THE STARTUP CHAT

[0:00:00]

Steli Efti: Hi everyone. This is Steli Efti.

 

[0:00:03]

Hiten Shah: This is Hiten Shah.

 

[0:00:04]

Steli Efti: In today’s episode of The Startup Chat, we’re doing a Q&A session based on all the questions you guys have sent us around the eBook that we launched, From 0 to 1,000 Customers & Beyond. We’ve done 4 podcast episodes in the past on how to acquire customers and how to hit certain milestones, your first 10 customers, getting from 10 to 100 customers, from 100 to 1,000 and so on. We’ve put all that knowledge into a little eBook that a lot of people liked and appreciated. We asked you if you have questions after you read the eBook, and tons of people sent questions in. We did a part 1 of the Q&A session already, and this is going to be the part 2. We’re just going to jump right into this and ask the first question. All right, so this is more of a sales related question. The question is from … I’m not sure how to spell this name correctly, but Uzer, I think. Uzer asks, “What is the best way to generate leads to do up on sales in order to acquire the first 1,000 customers?” The question is should I hire freelancers and give them a bunch of instructions, or should I just go to places and download lists? What’s a good way to do that? Then the next question he also asks is it a good idea to just create this big lead list and send a mass email, or should he do highly personalized one-on-one emails? We’ve talked about this before. There’s an episode where we talk about cold emails. I’ll try to look it up as we speak. It was episode number 14 where we talked about cold emails, especially from a sales perspective. Uzer, I highly recommend you to listen to episode 14. We talk a lot about the technical stuff on how to send cold emails and sales emails and how to do it right. In this case, my advice would be in the early days, don’t outsource lead generation because you’re probably are still in the process of exploring and trying to understand yourself who your customer is and what the best industries are and the job title and all that. I would do it manually and painfully first myself until you have some level of success. Once you have success, you could outsource it and you can actually teach a freelancer how to do what you did. You need to be able to teach success. If you haven’t done lead generation with some consistency and some predictability, I would not pay somebody else to try to figure this out. In the early days, I would highly recommend you to go low volume, high quality instead of going massive volume. Please, please, please don’t send 20,000 emails at once. The only thing that will happen is you’re going to piss off a ton of people. You’re going to get blacklisted from Google and blocked out of your email account, and your deliverability rates for emails will go down dramatically after that. Probably your first email is not going to be your best, so you’re probably going to waste a lot of opportunities, so just don’t do that at all. The early days, send 20-30 emails a day. Do it with consistency. Do it with a good cadence. You send 20-30 emails in the afternoon. The next morning, you check who responded. You set appointments, you make calls. After lunch, you start doing lead gen again sending out the next batch of 20-30 emails and tweaking and learning along the way versus downloading a list of 50,000 emails and then sending one massive blast to everybody.

 

[0:03:53]

Hiten Shah: Yeah, I couldn’t say it better myself. Definitely go look into the old episode that we had which is still highly relevant about cold email, because that’s going to help a ton.

 

[0:04:04]

Steli Efti: All righty, so the next question is another B2B and B2C question. Here, is asking basically should they start with B2B or B2C. We talked a little bit about this and said that you probably want to pick one or the other and not do both in parallel. He also I think asks here that they have a lot more experience in the B2C side of things and they’re a lot more familiar with it, but they are very tempted by the fact that there has been some signals from the enterprise world to pay money for this. I’ve been in this situation before many years ago where I had an end consumer product, and then all of a sudden inquiries would start coming in from big enterprise businesses telling me they wanted to purchase the product internally. Although I had no desire to go into the enterprise business, this incoming interest made me blink and lose focus and go into the enterprise world, and that didn’t go that well for me. Yeah, I think my advice here is if you think your product and your expertise is in B2C and you’re seeing some success there or you’re really early on there, stay with it. Don’t get distracted by inquiries of large companies telling you they want to buy your product. It’s always flattering and it’s always like, “What if we could make a ton of money with B2B and then finance the B2C side that way?” Most of the time it’s wishful thinking. The enterprise deals, they’re going to suck up all your attention, all your energy, all your time. They’re going to put you on a completely different path in terms of product development. If you’re not prepared for doing enterprise sales, if you don’t have a lot of money in the bank and an experienced sales force and you don’t know that world, you’re probably going to waste a ton of time and then not get anything in return. I would stay focused and don’t allow any enterprise potential customer to distract you if you’re currently on a good path with B2C.

