01:22:21.180 --> 01:22:26.500 align:middle line:84% Because for our product, those are college kids 01:22:26.500 --> 01:22:29.660 align:middle line:84% who don't have the slightest concern about having 01:22:29.660 --> 01:22:32.580 align:middle line:90% their second heart attack. 01:22:32.580 --> 01:22:33.720 align:middle line:90% So forget it. 01:22:33.720 --> 01:22:37.940 align:middle line:84% As a startup with limited resources, you can't go there. 01:22:37.940 --> 01:22:42.060 align:middle line:84% You need to really focus and start there. 01:22:42.060 --> 01:22:44.060 align:middle line:84% And if there's one slide from tonight 01:22:44.060 --> 01:22:46.760 align:middle line:84% that I hope you will remember, that's it. 01:22:46.760 --> 01:22:49.780 align:middle line:90% 01:22:49.780 --> 01:22:53.260 align:middle line:84% Divide your market up by who wants it, 01:22:53.260 --> 01:22:57.740 align:middle line:84% and go after the ones who want it the most. 01:22:57.740 --> 01:23:00.380 align:middle line:84% If you want to change people's buying habits, 01:23:00.380 --> 01:23:04.110 align:middle line:90% takes a lot of motivation. 01:23:04.110 --> 01:23:06.830 align:middle line:90% Pain is pretty motivating-- 01:23:06.830 --> 01:23:10.750 align:middle line:90% greed, fear, vanity. 01:23:10.750 --> 01:23:15.910 align:middle line:84% But if you're selling virtue, that's a tough sell. 01:23:15.910 --> 01:23:18.670 align:middle line:84% And when I was selling Regain, the patients 01:23:18.670 --> 01:23:20.710 align:middle line:90% didn't feel any better. 01:23:20.710 --> 01:23:23.490 align:middle line:84% What would happen was every six months, the doc would say, 01:23:23.490 --> 01:23:24.250 align:middle line:90% nice going. 01:23:24.250 --> 01:23:28.190 align:middle line:84% Your blood chemistries are improved. 01:23:28.190 --> 01:23:34.790 align:middle line:84% When I was selling Night Bite, people 01:23:34.790 --> 01:23:37.930 align:middle line:84% would call me in the morning and say, I think it worked. 01:23:37.930 --> 01:23:39.790 align:middle line:90% I said, did you wake up dead? 01:23:39.790 --> 01:23:40.310 align:middle line:90% No. 01:23:40.310 --> 01:23:41.130 align:middle line:90% It worked. 01:23:41.130 --> 01:23:44.190 align:middle line:90% 01:23:44.190 --> 01:23:45.530 align:middle line:90% So there was feedback. 01:23:45.530 --> 01:23:47.910 align:middle line:84% It changed the way they felt. Sorry I'm 01:23:47.910 --> 01:23:49.350 align:middle line:90% being a little facetious. 01:23:49.350 --> 01:23:52.870 align:middle line:84% But the point is, figure out who wants your offering. 01:23:52.870 --> 01:23:54.230 align:middle line:90% Not everybody. 01:23:54.230 --> 01:23:55.590 align:middle line:90% Who wants it? 01:23:55.590 --> 01:23:56.670 align:middle line:90% Find them. 01:23:56.670 --> 01:23:57.650 align:middle line:90% Tell them about it. 01:23:57.650 --> 01:23:58.530 align:middle line:90% Take their order. 01:23:58.530 --> 01:24:02.880 align:middle line:90% 01:24:02.880 --> 01:24:04.320 align:middle line:90% I love marketing. 01:24:04.320 --> 01:24:06.920 align:middle line:84% I have huge respect for marketers. 01:24:06.920 --> 01:24:10.780 align:middle line:84% There's all kinds of mechanics, multivariate factor analysis, 01:24:10.780 --> 01:24:12.640 align:middle line:84% et cetera that go into marketing. 01:24:12.640 --> 01:24:16.360 align:middle line:84% I'm going to save you two years of graduate school and two 01:24:16.360 --> 01:24:20.960 align:middle line:90% bullet points for marketing. 