hatchconf customer discovery
TRANSCRIPT
HatchConf:
Customer Discovery
Ned Lilly, CEO, xTuple
On the Launch Pad• What you’ve heard so far• Idea, Funding, Business Model, Team
• So now all we need is . . . someone to buy this thing!
• So where do you start?
Your Circles• Let’s start with the obvious• Is it something you use yourself? (Eat your
own dogfood!)• Friends, family – anyone you know in the
business that could use your product/service. If you can’t ask them, you shouldn’t ask anyone else.
• Investors – anyone in the business willing to invest should certainly be willing to try your product (or help point you to someone who will).
The Importance of Beta
• Never design your product or service in a vacuum – identify “beta testers”
• Don’t expect them to pay – you need their input at least as much as they need your product
• But define the value proposition – free for some period of time, but they will have to pay later
xTuple’s experience• Built product with one initial
customer
• Got it to “good enough” – now what?
• Small “acquisition” of supposedly captive customers• Only works if they’re really captive!
Other Paths to #2, 3, 4
• Does beta customer #1 have colleagues in the same or related business?
• Don’t forget: They want you to succeed, it’s OK to ask for their help
• Identify communities of interest, opinion leaders
• Word of mouth is your best bet
Vertical or Horizontal?
• Would you rather have customers that are all pretty similar (own a niche)? …
• Or is there greater value in demonstrating a broader market appeal?
• You’ll need to choose one or the other.
Back to xTuple• We opted for horizontal – but it takes
longer, and is usually more expensive
• Freemium distribution model reduced our customer acquisition costs
• Now it’s humming, but it took 10 years!
The Virtues of Vertical
• More readily available customer lists (sort by industry, etc.)
• Trade groups, other marketing channels
• Word of mouth is easier within groups of common interest
Finally, a Culture Note
• Lesson learned: Everybody needs to sell!
• Get comfortable with that, or go do something else.
• Even when you hire dedicated sales people, you can never lose that focus.
• If you don’t have customers, you don’t have a business.
Conclusions• Eat your own dogfood• Friends, family, investors• Beta customer #1 – for feedback and
introductions to customers 2-4• Decide: vertical or horizontal• And remember, customers are
everyone’s job