02. Finding your first users

Estimated Time

  • Reading: ~7 minutes
  • Video: ~50 minutes
  • Activities: to be completed prior to the next week

Insights

  • Celebrate your first customer, then obsess over finding more
  • Group your users in cohorts to better track and analyze
  • Delight your customers

Your first users

  • Finding and delighting your first paying customer is a monumental step in your startup journey
    • Congratulations if you have hit this milestone!
    • Keep grinding if this is your next major goal
  • Going from 0 people paying for your product to 1 paying customer is a reason to celebrate (and then get back to work!)
    • You can't get to 10, 50, 10,000 customers without getting your first one
  • The relationship with your early customers is really more of a partnership
    • You should be talking to them frequently, collecting their feedback regularly, and iterating based on their needs
  • Early investors will often ask for the number of users and paying customers
    • Own this number and be direct
      • "We have 11 customers paying us $29.99 a month and we have 23 users in our 14-day free trial. On average we covert 30% of free trial users to our paid tier."
      • You do not need to talk about who is in your sales pipeline, or who you might be able to attract based on some other variables
  • Do you know where to find your first users?
  • Leverage your network
    • When looking for your first users it never hurts to start with someone you know
      • Reach out to people you've worked with, friends of friends, family acquaintances... especially if they are a part of your ideal customer profile
    • After talking to them be willing to ask who they know that could benefit from your product and see if they will introduce you
      • Once you meet these new individuals repeat the ask to gain access to their network via warm introductions and so on
      • You would be surprised how often one customer conversation can turn into three or five more!
  • In the article, How the biggest consumer apps got their first 1,000 users, their research shows that "just seven strategies account for every consumer apps’ early growth"
    • Those seven strategies are: go where users are offline and online, invite your friends, create FOMO, find influencers, get press, and build a community
    • And the majority focused on just a single method
    • None of these big consume apps were successful in more than three
    • The key is to go where your users are and stay focused on acquiring them with as few variables as possible
  • Once you find a method of acquisition that works double down and keep acquiring customers in this way
  • Acquisition Channels
    • Do you know how users are finding you?
      • Intent-based
        • This is when users know they have a problem and are looking for answers
        • Or if you are more well known, they know your brand and then search for their solution
      • Demographic-based
        • This is statistically based on indicators like age, gender, ethnicity, etc
        • This typically shows lower intent and is often from paid social
      • Psychographic
        • This is a group that is based on similar interests, behaviors, habits, values, etc.
        • Again this typically shows lower intent and is often from paid social
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      • Looking at metrics like click-through rate (CTR), cost per click (CPC), cost per acquisition (CPA), and customer acquisition cost (CAC) is important to understand when finding your initial acquisition channels
        • The content reach, clicks, and click-through rate are your first signal in a channel
        • If you get low reach then you need to expand your audience
        • Why look at CPC, CPA, CAC?
          • These are your main budget metrics
          • CAC measured against the lifetime value (LTV) of your customer is a key indicator of if you can make money using your current acquisition methods
    • Growth University has a couple of blog posts that go more in-depth on these topics:
    • At the intensive, 2-day Founder.University, program Craig Zingerline gave a talk on owning your initial acquisition channels that is worth checking out if you are interested in these metrics
  • Additional methods to acquire your first customers
    • Kevin Systrom and Mike Krieger, the co-founders of Instagram, talk with Mike Maples on the Starting Greatness podcast on How to Get Customer to Hire Your Product
    • Conducting market research is a great way to find out where your customers live and this is a strong method for acquiring your first users
    • Twitter is another great place to acquire customers and learn about places to launch your startup - this thread suggests the following as places to launch to improve your chances of acquiring customers:
    • Provide value to your users
      • This could be with an educational blog that draws users in and positions you as a thought leader in the space
      • You could attend events and be a face in the community where your users live
      • Be active on social media and leverage your area of expertise to help others
        • Often you can do this in exchange for their feedback as well
        • Think of it as a skill swap - a way to provide feedback in exchange for feedback
    • Cold emails based on your target audience is still an option
    • Uber went another route and started with a very specific target audience and then relied on word of mouth in the early days to acquire customers
  • Group your users in cohorts for analysis
    • Once you are acquiring your customers, it is important to understand when and ultimately why they are signing up
    • "Instead of looking at cumulative totals or gross numbers such as total revenue and the total number of customers, one looks at the performance of each group of customers that comes into contact with the product independently" - Eric Ries "The Lean Startup"
      • Tracking in cohorts will allow you to analyze if:
        • Certain changes to product features increase sign ups
        • Which marketing campaigns are working best
        • And help you decide what to cut and what to continue to do
      • If you are tracking metrics based on cohorts you will be able to run tests against the cohorts
  • Communicate with and understand your first users
    • It can not be stated enough... you need to talk to your users!
    • Not understanding your users can be detrimental
      • Understand what they love, what they wish you had, what they don't need, when they use your product, who is using it, what would make them use it more, etc.
    • All of the things that you were researching and validating initially while learning about your ideal customer profile need to be continuously validated as your product and customers evolve
    • If you're looking for more insight on how to talk to users this is a great resource
  • Delight your first users
    • Think of your early relationship with your first users as a partnership
    • Your customers are aware they are working with a startup; leverage this
    • If you are open and responsive to their questions and needs you can gain a ton of valuable insight from their feedback
      • Often these customers are happy to provide insights because they feel they are helping build the product, and more importantly, you are solving a key problem for them
    • It is really never too early to start thinking about customer success
      • You might not officially have a team by this name in the early days, but the customer success mindset is something you can (and should) implement at any point
      • As highlighted in Jason's "Customer Success" blog post
        • There is a difference between being customer-focused vs product/feature-focused
          • This shift is often meaningful and can be as simple as starting with the way you talk about the positions in your company
            • What is your reaction to these titles: Account Manager vs Customer Success Manager?
            • They are the same role, but can you sense the shift in their focus and their goals simply based on the change in their title?
          • Another way to think of this is to be solution-focused; meaning you help your customer solve their problems
          • Jason points out: "It's much easier to sell to existing customers than find new ones. Treat your existing customers well."
        • It is important to prioritize your customer needs and goals and to be proactive rather than reactive whenever possible
    • When you focus on your customer there are additional things to think about and focus on during your interactions with your user
      • What does success look like to them?
      • How could we help get this user promoted?
      • If they are upset, was there a mismatched expectation?
      • If they are confused about something, how can we make this clearer in the future?
      • How can I reduce as much friction as possible?
    • The number one key to customer success is to focus on the main pain point you’re solving
  • Kick off the startup flywheel by figuring out where your users hang out, acquire your first paying customers, then delight them, and find more!

Additional Resources

Activities

Week 5🔲  Generate a list of initial users and get in front of as many of them as you

  • Leverage waitlists, early access to beta versions, build an audience
  • Sell them what you are building
  • Collect feedback on wireframes, early MVP

🔲  Group for Cohort Analysis

  • Continue work from the ideal customer profile module

🔲  Generate Blog/Twitter content

  • Leverage "key terms used to describe your space" from last week to write thought leader posts

Week 6

🔲  Customer outreach

  • Cold call
  • Talk to users

🔲  Gather feedback from test

  • Group feedback based on persona

Week 7

🔲  Schedule demo for users

  • Record your demo and share it online (on your website, social media, etc)
  • Convert cold calls to demos

🔲  Group users and track in your cohort analysis template

  • Continue work from the ideal customer profile module

Week 8

🔲  Track user blog click-throughs, interactions, follow-ups, demos

🔲  Prioritize the user feedback for iteration

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