Financing Options: Customers
I wrote in an earlier post in this series that friends and family is the most common form of startup financing. If you are talking explicitly equity investments, then that is probably true. But the most common way that startup businesses get money to get going is they sell something to someone. In this context, someone means customers.
Customers are a great way to finance a business for many reasons. First, customer financing is typically non dilutive. They want something from you other than equity in your business. Customers also help you fit your product to the market. And customers will help debug and improve the quality of the product. An early customer will give you credibility with other customers. And an early customer may spend more with your company down the road.
The most common way customer financing is done is you sell the customer on the product before you've built it or before you've finished it. The customer puts up the money to build the product or finish the product and becomes your first customer. Usually the customer simply wants the product and nothing more. At times an early customer might ask for some exclusivity on the product or even some free equity in the business, but most of the time the early customer simply wants the product from you and nothing more.
So why not take this approach with every startup? Well, it isn't always possible to find a customer who will put up money in advance of the product being complete and ready to use. It takes great salesmanship to convince a customer to buy something from you that isn't built or isn't finished. But even if you can convince a customer to do this, there are some negatives.
First and foremost, building a product explicity for one customer often makes it less applicable to the market as a whole. An early customer who provides funding to build your product will want the product tailored specifically for its needs. And a highly tailored product is often not well suited to a broader market.
Second, you risk building a "fee for services culture" in your company with this approach. Some companies build products for customers for a fee. Other companies build products and sell them "as is" to customers. The latter is the scalable model for building valuable companies. If you use customer financing, you risk being pulled into the former.
And customer financing is much more difficult, if not impossible, in consumer facing services. It is much more applicable in business facing services.
Those are the pros and cons of customer financing. If you can convince a customer to put up significant capital in advance so you can build or finish your product, you should consider it very seriously. Many great companies got their start this way.
Another way to “cheat” when you cannot sell a product that isn’t built yet is to use subscriptions.Even if you’ve built your service already and want to sell the service on a monthly basis, selling discounts for 1 year will allow to charge the whole year and hence make cash in the bank for stuff that hasn’t been “delivered” yet.
great point. that’s almost another post in this series. in accounting terms it is called deferred revenue and its a great way to finance your business
At the same time, you should maybe also highlight in another post the risk of this “forward” growth in terms of financing. At some point, the growth will decline and it is key to adjust costs accordingly ahead of time if you want to avoid looking for working capital that can be _extremely_ expensive (in terms of ownership for example) for many business owners.
Sharp experiential advice, thanks Julien.
I was going to bring that up. You do what you have to do to get things started, but getting on a deferred revenue treadmill is tough to get off of.
@Julien: “At some point, this growth will decline and it is key to adjust costs accordingly.” Hmm, I could swear I saw that line somewhere before. Oh, yes, it was in the dictionary under “RIM”. Ha!
Annual subscriptions and discounts for annual up front payments are a great ways to finance a start up.Apart from the obvious cash flow benefit you get the customer committed to using your product/service
Thanks for the post, Fred. Kickstarter seems like a great way to get prospective customers to buy ahead of time (as you well know!). Also, often membership clubs get charter or founding members ahead of time. On a completely diffferent scale, Bloomberg LP started this way, building the first terminal for the first customer, as told in Mike Bloomberg’s autobiography. Are there other examples of notable companies that started this way?
I think that Oracle had a very early contract with the Department of Defense (or CIA, don’t remember) to develop their relational databases that gave them a significant amount of cash.
too many to listbut Bloomberg is a great example
they are b 2 b – also, his mother just died….
Tesla is B2C. The took preorders and then finished building the car.
Great point about fee for services, but there is a middle ground between fee for services and product-oriented which can be more insidious. I am all for sales (who doesn’t want revenue), but I have seen a number of cases where companies become sales-driven (or more correctly deal-driven) than product-driven.As you said, product- and market-orientation make a scalable company. But it is oh-so-tempting when there is one big deal to make “just that one tweak” to the product to fit the deal, even though it distracts from the product goals. Sure, sometimes that “just one tweak” is the customer insight for the market as a whole, which is great, but too often it becomes another distraction in the rat race after current revenue instead of growth.Insidious: because you *think* you are product-driven, when you are really deal-driven.
i see this all the time, both in our portfolio and outside of it
I bet! :-)How do you counter it?
