First Ten Customers
I’m a big believer in “mental practice” (and, preparation). I was once an avid tennis player. Even when I wasn’t at the court, I constantly “practiced”. Sometimes I read books. Sometimes I replayed (in my mind) what happened in earlier matches. Sometimes I thought of things I’d practice once I got to the court next time. Did it help my game? Maybe, or maybe not. Did it make me enjoy the game more? You betcha!
I’ve been recently thinking a lot about selling and customers, etc. I have nothing to sell right now, but the idea is that I’ll have something, something worth selling, some day, and I’m preparing for that day. (Please also check out my earlier post, I CANNOT EVEN SELL MY PRODUCTS FOR FREE! <- “plug” :))
I learn things by looking at other entrepreneurs, some successful, some not so much. But, you can always learn from anybody. One thing I notice about not-so-successful startups is that they don’t usually understand the value of initial customers. (I’m using the word “customers” more broadly than usually used. Anybody who tries your product at least once, whether she ultimately buys it or not, is a customer. Also, an “imaginary customer”, anybody in your (current) target market, who knows about your product, is really a customer already, in my definition, regardless of whether he has actually used your product or not, as long as you know who they are.)
These startup people say that they will grow their business to 1 million users, or whatever, so they don’t have any time for a single user. They appear to think that, since I have 8 hours a day, and since I have (or, will have) 1 million users, I can only allocate 0.03 seconds per each user per day, or something like that.
In many cases, they never reach that 1 million user goal.
I believe this is a wrong way to think about customers. If you think about scalability before you reach the product-market fit (see below), you will likely never attain that scalability goal. Only few companies with such strategy have been successful, in my view, Google being one of them. It is well known that Larry Page and Sergey Brin were obsessed with “automation” from the very early days of the company. They decided not to implement anything that could not “scale” (e.g., things which require manual work, etc.). Google did not have real “customer service” until very recently. But, that’s an exception, not the rule.
For many early stage startups, the goal of their very existence is to find the market and understand the customers, and everything about their customers. First ten customers are much more valuable. Likewise, first hundred customers, and first thousand customers, … are very valuable to a startup. They are not just one of one million nameless users.
A startup constantly goes through “micropivots”. Eric Ries defines a pivot as “a change of strategy without a change of vision”. I will likewise use the term “micropivot” as “a change of tactics without a change of strategy”. A startup constantly changes the product, adds and subtracts features and modifies them, and it also constantly changes its positioning in the market. The “correct” way to do this is through customer feedback. When you have ten customers, the best way to get the next 100 customers is by understanding the existing ten customers. When your goal is to get the next 1000 customers, you will have to understand the existing 100 customers, and so on. And, you’ll have to constantly “micropivot”.
Often, we use the term “product market fit”. But, this notion can be somewhat misleading, for example, as Ben Horowitz points out in this essay, The Revenge of the Fat Guy. For me, a better paradigm is the customer development process by Steve Blank. This is an iterative process. Especially the first two steps, customer discovery and customer validation, should be iterated, until you find the “right customers”. Your first ten customers may not be the one in your eventual market, but they are the most important customers.
“Startup is a temporary organization designed to search for a repeatable and scalable business model.” -Steve Blank
