Unlock the Potential of the B2b saas sales model for Customer Support

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what's going on everyone I'm Jonathan bird today we're going to talk about getting your first 100 customers for your be to be startup so why first hundred customers first what are you trying to prove yourself prove to your team and to your potential investors and second what are you learning from getting your first hundred customers and lastly what is the difference between your first 100 customers and your later thousand customers so let's go into each topic so first what you're really trying to prove to yourself your team and the potential investor is that there is demand there's a significant business opportunity out there and you want to understand about the market space and throughout the process if you get to your first you know twenty thirty and all the way up to one hundred customers they're also proving that there's a form of repeatability so that this opportunities this go-to market has some level of repeatability and skill building in it second when you are getting to your first hundred customers what are you and your team learning as a company first you understand what you need to build whether it be feature requests a product an improvement you're really understanding what your product roadmap should look like and then second you get a better understanding of your customers who they are what their job titles are what is the problem they're trying to solve or keeps up keeps them up at night and things like that the more understanding you have about your customers easier it is to build your product and scale your company and third another really important thing that you're learning throughout the process is actually how to sell and when you're selling to your first hundred customers you're selling yourself then you're a credible person your company because your company really has no brand and then three your actual product or the solution to your customers problems and throughout a process you are not only learning how to sell but you're also understanding how customers make buying decisions what do they vet what what are they looking for are they comparing something else where's their budget coming from who are the competitors out there that you haven't learned about are they thinking about builders by what is their internal legal and a procurement process look like so you'll be learning so much about the customers internal processes and if you have enough of a data point around 100 customers you'll understand the differences between companies but also similarities so you're really learning a ton by selling to your first hundred customers directly so what's so different about your first hundred customers and later thousand customers first one of the real challenge is that you don't really have a credible brand nobody knows you exist nobody have heard of your about your company and they don't know they haven't made up my mind whether they can trust you or not second is that you're probably not as robust and underprepared so your infrastructure might not be as reliable and scalable and their security compliance is probably not really there and your internal process too probably is not as efficient to handle multiple different customer inquiries so that is really different from getting your first hundred customer to the next thousand customers but there are also benefits to first the top executives at your company are talking to customers directly so your customers have direct access to all the decision-makers in the company therefore really being able to make key decisions quickly build products quickly and then you can deliver those things to customers quickly as well so there's that rapid short-term feedback cycle and by building your products yourself and sell yourself you have this really accelerated learning process and it is a perfect time to do things that don't scale please go check out Paul Graham some essay titled do things that don't scale it's a great essay talking about how to build your company in the early days really rapidly and really get to build your core DNA throughout the process okay part two so how do you actually get your first hundred customers well there are multiple different tactics you can use here and I'll share a little bit about how burr started in the early days first when you're about to start your engine you have your car's not quite running it's not actually fully built yet but you have to get something going so what we did in the early days was as anyone can imagine start asking your friends in the industry if they're working for a bigger company you don't understand whether they could be a potential customer early customer of yours if they're building their own startup of course you want to talk to them too but but there has to be a business case for it so you want to start asking your friends and friends of friends to you get as many feedback as possible throughout the process you're not only selling you're getting kind of feedback to the device you get insights into their daily lives and again really understanding about your prospects and customers deeper throughout this process and second something we did in the early days was working with kind of a distribution partner my friend was running this platform almost like a marketplace for other companies we implemented integrated with their platform they were kind of selling on us on their behalf it didn't really work out as well as we hoped in their days and there are a lot of different reasons for it but we actually gained a couple of really valuable customers and during that process and when you say valuable customers in your early stage you're not just paying a lot of dollars it's more about really guiding you towards the right product roadmap they're asking the right questions they're challenging you and really stretching your company and the product in the right way and they're not asking for really random strange things so you have to have a certain level of luck here but if you get these really high value customers you want to hang on tight to them and really roll with them as much as possible and after joining Y Combinator we tried four different tactics one was good old-fashioned outbound so we started sending up on the emails whether it be email addresses which we found somewhere online but we also tapped into otherwise come later companies we didn't just spam everyone we wanted to really understand their value property what they're trying to build and if there was a good use case to add messaging capabilities so we handcrafted personalize those out bounds and sent it to our ideal buyers who could be sitios with your engineering or with your product second we did a lot of content and SEO and here when you say a lot it's not like having you know series of writers out there it just basically us writing blogs maybe one or two blog posts per week and then doing a heck of an SEO around it so in the early