By calling attention to it and talking about it. It works but entrepreneursoften can’t help themselves. They love to sell
“By calling attention to it and talking about it.” So often the best course of action when problems arise in almost every relationship and endeavor. The best leaders/mentors are always the ones who do this.When you aren’t the one in the lead, sometimes it’s more challenging. But its still got to be done if you have any investment at all in keeping things on the rails.I’ve definitely learned to take a deep breath and just do it and have found it’s almost always respected and often even appreciated
Do they ever! Wasn’t there some study years ago that showed most successful entrepreneurs have some sort of sales background or talent?
Entrepreneurs comes with all types of skills sets from creative thinkers to sales people, to engineers etc. The real trait that seems to be standard with all of them is that they are driven and don’t give up.
Fred – I know you are not a huge sales side guy and I think your terms here are inaccurate. And I think it is important to clarify.Most entrepreneurs lack the confidence to sell. They serve instead. You are bringing attention to their lack of confidence and their service mentality.Confidence brings the mindset that you will not give them everything they want and they will still buy. It also makes you qualify customers more effectively.Every great salesperson has the same mantra – teach me what we do and don’t do, will and won’t do, and I will sell around it. That’s selling and that scales.Giving a customer everything they want is servicing and that does not scale. After all, customers have no duty to do what is right for your business, just their business.
I think the joke “What is the difference between a used car salesperson and a software salesperson? The used car salesperson knows when they are lying” applies.I agree 100% with your comment and Liked it, except in this case you don’t know what you are going to do.But once you actually have a product…..you are spot on.
Excellent point! It’s easier to make a sale/deal if you’re willing to bend to the customer. I’ve gotten stuck in that mode many a time and it comes back to bite you.
Great points:”Confidence brings the mindset that you will not give them everything they want and they will still buy””customers have no duty to do what is right for your business, just their business.”
Although that one big sell may be tempting I imagine that you can’t have it both ways. Company culture must be consistent to be effective and permeate throughout the organization.I can’t help but think of one of Chrisensen’s main message in The Innovator’s Dilemma – the customer is not always right. Follow the market not the customer.
It’s easier said than done. If you are bootstrapping, it’s very hard to turn down cash like this. If a customer is offering you $100K upfront to make a few tweaks and develop a couple new features, and if you have cash-flow problems, you just can’t help it because you need to survive…
It really is, and I understand it. That is why investors are there: to get you the runway you need to decide if you are:a) Fee for service (which is perfectly viable as a business, but not growth)b) Product- and market-driven, so you can turn it down; orc) Product- and market-driven, but what they want makes sense so you do it anyways.
BTW, on saying no, a great video of Steve Jobs during the Apple turnaround days just surfaced.http://www.youtube.com/watc…
Great video: “Focus is saying no”I have now stolen that line. So true. I had to do a mea culpa today because I said yes, when I should have said no.
Ditto… great video… I’m starting to use “no” on a personal level, and l’ve been impressed with its power. I’ve said “no” to joining 3 boards as asked by friends and community representatives, “no” to many events I’ve been personally invited to, as well as “no” to spending time with friends on weekends (to an extent). So far its worked for me, and I haven’t lost anything of value by using it (gained rather).
I think you do what you have to BUT be very aware you are crossing the line and it has to be a one off, otherwise you start slipping into that other 50%.
>If a customer is offering you $100K upfront to make a few tweaks and develop a couple new features, and if you have cash-flow problems, you just can’t help it because you need to survive…I agree. In early days, a startup’s main goal should be survival. Only, it’s preferable if it doesn’t happen more than one or two (or, worst case, a few) times, otherwise it risks becoming a consulting/services company instead of a product company.If it’s one or two times, I think – depending on the size of the customization the customer wants – that it can be handled using version control software (Subversion / Git / Mercurial etc.) and making the specific version a separate branch. Though it would be a bit of a pain, it’s possible. This sort of thing is already done a lot in traditional enterprise software product companies, and is not rocket science. Later, any features found to be generic can be merged into the main version.
You are building a company and how you get to the launching pad is almost irrelevant in the long run. Take the damn money, every time!
Airplane manufacturers do this quite well. They usually have customers who put orders upfront before the development is finished in exchange of early access and disccounts.Without this –and government help, be it non-repayble loans in Europe or defense contracts in the US– new planes would not be viable because of the huge cost of devoloping them.
