Intro

Welcome back to Thinkk's startup foundations course. Today, we're diving into one of the most thrilling – and sometimes daunting – milestones in your startup journey: acquiring your first customer. At Thinkk, we've guided countless entrepreneurs through this crucial phase, and we're excited to share our insights with you.

Your First Customer

Let's start with a truth that might sting a little: your product isn't going to sell itself. I know, I know – you've poured your heart and soul into creating something amazing. But here's the thing: even the most groundbreaking innovations need a push to get off the ground. Think of it this way: if you built the world's comfiest chair, but left it in your garage, would anyone know about it? Of course not. The same principle applies to your startup. You need to get out there and introduce your product to the world.

The Manual Approach: Embrace the Grind

At Thinkk, we're big believers in what we call "embracing the grind" in the early stages. This means doing things that don't always scale – activities that might seem inefficient but are crucial for getting those initial customers.

Most of us are all too familiar with the benefits of systematized approaches. After all, manual labor is more tiring and less scalable than a systematized approach. But the best thing you can do is recruit your first customers manually. These one-on-one conversations let you learn your customers’ fears and gain a very real understanding of their problems. Not only will this let you create a truly personalized product or service, but you’ll also gain all the data necessary to, momentarily, create an incredible automated outreach program.

Here's a little secret: some of the biggest tech giants you know started with manual, grassroots efforts. Airbnb's founder Brian Chesky went door-to-door in New York, taking professional photos of apartments to boost listings. Both the CEO of Tinder and Bumble personally went to college campuses to sign people up. So, roll up your sleeves. It's time to get personal.

Defining a Lead: Who Are They and Where Can You Find Them?

Before we dive into lead generation strategies, let's take a moment to clarify what we mean by a "lead". It's a term that gets thrown around a lot in the startup world, but it's crucial to have a clear understanding of what it really means.

In simple terms, a lead is a person you can contact. That's it. If you can reach out to them, they're a lead. But here's where it gets interesting – not all leads are created equal. What we're really after are engaged leads: people who show interest in what you're selling. Think of it this way: if you bought a list of emails, those are leads. If you get contact information from a website or database, those are leads. The numbers in your phone are leads. People on the street are leads. If you can contact them, they're leads.

But engaged leads? Those are the gold standard. These are the folks who've given their contact information on your website, followed you on social media, or replied to your email campaign. They're showing active interest in what you're offering. So, where can you find these elusive engaged leads? Here are some prime hunting grounds we recommend to our clients at Thinkk:

1. Your Personal Network: Don't underestimate the power of your existing contacts. Friends, family, former colleagues – they're all potential leads.

2. Social Media Platforms: LinkedIn, Twitter, Facebook, Instagram – these are treasure troves of potential leads. Look for people engaging with content related to your industry.

3. Industry Events and Conferences: Whether virtual or in-person, these gatherings are full of people interested in your field.

4. Online Communities and Forums: Places like Reddit, Quora, or industry-specific forums often have people actively seeking solutions to problems your product might solve.

5. Your Content Audience: If you're creating valuable content (which you should be!), the people engaging with it are prime potential leads.

6. Referrals from Existing Contacts: Ask your network if they know anyone who might benefit from your product or service.

7. Cold Outreach Lists: While less warm than other sources, carefully curated lists of people in your target market can be valuable lead sources.

Remember, at Thinkk, we believe that leads are everywhere. The key is to focus on finding the right ones – those who have the problem you solve and the means to pay for your solution. Now, you might be thinking, "Great, but how do I turn these potential leads into engaged leads?" That's where our Fantastic Four lead generation strategies come in. Let's dive into those next.

The Fantastic Four: Your Lead Generation Arsenal

Now, let's talk about the nitty-gritty of getting leads. At Thinkk, we've developed what we call the "Fantastic Four" – the four fundamental ways to let people know about your stuff:

1. Warm Outreach: The word ‘warm’ implies reaching out to people who already know you. Your network is gold, folks.

2. Cold Outreach: Contacting strangers who fit your ideal customer profile. The word ‘cold’ just means that you haven’t contacted them before, or they haven’t already shown interest in the service you offer.

3. Posting Content: Sharing valuable, free content to attract potential customers. Hey, look at what you’re reading (or listening to) now!

4. Paid Ads: Using paid advertising to reach a broader audience. Just so we’re clear, this is a strategy that’s better used once your first 100 customers have been acquired. If your entire plan to get your startup’s first customers comes down to an ad campaign, it’s more likely than not you’ll go belly-up.

