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6 Tips To Help Entrepreneurs Win And Grow A Strong Customer Base

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by John Vrionis, partner at Lightspeed Venture Partners

Waitress serving customers

As part of the Lightspeed Venture Partner Summer Fellowship program, I ask guest speakers to come in each week and talk to the Fellows about key topics related to building a successful startup. Hustle and scrappiness are attributes that every great entrepreneur has. How they apply those characteristics to customer discovery – the phase where the entrepreneurs hunt down customer prospects to validate their hypothesis – is as much art as science. And technical entrepreneurs, which is what most of the Fellows are, typically need some direction on how to best spend their time when they are not working on product. The best entrepreneurs Sell, Design, Build in that order. After a decade as a VC I’ve found few entrepreneurs who are as good at this as Jason Gurwin and Peter Michalidis, which is why I ask them to spend an hour with the Fellows every summer talking about their experiences and sharing their tactics.

Jason and Peter were Lightspeed Summer Fellows in 2008. I thought their idea was impossibly hard – mobile coupons. Why so challenging? It required getting consumer packaged goods (CPG) and retail companies to cooperate and integrate with technology systems that were often put in place before Jason and Peter were born. I accepted them into the program because they were incredibly talented entrepreneurs and I figured their summer experience (and inevitably failed idea) would teach them valuable lessons that they then would apply in the future to a much better startup idea. As is often the case, I was wrong, and they turned their startup, Pushpins (acquired by Ebates in 2013), into a success. The following is straight from Jason and Peter based on their Q&A with the 2015 Fellows. I asked them to focus primarily on how they tackled the early challenges every entrepreneur faces of getting time and information from people at established companies when you are working at a company nobody has ever heard of. The following are six tips they recommend entrepreneurs employ in order to quickly win and grow a strong customer base. 

1. Don’t Fear Rejection.

Being a successful entrepreneur requires facing rejection head on without fear. Especially early on when you have a basic product (or a concept) and no customers. A startup is like a giant rock on the top of a hill. Every time you get a customer to say “yes,” it starts propelling it down the hill just a little faster. Oftentimes though, entrepreneurs convince themselves that it’s not even worth starting to push.

  • “My product isn’t ready yet. It needs just one more feature.”
  • “I’d rather wait until we have a few more customers to reach out to them.”
  • “They’re so much bigger then we are. Why do they need to work with us?”
  • “If they say no, we lose our one chance of getting them as a customer forever.”
  • “They aren’t going to write an article on us, they just covered our competitor yesterday.”

Statements like these act as a security blanket because rejection hurts. No one wants to be told that a customer doesn’t want to use your product. Jason and Peter told the students that they couldn’t let the fear of rejection be debilitating. They pointed to a motto that has followed them their entire lives, “You don’t get what you don’t ask for.”

2. Identify With the Person Who Can Say, “Yes”.

As an entrepreneur, time is generally your most scarce asset. In order to build momentum, target the easy wins first. Prioritize those with whom you have a relationship. Perhaps you both attended the same school, have a mutual contact or met them at an event.

To make your email most effective, the initial introduction should be short. Start with a bulleted list that summarizes the email’s content so the recipient understands you are looking for advice, not a job. And synthesize your information in bite-sized chunks that will help the reader think about what you are doing.

Counterintuitively, a lot of times it makes the most sense to contact people higher up at companies. “They often have less to lose and remember the times that they were helped on their way up the corporate ladder,” Michailidis said.

Make it easy for them to say yes. Don’t ask for an hour of their time, just ask for 15 minutes. Don’t think of it as a sale, think of it as a start of a new relationship. Don’t send a spammy template email that you send to everyone. Gurwin suggested, “Spend the time to understand the best way to connect with each person. Some people are more casual and others are more formal.” You have to test different messages to see which gets the best responses from customers.

3. Pick up the Phone.

Don’t be afraid to pick up the phone. Making cold calls can seem difficult, but cold calls can be even more effective than email. When you are a student you have the advantage that you look harmless and won’t be perceived as potential competition.

Gurwin told about a Pushpins tradition – Cold Call Fridays. “Every Friday, we would have a list of people we wanted to reach. Starting at 8 a.m., we would go from one to the next.” Gurwin suggested that by doing all cold calls at once it reduced the fear of rejection. “Once you hear ‘no’ a few times, it doesn’t hurt as much. In fact, it motivates you even more.”

