Talk to 100 Customers Before You Launch
I’ve done it. Nothing will better prepare your new venture for success.
Years ago I found myself out of college, in my older brother’s basement, sitting at a computer on a card table, coding a product I didn’t completely understand but my older brother knew his customers would buy.
In true startup style, my bed was next to the card table.
I was still clearing the college out of my veins and my natural aversion to joining the corporate world (and plan to go to law school the next year) made me an easy startup recruit.
So, I became co-founder and employee #1 (my brother wisely kept his day job until we got some revenue lined up) in what we would eventually grow into a nationwide leader in energy management software & systems.
Today good guidance and wisdom about startup practice are easy to find. Back then, not so much. Today, thanks to the wisdom and dedication of people like Steve Blank, and programs like the NSF’s I-Corps, technology entrepreneurs are learning the importance of talking to — listening to — 100 customers to understand what the market wants.
Yet, long before it was conventional wisdom, I called 100 customers that first summer. This was before wide business use of email, so I made phone calls to 110 small utilities within a few hours driving distance (our customers were utilities and small ones were the logical place to start.)
The simple reason was that we needed sales and it took that many calls to get approximately $50K in revenue. That revenue was not for our core product, but an earlier (and simpler) one to sell. It gave us some needed runway while we got the main product ready.
Cold calling was painful work. I had no experience in it and much preferred to be writing code. But looking back, it probably had a lot to do with why I stayed a tech entrepreneur all my life. And yes, along the way I did get into law school and got talked out of going. Twice.
In one cold call, a customer told me they had a board meeting that evening to approve a purchase of a system like ours from another vendor. I asked if I could come to the board meeting and show our system.
It was less than a two-hour drive. So that evening, I loaded my PC and monitor from my basement card table to my rusty Honda hatchback and drove off to show software to a small town utility board.
We won that business and sold 2 more systems that summer, were able to bill for software, computer equipment, and training and not only get our business some much-needed revenue but gain confidence that we could compete.
In the years since, best practices in entrepreneurship have evolved. Best-in-class accelerator programs now regularly encourage new entrepreneurs to talk to 100 customers before launching a product.
This recommendation is not exactly what I did back then — I was trying to close sales. In that case, we had enough information already to know what customers were buying in our particular field.
The ‘100 customer’ advice we give today is about making sure a new company takes the time to test its value proposition. Get a real and useful sample of what customers want and adapt based on what you learn. It makes all the difference in assuring that customers actually value and will buy what you plan to offer.
Many inventors and technical founders struggle with the 100 customer assignment. It is a great deal of work. And it’s pretty much guaranteed you’re going to hear a lot of negative feedback about your new idea.
That can be painful and frustrating. Immeasurably less painful however than sinking a couple of years worth of time and money into a new product only to find customers want something different than you imagined.
Approaching the 100 customer challenge right.
If you are going to do this — and you will be very glad you did — it takes some planning to do it right. If you get your company into an incubator or accelerator program, they will likely guide you on this.
But if you are going it alone, there are some good guidelines for developing questions that will avoid confirmation bias and help you uncover useful insights. Here is one good discussion of how to approach customer discovery.
Don’t feel bad if you dread the idea of talking to customers, especially dozens of them. It’s common. You’ll get rejected and ignored sometimes. But you will also have wonderful experiences with curious people. You will learn volumes about what customers need and want and how they buy.
You will also gain confidence as an entrepreneur which will serve you far into the future.
If you are a person who likes a challenge (and I’m guessing if you’re here, you are) think of this like you would any personal challenge. Once you do it, you will feel a sense of personal empowerment you can’t get any other way.
You will have talked to 100-frigging-customers!
I highly recommend using a nice free customer relationship management tool to track your discussions. That way you’ll have the beginnings of what will eventually be your sales pipeline.
And let’s be realistic, some of these customers will be a better fit for you than others, learning that is also part of the experience.
Keep your head up when you hear discouraging feedback and be willing to change your idea. The process is wasted if you end up just doing what you intended anyway, unless of course what you intended turns out to be exactly right based on 100 customer interviews. It won’t be.
Is finding and interviewing 100 customers fun? No.
Is it easy? No.
Will you be miles ahead of most startups if you do it? For certain.