Reflecting on the Acquisition of My First Customer
Each of my startups had unique experiences when it came to acquiring our first customer.
In my initial venture, we pursued large Fortune 500 customers. Our first customer paved the way for our future success.
The first customer signed a $10k contract for a small pilot, but their competitor went on to sign a $6m multi-year contract. Securing such significant deals from a small number of major clients gave us a clear vision for the future and provided a thrill of excitement.
The second time around, we targeted small and medium-sized businesses (SMBs). This approach resulted in confusion as we struggled to define our Ideal Customer Profile (ICP).
As a founding team, we were uncertain about how to interpret our initial SMB customers, as they subscribed at low price points ranging from $12 to $99 per month. We debated which market segments they belonged to and how well-suited our product was for those segments.
We didn’t allocate as much time to engaging with the high volume of SMBs in my second startup as we did with the limited number of Fortune 500 customers in the first one. Due to the lack of in-person or phone interactions, we failed to gain deep insights about our SMB customers.
A key lesson learned: gathering sufficient data to make informed decisions about the future may require acquiring 20 to 50 paying customers in the SMB segment. The diversity among SMBs in terms of business types and operations necessitates gathering a sizable sample size.
On the other hand, a single enterprise customer can provide a clear glimpse into the future if you pay attention. Customers within the same industry or vertical are often quite similar.
