S T R I P E AT L A S → GUIDES → YOUR FIRST TEN CUSTOMERS

Your first ten customers

Scrappily start your sales process by identifying, approaching, and
converting prospects into customers one at a time (for a start).

Patrick McKenzie
Patrick has built four so ware companies that did business
internationally. He now works on Atlas at Stripe.

Introduction

How do you find prospects for your company?

How do you determine if prospects are good or not?

How should you communicate with customers?

How should you go about following up?

What should you ask for on the call?

How can you get better at this over time?

Starting an internet business?

Join Stripe Atlas →

If you build it, they will do absolutely nothing.

Entrepreneurs have to actively recruit their own few first customers. This is hard, important
work, because the first few customers will help you refine your product, begin
understanding how to position it in the market, and provide important social proof for
your company. This will generally be via active sales rather than the customers passively
stumbling upon your offerings. Early-stage companies do not yet have the marketing
machinery which exposes them to steady streams of qualified leads acquired in a
repeatable fashion. You will instead convince people to use your product one at a time.

The good news: you can do this, and do it well, even if you’ve never done sales before and
even if you feel uncomfortable with it. You have advantages most sales reps lack: the ring
of authenticity, commanding understanding of the problem domain, and the ability to
make changes to the product to close early deals almost in real time.

It won’t be trivial, but it is easier to get started than most entrepreneurs think. You don’t
need to have a perfectly polished product or superior sales skills to count to ten.

Why ten? You likely won’t be able to sustain your business with only ten customers, but by
the time you have ten happy customers, it isn’t a fluke anymore. You’ll start to hear
recurring themes about their needs. You’ll have nascent but real goodwill to turn into
references and referrals. You’ll be able to point to potential employees and investors “This
isn’t a pipe dream anymore; every so ware company with ten paying customers gets to a
hundred and every company with a hundred gets to a thousand. We just have to execute
on this; do you want to come along for the ride?”

We’re going to break down the basics of hardscrabble sales in a business-to-business

context: finding companies which can use your so ware, quickly winnowing down to ones
worth your time to sell, and making the crucial first conversations happen.

Somewhat surprisingly, early sales conversations resemble pitching; you’re attempting to

quickly intrigue someone with the seed of your idea just enough to earn the privilege of a
longer conversation.

How do you find prospects for your company?

You’re going to do things scrappily in a spreadsheet to start out, likely with only a handful
of columns: name of company, name of person, email address. That spreadsheet starts
blank and terrifying. You need to carve out dedicated time to get names on it. You don’t
need many to get started—a few dozen will keep you quite busy until you get good at the
mechanics of pivoting from a company to a decisionmaker’s contact information and
getting in contact with them.

Most entrepreneurs are not coming at a product area or industry entirely from a blank
slate. You likely already have colleagues, beta users, or similar folks in your network. They
should likely be the first names on your list, if not to sell to then certainly to ask for
introductions to other folks in similar circumstances. You will tend to close many more
sales from warm introductions than you will from an equivalent amount of cold pitches, so
start by picking this low-hanging fruit.

While you’re doing that, you’re also going to attempt to find new leads: companies and
people at them who could potentially use your offering. At the simplest level, this means
writing down a list of what industries and job roles you expect to make use of your
offering, then Googling until you can’t stand it anymore. If you’re selling e.g. to office
managers of dental practices, locking yourself in a room for an hour will give you the
names and contact information of several dozen dental practices in Topeka, Kansas. Repeat
for as many cities as you need to develop a few dozen names.

There are ways to be more efficient at this by finding places where customers congregate
online, such as industry associations, conferences, communities / forums, and specialized
directories. These are worth investigating, both from the perspective of developing leads
and from the perspective of learning about organic behavior among your target
customers. What are the issues which routinely come up when they talk shops with their
peers? What pain points do they have and how do they conceptualize them? What else do
they use? Knowing the answers to these helps your development, marketing, and
sales efforts.

A note of caution: You can also purchase lists of leads from various providers, but for a
variety of reasons they’re harder to make use of effectively than leads you develop yourself.
You’re also likely to feel worse about the experience. Defer using them until you’ve done
things the hard way; the lessons you learn about the mechanics of developing and
qualifying leads will inform your sales processes for years to come.
How do you determine if prospects are good or not?
As you get more experience running your business, you’ll get better at qualifying
customers—determining which ones are likely to be easiest to convert, most profitable to
service, and least hassle to support. In the early days, though, you don’t have much data to
go on and you may not have an intuitive sense for your market and ideal customer
profile yet.

