In the early stages of a startup, founders should focus on doing things that don't scale, such as taking on the role of sales, understanding sales funnels, charging for products, and working backwards from goals. Manual customer recruitment is crucial, and founders should actively engage with customers. Founders should learn how to do sales themselves before hiring a sales team. Effective sales emails should be short, clear, and free of jargon, and founders should learn how to create concise and engaging videos or gifs. The sales funnel is important, and startups should prioritize leads that are most likely to close. Charging the first customer demonstrates the value of the product or service. Working backwards from goals and tracking conversion rates is crucial for understanding the sales process. It is recommended to use sales CRM software. The most profound aspect is the importance of doing enough outreach and not outsourcing sales to get the first customers.
Introduction
- Gustav, a group partner at Y Combinator, shares insights on transitioning from talking to users to acquiring first customers.
Outline
In the early stages of a startup, it is important to focus on doing things that don't scale. This includes founders taking on the role of sales, understanding sales funnels, charging for products, and working backwards from goals.
- Founders should take on the role of sales to understand customers and their needs.
- Understanding sales funnels helps in optimizing the sales process and improving conversion rates.
- Charging for products from the beginning helps validate the market and generate revenue.
- Working backwards from goals helps in setting clear objectives and prioritizing tasks.
Do things that don't scale
The most profound aspect of the topic "Do things that don't scale" is the importance of founders actively engaging with customers and taking action in the early days of startups.
Key points:
- Manual customer recruitment is crucial in the early stages of a startup.
- A good product alone does not guarantee growth; founders need to actively engage with customers.
- Founders should be willing to switch markets and learn sales skills.
- Persistence and determination are key factors for success in startups.
Founders should learn how to do sales
Founders should learn how to do sales because it helps them understand their customers and the problem they are solving. Learning sales gives founders control over their startup's destiny and allows them to effectively communicate with customers. Founders should not hire a sales team until they know how to do sales themselves. Learning sales is easy if you know the problem, product, and market well. Passion for solving customer problems is infectious. Examples of founders who became good at sales include Tony from DoorDash, Matild from Front, Tracy from PlanGrid, and Steve Jobs. The founders of Brex recruited their first 10 customers directly from the YC batch by offering a simple, useful product. They actively onboarded each customer themselves.
- Learning sales helps founders understand customers and the problem they are solving
- It gives founders control over their startup's destiny and effective communication with customers
- Founders should not hire a sales team until they know how to do sales themselves
- Learning sales is easy if you know the problem, product, and market well
- Passion for solving customer problems is infectious
- Examples of successful founders who learned sales include Tony from DoorDash, Matild from Front, Tracy from PlanGrid, and Steve Jobs
- The founders of Brex recruited their first 10 customers directly from the YC batch by offering a simple, useful product and actively onboarding each customer themselves.
Founders should learn how to write effective sales emails, which should be short, clear, and free of jargon or buzzwords. The emails should address the potential customer's problem and include social proof to showcase the founder and their team's impressive qualities. The email should be written in plain text, like a message to a friend, and include a link to a simple website with product information.
- Sales emails should be short, clear, and free of jargon or buzzwords
- Emails should address the potential customer's problem and include social proof
- Emails should be written in plain text, like a message to a friend
- Include a link to a simple website with product information
Founders should learn how to create concise and engaging videos or gifs to capture the attention of potential customers. Understanding the sales funnel concept is crucial, and including a call to action in emails sent to prospects is important.
- Create concise and engaging videos or gifs to capture attention
- Understand the sales funnel concept
- Include a call to action in emails sent to prospects
The sales funnel
The sales funnel is a crucial aspect of acquiring customers for startups. Startups should focus on prioritizing leads that are most likely to close, rather than chasing every lead. It is important to have a large pipeline of potential customers and to prioritize those who show interest and are responsive. Leveraging personal networks can make selling easier, as selling to people you know is typically easier than selling to strangers. Selling to startups, especially those in the software industry, is recommended as they have shorter decision-making lines and less bureaucracy compared to larger companies. Lastly, it is important to recognize that most people are not early adopters and may not be interested in trying a new product, so startups may need to send hundreds of emails to find those who are receptive.
- Create a list of potential customers.
- Reach out to them through email, LinkedIn, etc.
- Schedule and conduct a demo or meeting.
- Discuss pricing.
- Close the customer.
- Onboard the customer to ensure product usage.
- Track customer information and prioritize easier sales initially.
- Prioritize leads that are most likely to close.
- Have a large pipeline of potential customers.
- Leverage personal networks for easier selling.
- Sell to startups for shorter decision-making lines.
- Recognize that most people are not early adopters.
- Send more outbound messages to reach early adopters.
Charging your first customer
Charging your first customer in a startup is crucial as it demonstrates the value of your product or service. Overcome the fear of rejection and move on if a potential customer is not willing to pay. Consider these key points:
- Charging customers signifies that you are providing real value.
- Don't be afraid to ask for payment upfront or offer a money-back guarantee.
- Free trials can be effective, but credit card information upfront is better.
- In B2B sales, avoid free trials and offer a money-back guarantee or opt-out option.
- Increase prices until customers complain but still pay.
Working backwards from your goal
Working backwards from your goal is a common mistake made by founders. To understand the drop-off at each step of the sales funnel, founders need to track and analyze conversion rates. By tracking data, founders can receive feedback on what they are good at and what they need to improve on. It is recommended to use a sales CRM software to automatically track conversion rates. Without tracking data, founders cannot accurately determine if sales is not working and should explore other marketing strategies.
- Founders often make the mistake of not working backwards from their goal.
- Understanding the drop-off at each step of the sales funnel is crucial.
- Tracking and analyzing conversion rates provides valuable feedback.
- Sales CRM software can automate the tracking of conversion rates.
- Without tracking data, it is difficult to determine if sales is not working.
- Exploring other marketing strategies may be necessary in such cases.
Summary
The most profound aspect of the text is the importance of doing enough outreach and not outsourcing sales in order to get your first customers.
- Tools such as apollo.io, close.com, pipedrive, and hunter.io are recommended for sales CRM and finding contacts.
- Doing things that don't scale and finding alternative online platforms for reaching potential customers are emphasized.
- Relying on scalable growth channels may not be effective in the early stages.
- Leveraging personal networks and doing sales yourself are suggested.
- Relying solely on online marketing platforms like Google and Facebook hinders the ability to directly interact and learn from users.
- Personal communication and understanding user needs are crucial in the early stages of a startup.