Good insights. 1 point and 1 question on this:- If you’re driven to develop special product features for clients who are paying for it, make sure that at least 80% of these features will appeal to other future clients and become part of your standard offering.Q- If you start generating a bit of revenue initially due to this approach, how do you handle the fact that you’ll start to get valued against a revenue multiple instead of the overall market upside potential and other metrics like most other non-revenue start-ups?
Hi William…On your first point, I agree that a high percentage is logical, but honestly, it’s hard to know, especially at an early stage.In the enterprise, I’ve always been surprised how companies in the same market segment wanted features that were unique only to themselves. I presume this comes from legacy workflow and infrastructure.
It’s true that enterprise clients will be more demanding and exacting in their requirements. The trick is to build a platform that is flexible enough that it can be configured to meet those needs (wink).
Need many ‘winks’ William 😉 Whether it is building for funding or in an NRE type environment, this is never perfect. Often a useful funding mechanism, but always with some pain. The best success I had was when I built a product for a channel partner (they funded) and we (company and partner) shared upside from the partner’s guaranteed distribution agreement.
“this comes from legacy workflow and infrastructure”…especially true in the DC area where government agencies and their huge pool of vendors/contractors are always trying to figure out how to continually “update” antiquated systems.
Well said Melissa.
This model is one reason why i’m in the middle of building a technology product for my services business. Firstly, it’s a new conversation with clients when you are solving a problem for them with a ‘product’. Secondly, it’s an easier sell for their budgets internally (vs. yet another consulting contract) and then the services work becomes the value add that makes it all work. And lastly, if you do it right (meaning partner right) you can leverage someone else’s sales force. The big downside for me is that if you find the right investor they are a partner with you as you grow and can help with connections, business approaches and larger investment down the road.
Great insight about selling a “product” vs a service. Great insight about the value of conversations with clients – they many not have all the answers – but they do know what how much it is worth to solve a problem.And that information is invaluable to designing product and pricing it to deliver a profit from the start – with enough margin to create working capital. There’s nothing new about that. Many leading companies grew this way before leverage became the way to fund growth. Wouldn’t it be economically revolutionary if there were a structure for exchanging warrants or options to customers willing to refer other customers and/or pay in a premium in anticipation of product improvements.
Hey Fred,In my mind the singular early-adopter (SEA) model works best for physical products and perhaps enterprise services. Outside of this realm, and into consumer services that depend on generating a network effect to become valuable, the model seems implausible. Take for example two companies you’ve invested in previously – Twitter and FourSquare – neither could rely on the SEA model to be meaningful components of your portfolio. What I think would be an interesting exercise is to draw the spectrum between the SEA model and many early-adopter model to try to figure out where different products/services fall relative to each other on this continuum. The different models seem to apply best in very specific situations and by no means do I see only two possible models. For example, as a company matures, it may start to move along the spectrum as many companies have in the past. I apologize if I’ve just written confusion for any reading this comment. Julian
Coincidentally Fred, I considered the advantages of raising funds from customers here: http://www.comradity.com/co… after learning that PayPal offered pre-IPO options to customers who had been pivotal to their success in Eric M. Jackson’s book, “The PayPal Wars”An economy in which businesses share the upside with paying customers would be revolutionary indeed.The question is would an investor be willing to fund such a start-up or would it have to be funded exclusively by customers?
a friend’s company has been financed by one of their first customers (and yes, they’re in enterprise software).it’s been nice for them to have that cash, but it’s made decision making a pain in the ass as they ultimately have to cater to their one huge client.
They could always fire that customer down the road or as soon as the customer’s needs go out of alignment with your friend’s company needs for growth.
the customers can fire the company or did you mean the other way around? 😉
You can fire customers.As a matter of fact if you think about that it is very powerful.I always put in a two way termination for convenience clause.It really makes customers think. You might fire me? Damn straight. People forget the last part of “the customer is always right” that is: “or they are not a customer”Any relationship where it is only one way is not healthy.
haha… i agree.i was only half-joking when i made my remark with a ;)i was raised in the restaurant business – the epicenter of the servicemantra “the customer is always right” – but i always loved when my parentsran into a customer who was beyond manageable and would just show them thedoor.in business, particularly one that involves community, your customers are asmuch a part of your product as your product itself.*****:: * @reecepacheco <http: twitter.com=”” reecepacheco=””>*:: watch awesome stuff @ shelby.tv*
your sig markup got funkafied.I dig your folks style. Great buddy of mine has tended bar for over a decade (many years at the Mercury Bar on 33rd and 3rd ave) and is getting ready to open a place with another long time friend in South Carolina.I’m sure they’ll have plenty of customers that are always right until they’re not.
