How to get your first customers
Plus, why those first customers should be excited to play a role
The TLDR
Your first set of customers should come from your network
The next set of customers should come from your network’s network
This go-to-market strategy helps you 1) control early marketing costs; 2) control growth so you can focus on turning early customers into reference-able customers
Today, I’m going to take a divergence from sharing high-growth stories like Lovable’s and OpenAI’s.
Instead, we are going to talk about a common question I get - where can I find my first customers?
Everyone loves stories about companies who see massive, dare I say, parabo1ic growth.
What I’ve learned, through researching those stories, is that its the classic story of what appears to be an “overnight success” but really isn’t.
There is no denying that both Lovable and OpenAI grew at an insane rate.
Still, just like every other product, they had to start somewhere.
That early growth is typically the hardest part.
Where to land your first 0 to 100 customers
Just this week I had a prospect ask my advice about where they should focus to land their first 50 beta customers.
I told them they wouldn’t like the answer.
You see, everyone wants the easy path.
“Our product will go viral.”
No, it won’t. At least the vast majority of product launches won’t.
For those that do, they likely had existing distribution they could leverage. Just like Lovable did leveraging their 50,000 GPT Engineer fans.
The thing is, everyone, and I mean everyone has some degree of existing distribution.
That’s your personal network.
Regardless of how small your personal network may be, your first 10 customers should come from within your network.
Why?
Because early-stage products are rarely at feature parity with competitors. Even if you have a killer feature, or two, you are likely selling on the basis of your relationships.
It’s the quickest, and often easiest, path to revenue.
If you have a larger network , there is the chance that your first 100 customers, or more, come from your network.
This strategy works whether your product is B2C, B2B, B2B2C, virtually across any business model.
“But I don’t like selling to people I know!”
Smeh.
Why not?
If you build an amazing product that provides a ton of value why wouldn’t you sell it to your network?
The goal here is to get people using your product and, hopefully, telling other people about your product.
More specifically, the goal, at this phase, should be to have a reference-able product from day one. Meaning, paying users are willing to tell prospective users that the product is worth their investment.
I use this exact strategy at Jack Henry when I’m rolling out our new products to customers. It’s worked like a charm. In fact, my go-to-market team leverages a monthly process to source reference-able customers. That way we don’t end up wearing out the same few customers as references.
Landing the next set of 100+ customers
Real growth occurs when you can break out beyond the first set of customers.
To do that, leverage network effects.
Said differently, your next set of customers should come from the network of your network.
My advice is to build this process into your product making it easy for people to share your product with their network.
An easy example of this is how Substack, the host of this newsletter, has a feature where I can add a button, see below, inside an article encouraging you to share the article with your network via social media.
Or, how social media algorithms use post engagement to determine where and who they share posts with. The thought is that if you like a post, so will your friends because you probably enjoy similar things.
The key here is demonstrating value.
If the first set of customers pay for your product because they know, like, and trust you, this second set doesn’t. So, the path to landing them as paying customers is more about demonstrating a ton of value and less about your relationship with the customer.
Benefits to this go-to-market strategy
There are multiple benefits to leveraging this type of early adopter go-to-market strategy.
The most obvious is cost.
Early-stage startups tend to have limited marketing budgets. Fortunately, word-of-mouth isn’t as much capital-intensive as it can be time-intensive.
My company has a large marketing budget, but we still leverage network effects.
In fact, its part of our standard playbook.
One way that looks is that we have advisory boards made up of our top customers. When we are launching new products, those advisory board members get early looks at the product and the option to be a beta tester. That provides us with early feedback and, hopefully, reference-able customers when they convert to being a paid user, which is about 65% of the time across all of our products.
Another benefit is that you can control your growth.
When I launched my first startup back in 2010, I made a big mistake. Instead of controlling growth to select geographies, I allowed users to register from anywhere. Our model required users and vendors to work. Imagine how hard we scrambled when one day 620+ Peruvian users joined the platform overnight, without any vendors to service them.
Not only does controlling your growth allow you to demand resources, but it also allows you to focus on providing early customers with the best possible experience.
This is a play I’m using with the team at Cr3dentials. My advice was to limit the number of betas they take on, so that they can ensure they hit a homerun. Doing so will make sure they walk away with their first set of customers and, hopefully, customers that are willing to talk to their network about the product.
There is one final benefit to gating who gets in as an early adopter and thereby controlling your early growth.
You create a feeling of exclusivity and those early users have an oversized amount of influence on the next feature set your focus on.
Using those things to your advantage can help you build even closer relationships with your top prospects and customers, while setting you up for parabo1ic growth once you are ready.