 

[0:06:25]

Hiten Shah: Yeah, completely agree. You don’t want to steer off the path if you’ve found something really great. Any customer is a distraction. Every customer is in a lot of ways, especially when it comes to figuring out what to do next. Enterprise ones are really usually an epic distraction, unless that’s the exact customer.

 

[0:06:44]

Steli Efti: Yep. All right, the next question is one that we actually have an episode recorded that’s going to launch soon where we talk about this. It was from Bob who basically asked when is the right time to hire the first inside sales person. He says we have a lot of business customers, but mostly through word of mouth. We’d like to ramp up B2B sales by a dedicated person this year. Are we ready or how do we know that we are ready?” We have an episode that is going to be released very soon in the next week or two where Hiten and I talk about how to hire your first salesperson and how to think about hiring salespeople. We address a lot of that topic there. Just to quickly respond to this here, I would say first you want to do sales yourself. Once you have done inside sales, and not just with word of mouth, not just with people you already know, they are in your network, but with strangers. Once you’ve been able to acquire customers through doing inside sales yourself, that’s typically a good time for you to bring in some people and try to teach them what you have done and see if you can replicate the results. If all your customers so far have been through your personal network and through inbound requests, I would not go out and hire somebody to do outbound sales for you. That’s typically never going to work. You want to do the job yourself and understand it a little bit, and then try to bring somebody in and see can you teach that person to get the same results as you got. All right, let’s look at the next question here.

 

[0:08:19]

Hiten Shah: Yeah.

 

[0:08:20]

Steli Efti: Sam asks, “Okay, when using content marketing to scale our startup and our customer acquisition, how do you avoid your company to become too bloated with basically crappy, unqualified leads? For example, many of the people who book demonstrations of our product today aren’t our target customers: wrong country, not a buyer, no budget, et cetera, et cetera. Establishing this takes us a lot of time.” They’re doing content marketing. They’re getting incoming leads, but now they feel like they have too many low quality leads and a lot of time is being wasted figuring that out.

 

[0:09:04]

Hiten Shah: Yeah, typically you would find the ones that are high quality out of all the low quality ones. This is a problem most content marketing engines have, which is they get a lot of leads and not all of them are qualified. There’s a number of ways you can resolve that. You can put qualifying drop downs or form fields right in the lead gen form that you’re using for the demo request. That’ll help you at least easily score them, or not even score them, just get them ahead of time. In some of ours around some of the tools that we have, we asked for their marketing budget. If they don’t have a high enough marketing budget, our tool just won’t be able to help them. There’s a lot of things like that that you can do. My biggest suggestion is just change the forms and make it so that you’re actually qualifying right in the forms and not having to do anything fancy to disqualify them. The other thing, the question I would ask if this person was in front of us and we’d go back and forth would be are any of the leads qualified. Because if none of the leads are qualified, you probably need to switch your content marketing and maybe even your marketing channel.

 

[0:10:07]