I think a question everybody should ask themselves is whether they *need* to build a product for this client or if they could get away with cobbling something together from preexisting solutions. If you can still please the client by providing “glue code” that is probably a better way to go.But us developers tend to get too excited about what we can build, rather than thinking about whether we need to build it in the first place. That excitement leads to great software, but needs to be carefully reined in as well, so it doesn’t lead to “Too Much Software” (TM).I speak as somebody who once came out of the fog of a 3-year-long tangent. I then built the glue code (that would have pleased the same customer by the same amount) during a weekend hackathon.
One great way to do this that does not drag your team into customer muck is to private label a competitors product (not always available but in many industries very common) than sell that product under your name, use the money to build your product than migrate the customers without them knowing.So it would be white label-sell-build-migrate financing. I have seen it done a few times and in 2 examples it resulted in $100million+ companies where the founders maintained all of the equity.
> you risk building a “fee for services culture”+1 to that. By definition you’re selling to the visionaries and early adopters. Become too addicted to that and you never get to the mainstream.* If every deal comes with a list of new product features to be implemented, you have not crossed the chasm.* If every deal is “high touch,” you have not crossed the chasm.* If every customer is using a different subset of the product functionality, you have not crossed the chasm.
I agree family is the most important thing when it comes to starting a business. They are the foundation that you build on and share the sames dreams. I know we own a franchise called Once Upon A Child and it took all of us to put our heads together and achive greatness……
Great coverage of the flip side of customer funded development. The siren call of a service company is ever present in every tailored feature.
You do what you have to do to build your company.Every single form of financing has pluses and minuses.If you go in with your eyes wide open and you orchestrate, that is not let one area dominate the other: sales, development, finance, support, product management. You will be fine.Its when you let one discipline drown out the others you have problems.So yes, you need more than one customer, and yes getting subscription money upfront is great, but remember you now aren’t going to get that money later, and you had to discount, and yes its easy to become a consulting-ware company.But one of my favorite all time quotes from a partner of mine when we were arguing about sales/development/finance balance and I brought up a decisionwe made in the early days which was VERY sales driven:Don’t talk to me about what I did behind the dumpster when my kids were starving! I did what I had to do.
“Don’t talk to me about what I did behind the dumpster when my kids were starving! I did what I had to do.”Some scary imagery entered my thoughts with a statement like that.
You had to be there for the comment. We were having a meeting like all of mine while we were walking and I literally had to stop walking because even though it was very heated, I could not stop laughing.It involved the price: $5 and the act, but it certainly was not appropriate for this blog, and I think Fred even might delete this post which is fine.
If when you are building a company and you don’t have some dumpster moments, then you have not lived, my friend.Well played!
Are there consumer facing sites that do manage to bootstrap from customer’s paying them?
Sure, they are just not advertising based as far as revenue.
do you have names?
Craigslist is the most obvious.
My wife has told me my whole marriage (21years), “Nick, you have a million dollar idea inside you…”Now, I’m not an entrepreneur, I’m a computer programmer/web developer for 15 years. So, I’ve always just listened to my wife but never really gave it any thought until about 2 years ago!Today, I find myself sitting on 2, what I believe are “Million Dollar” ideas!I’ve been dabbling here and there with the Design of them and even recently starting working with a Mfg. overseas to start developing it.My biggest frustration right now, is I’m trying to do it completely on my own – entirely.Mainly because I have not idea how or to who to sell my ideas!With that being, does anyone have any suggestions or information that would help?Thank you.Kindly,NJB, Sr.
As you point out, this isn’t always possible, but when it is, this is without a doubt the best way to finance a new venture.I’m reminded of the example of Ann Winblad when she started Open Systems in the 1970s. Standing on a shipping crate, she offered 20 guys a lifetime license for the general ledger module of their yet-to-be-developed accounting software, but only if they wrote her a check that day for $10,000.Sensing hesitation, she added “and if you need to write a personal check, write ‘hold until Monday’ in the memo so you have time to get reimbursed.She walked out with $120,000 in her purse.Best seed round in the history of the universe.