Let's break these down and see how you can apply them to get your first customer.

1. Warm Outreach: Your First Line of Attack. This is where most of us should start. Remember that list of contacts in your phone? That's your first batch of potential leads. Warm outreach is easier than it sounds. First, make a list of everyone you know who might be interested in your product or who might know someone who would be. Then, craft a personal message for each. No copy & paste jobs here! Finally, follow up. We suggest reaching out up to three times if you don't get a response. A pro-tip is using what we call the A-C-A framework in your conversations. This consists of acknowledge what your lead said, complimenting them on it, and asking another question. This keeps the conversation flowing naturally and builds rapport.

2. Cold Outreach: Broaden Your Horizons. When you've exhausted your warm contacts, it's time to reach out to strangers. Here's how we do it effectively. Your first step is to build a targeted list of potential customers. Then, you’ll want to personalize your outreach. Show you've done your homework, because no one likes a stranger trying to sell them something. The more personalized the message, the more it appears one-of-a-kind. This decrease in perceived supply increases its perceived value. Finally, offer something of value upfront. We call this "big fast value."

3. Posting Content: Become a Valuable Resource. Content is king, but value is the kingdom. Here's how we approach content creation at Thinkk: First, focus on solving problems your potential customers have. Second, use a mix of formats and platforms, ranging from blog posts and videos to social media updates. Finally, be consistent. Set a schedule and stick to it. Remember the mantra: "Give until they ask." This is a concept pioneered by Alex Hormozi, renowned entrepreneur and CEO of Acquisition.com. His greatest recommendation is to provide so much value that people feel compelled to reach out to you.

4. Paid Ads: Accelerate Your Reach. While this might not be your first step, paid ads can be a powerful tool when you're ready. Here's what we keep in mind: First, start small and test different platforms. I was the person that dumped thousands into Google Ads thinking that scale would solve my problems. It didn’t, and I was left deep in the hole. When starting a new ad campaign, it’s best to use a budget that’s large enough for 100 people per month to see your message. That’s a large enough sample size to know whether your campaign has worked, but often not large enough to bankrupt you before you start. Next, focus on your ad's "call out" – how you grab attention in the first few seconds. Since the rise of social media, our attention spans have shrunk and our willingness to give people our time has decreased with it. Use a catchy and compelling headline to grab your audience’s attention. Finally, use our "What-Who-When" framework to structure your ad content. Say what it is that you’re offering, who it’s for, and when it’s happening. Calling out your audience lets them know your product is for them, and telling them when it’s happening creates a sense of urgency that gets them to act.

Founder-Led Sales: You're the Best Salesperson

As a founder, you are your startup's best asset. No one understands your product better, and no one is more passionate about it than you. This is why we advise our portfolio companies and clients to always lead the initial sales efforts themselves. It’s the same thing we did when we started Thinkk. Our founders led our sales efforts for almost two whole years.

When you're talking to potential customers, you're not just selling a product – you're sharing a vision. You’re selling yourself. Your enthusiasm is contagious, and your deep knowledge of the product allows you to address concerns on the spot. You’ll be able to hire a salesperson once you’ve built the foundation.

Crafting Your Offer: The Key to Conversion

Now, let's talk about what you're actually offering. At Thinkk, we emphasize the importance of creating what we call a "Super Slam" – an offer so good, people feel stupid saying no. Here's how we structure it:

1. Dream Outcome: What's the best possible result your customer can achieve? Remember - sell the vacation, not the plane ticket. 

2. Perceived Likelihood of Achievement: How can you show them it's achievable for them? They need to believe that you can deliver on the dream you’re selling.

3. Time Delay: How quickly can they get results? No one likes to wait. It’s the reason Xanax is more popular than meditation.

4. Effort and Sacrifice: How easy can you make it for them? Again, no one likes effort. Decrease the effort for them and watch how the value of your offering skyrockets. 

When crafting your offer, aim to maximize the first two and minimize the last two. This is the way that offers become irresistible.

The Power of Persistence

Here's a hard truth we often share with our clients at Thinkk: you're going to face a lot of rejection. But remember, sales is a numbers game. Let's break it down. If your goal is to sign two customers, and your conversion rate from demo to customer is 20%, you need to conduct at least 10 demos. To get those 10 demos, you might need to reach out to hundreds of potential leads. Don't get discouraged. Each "no" gets you closer to a "yes." We like to say, "Yeses give me opportunity. Nos give me feedback. Either way, I win."

