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  7.5. Mike Maples, Jr. of Floodgate on Prototype Testing at Chegg (3 min.)

Mike Maples, Jr. is the managing partner of venture capital firm, Floodgate. He has backed a host of successful companies such as Twitter, Chegg, and Digg. Previous to launching Floodgate, Maples co-founded Motive Communications, the world's leading broadband software company in 1997, and played key roles in its growth from raw startup through sales of more than $75 million.

In this video, Maples illustrates how Chegg, used a prototype of its proposed textbook rental service to validate whether or not customers would rent textbooks on the internet. In short, Chegg launched a textbook rental website without any inventory or warehouses. When customers would order books, Chegg would ship them through Amazon and ask the customers to simply return the book to Chegg instead of Amazon. The prototype was in fact validated and helped the Chegg team decide whether to fund the project. Chegg became a large success, going public in 2013 with an initial market cap of roughly $1.1 billion.