Quick intro
What’s the problem?
Building stuff is fun. Especially, if you’ve learned how to code, design, record, or any other relevant skill. The process of applying your skills to create something new can be deeply satisfying. Therefore, focusing solely on product development feels more comfortable than going out and talking to potential customers. However, as an entrepreneur, it's crucial to shift from a building mode to a marketing and sales mode. Because at the end you want to build a business around your product which will, someday, rely on paying customers. And to get the engine running it always starts with the first paying customer. But how should you approach them? How to showcase the value of your product to them?
Own background
What’s my context/experience?
I spent months in head-down mode. When I started developing a social media platform for musicians, I was so deep into the development of the platform that at the end I built a whole, functional social media platform with several features based on my assumptions. I talked to friends who are musicians about their pains, but that was before the development process. Identifying the pains from the chats with my friends and deriving my assumptions were the only foundation for the whole platform I built. At the end the platform failed, because the first 20 users weren’t really spending time on the platform and I decided to pivot towards creating content and events with musicians.
Three years later, I came back to the platform idea. This time the users were people who love underground music and could consume exclusive content or buy guest list spots for events on the platform. And this time, together with my brother, we focused on just building a prototype with the most essential features. In the meantime we reached out to our Instagram community of music enthusiasts and asked if they wanted to buy one month of exclusive content plus 3 guest lists spots for music events. We pitched them the product and sent a payment-link in case they would like to purchase it. And it worked. Well, at least it worked to get our first paying customer. The first person who actually invested his personal money into the value proposition of our product. A few weeks later, after our product became more mature, we got our second, third, fourth and more paying customers. It felt like a breakthrough. For me personally it felt like a new level of entrepreneurship. A level in which I finally realized that I need to step out of building mode and actually approach potential customers and showcase the value of the product. On the one hand I felt naked and vulnerable, as I asked strangers for money to pay in exchange for a product we created. On the other hand, it gave me external approval that our product actually provides value and is worth money to people.
My approach
How do I tackle it?
Since acquiring the first customer, I thought and researched a lot about when and how to best approach your target group to evaluate the value of your product. As opinions differ and several factors can play a role on timing and method I put together a framework to help me and other entrepreneurs by acquiring the first customer (see image below).
Noah Kagan, a successful entrepreneur and content creator, wrote that it’s essential to get the first three paying customers 48 hours after starting a new business. He states that if you can’t get three paying customers in that timeframe, it’s a strong signal that your idea might not achieve product-market-fit. And before wasting too much time on building such a product, it’s better to pivot fast and try again to find the first three paying customers.
Based on my experience and by talking to other entrepreneurs I included the opportunity in the framework to add an extra round of building and evaluating a first Minimum Viable Product (MVP) before approaching potential customers with a sales offer. This can, for example, ensure that you have the chance to refine the branding or value proposition of your product before exposing the idea to your list of potential first customers. Keeping in mind that the longer and more rounds I'm in the cycle of building, the higher the risk that I'm developing a product no one is willing to pay for.
After deciding to reach out to potential customers, Noah Kagan recommends creating a list of your ideal first 10 paying customers. Those are people who you think are experiencing the problems that you want to solve with your product. Ideally, you have the contact details from those people. When approaching them there are several options. You can directly send them your offer, including the price and value proposition of the product, as well as the timeframe in which the offer is valid. As also stated in ‘The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you’ (a famous guide for founders), it's crucial to include a commitment in your sales offer to prove the customer's willingness to pay. If you have the time to meet up or talk with your potential customers it can be insightful to talk about their pains and past experiences first before moving forward to potential solutions and finally, your sales offer.
In case, and probably it will happen in several cases, people reply with a 'no' to your offer, make sure to follow up with questions that give you the opportunity to learn why they’re not interested, for what they would pay instead, what would be a no-brainer for them or if they know someone else who might be interested.
Recently I read Paul Graham’s essay ‘Do Things That Don’t Scale’ and it resonated a lot with me while thinking of my first customers. He states that especially at the beginning of a startup the founder has to get out of the comfort zone and manually put the effort into acquiring their first customers.
Looking at the framework, I think that there is no perfect way on how to approach your first potential customers. I even mixed things up by approaching people directly with the sales offer while having a first conversation with others or evaluating the MVP simultaneously. But what all those approaches have in common is that you have to reach out to your target group. And this is definitely key in acquiring your first customer.
Getting your first paying customer is a crucial milestone for any entrepreneur. It validates your idea, provides valuable feedback, and sets the stage for future growth. By following the framework outlined in this article, you can increase your chances of success and build a sustainable business. Remember, there is no one-size-fits-all approach, so experiment and find what works best for you.
Inspiration I used for this article
Books, Podcasts, Articles, Quotes
- Million Dollar Weekend by Noah Kagan on how to quickly evaluate your business idea.
- The Mom Test by Rob Fitzpatrick about how to interview and get honest feedback from your target group.
- Paul Graham in 'Do Things that Don't Scale' about the importance of going the extra mile to acquire customers when starting a business.
Community Space
Your comments, ideas, feedback
- What's the most creative way you've seen someone get their first paying customer?
- How did you overcome the fear of asking someone to pay for your product or service for the first time?
- Do you think it's more important to focus on building a perfect product or getting your first paying customer as quickly as possible? Why?
- What are some resources or tools you've found helpful in acquiring your first paying customers?
- ...
Join the discussion below. Or write me an email to fabiano@40hourentrepreneur.com