We found this rather old fashioned view of company finance: i.e. makesomething sell it get some money make some more, sell that etc. veryuseful for us. However thats because our basic tech is an underlyingcomponent. i.e. Develop, throw at market, if it doesn’t stick move on,is not really an option for us. There are caveats thought:1. Tweaking for customers is not a bad thing. At least 50% of the timeit a good tweak. You just have to be careful about the other 50%.2. Its a hard sell but BigCorp should prefer to have something youbuild and KEEP the rights to because your incentive to actually do itproperly is much much greater.3. Be very careful on your margins and even more careful on specs. IfBigCorp wants extra this and extra that later on then they have to payfor it.4. Really really really try to design with a good reusablearchitecture and your own objective as the primary driver.Its also a great way of avoidings VCs as well ;-).
“Its a hard sell but BigCorp should prefer to have something youbuild and KEEP the rights to because your incentive to actually do itproperly is much much greater.”This is where sales skills and very credible knowledge base is so critical. And I would add #5. capitalize on version 1 profits and insider access to customer intelligence to develop irresistible upgrades to continue generating more working capital for the mothership invention.
Big caveat is that we are emphasizing *products* companies here rather than *services*. A great article discussing the latter and whether everyone should switch to the former or not is here (Mark Suster): http://www.bothsidesoftheta…I’ve read this over and over and take away something different each time, for my services company.
Having been on the “other” side of the software development process in three different situations let me add some insight. First, learn to say “no” if you are asked something that is beyond the scope of work and or impossible. If you have a sales person, make sure that you reward them based upon something other than sales. In one situation a software development firm hired a sales person who basically got so wrapped up in the presentation that he was claiming they had programmed artificial intelligence….or a program that could determine which orders to pick and ship for maximizing a variety of parameters that we could establish. Ended up with a software that was claimed to be an 80% fit out of the box that ended up not working out of the box. In another situation we were a software company first customer and we paid to build the prototype which they then went and marketed to other companies. As time went on they realized that they were offering our modifications to all their clients….for free and losing a massive income stream; what made sense starting out wasn’t all that bright of an idea later on. Finally, remember, its a two way street, we hire you because you brought an idea to the table that no one else did and don’t get so wrapped up in satisfying us that you foreget the fact of why we did business with you in the first place.
Pricing strategy would be a good follow-up topic for Fred’s MBA Monday topics, wouldn’t it?
Consulting on the side might also fall in this category.
Great post, as I definitely think a lot of startups forget about this financing option when getting started. A startup I’m advising is using this method as their primary source of seed funding before raising a larger round, and it had been particularly beneficial for them. It obviously allows them to retain a greater portion of equity, but there are also two other advantages. First, it subconsciously keeps their burnrate down as they realize that they aren’t flush with a round of cash, and it also incentivizes them to keep closing deals and adding customers since its their primary source of funding.
In my *limited* experience, if you want to build a new-market/low-end disruptive product, customer financing is impossible.Customers who would finance product development are invariably under-served rather than over-served as such you end up building something sustaining rather than disruptive.Not my cup of tea.
Customers are indeed a great way to finance business, but I disagree with “They want something from you other than equity in your business”.I know of a prominent SaaS enterprise software start-up that closed a very large deal by offering equity as a discount to the customer. This may not be common and may have some downsides, but it certainly serves a few purposes:1) To win a large customer, a vendor didn’t discount the subscription price but offered equity that allowed them to have the much-needed positive cashflow and a referencable customer, early on.2) The equity paid to the customer for “co-innovation” — learning from that large customer — improves the product for other customers as well.3) Customer now has an upshot, not just skin in the game as in the case of an upfront purchase, to make sure that the vendor not only stays in the business but sees significant growth to get a good return on their equity.4) Customer gets to invest into a high-risk instrument without having to use the cash. Using software from a start-up is a risk (if you believe so) irrespective of how the customer has financially invested into a start-up.
Now that sounds like the beginning of a new economy to me.
