Transcript
A (0:00)
Success story is a Square partner. Now, your favorite neighborhood spots run on Square. You know, I was just at Panther Coffee here in Miami last week. And beyond the incredible cortado, what struck me was watching them seamlessly handle the morning rush the barista mentioned they've been using Square to manage everything from inventory to building their loyal customer base. It's so much more than just that little white card reader that we all recognize. Square knows that local businesses can be big businesses. And as things get more complex, Square meets you at every opportunity. So whether or not you're expanding, expanding to new locations, building a loyal following, even covering cash flow gaps, Square's powering all the behind the scenes stuff that matters. They knock out today's to dos and they unlock tomorrow's what ifs. If you're ready to see how Square can transform your business, go to square.comgo/success to learn more, that's square.com go/success square. Meet you there.
B (0:58)
Oh hey. Love your shoes. If you're hearing this, this is your sign to try those on. Trust us, you can totally pull them off. In fact, try on every shoe here if you want. We won't stop you. In our house, you've got unlimited freedom to play. And hey, fall is the perfect season to do wear, be whatever you want. And with tons of shoes that get you at prices that get your budget, we'll give you something to brag about. So go ahead, try them on.
A (1:26)
Let us surprise you in this Lessons episode. Explore how turning customers into investors reshapes the path to going public. Discover how ownership deepens loyalty and brand advocacy. Understand why retail investors often act like long term institutions and uncover how this model gives entrepreneurs both capital and an engaged shareholder base.
C (1:52)
Now I'm curious for the entrepreneur that's going into this. An entrepreneur goes and raises some money and they usually want to find some investors that are going to provide some.
A (2:05)
Value to their business.
C (2:07)
What is the benefit to somebody that has, for example, 50 million ARR or annual recurring revenue, 100 million annual recurring revenue to get this crowdfunded investment? Isn't that just. Is that, is that headache pre IPO or at that point they don't care because they're already going to be publicly listed.
D (2:29)
Turning customers into investors in an IPO is potentially the most strategic and savvy move any company in the United States can make. And we know this is going to be a breakthrough mechanism when customers become investors. Here's what happens. Those customers are now emotionally invested in the deal. They're financially invested, they're literally invested in the outcome of the business. So what does that it means their lifetime value to the business is going to increase those customers. And now investors will buy more product, buy more services. They're less likely to use products or services from competitors. They're more likely to tell their friends, family, social network that they're an investor, that they're a customer. And so the network effect is tremendous. And not only that, but what we've seen over the years, Scott, is that when companies turn customers into investors and those companies end up actually going public, those investors, they tend to act like institutions and institutions tend to be long term shareholders. They're not flippers, they're not day traders. An institution that buys $50 million in an IPO, usually long term, they hold those shares for a number of years. They believe in the vision and the founder and the business opportunity down the road. They're looking ahead. Well, customers tend to act the same way. So creating a shareholder base. Actually in this series, it's a mix of institutional investors alongside everyday Americans. The customers of the company, the fans, the followers, they're coming in together, investing into the IPO at the IPO price and the smart money. The institutional investors, by the way, they're not getting a discount. There's no favors. They're all buying the same shares at the same price. And these are both different constituents because the average retail Investor might buy $1,000 of stock, but they act like an institution because they are buying into the vision of the company. They're satisfied customer, they've generated value or received value from the product and so that's really valuable for the business. So from the company standpoint, what do they have to gain by having 30 or 50,000 customers become investors? Well, those will be the most valuable customers in the history of the business. They are a massively powerful type of brand ambassador that can promote the brand and they're going to be long term shareholders as well. So we think that this is really a winning formula for founders and entrepreneurs to empower their customers, return the favor and it's a thank you. If you think about this, it's really interesting. Companies like Uber and Lyft, these companies that stay private for 10 years, 12 years, they raise billions of dollars in venture capital from private investors in private markets. And those companies would never have multibillion dollar valuations in private markets if it weren't for the millions of who use the app. Yet it's the customers who are effectively left out and are always excluded from becoming owners. And you and I as customers of Uber, for instance, the only thing we could do is buy shares of Uber after it went public. Well, by that time, Scott, it's too late. The value's already been realized by the early investors, and you and I end up looking like the suckers. Because we're now holding shares of Uber that has stayed private for too long. The chances of you and I getting a 5x or 10x on our investment is slim to none. So we're changing that paradigm by allowing customers to become owners in these businesses at much earlier stages in the company's growth and in their life cycle.