When you do get them on the phone, look for commonalities that might help start a conversation. Maybe the person was quoted in a news article that resonated with you or they recently made a business decision that inspired you.

Say things like, “we’ve never met, but you said something that resonated with me” or, “I don’t know you personally, but when I saw that you did…” Once you are in the door, you have to show you are a subject matter expert and can drive value to them. This is how you turn your request for 15 minute of time in to a mutually valuable relationship.

Michailidis told a story of how he reached out to the CEO of a large grocery chain at his home in Belgium. “I called and his wife picked up. I kept her on the phone until he walked in the door for dinner.”

In fact, they recommended that 3-6pm on Fridays are often the best time to make cold calls. People are usually in a good mood for the weekend, there are fewer people calling, and their assistant might have already left for the day.

4. Be Enthusiastic.

Being young can help you get a foot in the door, according to Michailidis. “The feedback from our partners was that they really appreciated our fresh mindset and enthusiasm about the grocery business, which they didn’t normally see.” Enthusiasm is contagious. A young entrepreneur can bring a fresh perspective to an industry that they might not have heard.

Be willing to help partners accelerate testing new markets. Gurwin said, “We were a mobile first company, and we reached out to a company back in 2009 that hadn’t really built anything in mobile. They loved that we could help them see how their content performed in mobile.”

For Pushpins’ founders, one of the hardest parts of selling to corporate decision-makers was convincing them that using Pushpins would not cost them their jobs. Emphasizing the upside is important: Things such as pilot programs and minimal viable products (MVPs) are helpful in such situations, as they remove most of the burden of risk and require only a small investment.

5. Get Your Product into the Hands of Real Users.

Your first few customers are usually your most important. They help inform what you should and shouldn’t be building. Finding customers is not always easy, so think about unconventional ways to get people to try your product, even if it takes a little chutzpah.

“When Pushpins was trying to get its first thousand customers, we would go to an Apple Store on the day of an iPhone launch and pay people in line a dollar to install our app, so we could really understand how they were using it,” said Michailidis.

The duo also said that they would look to Craigslist to get people to beta test the app. People are usually very excited to try out new products. This proved invaluable because by watching customers use the app in grocery stores, the team learned that they not only an easy way to save money, but to also manage their shopping list.

6. Turn Those Users Into Advocates.

Once you recruit someone to use your product, try to turn them into an advocate to other customers. Pushpins heavily relied on referrals to recruit new customers. Most tech startups apply that strategy, because it is the cheapest way to recruit new customers. People will be willing to try something new because they know it’s been validated by a friend. By rewarding people to refer their friends, it also helps you retain customers because they are building a loyalty to the product.

Early on when your product doesn’t have as much value, you can be over the top with customer service. For the first three years of their business, Gurwin said that he had his personal cell phone number in their App Store description. “This made for some interesting phone calls from Mom’s in Indiana.”

You can also try to build an initial following by leveraging public relations (PR). A company has to be really good at PR to get a lot of buzz. Editors of tech publications and websites receive hundreds of emails every week, so startups need to stand out from the crowd. Help a Reporter Out (HARO) is a free sourcing service that enables startups without a PR firm to find requests for information and respond with a pitch. “Once you start appearing in a couple of stories, you start appearing in more and more,” noted Gurwin.

The founders warned of expecting a PR firm to be a magic bullet. A bad PR firm just sends out the same template email over and over again; this saves time but does not improve the chances of receiving coverage. The really good PR firms have ongoing relationships with people at magazines, newspapers and TV shows; they are not just cold emailing them.

As startups mature, the way they acquire partners and customers change. You will need to supplement with more traditional tactics like email marketing and traditional advertising. But, that doesn’t mean that the hustle that got you there should disappear. You still need to bring creativity, enthusiasm, listen to feedback and, most importantly, never forget that, “You don’t get, what you don’t ask for.”

 

John Vrionis

John Vrionis (@jvrionis) is a partner at Lightspeed Venture Partners who focuses primarily on early stage enterprise and consumer technology investments. In addition, John is the founder of Lightspeed’s Summer Fellowship Program. John holds an MBA from Stanford University Graduate School of Business, an MS in Computer Science from the University of Chicago and a BA from Harvard University.