After building a product, the hardest test a startup faces is finding the first 10 customers who are willing to bet on you. Without a doubt, this is the hardest challenge for an early stage enterprise-centric startup to overcome. It takes focus, perseverance and sometimes, a bit of luck.
Benchmark Research finds that the average time for conversion from lead to opportunity is 84 days with an average conversion rate of 13%. Conversion rate from an opportunity to a deal is even lower – only 6% of opportunities convert to deals.
As an early stage CEO, how are you going to find the initial product/market fit with your first customers before you run out of cash?
Focus. Discipline. Relentless Execution.
Successful startups almost always have intense focus. Apple started with a computer Steve Wozniak made to impress his friends at the Homebrew Computer Club. There weren’t a lot of them, but they were really interested. Facebook started out just for Harvard University students. Again, not a lot of potential users, but they really wanted it. Successful startups start with a narrow focus partly because they don’t have the power to reach a big audience, so they have to choose a very interested one. But also because the product is still being defined. The conversation with initial users is very important market research. You need to know who you are selling to and what problems your product solves. It goes without saying, but make sure you have a clear picture of who will buy it, why they will buy it, what problems it solves, etc. These things will start to change as you gain traction, but you can’t start selling if you don’t have a particular kind of prospect in mind, and how it will help them.
Successful startups make their customers feel like they are receiving a custom product designed specifically for them – and, they are! When you treat these beachhead customers like partners rather than customers, they will significantly increase their commitment to your success and help you further refine your product with invaluable feedback.
For example, although Pinterest is now a mass consumer product, founder, Ben Silbermann began by recruiting users manually. He would literally walk into cafes in Palo Alto and ask random people to try out Pinterest while he gathered feedback over their shoulders.
Once you have identified who your first customers may be, do whatever it takes to win them over. Everything starts with a sale. You need the revenue. You need the product validation. You need the case study. You need it all. So, be flexible with your first customers and do what it takes to win the deal. You are not in the position of leverage, they are – you need them more than they need you. Remember it’s a big risk for a buyer to try something new, so minimize their risks wherever you need to in order to give them the piece of mind about the purchase.
It’s an art, it’s a science, it requires skill and emotional intelligence. But you can sell if you put your mind to it. Remember, without that sale you have nothing. So get going, get that first customer!