Steli Efti: Yeah, I love that. Yeah, I think there’s a lot of things that you could do, like try to figure out is there a single source where we get the worst kind of leads. Right? I remember there was a time where we put closer on the AppStore or something like that. We got a ton of downloads, but they were such bad quality that we just discontinued it because it was just noise. It didn’t really help at all. Sometimes you do something from a marketing perspective. Maybe you’re doing whatever. You’ve done a little viral video and it’s really cool and it gets a lot of people to sign up with their email for something, but the audience you attracted are not buyers. The audience you attracted with this marketing thing, although it drove traffic and signups, it’s not the type of traffic you want. Sometimes if you analyze your marketing efforts, you might figure out that there’s one thing you’re doing in marketing that generates a lot of bad quality leads, and then you can just stop doing that because it’s not worth it. The other thing is obviously you can ask things in the form when people sign up. You can probably determine some things just based on their IP. Right? If you know there’s certain countries in the world that we cannot service, then you could look up the IP of where people come from. You can look at the email. There’s a lot of times people that sign up with a business email address might be a higher quality for B2B product than somebody that signs up with their Hotmail address. There’s some clues and tells there. The other thing is if you’re reaching out, a lot of times people are just afraid to ask certain questions. I would encourage you, if you do reach out and do some selling through the phone to just qualify them up front. Don’t sell them. Don’t go into the demo showing them everything around the product. Take the first five minutes of the demo to reconfirm that they are a qualified opportunity and that your product actually could help them. If it doesn’t, then save them time and say, “You know what, I think we just discovered something really crucial. This is not going to work for you, and I want to be really respectful of your time. Here, I’m going to give you three recommendations of other products that might be good for you.” Instead of just doing a blind 60-minute demo and then asking them if they have any questions, and then 3 days later the third call you realize they don’t have the money or they have a use case that doesn’t work for you and all that. Yeah, try to figure out how to qualify your leads much earlier in the process to not be wasting so much time. Next question is a question from Adam. Adam says, “How should I think about starting getting leads through the web? I’m learning a lot more about SEO these days, but as I’m discovering this, it seems like it’s going to take a while before I see results through SEO. I’m open to advertising, but I don’t have a ton of money and a ton of experience in here.” Basically the question is, Adam is wondering how should I start marketing this thing? I could start doing SEO things, but it takes a lot of time. I could try to advertise, but I don’t have that much money and expertise. How do I get started with this?

 

[0:13:21]

Hiten Shah: Yeah, I would just say that SEO is definitely a longer term play. The first thing I would say is SEO really the right strategy for you? I think that’s the first question. There might be other things you can do. If you have limited money, then something like content marketing or using social media could actually be a much more better use of your time. If you do have a little bit of money, then I would actually recommend starting if you think SEO is going to work, start with paid ads on Facebook or Google and target specific demographics, specific keywords, specific persona. That’ll really help you get initial customers. Again, if you don’t have the money yet, then SEO might not be the best thing to start with. I’d probably start thinking about content whether it’s an email, newsletter, or a blog or something like that that you do.

 

[0:14:10]

Steli Efti: Yeah, I agree. Adam, if I were you I would listen again to the episode of how to get to your first 10 customers or take a look at the book of that segment, because what we talk about there is very much like the early non-scalable things you can do. Talk to you friends, your network, your neighbors, your ex-colleagues. Use social media, blog. Just do a bunch of work where you have to put up your sleeves and put in sweat equity to figure it out. Because all these more scalable ways of doing things, like doing massive SEO or paid acquisition, all that, that probably is going to just take a lot of time, take a lot of money, a lot of expertise you might not have. It’s also a few steps removed from the customer. In the early days, you should be as close to the customer as possible talking to them in person. Even if you’re building an online business, try to get insights, try to learn, understand the customer better. Over time as you establish that, you’re going to be able to spend more time, effort and money into really long term acquisition channels. All right, so next question is from Matthias. Matthias is running a company in a SaaS business in Brazil, and they’re selling software to the healthcare industry. He says that basically their main challenge is that they do have a product that once a hospital or clinic buys it, it does create a lot of value. It’s proven in the case studies and the numbers and all that. It seems to be it is very, very hard for them to sell these hospitals to try the solution. The question that Matthias has is what’s the best way for a new startup to educate and change the mindset and behavior of an entire market. They’re doing something super innovative in the healthcare world. They want to grow. They want to acquire customers, but they have to do some basic education and change a lot of the mindset before they’re even able to sell the product. For a lot of startups, that is a challenge where you don’t just sell your product and there’s a need and a problem people understand, but you have to educate people that there is a problem and get them convinced on that and then sell them your solution too. What are your tips? Where are your thoughts on that?

 

[0:16:40]

Hiten Shah: I think this is something where we can easily believe that we’re solving something so innovative that we have to educate people. That usually, in my experience, means that we haven’t really figured out what problem the product solved for people that is an existing problem. Because all products solve existing problems if they’re any good. I would spend more time figuring out why are people not adopting it. Why do they not understand it. The insights you will eventually get by asking those kind of questions is you’ll actually figure out where your innovative product solves the right problem for people. This is a common, common situation when people don’t go find the problem they need to solve first and instead just create an innovative solution.

