2013-08-12

Looking For Customers? Be A Hunter, Not A Gatherer

You can’t launch a product and then sit back and expect customers to magically appear at your door. To find those first users--and to find product-market fit--you have to seek them out. Here’s how.



You've come up with a great business idea, teamed up with trusted cofounders, registered your URL, thrown up your minimum viable product in WordPress, and emailed your link to a few VC friends to "gauge their thoughts." Now sit back, refresh your analytics dashboard, and wait for customers to sign up. Right? Wrong. If only it were that easy.

No matter how good your product is, customers aren’t just going to magically start knocking at your door. There are two main reasons for this: First, the initial version of your product is almost certainly wrong. Second, your customers don’t know they should be looking for you--and even if they do, they're probably too busy to try your product. This is why you need to go hunt[1]. You need to go earn people's trust, convince them to try your product, and listen to their feedback. Then you need to iterate and improve your product to the point where they'll pay you for it. Only when you’ve found your first set of customers and tailored your product to them can you sit go from hunting for users to gathering ones that just show up.

We’re often asked how we went found our first 10 customers, and then found the next 100, so we thought it’d be worthwhile to summarize our findings. These are the six things that we focus on when building an enterprise software business. This is one method, and by no means the only way to do it--you might want to adapt some of these ideas to your use case.

1. Create Your List

You've done in-depth customer research to hypothesize who your archetypal customers might be. Now how do you go about generating your list of prospective customers? Assuming that your business is trying to solve a problem that you have, the best place to start is probably your own Rolodex. If you have a problem, it’s likely that your business contacts have it, to.

Go through your address book, search your Evernote and email archive by subject, and check your LinkedIn connections in the industry you're targeting. Enter each relevant name and their company into a spreadsheet, and you're on your way. To supplement this collection of "friendly" targets, find public lists of companies that may be relevant: Often news articles on your subject are a good place to start.

Visit the websites of relevant industry associations and conferences to mine lists of members and attendees. To get contact information: check each company's website, run a Google search for "[first name]" AND "[last name]" AND "@[domain]," or use a paid service like The List Online. Of course, I also recommend looking companies up on DataFox, where you’ll find a lot of information packed into our one-page tear sheets, plus links to their LinkedIn and Crunchbase profiles, etc.

2. Turn Your List Into A Tracker

You should now have a list of a few thousand targets, most of which will be 1st- or 2nd-degree connections. To empower you to prioritize and keep track of your outreach, you need to turn your list into a tracking tool. At this stage, there is no need to use CRM software. Everything you need can be done using Excel or Google Docs. I prefer the latter because it is easier to share with my team. One person should own the sales job, but the whole team should contribute to the list of prospects.

One of the main reasons not to use a real CRM is that you don't know enough about your customers yet. A spreadsheet gives you the flexibility to effortlessly change columns, rearrange rows, and re-prioritize your prospects. It also saves you time and money upfront.

Example of Google Docs tracker

Start with these columns in your tracker: name, title, company, last contact, status, notes. For the advanced user, add a few thin columns to denote milestones such as "first contact," "responded," "interested," "on trial version," "paying customer." Color coding using conditional formatting helps you digest your tracker visually.

You can also add columns that help you prioritize your outreach. I recommend organizing contacts into three priorities. Sometimes you can make a contact’s priority determination based solely on the name of the company, but if your list is long you may want to include factors such as location, number of employees, expected willingness to pay, and expected benefit from your product.

3. Eat The Frog

Now the real work starts. Unless you have years of sales experience, cold-calling, emailing and seeking warm introductions to potential customers can be a grueling endeavor. Because it's so difficult, give yourself large chunks of undisturbed time to do this. Don't let other tasks distract you. The expression "eat the frog" refers to tackling your most arduous (and important) tasks at the beginning of the day, when your mental energy is high.

