David Cummings on Startups

The First Five Customers

Written by

David Cummings

in

Solid State Transition digital abstract series...

When you’re just getting started with a new venture there’s a tendency to spend too much time trying to perfect pricing before you’ve signed your first customer. The most important thing for you to do is to get them to pay you something (even if it is tiny) and then bend over backwards to make them successful so that they allow you to showcase their success in your first marketing. The first five customers aren’t about making money but rather about getting feedback and reference customers (they do need to pay you something to have some skin in the game).

Here are some things to keep in mind about the first five customers:

  • Don’t worry about pricing other than to be reasonable and get them paying something (it is easier to lower prices than to raise prices but the overwhelming tendency is to price too low)
  • Make the ask early in the relationship to be able to use them as a reference if the relationship is successful
  • View the first few customers as a paying advisory board more so than your eventual typical customer
  • Feedback and input, along with references, are 10x more valuable than the money they are paying
  • Great customer service is the easiest way to differentiate yourself when the product is still immature

Signing the first five customers is one of the hardest things to do, ever, but it is also incredibly rewarding. Entrepreneurs should view those first five customers more as partners to help them sculpt their business as opposed to exactly how the business will operate.

What else? What other thoughts do you have on the first five customers?

Comments

5 responses to “The First Five Customers”

  1. Stephen Reid Avatar
    Stephen Reid

    These couple of points are right on with some of my experiences selling to school departments and how other ventures have grown.

    > Make the ask early in the relationship to be able to use them as a reference if the relationship is successful

    The word of mouth of your first customer will target ‘exact fit’ customers that would be otherwise difficult to find. And if you’re working with small parts of big companies, this will especially be beneficial for getting that next contract a little more involved/

    > View the first few customers as a paying advisory board more so than your eventual typical customer

    Your customers know why they decided to go with you and what issues they were facing, and what their decision points were. In terms of how to grow your customer base, they’re a perfect advisor. [But don’t give in to every unreasonable feature request. [side note; gra / tag competition highly suggests advisors]

    Reply
  2. Customer Acquisition is the Most Difficult Part of a Startup « 10,000 Startup Hours – David Cummings

    […] The first five customers are the hardest to sign […]

    Reply
  3. Jeff Barnes Avatar
    Jeff Barnes

    We have been through the ‘first five’ scenario a few times now and your comments are spot on. I think it is also important to remember that it is a jump in the dark for the new client as well. They want what you are selling but aren’t sure whether they are making the right decision because it is a new product or solution and there might be a better, quicker, cheaper one coming out next week by someone else. What we have found useful is to get the client to regard the sale as a partnership not a buyer/seller situation which means that both of you want it to be a success. This often affects the price but the benefit of having a happy reference is huge.

    Reply
  4. Enrique Shadah Avatar
    Enrique Shadah

    We are trying to land a large corporate account as our first paying customer and it takes a long time. Cold calling being no-one is as hard as it gets. We are starting with the latent need, but still takes 50+ cold calls to land a handful of potential early adopters. Great post. Good to know I am not as bad as I think I am 😀

    Reply
  5. Initial Customers Always Find Bugs | David Cummings on Startups

    […] the first few customers is incredibly difficult (see The First Five Customers), yet after all that effort, the next challenge is keeping them as they inevitably find product […]

    Reply

Leave a reply to Stephen Reid Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More posts