News

Our Journey to the First Paying Customer

Scott White
September 18, 2019

In the long-run, startups fail because the value of each customer does not offset the cost of acquiring the next customer.

In the short-run, startups die because they simply can't acquire customers.

Before you can make it big though, you need to get a single person to pay. Then you can focus on 10, then 100, then 10,000. But first you need one.

We wanted to share our journey to paying customer #1, and the lessons we learned in the process. I'll start by objectively outlining the touch-points that lead up to our first customer paying, and then move on to what we learned, and some of our tips for getting to paying customer #1.

Some background on us

At Monolist, we're building the command center for engineers – one place where you can manage pull requests, tasks, messages, and alerts across all of the tools you use at work.

We aim to address the pain that arises (lost tasks, disconnected discussion, slow release cycles) when trying to manage work across many tools. We pull together all of the tasks you have across these various tools, and provide a layer of intelligence that ensures your most important work never slips through the cracks.

About our customers:

  • Our target customer segment is the software engineer
  • To get the most out of Monolist, the customer needs to integrate a variety of tools
  • We sell bottoms-up, so we are targeting "consumers" inside of companies, not executive decision-makers like CIOs or CTOs

Our Journey

Day 1: Sally was first introduced to Monolist via a blog post that made the rounds on Hacker News.

hacker news

Day 2: Sally signed up with a personal account, didn't integrate any of her tools, and had a poor first experience.

day1

Day 18: Sally and I set up a time to chat about what was on the roadmap, and whether it would be enticing enough for her to continue using Monolist. From our discussion, two upcoming features were compelling enough that she said she'd be willing to move her workflow over to Monolist.

day2

Day 60: Sally discovered the new features we discussed through a blog post announcement, and asked to get added to the beta for her work account where she could integrate her tools.

day60

Day 120: We identified the one missing piece for Sally, and asked her to commit to paying if we would be willing to build it out.

day4

Day 132: We built the features, and Sally paid.

stripe

What did we learn, and what were some tactical steps we took to get there?

Step 1: Before trying to sell anything, it's crucial to determine exactly who you want to sell to, what problems they have, and how your product solves those problems.

For a variety of reasons, identifying the target user is perhaps the most important thing an early-stage company can do:

  1. The sum of your target users represents your addressable market. The size of your addressable market matters when the goal is to acquire customers.
  2. The target user determines the problems your product will solve, and correspondingly the shape of your roadmap.
  3. Identifying who the target user is reveals who the target user is not. This saves a great deal of time in user research, customer development, design, and ultimately development time.

Step 2: Before selling, build a list of prospects in your target customer segment

Once you have a target user segment, it's time to build a list of people in that segment that you want to collect feedback from on the product you've built, and ultimately sell to. For us, there are a few ways that we built our list.

Using your network

Leveraging your network is a great way to get started because:

  • People in your network are more inclined to help you
  • They can act as a multiplying effect by introducing you to other people like them that are within your target customer segment

The most important thing about your network is this: Make it easy for your network to help you.

Make your ask simple and clear, and provide the resources your connection needs to fulfill the ask.

Bad ask: "We'd appreciate it if you'd let people know about us."

  • Bad: The connection doesn't know how to share, who to share to, or what to share.

Better ask: "Would you be willing to introduce me to {Jane Doe} at {Startup}?

  • Good: The ask is specific. You want to be introduced to a specific person.
  • Bad: Your connection doesn't know what you want from the person they

Best ask: "Would you be willing to introduce me to {Jane Doe} at {Startup}? I would love to give her a 15 minute demo of what we've built so far and collect her feedback. I've included a draft that you can send over with some details about what we do and why we'd like {Jane's} feedback specifically."

  • Good: The ask is specific. You want to be introduced to a specific person.
  • Good: The connection knows what you want from the person they are introducing you to
  • Good: You've included resources that are helpful for drafting the introduction message

Blog in communities that are relevant to your audience

Blogging in specific communities is a great way to get your product in front of an enthusiastic and tailored audience. Blogging is also an investment in your online presence, and can pay dividends long after your blog is posted.

  • The people in these communities are typically early adopters of technology, are likely enthusiastic about the problems you're trying to solve, and are willing to provide better feedback.
  • Blogs are great for re-engaging churned or dormant customers. In our example above, our first customer was re-engaged through a blog post.
  • Blog posts provide great SEO, and can drive organic traffic long after you post the blog.

We're targeting software engineers. Here are a few that worked for us:

Go to local meetups with people in your target segment

As we've already discussed, it's important to focus your sales cycles exclusively on people in your target customer base – any other group will just waste your time. Meetups are a great way to find tailored groups of individuals squarely in your target market.

Other reasons meetups are great:

  • They are filled with enthusiastic early adopters.
  • There are often presentations or talks, so you have the opportunity to communicate your value prop to many people at once.
  • If you're new to it, selling something face-to-face is incredibly uncomfortable, and is a great way to overcome the sales jitters.

We mostly used meetup.com.

Mine social media:

Startups are about solving problems. And people love to talk about their problems on social media. As such, social media can be a good place to discover people who suffer the problems that your startup is trying to solve.

  • Identify search terms that are correlated with demand for your product
  • Save the links to all of those searches
  • Every day, refresh those links and personally reach out to every new person that tweets about a problem that you think your product solves

twitter-comment twitter-response

Step 3: Talk to your prospects, and validate that the problems you believe exist are actually felt in your target customer segment

Startups have limited time and money to test their value hypothesis. Luckily, tools like Figma have drastically reduced the amount of time it takes to get a prototype into the hands of end-users.

Before building too much, you should talk to your prospects to ensure that they truly feel the pain you think they do. Once you understand the nuances of that pain, you can design something quickly to address it, and show it to those users.

Before ever writing a line of code, you should be able to get a response from a user as to whether your solution is compelling or not.

Once you have strong positive feedback on a few prototypes, then it's off to the races.

prototype

Step 5: Be flexible for the close

Once you've built the prototype that you think will solve the end-user pain, you'll almost always find a missing link – something that's missing in the experience that means your product cannot fully alleviate their pain. It's your job to identify what that missing link is, and gain leverage from it.

At the end of the day, you can never truly test your hypothesis until you ask someone to pay. Once you identify the missing link, offer to fix it, conditional on eventual payment from the customer.

Wrapping it up

The process of selling is about identifying user pain, and educating the potential customer how your product or service can alleviate that pain.

For us, the formula ended up being fairly simple:

  1. Narrowly identify your target customer
  2. Build a list of prospects in that customer segment by any means necessary – often non-scalable
  3. Validate that those prospects feel the pain you think they do
  4. Sell them a solution to that pain before you build it
  5. Build the solution contingent on commitment

❗️ Are you a software engineer?

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