- How do you get your first 100 paying customers?
Now I'll be honest,
the first time I went through this journey,
it was a complete mess,
I didn't really know what I was doing,
but having gone through it multiple times
and I'll explain what the two different times were,
I'm gonna walk you through the three principles
that I learned that if you actually employ,
you'll be able to get to your first 100 paying customers
a lot faster, intro.
(upbeat music)
What's up everybody, welcome to Unstoppable,
I'm TK on this channel, I help SaaS founders like you
accelerate your path to the next stage of growth
with an unstoppable strategy.
If you are new to the channel, welcome,
be sure to hit the subscribe button and that bell icon,
I drop an episode like this three times a week,
all with actionable strategies
to help you grow your SaaS business faster.
If you are part of my SaaS go-to-market coaching program,
if you're part of this community, welcome back,
it's really great to see you over here.
So I went through the first 100 customer journey twice
at ToutApp, my last SaaS business.
The first time was when we got to 100 customers
on our self-service business, that's how we started off,
as we started to grow, as we raised venture capital,
we started to go up market,
we sold into mid-market and enterprise,
and then we hit our first 100 customers
under that side of the business,
the sales-driven side of the business,
and in both cases I learned a ton.
And so I'm gonna walk you through my three principles
that you absolutely need to learn, need to know
as you're navigating this journey
to your first 100 customers,
and hopefully this will help you navigate that path faster.
So if you're excited to dig in,
go ahead and smash up like button
and let's go into the first thing you need to know.
Okay, so I put this into a little spreadsheet
and printed it out because one of the things
that you absolutely need to understand,
and it's kind of obvious when I pointed out,
but we don't think about it this way in the beginning,
is there is a lot of different ways
to get to 100 paying customers.
So for example, with 100 customers
and I printed out this little spreadsheet,
so it's easy to kind of illustrate the point,
you can do 100 customers at $30 per month,
that's what we did at ToutApp on our self-service business.
Salespeople were paying us $30 a month
to use our sales engagement product,
and at $30 a month, you will get $3,000 per month
with 100 customers, and you will have ARR,
yearly recurring revenue,
annual recurring revenue of $36,000.
If you do 100 customers paying $100 dollars a month,
then you get to 120K ARR,
if you do 1000, then you get to 1.2 million ARR.
So you can start to see 100 customers
could mean a lot of money for your business
if your pricing model is right,
and it's really, really easy to forget that,
you know, your pricing models are really gonna dictate
how quickly you're gonna grow.
If you are trying to bring on 100 customers
and they're paying say even $9 a month or $15 a month,
you're gonna need a lot of customers
to actually go through your sales and marketing funnels
and actually convert to paying you money.
On the other hand, if you actually kind of go down
the list over here, let's just say you have 100 customers
paying you $500,000 per month,
which is, I don't know what you're selling,
but if you figure that out, good for you,
then you are at an incredible ARR, right?
So why do I say this?
The main reason I would say this,
is the first principle I really learned,
is you really gotta hone in on what is the urgent
and important problem that you're solving
and what is the business value that you're delivering,
and based on that business value,
you need to understand what your pricing is going to be.
If you are pricing at $30 a month,
your path to 100 customers is gonna be wildly different
than if you are say charging $10,000 a month.
Now mind you, if you just get eight customers
at $10,000 per month, very quickly,
you are already at a million ARR,
and that means you can start to think about your series A
and, or even profitability.
So what you charge is determined by
the amount of business value you're actually delivering,
and so the more you can charge,
the more your average customer value is going to be,
and the easier relatively it may be
to actually get to your first million ARR,
which is really the goal of this, right?
So the first principle here is just kind of do the math,
on what your pricing model is gonna be,
how do you actually drive up that price
so that you actually need fewer customers
to hit escape velocity, that million, 2 million ARR.
Now you wanna get to 100 customers
and you're charging a very high ACV,
it'll probably take you a much longer time
because the more you charge,
the longer the sales cycles are,
the less you charge, the shorter the sales cycles are,
or rather if there is no sales cycle,
it's more of a marketing process,
but you just need more volume of people.
