The most vexing question for a B2B tech startup is how to find the first customer.
It’s all different before you have a customer. Really different.
Customers are like inherited wealth. If you have $100 million, getting to $125 million is just compound interest. If you are broke, getting to $1 million dollars is a very big deal.
So the startup needs to find that first customer.
They are in a B2B world. They have a very compelling value prop. But the Fortune 1,000 is a vastly over sold market. There are way too many technologies chasing way too few buyers. Thus, sales cycles are very expensive.
Every VC-funded startup raises initial, dilutive money, then they hire the typical marketing types who buy lists and spam with Hubspot until someone buys something. They develop “sales funnels” and try to impress with metrics. And they generate “leads” which are unsuspecting contacts who download something curious or interesting from the website.
There are often multiple rounds of financing causing the “owners” to become low level employees. Often “promoted” to CTO.
Is there a better way? Sure there is.
Sell your way to your first customer. It is not traditional and it does not require venture funding. In fact, it may eliminate venture funding or it may delay it to a point where your valuation is enough that you maintain control of your firm.
How to find that first customer? Well, first, align your strategy in a fundamental way. You are not selling. You do not have the time, the money, the runway for a prolonged sales cycle.
You built a technology product that solved some clear need you saw, perhaps experienced.
You need to employ an entirely different strategy—–“find the customer looking for you.” You need to take your value prop, your unique selling prop, and boil it to one sentence. You need to then get that sentence in front of 50 profiled firms fast and find someone who both bites and is enough of an early adopter to move.
Wow, that sounds hard. Really?
Consider the alternative.
You pitch endless VCs who have no idea of what you are selling. Nor do they care. If they invest, you become one of 20 investments where they expect 10-15 to fail or at best break even (you do not break even, they do!). Like those odds?
Then you are forced to take the invested money and hire marketing departments “who did it before.”
You hire teams of sales reps, about a $125,000 or more each, most of whom will fail because they have no understanding of how to work in a world with zero infrastructure.
OK, no big deal, so you then do another round. Then another, then another. You are now an employee, working for some VC who could not care anything about your success.
Do I have your attention?
So how to find the first customer?
First, you understand you are not selling to the market—you are selling to the early adopter and they want to find you as much as you want to find them. But both of you are essentially blind at this point.
You do NOT sell to the entire market. You find someone or you personally go to people who have existing customer relationships. They NEED to bring the customer new ideas. They need you but they cannot FIND you.
2-3-4 such “partners,” “consultants” can take you to 50 targeted prospects.
All you need is one person to say “yes.” Just one.
You then live, perhaps on 2 meals a day, but you live to grow, not get diluted.
One or two customers gets you 5-10 because they all know each other.
It sounds hard but it is the only way to get there without diluting yourself into total servitude.
Find the customer looking for you.
It is the only strategy that saves you from VC-funded servitude.