Getting the first 100 customers
Just last week LotStocks won an award for best LA FinTech startup of 2018.
It’s been a long journey but it all started with the first 100 customers.
Education is by far one of the most challenging aspects of acquiring new customers any startup can face. A simple ad or catchy title simply isn’t going to cut it. That’s exactly the kind of wall we hit. No one knew who we were and they had no idea how what we do was even possible. As a result those first 100 customers were incredibly challenging.
When it comes to other people’s money, the first thing they want is to feel safe. By default most people avoid new things or approach them with heavy skepticism because they don’t feel safe. There’s nothing wrong with this, it’s the fear of something new and it’s completely normal but how do you make customers feel safe in trying something new?
There’s not a whole lot of books or content on this problem, we had to work our way through it. We were hit with several challenges in getting to our first 100 customers and I hope sharing those challenges and how we addressed them will help some of you here.
Stranger Danger : You’re the new kid, no one knows you.
This one’s pretty frustrating because it cannot be fixed remotely. It’s time consuming, and you don’t get to set the schedule. You have to go outside, get in front of people. This means attending events. Introducing yourself, talking to new people, as many people as possible to get your name out there. Who you are, what you do, why anyone should care etc. 20 events is no joke, attending them is nearly a full time job. Each event happens about once a month and there are a lot of them. Luckily they try to avoid one another in their timing as to better their chances of a large crowd. You can turn this into a sort of circuit if you add them all on your calendar. You should have 2-5 events every week of the month.
For us, what it meant connecting with bankers, logistics consultants, financiers and business owners at founder events, meetups and workshops. These first events are the toughest because they’re unfiltered, everyone and their mom can get into these things and wading through the crowds is really not a great experience. In these events you’ll find the first 30 customers who think what you’re doing is interesting but this isn’t scalable. What you’re really after here are the headhunters looking for something real. They’re the needle in the haystack and you need them more than they need you. You’re going to feel like you’re wasting your time, that these events are not worth it and that there’s no point. Get over it, it’s work and you need to do it if you want people to take your seriously.
Referral : They don’t necessarily want to know you, they want their friends to know you.
The headhunters are there but they’re indistinguishable and for good reason. If people knew who they were, they’d just get mobbed. It took us a good 10-20 events before one of those people really took notice. In our case it was a law firm. This is the key to the private events. They’re not publicized but they exist and this is the room you want to be in most of all. These meetings often open the door to more meetings like it and once you’re in this circle it’s much easier to find more of them. The good news is, these meetings are comped so you’re not paying for entry anymore. Your awesomeness is the price of entry and the drinks. This is where traction starts because anyone in this room is working on something legit and the only way you find yourself there is bringing something interesting to the table. However, just because you’re here isn’t always enough to sell these customers, they’re incredibly smart and as such are skeptical and analytical. In those meetings you’ll find the next 10 or so customers.
Prove it : They believe their friends but they still don’t believe you. They want proof.
They’ll take a risk on you but they want to see it work before they say anything to anyone about what you do. We had a small group and we made damn sure they had a good experience. What’s important is that these are the customers who have friends and share what they’ve found. Thus organic growth begins. These people must have a good experience, this doesn’t mean lie, this means don’t screw it up.
Prove it again : Once isn’t enough, do it again, and again and again.
Unfortunately once is definitely not enough. It took three investments and showing them the math before they actually believed us enough to tell their friends about it. From this group, each good experience results in a few more customers but what you’re really after here is collecting those good experiences because what you need is social proof. The next group of people are not as analytical as the first, they default to the opinions of their smart friends to vet something for them first. The more good experiences you can stack up before getting to this group of early adopters the better.
Just the tip : Most people want to dip their toes first.
This one is difficult, the barrier to entry for most people in the private groups is pretty negligible. Meaning they often have more money to play with and are more comfortable with taking risks on new things. Even if your product isn’t inherently risky, the fact that they’ve never heard of you means you could just up and disappear. The people in this third group who take the lead from those who took the first step are far less trusting. They want to be able to try something with as little money as possible. This was something our platform was actually really good at, despite the deep pockets of the first few customers, it wasn’t really necessary to jump in that deep.
We decided very early in designing the platform to allow for promotional codes on sign-up to deposit funds to the users account. This gave anyone, no matter how skeptical, the opportunity to try something new risk free and it worked. A customer given no credit on sign-up would try the platform out with a small amount. However giving a customer a credit to their account would start with double or triple the free credit amount. Now they’ve taken a big risk with you, they need constant attention.
Stay with me : These customers are the most demanding of all, they want contact.
This one is actually probably one of the easier aspects but a lot of people screw it up. They funnel all their support through an email alias they never check, or they don’t list a phone number or email at all and just have a “support ticket submission form”. No one wants to feel left out in the cold or like they’ve been ghosted and they certainly don’t want to feel like you’re hiding from them. We did a couple of things to take care of this, but really the most important was Integrating live chat into our website. This was a very easily implemented step forward but it isn’t free. You don’t have to use the expensive integrations but when your customers know they can get a hold of someone on your team directly they feel safe and to us that’s worth every penny.
The payoff : What’s it all really for? Getting your name on the door.
You’ve got your first hundred customers, they’ve spent money, had good experiences. They know who you are, what you do and why you do it. They’ve shared your product and your customer base is growing. Now what do you do with that?
Suddenly something new is possible. Those events you attended in the beginning have a new purpose, blatant promotion. You know the owners of the events. You’ve asked them to put your name on the list. You’re invited back for free without even asking. Your drinks are included because you’re the company whose name is on the invitation.
Best of all you’ve broken the social proof barrier. Winning the award stakes your name in the ground like a flag on a moon. No one can question whether it’s real or not, they can see it for themselves and guess what they want? A t-shirt with your name on it. (No we don’t actually sell t-shirts). Right now we’re pretty focused on robots because robots are freaking cool.