[SOUND] My name's Andrew Isaacs. I'm the faculty director for this program. Welcome back. I'd like to share a few thoughts with you regarding Professor Coopersmith's lecture on business models. In the lecture that follows, you'll be examining what we mean, not only by the term business models, but how we use business models to disrupt preexisting businesses. Here's what I mean by that. A business model of course, is how we take a value proposition, meaning how we create value and bring it to market, meaning how we deliver a business model to consumers or to other businesses that pay money for the transaction that takes place between buyer and seller. So that's what business models are all about. But disruptive business models have opened up a new world of opportunity in the present day, particularly based on technology. The rapid development of new technologies, especially information technology, has opened up new business models that were not previously available to us. So look for business model disruption and business model innovation over the course of the lecture that's about to start. The second thing I'd like you to pay special attention to is the concept of MVP, minimum viable product. MVP is indeed a new concept in innovation. Because we've seen a shift over the past 30 or 40 years from innovation being fundamentally for businesses to being innovation that's fundamentally for consumers. The reason is because we can now innovate in many different ways and test those innovations in consumer markets that would not, if the introduction had been into business markets, would not have tolerated the introduction of incomplete products. The term minimum viable product indeed implies an incomplete product, a product that's not fully tested, fully validated, fully featured, fully rendered, fully complete. That's a relatively new innovation for businesses themselves. Now here in Silicon Valley, in the past year or two, we've come to craft a new equation that simply says, MVP equals E, it is the product. The products that we ship, deliver, provide to our customers indeed, are always MVPs. They're always minimally viable products. Some of the most famous new product innovations, for example the Tesla automobile, are designed specifically to be incomplete when delivered. Because, the consumer of a Tesla automobile, the buyer, is willing to accept the incompleteness of that product, knowing that software updates and enhancements will be delivered for free over the lifetime of the vehicle itself, over the course of ownership. The result is that, for example, the first production Tesla Model S which was 2013 model year, still driving today, behaves as a different vehicle than it did when it was shipped from the factory three years ago. Well, that's a striking change in automobile engineering. But it reflects other forms of consumer innovation as well. For example, your iPhone behaves differently three months after you buy it based on automatic updates that come, and you've come to expect that. So MVP has come to equal P. The products that we are now accepting, and in fact, expecting our innovative companies to provide us with, are, in fact, minimally viable at the time we make the purchase. I hope you enjoy the lesson that follows.