How to Get Your First Customers | Startup School

Introduction

Startups are having to acquire customers and get revenue in the door sooner and sooner. Gone are the days of raising big venture dollars before you really focus on revenue and customers.

Times have changed. Founders can no longer woo investors with just great ideas and "users." The people behind the funding want to see real results right off the bat, which means the days of raising money with no proof of success are over. When the much-feared next recession finally hits, investors will get even pickier.

There's no better way to de-risk an early-stage company than to get someone to pay for the solution. This forces you to get scrappy on how you put together your first solution because you likely won't have much capital or time to do it. If you can get even 20 people to buy your product or service, you'll set yourself apart from the rest.

Early acquisition on a shoestring budget

Young companies typically don't have much money to spend on customer acquisition, and a lot of startups begin with no money at all. With a small budget, you can't hire an agency or a marketing department to do your work -- you have to earn your first customers yourself.

That would be easy if you had unlimited time, but you don't get that either. Tight budgets don't provide you much leeway, so if you can't prove your viability before it's time to fund-raise, you won't get far.

It's also important to note that growth tactics that work for bigger companies don't work for startups in their earliest stages. You're not going to have a "perfect product," and it definitely isn't going to sell itself -- nor can you build a comprehensive marketing plan that resembles a Fortune 500 marketing strategy you learned about in your MBA class.

Fledgling startups need quick-hit, low-cost, likely unsalable marketing efforts to bring users to a less-than-perfect product.

Fortunately, the same constraints that limit your options can also be guidelines to success. When you know exactly how much money you have and where revenue needs to be, you can optimize your sales approach to reach the target.

In your earliest stages, you might not even know who your ideal customer is or how to market to that person. However, running these quick and dirty tests on a small scale with some manual effort makes it OK to get some things wrong as long as you're learning from each iteration to improve the next time.

How to acquire your first paying customers

Kill any ideas you have about big marketing campaigns, SEO efforts, launch parties and Super Bowl ads. I've found that those gambles can be too risky on a shoestring budget. Instead, take an incremental approach, with rapid experimentation to acquire your first customers.

Once you narrow down which 10 tactics you'll use, create test cards to validate your odds of success and define what you're working toward. These cards force you to approach sales like a science experiment by having you walk through the steps, setting parameters for success or failure and defining the metrics to measure.

Here are some ways you can do just that, even with a shoestring budget:

1. Make an appearance at trade shows and conferences.

Early-stage customer acquisition strategies rarely scale well, so don't worry about that. Attend conferences and trade shows in your industry to make vital connections.

2. Don't be afraid of cold-calling.

Even our favorite unicorns started simple. Uber began by cold-calling limousine companies. You could try LinkedIn outreach or work your network for warmer introductions.

Bring doughnuts to the offices of your prospects. Really. We have a company in the healthcare space that did just this and it worked.

A tip for cold-calling: Don't try to close a prospect on the first call. Make the first call and invite to a special event or dinner you host, or a ticket to a ballgame suite. This lowers the barrier and helps you get your foot in the door.

3. Take advantage of paid ads to get you started.

Paid ads are great in the early stages because you can test things almost immediately. Even if the unit economics aren't there, it's OK at the start, as you're trying to drive revenue and validate assumptions in the business model -- not show profitability. Try Facebook, Instagram and LinkedIn ads to get started.

Start small. You don't need to hire an ad agency or do large media buys. Get targeted, with a budget of $500, and learn to DIY.

4. Piggyback platforms.

Use Airbnb's trick and get your first customers from another platform where users already live. They used Craigslist's user base to get started. Zapier did the same thing with online forums, where it posted links to get email addresses.

Follow these examples and think about where your customers already hang out online. Platforms that already have users can be a great place to find customers of your own.

Selling your product is not a multiple-choice question. You can do two things at once. Pick your favorite potential tactics, and then target sample sizes that are just large enough to generate statistically significant results and get moving. Run your tests and measure the ROI of each channel. Keep it quick to limit your costs while validating your theories.

When one of your tactics leads to positive results, double down on it. Then, repeat the process for any other successful tactics you try. This provides you with feedback from your real customers that you can use to improve your business model and product. For now, though, just focus on converting new customers.

If you follow these four steps, you'll end up with at least 20 new customers. Don't worry about what your future holds or whether you'll be able to sustain your early success. Get your first customers on board, treat them well and use that success to fund your next steps.

Conclusion

Selling your product is not a one-size-fits-all approach. Implement multiple tactics simultaneously, targeting sample sizes large enough to yield statistically significant results. Measure the ROI of each channel, keeping costs low while validating your hypotheses. When a tactic proves successful, double down on it and repeat the process with other promising strategies.

By following these steps, you’ll secure at least 20 new customers. Focus on converting these initial customers, treating them well, and using this success to fuel your next steps. This approach will provide you with valuable customer feedback, helping you refine your business model and product as you grow.