This was an interesting and very useful post + comments. Personally I think this is a great model for selling to businesses, especially enterprises where the cost of building a product can be prohibitively high.Unfortunately the other members of the founding team do not have the same confidence that I do in this model and they have raised some legitimate concerns.We’ve been building out a prototype for enterprise software where the product output is tailored to the client’s requirements. The majority of the product (front-end, database, and some modules) are re-usable from client to client. The business model I envisaged for this is via the customer financing model. Using upfront and consulting fees to fund the development & delivery of the product and licensing fees (annual/per user basis) to cover on going costs and provide consistent revenue streams. Given the nature of the Enterprise industry I expect the upfront fees to paid on a milestone basis (to help us with cash flow and provide the customer comfort that a startup can deliver).The concerns are from what happens if the startup fails to deliver the product as specified? Beyond just missing a milestone but having the final product fall short or the business runs out of cash prior to completion? I assume the majority of these challenges would be covered by the contract but am curious to how this is normally handled.PS this is not expected to be a one product shop, there are ancillary products, modules, etc we expect to build and sell. We are focusing on an industry where we are subject matter experts. Any service/consulting we would provide is most likely to result in new products being built that would be marketable to other clients. So would you consider this a services or product based business?
One great example of a B2C company pre-selling was AirBNB selling the Obama/McCain cereal. Of course it wasn’t their core product, but in terms of seed funding/PR value/out reach to customers it was an amazing tool.I wrote a post about popular web companies that sold “souvenirs” e.g. Seth Godin and his milk carton book, or the vinyl toy from Twitterific, but I wonder if this could be a way to presell to customers? e.g. Could a food focused startup sell a physical cookbook or kitchen gadget to generate revenue before they launched a recipe site?FYI this is the referenced post:http://replicatorinc.com/bl…
If you are reselling something that you’re buying in bulk after adding some additional value, vendor financing is just as potent as customer financing. Yes, finding a vendor willing to wait for payment is not easy, but neither is finding early customers willing to pay for something up-front.
Fantastic article. Thanks for the great insight
Fred,I believe customers are the most tangible and sustainable financing source for start ups. Is it not true that every start up goes through the storming, norm-ing and performing cycle? As much as I want to believe that every start up can be a Twitter or Facebook, it is just not feasible. I think the most important ingredient is the team, as long as a company can come together as a performing team, they can pivot and build things of value. I am a big believer that “fee for service” is a good pivot when you are in the early stage of the development, it justifies why you want to bet on a team i.e. they can execute, be disciplined and build something of value (customers are the most important indicator of value), the subsequent phases can be built on top of that model. You yourself quoted the example of Airbnb as a team that you passed up, it proves that as long as you have a good team all financing options are on the table depending on the cycle the startup is in. Just my 2 cents 🙂
Consider that Google, eBay, Amazon, PayPal all gained momentum early on by creating value for small business people worth paying for. Small businesses need more help than ever. So this continues to be a good market for start-ups to consider. Think about the many ways social media,information design, communication, ecommerce, and backend administrative technologies could give small businesses value.The above success story cases experimented a lot to figure out their pricing strategy. I imagine many of them wish they had known what the know now then. They would have been more confident about the value they offered small business and charged more sooner. And PayPal which offered pre-IPO options to their most valuable small business customers might have avoided a second funding round by offering equity in lieu of cash to these same customers for referrals. Raising working capital from offerings which improve the relationship between small business and their customers does not risk losing control to one customer and does create working capital to continue to improve freedom to choose for everyone.Starting a b to c concept with funding from small business is the source of customer funding I was suggesting in a the post, Capital Idea, here: http://www.comradity.com/co…
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Nice one, there is actually some good points on this blog some of my readers may find this useful, I must send a link, many thanks.
If when you are building a company and you don’t have some dumpster moments, then you have not lived, my friend.
You mentioned in the closing remarks that many companies have launched this way. Can you mention a few? Thanks for the great article.
Good one, and having done it several times over, I’d agree.
I’m repeating myself, but I think you do what you have to do to get the business off of the ground with your eyes wide open.Sadly, if you do things correctly you probably will lose that first customer as you transition from fulfilling their needs without question, to balancing a product, with many customer requests from support, requirements from development, and direction from sales/marketing.But you can make that transition. It is tough on the first customer, but they had a good run.
Lets face it, what we are talking about here is a start-up going to a huge company and solving a problem.It has to be a huge company because nobody else has budgets that are going to make a difference.In this case you aren’t going to get VC funding because they are going to say selling software to BigCo blech.The person at BigCo probably has a trusted relationship with you and the commitment is that you are going to solve the problem. You are going to do it cheaper and faster than having Accenture do it.You are going to keep the rights and try to sell it to other companies. Places like Accenture have a really tough time doing this because they don’t have the talent and don’t have the stomach to do what you need to do to make the project a product. That is what we are talking about.