One way to save time is to use email templates rather than crafting custom messages to every lead. Use a tool like Evernote to save various versions of your outreach email: One version asking a contact for an introduction to someone else, one version asking for a phone call, one version asking the recipient to check out your website, etc. Use your spreadsheet to monitor the efficacy of different subject lines and contents in order to refine your templates and make them more effective.

Send follow-up emails, it's okay to be persistent!

It’s important not to be disheartened if you don’t receive results right away. Remember that, like you, people are busy and receive way too many emails. To help remind contacts about your product, use the 1-4-7 rule: if you don't get a response to your first email within four days, email again. A one-liner along the lines of "just bringing this back to the top of your inbox" will do. Three days later, send a third email.

At this stage, you're mainly looking for feedback that will allow you to iterate on your MVP, so ask for a 15-minute call. Sometimes it helps to say something like, "I promise to keep it short and interesting." It also helps to suggest specific times, like "1 p.m. on Wed., Thu., or Fri. next week." Above all, make it easy for the recipient to respond without needing to look away from their inbox.

When you do get a response, do your homework! Before a call or email, look the person up on LinkedIn and save the URL in your tracker so you don't have to do it again next time.

4. Do Things That Don't Scale

Paul Graham wrote a great essay explaining that doing things very manually early on in your startup isn’t a bad thing--in fact, it’s often critical to learning and iterating properly, even if you won’t be able to repeat these steps at scale and in the long-run. For our purposes this means that you should go to absurd lengths to track down and delight your early customers.

At our company, we manually create accounts for new users and send them their login details personally. Our product allows users to track company growth, and we send handwritten email notifications to certain users informing them of developments at the companies they care about. When someone clicks the "reset password" button, my cofounders and I get an email and we manually send them a new password along with a question or a friendly message.

Doing things manually impresses your early customers and helps you receive constant feedback from users. It helped us learn what people actually want from alerts and notifications, and allowed us to re-engage users who stopped using the product for a while and forgot their passwords.

Treat your early adopters like investors. In fact, some of them may ask to invest in your company if they see the effort you're putting in and the progress you're making.

5. Listen And Collect Feedback

At this point, you have a small base of users. You’re focused on delighting them and keeping them engaged. But it’s not enough just to solicit feedback: Keep track of everything your customers tell you. I type away furiously on every call. During in-person meetings, I prefer to keep handwritten notes and type them up later, in order to appear more engaged at the meeting. All of my notes go in Evernote, and I enter summaries in a 40-page Google Doc that I share with my cofounders. Certain bug fixes or feature requests are prioritized and handled immediately, but larger projects enter our product roadmap once every few weeks when we get in a room and whiteboard all the feedback in our feedback document to infer what the critical and most common requests are.

6. Charge

Most founders feel a strange hesitation when it comes to asking a customer to pay for the product or service that's being provided. This stems from the fact that to a founder, the product never feels fully complete. There are always more bugs to fix and features to build.

It's important to be cognizant of this curse and to try to overcome it. No matter how bad it feels, ask your users to pay you when you see them engaging with and getting real value out of the product[2]. Until you realize that people are willing to pay for your product, it’s going to feel weird. So don’t wait. The sooner you start charging, the sooner you’ll feel comfortable with it.

It’s important to become used to charging, because having paying customers helps you focus your unscalable efforts, your attention, and your product roadmap. It also makes the customer value your product more, and gives them an incentive to truly use and support it within their organization.

Time Well Spent

There’s a consistent theme here: Spend as much time with your customers as possible, including finding them in the first place. No founder has ever failed because they tried too hard to find and delight their customers. More importantly, these first users will help you find missing features, bugs, new opportunities, and ultimately, product-market fit. Once you have product-market fit in sight, charge your customers. As our advisor once asked us: Why would you open a beautiful store with great products without turning on the cash register?

[1] We are building a B2B business in a market where customers are used to paying subscriptions for valuable data and analytics.

[2]Getting to paying customers early isn't the goal of every business.

[Image: Flickr user Varin Tsai]