So there's no perfect answer to this,
you've just gotta find out what is the business value
you're delivering and what your pricing is
and how do you optimize for that,
because that will determine everything else that you do.
Now, if you are thinking about your pricing model,
you're not quite happy with your pricing model,
you're starting to realize, oh okay,
100 paying customers or a million ARR or 3 million ARR
or whatever the goal is right now for you,
we need to figure out what this row is
and how we should charge.
You can check out this video I did on pricing strategy,
you don't have to go right now, I'll link to it below,
but you should check it out right after this
because if you get your pricing right,
and you actually optimize how much you're charging,
everything's gonna become a lot easier for you.
So once you've done that,
really the second thing you really have to get sorted
for getting your first 100 paying customers
is awareness, right?
You wanna actually figure out awareness, how that works.
Now there's a small caveat here,
there's like almost a little dotted line over here,
you need to make sure your product strategy is right.
So every SaaS business essentially has three pillars,
there's market, product and go-to-market.
The market has urgent and important problem,
the product solves that problem,
the go-to-market actually gets people to get understand it,
see it, and buy, right?
So you wanna make sure if you're gonna get to 100 customers,
you probably need to make sure that your product is solid,
you're solving this problem in a compelling way,
customers are able to activate, like all of that,
so that's kind of like a, kind of an assumption here
to get to the 100 paying customers.
And you may not be perfect for your first five customers,
but you need to keep focused on that to make sure
customers are successful using your product,
otherwise all this other stuff you're gonna do
to get more attention
and get more people checking out your product,
they won't stay, and so then it won't work.
So product is important,
but I didn't wanna go into details on that on this video,
I'll probably cover that in another video
if you guys are interested, let me know in the comments.
The second thing that you really need to figure out,
is based on how much sure charging
and who your customers are,
how are you gonna get awareness
for these 100 paying customers?
Now, generally speaking,
if you're driving a sales-driven process,
your conversion rate is gonna be roughly 20%
from an opportunity, which means that,
out of all the opportunities that get created,
20% of them will close to become customers.
So the number of leads or users you're gonna need
is a much higher number,
so you will probably wanna start to do the math on,
all right, how many leads do we need
to actually generate 100 customers
if our close rate is 20%?
If you're doing more of a self-service business,
ToutApp, for example, converted users to paid at 8%,
so if new users signed up and started a trial
in the self-service business,
8% of them would actually swipe their credit card
at $30 a month.
And so we actually kind of knew how many leads
our users would have to generate
for that side of the funnel.
So you'll wanna start to understand,
all right, how many leads do we need?
How many users do we need to generate
to get to our goal of 100 customers?
And based on that, you'll wanna figure out
how to drive awareness with these people.
Now, in this channel, I've done a bunch of different videos
on how to get awareness, but for ToutApp for example,
in both the self-service business
and the sales-driven business,
we followed a very specific formula for driving awareness.
We started with communities and social,
we were selling to salespeople,
so we said, okay, where are salespeople hanging out?
They're hanging out on LinkedIn,
they're hanging out in groups at that time,
LinkedIn had groups, so there were physical meetups,
there was AiSP, it was an association
where they held meetups,
so we hooked into those communities
and on social to drive inbound demand into our funnel.
The second thing we did is we found influencers.
Now influencers typically you think of Instagram models,
I'm not talking about that unless you'd B2C,
but I focused on B2B, and B2B in every industry,
there's actually tastemakers, there's experts,
there's trainers, and what we found,
was there was a huge number of sales trainers.
There were people talking about where sales is going,
how to do sales effectively, and so we actually hit them up,
we gave them our manifesto and said,
hey, here's what we're doing, here's why this is important,
we'd love for you to incorporate this into your training,
talk about this, give our manifesto out for free
and also refer us, and we'll give you advisory shares
for doing that, and that was a really great way
to drive growth because we had people
that were already hooked into our customers,
training our customers to actually recommend us,
and it created this big movement around sales engagement,
sales acceleration, whatever,
we went through different names in the early days,
it's sales engagement now.
