Getting those first sales is a massive moment for startups, and whilst getting any sales is better than getting none getting it right early can set the scene for rapid growth and success. The following list of tips are my favourites from a list of ten in a guest post on OnStartups by Chris Savage, founder and CEO of video hosting business Wistia, in the original post he goes into more detail behind each point.
- Don’t wait to sell – define your minimum viable product and then get out of the comfort zone of development and find people to buy it. There is no better validation or education.
- Do things that don’t scale – many startups run scared of this, but getting early validation and then building processes that scale lowers risk
- Focus on the buyer not the user – this also requires a step out of the comfort zone of working with users who love the product but unfortunately they don’t usually write the checks, especially not if they are big ones. As Chris says, Salesforce is a pain to set up and has a poor UI but it has great dashboards for executives and is an $18bn company.
- Don’t price against cost – this is my favourite on the list, in new markets pricing should be according to value to the customer. Steve Blank writes well on how to test pricing, ask if the customer would use the product if it was free, then if they say ‘yes’ ask them if they would pay $big and work from there. Cash is the scarcest resource for most startups and leaving money on the table means there is less to pay for customer service, new features, new sales people etc. I was talking to a serial entrepreneur friend last night who has recently gone exec at a company where he is an angel investor, they were pricing more on cost than value and he has succeeded in increasing prices to existing customers by 6-10x.