Good customers for early startups share a few attributes, though, so you can
prioritize these:

Early adopters: Whatever you’re selling, whether that is consulting services, so ware, or a
physical product, you want to sell it to someone who has bought similar things before.
They know the value proposition and they know how to work their internal decision-
making processes to successfully purchase the thing. You do not want to be someone’s first
rodeo; they may give you very unrealistic signals with regards to how close their
organization is to making a purchase, they may not be able to properly value your offering,
and they very likely will be a difficult customer to onboard and service.

The term of art in the industry is “early adopter”; someone who, for whatever quirk of
personality, is comfortable using products before their friends or colleagues are. They were
likely on the internet first among their peers. They switch phones the day the new model
comes out. They positively enjoy trying new so ware and are always on the lookout for
new useful things.

How do you identify early adopters? One way is to look for early or reference customers of
firms which aren’t competitors but which are laterally positioned relative to you. For
example, if you sell invoicing so ware for web development firms, look for firms which use
project management tools created by similarly positioned startups. (You can o en find
customers mentioned on company’s blog or home page.) This lets you dodge a major
objection to going with a new company, which is the risk factor: clearly this customer has
sufficient tolerance to adopt a solution from an “unknown” provider; they’ve done it before.

You can also look at hangouts for early adopters, like Product Hunt, and scope down to
members who are likely to be in their industry. You do not need many names to count
to ten.

On the internet: It is o en easiest to for internet entrepreneurs to sell to people who are
aligned with the internet.
What does alignment look like? They spend time on the internet voluntarily; they’re active
in communities online; their online identity and their professional world mingle. This is
convenient for you from an identification perspective (since their online activity gives
publicly visible evidence of their existence and contact information) and from a sales
perspective: they’re likely to not need reference customers, high-quality printed collateral,
or other indicia of Serious Sales Efforts (TM) because they’re comfortable
transacting online.

When you’re organizing your spreadsheet, prioritize upwards firms and people who have
developed web presences. There still exist many, many firms which have almost no
footprint on the internet. Many of them make excellent customers for many businesses,
but they are unlikely to be excellent customers for your business today.

Light sales cycles: Even within a particular market, some firms have more process for
particular purchases and some have less. You want to rigorously qualify prospects to find
ones where a single decisionmaker can green-light adoption of your offering out of their
discretionary budget. This will disqualify many potential users, and perhaps even the
majority of particular markets (those for enterprise so ware, for example), but o en there
will still be enough users le to count to ten.

How to identify users who have decisionmaking power and budget readily available? Prior
to having conversations, you’ll work on heuristics. One of them is that business owners at
small businesses typically have total discretionary authority and are still intimately involved
in many significant purchases; this makes them a good point of entry for products costing
$ to $ , . Even if they’re not going to be the end-user at their company, they can
make the decision to adopt you and forward you to the person who would use your thing
directly.

A er you’re in conversations with a prospect, ask point blank: can they independently
decide to buy your thing? This is not a question many entrepreneurs are born being
comfortable asking, but it is one you should get over reticence about. You are not the first
person to ask it of your counterparty and you will not be the last. They are highly unlikely
to be offended by it. If they demur, round that to Not Interested Right Now and move to
the next prospect; you can always circle back a er you’ve counted to ten.

Intrinsically reachable: Some businesses and some decisionmakers are intrinsically easier to
reach than others.
Which businesses are intrinsically reachable? Typically, the ones where that is a pre-
requisite for operating their own businesses. Lawyers, accountants, consultants, and other
service providers are always willing to pick up the phone and talk to someone on spec
because that is the primary way they find new customers, and they are in constant search
of new customers. This is very different behavior than that exhibited by folks who work in
back offices or e.g. individual contributor engineers, who would generally prefer not to take
a call because it distracts from “real work.” Engineers are intrinsically reachable (by dint of
being tied to a computer all day every day) relative to e.g. field service professionals.

If you sell so ware across a number of verticals, prioritize firms and decisionmakers who
are intrinsically reachable; this maximizes the effectiveness of your early sales efforts.

How should you communicate with customers?

Use what is natural for you and for customers, but if you have any doubts, overwhelmingly
the most common option is cold email to get a phone call, with the main sales effort either
happening on the call or a er it.