01:24:20.960 --> 01:24:22.660 align:middle line:84% Find out what your customers want. 01:24:22.660 --> 01:24:30.840 align:middle line:90% 01:24:30.840 --> 01:24:33.760 align:middle line:84% Obviously, there are a lot of sophisticated mechanics 01:24:33.760 --> 01:24:35.340 align:middle line:90% associated with doing that. 01:24:35.340 --> 01:24:38.200 align:middle line:84% But if you dig into the mechanics and overlook these, 01:24:38.200 --> 01:24:39.420 align:middle line:90% I fear for you. 01:24:39.420 --> 01:24:44.040 align:middle line:90% 01:24:44.040 --> 01:24:48.760 align:middle line:84% So in fact, what we're trying to do is find our customers. 01:24:48.760 --> 01:24:51.840 align:middle line:84% We're not putting ads on the sides of buses for everybody 01:24:51.840 --> 01:24:53.480 align:middle line:90% because we're entrepreneurs. 01:24:53.480 --> 01:24:57.240 align:middle line:84% And the words "startup" and "undercapatalized" 01:24:57.240 --> 01:25:00.680 align:middle line:90% are synonymous. 01:25:00.680 --> 01:25:03.860 align:middle line:84% So use your money wisely at the top of that pyramid. 01:25:03.860 --> 01:25:10.240 align:middle line:90% 01:25:10.240 --> 01:25:13.640 align:middle line:84% Let me tell you one real quick story. 01:25:13.640 --> 01:25:15.960 align:middle line:84% A couple of us invented a product-- 01:25:15.960 --> 01:25:19.600 align:middle line:84% 2 1/2 ounce drink, helps you sleep at night. 01:25:19.600 --> 01:25:22.700 align:middle line:84% And we said, well, we have to put packaging around it. 01:25:22.700 --> 01:25:24.200 align:middle line:90% Who's this for? 01:25:24.200 --> 01:25:25.900 align:middle line:90% And we did-- this was stupid. 01:25:25.900 --> 01:25:27.340 align:middle line:90% We should not have done it. 01:25:27.340 --> 01:25:29.080 align:middle line:90% But we did a top-down analysis. 01:25:29.080 --> 01:25:32.880 align:middle line:84% And we said our market is working moms 01:25:32.880 --> 01:25:35.500 align:middle line:84% because they're overworked, they're overscheduled, 01:25:35.500 --> 01:25:38.840 align:middle line:84% they're overcaffeinated, and they're fussy shoppers. 01:25:38.840 --> 01:25:41.800 align:middle line:84% And we've got something that has a near pharmaceutical effect 01:25:41.800 --> 01:25:43.720 align:middle line:90% just from food ingredients. 01:25:43.720 --> 01:25:49.980 align:middle line:84% So we rented a list of 100,000 moms who met these criteria, 01:25:49.980 --> 01:25:51.900 align:middle line:84% shopped at Whole Foods, all that stuff, 01:25:51.900 --> 01:25:55.800 align:middle line:84% and gave permission to get this kind of mailing. 01:25:55.800 --> 01:25:57.560 align:middle line:90% And we heard crickets. 01:25:57.560 --> 01:26:00.630 align:middle line:90% It was like nobody replied. 01:26:00.630 --> 01:26:03.890 align:middle line:90% 01:26:03.890 --> 01:26:07.370 align:middle line:84% After a while, there were a few who replied, 01:26:07.370 --> 01:26:10.747 align:middle line:84% and they ordered, and they reordered, and they reordered. 01:26:10.747 --> 01:26:12.830 align:middle line:84% And because we were shipping it out of our office, 01:26:12.830 --> 01:26:14.230 align:middle line:90% we had their contact data. 01:26:14.230 --> 01:26:16.330 align:middle line:90% I called them up. 01:26:16.330 --> 01:26:17.830 align:middle line:90% Hello, I'm Bob. 01:26:17.830 --> 01:26:20.690 align:middle line:84% I'm the CEO of this organization that you've been buying product 01:26:20.690 --> 01:26:23.890 align:middle line:90% from, I love you. 01:26:23.890 --> 01:26:27.610 align:middle line:90% Why are you buying our stuff? 01:26:27.610 --> 01:26:32.730 align:middle line:84% And the answer in every case was I run marathons, 01:26:32.730 --> 01:26:37.970 align:middle line:84% and I can't train hard if I can't recover. 