David Cummings on Startups

More Confidence With Each Customer Count Milestone

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David Cummings

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The early days of a startup are the hardest. So many ups and downs, incredible amounts of uncertainty, and the realization that startups are actually much less glamorous than they seem. And, every time a potential customer says “no”, a potential employee says “no”, and a potential investor says “no”, the entrepreneur’s confidence is slowly chipped away. Only, something special starts happening as customers sign on and revenue starts to grow. Suddenly, thoughts like “this thing is going to work” and “this market actually needs our solution” start entering the mind. Confidence and customer wins beget more confidence and more customer wins.

Signing the first 10 customers is dramatically harder than signing the next 10. After signing 10 customers, especially 10 customers that didn’t come from existing relationships (e.g. non-friendlies), the product messaging improves, customer use cases become more compelling, and confidence grows.

Signing the first 100 customers is dramatically harder than signing the next 100. With 100 customers, testimonials become more plentiful, reference accounts more abundant, edge cases ironed out, and a repeatable customer acquisition process clear. Confidence continues to grow.

Signing the first 1,000 customers is dramatically harder than signing the next 1,000. With 1,000 customers, economies of scale start entering the financial equation, possibilities of dieing a quick death are no more (assuming recurring revenue with contracts), industry analysts are providing regular coverage, and the brand is becoming well known. The freight train has left the station and has tremendous momentum.

While the beginning is the most challenging, entrepreneurs can take solace in the confidence that builds with each customer count milestone. Then, at some point, the momentum is so palpable that it becomes clear a level of success will be achieved.

What else? What are some more thoughts on the idea that there’s more confidence with each major customer count milestone?

Comments

2 responses to “More Confidence With Each Customer Count Milestone”

  1. Dave Williams Avatar
    Dave Williams

    So true but it is not a linear progression and many times the highes get higher and the lowes lower as the industry evolves, transforms, employees move on, valuation fluctuates, cash needs increase, greater levels of management, process, new conpetitors, requirements from the CEO and other levels of employees with some growing with growth and others not able to keep pace, plus greater fat in the organization and potential drama and organizational inefficiencies. Not every stage scales with the original team and personnel issues become a greater and greater issue. What I have found is that as you become more successful things don’t get easier but only harder. Think about being a professional athlete. As you get more competitive everything gets tougher to compete- harder training, tougher opponents, etc. and if you don’t have the backing as competing companies, keeping pace gets tougher and tougher which many times leads to collapse of the opportunity or optimally an exit before competitors and bigger companies compete with you and take your employees. Nothing about this is easy and at time can be gut wrenching especially post sale, integration or worst case missed opportunity.

    Reply
  2. Sam Wheeler Avatar
    Sam Wheeler

    What has been written has been my experience as well. I have found those that succeed in start ups have a few particular traits. These are not in force rank order.
    1. Flourish with ambiguity.
    2. Love constant change.
    3. Feel as if they are on a mission.
    4. Comfortable being misunderstood.
    5. Can make decisions and move quickly.
    6. Willing to discard prior beliefs when proven wrong.
    7. Always try to hire smarter and better employees.
    8. Don’t give up, but know when to move on.
    9. Think of themselves as builders.

    There are more, but these few have served me well.

    Reply

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