Keep your cold emails concise and action-oriented, since you want to balance imposition
on your prospects with the benefit of speaking with you. Generally, your first outreach will
be a single paragraph, three to four sentences long, with a single ask.

Prove you put in some work:

The first filter to get good results with cold email is sounding like a human, not like a
spambot. So sound like a human. Since you’re in the Do Things That Don’t Scale phase of
your company, and likely not sending a huge number of emails per day, you can easily
spend a few minutes to research your prospect and open with a bit of genuine connection.

The best cold email I ever received was selling recruiting services. There are millions of
recruiters in the so ware industry; everyone with hiring authority has been pestered by
them before. The recruiter with the best pitch identified a problem I clearly had based on
evidence in a recent blog post of mine, proposed a sensible solution, and offered a call if I
wanted to discuss matters in more detail. He also said very clearly that he was going to
pitch me on the call.

You can generally do this in about a sentence a er your salutation. (This should go without
saying, but % of pitches in my inboxes need it said: get your salutation right. You should
know your prospect’s name, since you did your homework, and you should use their
preferred form of it.)

Hiya Karen, I really enjoyed your presentation about repeatable processes for
finding new customers for financial planners, particularly the points regarding user
personas.

This sails over the prove-you’re-a-human hurdle, because it shows that you were intelligent
enough to locate a presentation Karen has done and understand at least one point about
it. (If you can comment intelligently on their work, so much the better, but even being able
to paraphrase back to a customer e.g. what they consider to be unique about their
company makes you better than the vast majority of pitches they get.)

Start providing value:

A er you’ve gotten someone’s attention, you want to convince them that a conversation
with you is likely to be a valuable use of their time. This is o en a combination of tell-and-
show: tell them that you know what you’re doing, show a brief example. You have a cheat
code available to you as a founder, which is that you literally started a company in your
area of expertise, and regardless of how underprepared you feel, that reads to most
customers as “likely ambitious and well-versed in that problem domain.”

A er identifying yourself, if at all possible, give the prospect one or two useful takeaways
for reading your email.

I run a soware company which helps small businesses optimize their online
advertising, including managing campaigns for different personas. For example, I
see from your website that you are active with business owners, retirees, and
young couples, and our soware would let your ad creatives target the right
audiences with the right creatives and the right offers. I have some ideas I’d like to
run by you for how to better align your online advertising and your landing pages.
For example, your Facebook campaign for engaged twenty-somethings currently
sends prospects to the retirement planning questionnaire, but a better choice
might be your post about talking about money with your loved ones.
Ask for a specific, small thing:

Close your email with a specific “ask”: you want a short phone conversation. You can
explicitly label it as a sales conversation if you want to, although this is generally redundant
when speaking to business owners or savvy professionals. Your prospect has been sold to
before; they know you didn’t send them an email out of the blue just because you were
feeling lonely. If they agree to take the call, it will be because they’re not opposed to
hearing what you have to offer.

You should make it very easy for them to say Yes to your ask. Take all the cognitive load out
of it; rather than burdening them with scheduling, for example, suggest an appropriate
amount of time and an appropriate day.

I’d like to talk about how we could help your company convert more prospects into
sales. Do you have  minutes free this Thursday?

Inexperienced entrepreneurs o en try to anticipate the objections (“If you’re busy

Thursday then…”) in the email, but this is not maximally respectful of your prospect’s
reading time. If they’re busy Thursday, let them tell you that; they’ll likely counterpropose a
time if they’re very interested. If they come back with simple “I’m busy Thursday.”, propose
a different time, or offer to accommodate their schedule.

How should you go about following up?

One of the hardest and most natural parts about sales is to follow up. In most interactions
in life, we’re trained to read social signals adroitly and interpret non-response as
disinterest.

This is not an effective habit for selling. You should, instead, treat non-response as non-
response. Your prospects are busy people with many things on their plate. If they were
simply too busy to send you a response last week, dusting off their inbox with a one-
sentence followup email might catch them at a better time or cause them to prioritize you
more highly.
Some sales reps don’t take no for an answer. Particularly for your earliest customers, you
can take anything less than Wow That’s Very Interesting as an answer… but don’t take no
response for an answer. Keep pinging, once or twice a week, until your customer engages,
then play the conversation naturally from there.