Pricing: Charge from Day One

One mistake we see often at Thinkk is startups offering their product for free to get initial traction. While it might seem counterintuitive, we strongly advise charging for your product from the beginning. Why? Because paying customers validate your product's value. They're saying, "This is worth my hard-earned money." That's really powerful.

Start with a price that feels slightly uncomfortable – you might be surprised at what people are willing to pay for a solution that truly solves their problem. If you’re worried about charging for your product or service, you can sign your first five customers for free to gain the confidence you need, before increasing the price every five customers after that.

Leveraging Tools and Resources

In today's digital age, you've got a wealth of tools at your fingertips. At Thinkk, we often recommend:

• CRM Software: Tools like Pipedrive or HubSpot can help you track your sales pipeline. It’s one thing to get a client, it’s another thing to hold on to them. Keep a list of the clients and customers you’ve worked with, and reach out to them every so often to keep your name fresh. 

• Prospecting Tools: LinkedIn Sales Navigator or Apollo.io can help you find potential customers.

• Email Finders: Tools like Hunter.io can help you locate email addresses for outreach.

These tools can streamline your process, but remember – they're aids, not replacements for personal outreach.

The "Give-Ask" Ratio: Building Goodwill

One of our key strategies at Thinkk is what we call the "give-ask" ratio. In essence, provide value multiple times before making an ask. This builds goodwill and makes people more likely to reciprocate when you do make an offer.

As a startup, it’s best to make one “ask” for every ten “gives”. These “gives” can be sharing valuable content, offering free advice, or providing useful resources. More established companies eventually move towards three "gives" for every "ask." To see this in action, look no further than social media platform Instagram, which shows you an ad between every three of your friends pictures. 

Learning from Success Stories

At Thinkk, we've seen numerous success stories that reinforce these principles. We've worked with founders who personally visited offices to install their software for free, not only gaining customers but also invaluable feedback. We've guided startups to focus intensely on niche markets, tailoring their offerings to specific needs and seeing tremendous resonance as a result.

The Key Takeaways

As we wrap up, let's recap the key points to remember as you embark on your quest for your first customer:

1. Utilize the "Fantastic Four" methods of lead generation: warm outreach, content posting, cold outreach, and paid ads.

2. Embrace manual, non-scalable efforts in the beginning.

3. Lead your sales efforts personally as a founder.

4. Create a "Grand Slam Offer" that's hard to refuse.

5. Start with the easiest potential customers.

6. Use the A-C-A framework in your conversations.

7. Be persistent – sales is a numbers game.

8. Charge for your product from day one, increasing prices gradually.

9. Maintain a high "give-ask" ratio to build goodwill.

10. Use tools to streamline your process, but don't rely on them entirely.

11. Learn from successful startups' early strategies.

Remember, getting your first customer is about more than just making a sale. It's about learning, adapting, and laying the groundwork for your startup's future growth. Each conversation, each demo, each rejection is an opportunity to refine your approach and improve your product.

At Thinkk, we've seen time and time again that the startups who embrace this phase – who dive in headfirst, ready to learn and adapt – are the ones who succeed in the long run. As we like to say, "You either win or you learn." So, get out there. Make those calls. Send those emails. Book those demos. Your first customer is waiting for you to find them. And when you do, it'll be the first of many successes to come.

With these strategies in hand, you're well-equipped to land your first customer and start building momentum. Remember, at Thinkk, we believe that getting your first customer is just the beginning of an exciting journey. In our next class, we'll be discussing how to leverage that first customer to drive further growth. Until then, start reaching out. Your future customers are excited to meet you – they just don't know it yet!

Thank You

Thank you for joining us for our Startup Foundations course, "Building Your Startup." We hope these insights have given you a solid foundation to launch and grow your business. As you put these principles into action and start seeing results, you'll soon be ready for the next phase of your entrepreneurial journey. When that time comes, we invite you to join us for our next section, "Growing Your Company." In this upcoming series, we'll dive deep into scaling strategies, advanced marketing techniques, and operational excellence – everything you need to take your startup to the next level. Until then, keep pushing forward, stay persistent, and remember: every 'no' gets you closer to a 'yes.' We can't wait to see what you'll achieve.