01:26:37.970 --> 01:26:41.010 align:middle line:84% And better sleep helps me recover. 01:26:41.010 --> 01:26:44.850 align:middle line:84% Translation-- I do a better job running my marathons 01:26:44.850 --> 01:26:46.970 align:middle line:90% when I buy your product. 01:26:46.970 --> 01:26:52.170 align:middle line:84% I thought-- I though I was selling sensitivity and products 01:26:52.170 --> 01:26:53.690 align:middle line:90% made with love and all this. 01:26:53.690 --> 01:26:56.980 align:middle line:90% I'm selling to warriors. 01:26:56.980 --> 01:26:58.620 align:middle line:90% Totally wrong. 01:26:58.620 --> 01:27:01.900 align:middle line:84% I would have died of old age before I smoked that out 01:27:01.900 --> 01:27:04.420 align:middle line:90% from a series of Google ads. 01:27:04.420 --> 01:27:06.280 align:middle line:90% Talk to them. 01:27:06.280 --> 01:27:11.660 align:middle line:90% 01:27:11.660 --> 01:27:14.340 align:middle line:90% That's self-evident. 01:27:14.340 --> 01:27:16.500 align:middle line:90% We've already covered that. 01:27:16.500 --> 01:27:19.720 align:middle line:90% Oh, you poor things. 01:27:19.720 --> 01:27:22.620 align:middle line:84% You're going to see me again next Tuesday night. 01:27:22.620 --> 01:27:27.900 align:middle line:84% Then we're going to talk about how you pitch your business. 01:27:27.900 --> 01:27:36.540 align:middle line:84% And I'm going to invite some brave volunteers to come up here 01:27:36.540 --> 01:27:38.840 align:middle line:90% with mics and pitch to you. 01:27:38.840 --> 01:27:41.460 align:middle line:90% 01:27:41.460 --> 01:27:46.580 align:middle line:84% And I submit a little piece of homework. 01:27:46.580 --> 01:27:49.860 align:middle line:84% Those of you who are prepared will do better 01:27:49.860 --> 01:27:52.260 align:middle line:84% at this than those of you who are not. 01:27:52.260 --> 01:27:54.940 align:middle line:84% Work on how you're going to pitch 01:27:54.940 --> 01:27:57.580 align:middle line:90% your idea in three minutes. 01:27:57.580 --> 01:27:59.460 align:middle line:90% We'll give you three minutes. 01:27:59.460 --> 01:28:02.900 align:middle line:84% Our TAs have agreed that they will time you. 01:28:02.900 --> 01:28:05.120 align:middle line:84% Bang on a garbage can lid when your time is up, 01:28:05.120 --> 01:28:07.260 align:middle line:90% so you can't talk over them. 01:28:07.260 --> 01:28:08.960 align:middle line:84% The audience will give you feedback. 01:28:08.960 --> 01:28:11.900 align:middle line:84% It's an awesome opportunity to get feedback 01:28:11.900 --> 01:28:15.180 align:middle line:90% in an arena that's safe. 01:28:15.180 --> 01:28:19.300 align:middle line:84% Then I'm going to ask if you can do it in 30 seconds-- 01:28:19.300 --> 01:28:21.340 align:middle line:90% way harder. 01:28:21.340 --> 01:28:23.580 align:middle line:84% And I'm on a tear now with some of the people 01:28:23.580 --> 01:28:29.020 align:middle line:84% I'm working with-- three sentences-- tens seconds. 01:28:29.020 --> 01:28:30.420 align:middle line:90% It's like boiling the ocean. 01:28:30.420 --> 01:28:33.460 align:middle line:90% If you can do that-- 01:28:33.460 --> 01:28:35.520 align:middle line:84% what was the line from Karate Kid? 01:28:35.520 --> 01:28:39.260 align:middle line:84% "Man who catch fly with chopsticks can do anything." 01:28:39.260 --> 01:28:41.960 align:middle line:84% If you can do this in ten seconds, three sentences, 01:28:41.960 --> 01:28:43.970 align:middle line:90% you can do anything. 01:28:43.970 --> 01:28:55.000 align:middle line:90%