This is the second blog in a two-part series by High Alpha’s Director of Go-To-Market, Egan Montgomery. You’ll learn his team’s tried and true playbook for mitigating risk when launching and growing new SaaS companies. You can read the first blog in the series here.
Making existential decisions about their new business is critical but often daunting for early-stage founders. They don’t have the luxury of being wrong too many times (or for too long).
In the first blog of this series, I shared our philosophy for mitigating the risk of starting a new SaaS company by selling early rather than perfecting a product. If you haven’t read that yet, I recommend you start there and then continue with this article. Read it? Great!
Now that you understand the opportunity learning from your customers presents, you’re probably wondering, “How do I start?” Below are four tactics you can put into practice as a brand new company to prioritize customer learning:
1) Pair back the perfectionism
If you’re like most founders, you’ll hesitate to put something out into the world that isn’t perfect. This mindset is the number one blocker to effective founding sales. Whether you start selling now or in six months, you’re going to look back in five years and think, “Wow, we really sold that?” Start now. The benefits outweigh the risks.
2) Design a minimum viable solution
“Product” and “Solution” are not synonymous in your early days. If you’re doing it right, whatever you put in front of a customer from a technology perspective will have major deficiencies. Consider what else you might offer, like services, consulting, assessments, exclusive access, media coverage, and pricing discounts. Give your pilot program a name and be transparent that this isn’t a public launch. Focus on delivering value but don’t anchor that value solely to a technology product. And don’t forget to charge money. Without skin in the game, the customer won’t care.
3) Make it a goal to send out a sales proposal as soon as possible
Securing your first customer is a significant milestone, but that might be several weeks or months away. Break it up into more bite-sized goals. One KPI we use at High Alpha is “Days to First Proposal,” aka the number of days from the founding team’s start date until we send our first sales proposal. You’d be amazed how well correlated this number is to revenue success over the coming years. Best in class is in the 20 to 30-day range. Get that proposal out there, and good things will happen.
4) Treat your first customers like partners
It is about the revenue, but it’s also about the learning. Try to select your first ten customers strategically. Pick influential brands or astute buyers. Provide value but also extract value ruthlessly. Learn everything you can from them by asking questions. Show them as much as possible (e.g., roadmaps, new UI designs, revised pricing, marketing messaging, sales decks). When you treat them as a center of learning, most customers will feel proud that you care what they think. People love to help when you ask for it.
All of these tactics are good things to start, but they can take many reps to perfect. The earlier you start building these muscles, the better off you’ll be. If you’re trying it out, let me know how it goes. You can find me on Twitter and LinkedIn.