Getting to Initial Traction

If You Have 10 {Unaffiliated} Customers in SaaS — You Have Something.'

Jason Lemkin

HAMSTER-WHEELOne of the tough things in SaaS, a downside of the fact that it compounds, is that you’re always running on the Habitral.  That makes it really hard to see your moments of success, and perhaps even more importantly — really hard to see and internalize and process pre-success.

So I’d like to highlight a few of those moments, in case it can help you.

And the first key, critical moment, of Pre-Success, that no one will appreciate but you — is when you get 10 Unaffiliated, Paying Customers.  I don’t mean friends of your investors, or your old co-workers or boss.  I don’t even mean folks you hustled at some conference or meeting (well done, there, though.  But that’s prospecting, which is something else.).

No, I mean 10 customers that Just Came in Through the Ether.  A raw, unaffiliated, lead, that somehow found you on their own, kicked the tires, and now — is actually paying you.  Every month.

Because here’s the thing.  10 customers may not seem like much.  We called these guys “Beer Money” in the early days at EchoSign.  10 customers was $200 a month.  Didn’t really pay the bills on 4 engineers and 3 other guys.  Barely paid for Beer.

But …

10 is actually amazing.  Yes, you may still fail, of course.  But 10 is your first sign of pre-success.  Because it means three things:

  • First, you will definitely get 20 … and then 100.  I mean if you got 10 out of nowhere, I guarantee you will get 20 😉  And if you keep going at it, you will get at least to 100.  And then 200, at least.  At a minimum, you can keep doubling and doubling.
  • Second, more importantly, it’s amazing you got those 10.  >> Because no one ever heard of you.  Because why the heck should they trust you, and pay for your product?  It’s a huge vote of confidence not to be under-appreciated.  Maybe you were on TechCrunch or Mashable or PandoDaily or some blog, great.  But in the real world, no one has ever heard of you.  Yet you still got these 10 customers.
  • Third, it means you built something real.  Something valued.  Most importantly, Something you can build on.  These 10 customers will give you a roadmap, feedback, and indeed, the path to 1000 more customers — if you listen carefully.  Don’t take all their advice, of course, don’t get distracted from the big picture.  But the feedback from these first 10 customers won’t be from outliers.  It will be transformatively informative.  I guarantee it.

>> In other words, you’ve got the SaaS version of an MVP — the “MSP” — the Minimum Sellable Product plus the Very Beginnings of Organic Leadflow.

Because your 1,000th customer most likely will be just like your 10th, in concept and spirit, in category and core problem solved, in pain point at least.  At EchoSign, our first unaffiliated customer  was a distributed sales manager of a telesales team.  The exact industry she was in was unusual (debt consolidation), but digging deeper, the actual use case was exactly the same, in spirit if not in workflow, as 80%+ of the customers that came later.  The same as Facebook, as Twitter, as Groupon, as Google, as Verizon, as BT, as Oracle … as all of them.  The same core “goodness” that you’ve built attracts all of them.  Of course, you’re going to need to build tons more features, mature your product dramatically, etc.  But the core will be the same goodness as Customers 1-10 experienced.

Trust me.  10 customers may not pay the bills.  But if you got them Out of the Ether, you have the very start of organic leadflow, of organic demand.  That’s really special.  And something you can actually build on.

So this is your first time to double down now, after Customer 10 … even if it seems too small in absolute terms.  Even if others think it’s “Just Beer Money.”

Because this is your first pre-success in SaaS.  You should be proud.  Now, Next Stop:  Initial Traction!

Published on January 9, 2013
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