The third thing we did was we knew our ideal customers
were also hanging out in marketplaces,
every sales person had a CRM,
and so we'd pick the top three CRMs that we could find
that had marketplaces and we went to them,
again, either got listed on their marketplace,
or went approached them and said,
hey, here's our manifesto,
can you share it with your customers,
we're totally complimentary,
and that allowed us to actually get users as well.
Once these three started to work,
honestly these three things really drove growth
for our self-service business.
Then we made the shift, we raised our series then we said,
okay, we need to do more outbound,
and the reason we wanted to outbound,
is we revamped our ideal customer profile,
we knew we wanted to go after larger customers,
we didn't wanna wait for sales people to discover us,
we wanted to go after large teams,
so we made our list of dream 100 customers we wanna have,
and we actually spun up outbound.
We did cold calling, cold emailing,
and we started reaching out to these people,
again, we give them our manifesto,
we shipped them a copy of our books
and then called them up and emailed them and said,
hey, let's talk about, this is really important,
you need to make this transformation for your sales teams
and that got growth going as well.
And then finally, all the way at the end,
once all of these things were were humming,
we had honed in on our message,
we honed in on our manifesto,
we honed in on our ideal customer profile,
and that's when we turned on ads,
but truly we didn't spend a lot on ads,
most of our demand, for both businesses,
getting to 100 customers came through these two things.
So that's the first two things you really wanna hone in on
to get to your first 100 customers, that's what we did,
in both businesses that we built,
the self-service business
and the mid-market enterprise business.
You need to make sure you get your pricing right,
because there's different ways
of getting to 100 customers,
and it's gonna be different based on
what your pricing is, right?
So get your pricing right,
figure out how much business value you're driving.
And one thing I talk about in this channel all the time is,
we tend to under charge for our products,
we just do because we built it ourselves,
we're artists in a way, we undercharge for it,
so you really wanna figure out
how you can charge more and drive more,
I'll link to that video below, around pricing strategy,
you should definitely check that out after this video.
And then second figure out which ways
you can actually drive awareness
around what you guys are doing,
starting to build that trust,
starting to get your brand out there,
starting to educate the market
and that way they enter and become leads or users,
and then essentially go through your funnel.
Now, before I go into the third piece,
there's an important third lesson learned,
third principle here, let me just pause here for a second.
If you're starting to see the value in this,
on just approaching 100 users on a very principled way,
can I just get a yes in the comments below,
that way I know from you,
and it just means a lot to our team
when we hear from you and share any thoughts,
insights, or questions you have around this.
Also, if you are building out your SaaS business,
if you're looking to drive growth,
you're trying to get your pricing strategy down,
you're trying to get your go-to-market down,
you're trying to figure how to drive awareness,
I have my five point SaaS growth guide,
I'll tell you more about it at the end of this video
and I'll link to it below as well.
Now let's go to principle number three, so here's the thing,
the third thing is, you need to figure out,
are you marketing-driven or sales-driven?
So here's the thing, there's a very big difference between
these two segments.
So the first segment you have is this guy,
and the second you have is this guy.
Up to $1000, you can probably get away without a sales team,
if you're charging $1000 per month,
it's very likely you can get away
without having a sales team.
In fact, you shouldn't have a sales team,
if you're charging anything less than 10K a month,
or maybe even 5K a month.
The reason is once you add up
your customer acquisition cost, which is your sales person,
maybe an SDR, your ads, your marketing budget,
the amount of money you close on each deal
is not gonna be profitable for you,
after you pay out commission,
essentially pay your customer acquisition costs,
so you'll lose a lot of money.
So it's super important
if you are $1000 or less,
you have to figure out how to be more marketing-driven.
You have to figure out a way,
so you can actually have the product, start a trial
and people can actually get through the product
and can start getting used,
and then they'll swipe their credit card,
and maybe there'll be a customer success person
that helps a whole bunch of these smaller users at scale,
but if you start to put salespeople and humans over here,
then your economics are gonna be completely out of whack.