There are tools that automate this process, but they create time efficiency for sales reps
while creating time inefficiency for customers who use non-response as a way to discretely
communicate disinterest. Since you can afford to be very liberal with your use of time as an
early-stage founder, just write your follow-up emails by hand and send them manually. You
can do twenty in minutes if you’re organized.

What should you ask for on the call?

Your calls will generally be very different depending on whether you’re selling a low-cost
product or a high-cost product. Different industries and geographies have different
understandings for what “expensive” actually means, but broadly speaking, from a startup
perspective, so ware which costs less than $ a month supports low-touch sales and
so ware which costs more than $ , or so annually requires high-touch sales.

Low-touch sales can eventually be completed passively without human interaction, but
you’re using yourself as an accelerant for learning for the time being.

For low-touch deals, where a single decisionmaker can make a snap decision on whether
they’re in or out, you should ask for the sale by the end of the call. Ideally, you’re ready to
move immediately into taking their order, whether that is getting their payment and
shipping information (for a physical good) or getting them an account provisioned for your
so ware with the payment information to come later.

Many startups offering low-cost so ware offer a free trial. For your first few customers,
free trials are likely to give people an easy way out of actually successfully adopting your
so ware: they simply won’t get around to adopting it and cancel before the end of the
trial. Instead of offering free trials, strongly consider offering ludicrously good help with
onboarding or integrating the customer. If you have a data import step which has to
happen, for example, offer to do all the button-pushing yourself (including data cleanup) if
they just email you the files.

You can offer a -day moneyback guarantee to decrease resistance to adopting you, since
this has dynamics very different than a free trial does. A customer who has committed to
buying your so ware is committing to using it, and will only exercise the guarantee if the
so ware fails due to defects. A customer who has not committed to buying your so ware
can simply defer their purchasing decision for the time being, fail to develop sufficient
conviction to purchase, and then default to not purchasing. Since you’re optimizing
primarily for learning from committed customers for the time being, try to secure
commitments.

Some products are intrinsically complicated and are not amenable to simple order taking;
the customer will need to actually see evidence that the product will fit their purpose prior
to getting the ball rolling on purchasing the product. In that case, you should spend your
time on the call establishing rapport with the customer, learning about their problems and
motivations, qualifying them, and if appropriate ask for an opportunity to do a longer ~
minute demo call or present a “formal proposal.” If they’re amenable to that, then you’re off
to the races. We’ll cover the mechanics of more formal sales processes at a later date.

How can you get better at this over time?

The scrappy sales approach you start with is effectively a prototype for a future sales
process which you’ll be capable of performing repeatedly, at scale. At the moment, you can
change your process as quickly as you can change your mind, so experiment boldly with
what customers you go a er, how you pitch them, and what the structure of your
offering is.

As time goes on, you’re going to start codifying this process so that you can execute on it
repeatedly, as if from a script. Then you’re going to likely teach that script to other people.
Then you’re going to build systems and processes which enable a team of people to
execute that script more efficiently, at a higher quality level.
In addition to building the sales process itself, as you get more mature as a company, you’re
going to produce things adjacent to the product which make the sales process better. For
example, as you start to develop a marketing footprint (e.g. guides on how your customers
could improve something in their businesses), you can use those as conversation-starters
for cold outreach. You can build so ware which allows you to productize creating unique
value for your prospects, such as e.g. a web site speed analyzer if you’re selling web hosting,
so that you can deliver outstanding value to people from your first conversation
with them.

You can also feed what you learn from sales directly into the product itself: using the
words customers do to describe things in the interface and documentation, for example.

This synergistic interplay of product development, marketing, and sales is one of the joys of
running a business. We’re always interested in hearing what you’re doing—drop us a line
at atlas@stripe.com.

This guide is not intended to and does not constitute legal or tax advice, recommendations, mediation or
counseling under any circumstance. This guide and your use thereof does not create an attorney-client
relationship with Stripe, Orrick, or PwC. The guide solely represents the thoughts of the author and is neither
endorsed by nor does it necessarily reflect Orrick's belief. Orrick does not warrant or guarantee the
accurateness, completeness, adequacy or currency of the information in the guide. You should seek the advice
of a competent attorney or accountant licensed to practice in your jurisdiction for advice on your particular
problem.

INTERESTED IN IMPROVING YOUR BUSINESS?

We'll send you an update when we publish more guides.

Email GET UPDATES

You can unsubscribe at any time. Read our privacy policy.

→
Return to guides