older version the world WordPress we like SEO plugins to make sure that if we had a certain targeted keyword all those keywords are appearing the right places with right HTML tags whether h1 h2 and then images had all the alt tags that had those keywords contained in them and then hopefully the content was high in quality so that ultimately you know it led to more consumption of the content we also make sure that all of our websites main website although it wasn't as polished as it is today we're linking back to the blogs had the relevant keywords in them so that when we first started we were I don't know 30 50 70 pages deep but over the course of three six months we eventually came to the first page for the relevant keywords whether it be chat API or messaging SDK so it took a quite a bit of time but these things are like farming if you plant them well they will reap dividends over a really long period of time so if you're in the b2b space we recommend doing content and SEO and also in the longer term it helps with thought leadership and customers really trusting you more based on all the plethora of content that you have created over the years third we tried a community approach so we did launches with like stack share we answer a question on Stack Overflow we were the Cora to answer questions I feel like we should do a lot more of them these days we should but those channels tend to work well if you are especially in the early days if you don't need a lot of trash to get to the next level and it really worked really well for us and then to again this is when we launched a new product during Y Combinator we did a pretty big launch on product hunt I believe we were the most about it product of that day and I was second in the rank or things like that and then we also did launches on press through TechCrunch ventureBeat some of them were through the help of Y Combinator but some were from existing networks that we've nurtured so when you reach out to these especially writers and reporters you want to really customize and personalize your approach you're not just sending them hey we're a good cool company we just raise money please write about us it's not really appealing so what you want to do is read what they've written in the past and if your story is kind of related to their main area of focus so really try to understand what they're looking for and see if there's a lot of relevance in there so you want to approach with a highly personalized email and forth we try a review sites there are a lot of software review sites out there and we try to couple them we still have reviews on there but if we didn't really get the results that we had hoped for and I think review sites and analysts tend to become a little bit more important as you you know go into a later stage you're talking to a bigger cut customers who tend to care more about you know industry analyst reports because they have to jump through so much more hoop so many more hoops going through procurement so you want to be able to tell your procurement team tell your legal team tell the all other parts of your team that this is a very very credible company this one reviews and analyst reports come in handy and I think in the early days it didn't really work out as well as we had hoped because we didn't we weren't particularly targeting like the big enterprises or fortune 500 we're targeting you know SMBs startups and mid markets and the early days so the review size didn't really do a good job for us third thing i want to talk about is pricing we'll have a separate video in depth about price but when you're selling your first 100 customers unless you're like open source business which has a very different dynamic you always want to charge something and trust me you will get your pricing wrong that's okay you can always fix it later on but there are a couple of things that you want to be mindful of when you're setting your early day pricing one is never give anything for unlimited whether it be usage whether it be volume whether it be duration always kept it soft kappa some way so that they don't you know combining you in the back later on so think about how do you make a pricing that is tight the value I doesn't have to be super expensive especially if you're early-stage nobody's gonna buy you if you're expensive but always charge something so you are learning more about the customer is this actually creating value for the customer you understand their your buying process what does it look like what are they comparing this against what is the budget coming from is there a different way to anchor your pricing and also you understand your direction in the velocity towards getting to your product market fit because your pre pro market fit if you're getting your first hundred customers and the only real way to understand if you're getting closer in terms of b2b startup it's actually by charging something for your product also when you're like selling something especially early days is incredibly difficult to understand and balance a generalized product sizeable feature request versus one-off custom development work and kind of a rule of thumb is until you get to somewhere like a hundred km or are let's say 1 million to 1.2 million in AR and your recurring revenue you will probably make some compromises you might do a little bit of custom you know one for to get the customer to be a user in your product and that's kind of okay but one thing you have to be very careful is you don't want to have your you know most senior engineers Proc managers and even including yourself always doing your one-off custom work then you actually become a dev shop which will ultimately hurt the entire business so you have to really balance those things well and it's incredibly difficult it will continue to be difficult until even when you get to see multi-million dollars in annual recurring revenue so that's kind of like focus balance discipline and but still keeping yourself a little bit open-minded that kind of is more of an art than science so pick a couple of key principles and we try to stick to it and then but ultimately especially the early days just know that you don't know what you don't know so you might assume something is like one of custom work but ends it ends up turning out that that feature is one of the most popular you know sound features as well so you want to you know maintain deliberate discipline but also again a little bit of the flexibility so that's really important key takeaway when you're thinking about pricing in the early days is one focus on recurring revenue one-time revenues are still helpful but your business value enterprise value will come from recurrent revenue too is cross margin always have understanding of cross margin what drives them and really protect it as much as possible because that's the ultimate validation of the value being created on your customer side so that's it for the video today thank you for watching and looking forward to the next session