So it's super important for you to understand
if you are $1000 or less,
you're more gonna be product-driven, marketing-driven.
If you are $10,000, $50,000, $100,000,
whatever you're charging per month,
if it's in thousands of dollars,
then you're gonna need sales,
they're gonna wanna talk to a human
before they swipe their credit card.
They'll go through an entire process,
there's gonna be multiple stakeholders,
and so you'll wanna make sure you understand
which segment you're in.
And the truth is this decision around your pricing,
it seems a little benign,
but it's gonna really set the stage
of what your go-to-market machine is gonna look like,
it's gonna set the stage for how much funding
you're gonna have to do, because these two models
have different funding requirements,
it's gonna set the stage on what your homepage says.
So I did a whole video on sales-driven
versus marketing-driven,
do you have a top to sales button
or a star trial button on your homepage?
And a whole video on this decision,
it's an important decision, so you can check that out here,
I'll also link to it below
so you can check it after the video.
So that's the third thing as you're driving
to your 100 users, like first,
we got super purposeful about the pricing,
we knew how much value we were driving.
We knew for salespeople, $1 a day, $30 a month
is nothing compared to them getting commission on a deal,
so it's like, hey, let's help them,
and they were happy to pay it.
And we knew that for our entire sales teams,
if their average deal size was 25K
and our entire platform cost 50K,
then we knew that they would buy it
because even if they got two extra deals, they'd break even,
but they're gonna get a lot more on that
because they're gonna increase the product productivity
and the success rate for every sales rep.
So our pricing kind of set the tone
for the self-service business and the enterprise business.
Then you wanna figure out how to actually drive awareness,
you need the right messaging, you need a manifesto,
I talk about manifestos a lot in this channel,
we talk more about that inside the growth guide
that you can get for free and you need to drive awareness,
and once you drive awareness,
people will see you, you'll drive momentum,
they'll recognize your brand, they'll start to trust you,
and then based on that,
you'll enter them into your sales process.
And these are the three principles
that I really learned to distill,
now whenever I look at a SaaS business,
if someone's part of my SaaS go-to-market coaching program,
we're building out a go-to-market machine
to help them grow faster,
these are three things we really, really look at
because this sets the table, it sets a clear strategy
on what type of SaaS business you're building,
and then from there, it becomes a lot easier
to do all the other things.
So now you know, what are the three principles
you absolutely need to internalize,
solve and address as you're driving
to your first 100 paying customers.
And obviously there's very different ways
to get to 100, depends on the strategy on your business,
so hopefully you got value, if you did get value,
be sure to smash that like button if you haven't already.
Now I do videos like this three times a week
with actionable strategies, actionable insights
from my own experience in building, scaling,
executing SaaS businesses, I do it three times a week,
so be sure to hit the subscribe button and that bell icon,
if you haven't already.
And lastly, if you're building a SaaS business,
you're looking to scale it, if you wanna go faster,
I invite you to download my five-point
startup growth strategy guide.
It's completely free, and in it,
I go into much more details on
the exact strategies you need to adopt
to drive your SaaS business faster,
to accelerate the growth.
You can go to getunstoppable.com/strategy,
or you can just follow the link below, either works.
Also a link below to the pricing strategy video,
and I'll also link below to the sales-driven
versus marketing-driven video,
and that way you can check those out as well.
Okay, so I think we covered everything,
that's all I have for you guys today,
I wanna thank you again for watching,
by the way, if you got value,
please share this video as well with your co-founder
or your team, a fellow SaaS founder,
if you're part of a WhatsApp group or Slack group
with other SaaS founders, please share this video,
it will mean the world to me and my team,
we put a lot of effort into these videos.
And remember everyone needs a strategy for their life
and their business, but when you are with us,
yours is gonna be unstoppable.
I'm TK, and I'll see you in the next episode.
(soft music)
Then you aren't gonna be, oops sorry.
Thank you for watching,
and I wanna thank you for,
all right, that's weird.