 

[0:17:25]

Steli Efti: Yeah, it’s funny. Right? I would really try to examine the question, is it really that our customer needs to be reeducated, or is it that we just don’t know how to talk to them or don’t know how to present our solution to them in way that they understand and that makes sense to them. Then also just looking at the economics in general, I know that that was not the question, but I would just try to ask myself if we have a market that we have to educate before we can acquire them, can we afford this? Can we charge so much money and make so much money with these customers that the amount of marketing and sales effort that we’re going to invest in this to acquire customers will be worth it and we’ll have a positive ROI?

 

[0:18:21]

Hiten Shah: Yep. Yep, makes sense.

 

[0:18:23]

Steli Efti: All right, last question for the Q&A session today. This question could actually be a whole episode in itself. The question that Thomas asked, to summarize it, is basically that, hey, they did really well going from zero to their first customer, their first to 10, from 10 to 100. Once they hit 100 customers, it feels to them that they’re in a plateau. All the other milestones they were able to hit pretty quickly. They have been growing since they’ve hit 100, so it’s not like it’s still exactly at 100, but they’re not growing as fast as they did in the beginning. It’s very frustrating. It feels like they’re in this very slow progressing stage. He was asking, A, is this normal. Because we never talk about timing on these episodes. Right? How much time will it take you to get the first 10 customers, 100 or 1000. He’s like is it normal? Is it maybe that everybody once they hit 100 customers, they experience this plateau or this slow down effect, or is it something that we are messing up and we don’t understand it, but we need to change if we don’t realize it. I think there’s a grander theme here which is hitting a plateau, which is something a lot of businesses are getting into. You might want to answer his question about it, and if you think there’s more to it, this could be a good episode for the future.

 

[0:19:50]

Hiten Shah: Yeah. Time. Time is the biggest challenge in most things in life.

 

[0:19:59]

Steli Efti: Yeah.

 

[0:20:00]

Hiten Shah: I’m going to start by just saying damn, he nailed it. This is something we don’t talk about. I think you and I probably have some time to spend on time as an episode, and basically time in business and how you waste less time, but also how should you think about this. For me, it’s pretty simple. You’re not going to be able to figure out time unless you set some goals and targets and set how long you want to take for them and give it a shot. That’s all it boils down to. For me, a solution here isn’t like, “It should take you one month to get 100 customers.” The solution doesn’t work. Set a target, set a goal. Say in the next 3 months you’re going to get 100 customers. Right? That boils down to, if you count weekends, a little bit more than 1 new customer a day, and then do whatever you can to hit that cadence. Another way people do this is they just choose a weekly goal. They might even go as small as next week we’re going to get 10 more customers, and then they do everything they can to get it. This is a very good trick early on in a business when you really don’t have that many customers. That’s my best trick.

 

[0:21:09]

Steli Efti: Yeah, I love that. I think that’s super important. From the other perspective, I think if you ever get into the point where you feel like you’re in a funk or you’re plateauing, oftentimes it will point to the fact that either your saturated, that the certain growth vehicles or growth channels. Maybe you’re a really strong network and that helped in the beginning, but that is done now. There’s not much more you can get out of it. Maybe you have these winds that are just not scalable. That might be one problem. The original growth engines are just not roaring exponentially after 100, and you need to find out other channels of growth. It might be a team problem. There’s many different things that can happen. Usually when you plateau, it’s a signal that something needs to change in the business. A lot of times businesses what they do when things plateau is they just keep marching on, or even worse, doing more of the things that are not generating the results they want. I think that whenever you hit a plateau, it’s usually a really good time to step back, look at the big picture and ask what kind of change are we potentially resisting. What kind of fact or truth are we potentially ignoring. Because usually there is an insight, and once you unlock that, boom, you get to the next level and growth starts picking up again. Yeah, we should definitely do an episode on time and timing. It’s a super fascinating and crucial topic here. All right, so I think that’s it for this Q&A session for today. Again, we’re going to link in the show notes to the four dedicated podcast episodes that we did about all these four different milestones: getting to the first 10 customers, 100, 1000 and beyond. Also we’ll link to either the landing page where you can download the book, or as I said, the offer is always valid. [If it’s simpler 00:23:12], just shoot me an email at Steli@Close.io, and I’m just going to shoot the eBook back to you. That’s it from us for this week.

 

[0:23:25]

Hiten Shah: Bye.

[0:23:26]