How to get the first 10 paying customers for your devtool company (and other customer acquisition tips)

Aug 18, 2021

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  • Mo Shehu
    Mo Shehu

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Creating a product that people need and are willing to pay for is hard. At PostHog, it took us months to get to 10 paying customers — this after pivoting several times before we finally landed on product analytics. We tried a million things and took some hard knocks, so here are a few shortcuts to get to customer #10 faster. Tl;dr - talk to a million people, be hard on yourself regarding how much you’re going to put in, and be super selective about who you choose to engage.

Start with your inner circle

The first step was to mine LinkedIn for people with relevant job titles that James had worked with before. He also went through his entire contact list thinking about who could be a good fit and asking them if they wanted to try PostHog out. It’s a small world, and warm relationships are a great way to convert strangers into advocates of your product, so never burn bridges. Think about your coworkers at previous companies, the people you attended YC with, or even your old dorm room buddy. Anybody who’s ever had tangential contact with you or your work is fair game, and even if they don’t convert, they might know someone who’d be a good fit.

Join the right communities

Next, James looked for communities of people relevant to the roles we were targeting and showed up in real life to sell to them. We’re talking meetups, seminars, conferences, and pitch days in and around the Valley. You want to be present at these spots as much as possible so that you can hone your selling skills and gather vital feedback on how to improve your product.

Be laser-focused

The key is to select for only the most relevant prospects. If you sell product analytics as we do, for example, you want to reach out to developers and technically-focused founders that crave insights into their product usage and traffic trends. Those founders live on Twitter, LinkedIn, Openland, Slack groups (like ours), GitHub, and hang out at local conferences. Go to those places, establish a presence, and start engaging. It’s much more effective to talk to 10 targeted prospects at a conference than cold emailing 100 random prospects you got from some shady lead generation agency.

Set goals

Also, set manageable goals for this stuff. While he was pounding the streets (and airwaves) of the Bay Area, James set a goal of 2 meetings a day, every day. This sounds minuscule, but that 2-hour daily investment netted him 10 highly targeted prospects in a week, 40 in a month, and 480 a year. Plus, each of those conversations unlocked 2 more people that he could speak to, so the benefits compounded. For a high-ticket product like ours, we only needed to close a handful of each month’s prospects to achieve meaningful growth.

Set one meeting in the morning and one in the afternoon — or if you’re like Tim, cluster all your meetings around the same time so you can carry the feedback of the first daily meeting into the next. To simplify this process even further, use Calendly and let your prospects pick a time that suits them best.

Frame each conversation properly

Depending on where you are in terms of product/market fit, it’s critically important to frame your conversations with every prospect in the right way. If you frame it as "I have an idea, can I get advice?", lots of people will respond - but not many will buy. Instead, apply the Mom Test to these calls to figure out if your business idea is a viable one. The basic steps of the Mom test are as follows:

  • Ask for specifics. Avoid questions like “Would you buy this product?” Those are vague and unproductive. Instead, ask them how they solved their problems and what other solutions they tried. E.g., “I wanted to touch on your point about struggling to track user flow on a single landing page — could you tell me more about that?”
  • Find the true motivation behind feature requests. Sure, they want you to add another widget to your app that might solve a problem — but why do they want that specific widget? How else could you accomplish the same task? E.g., “Sure, we can add a Google Analytics integration — but what exactly do you want to see from GA that would move the needle for you?”
  • Question the assumptions around your business. If you incorrectly assume something to be a pain point when it’s not, you’re setting yourself up for failure. The reverse is also true — the correct assumptions about a set of problems could prove lucrative for you and your investors. E.g., “I know I mentioned that we solve X, Y, and Z — are these actual problems you’re facing right now? If not, what’s the real issue you’re struggling with?”
  • Manage customer and product risk. Product risk involves asking: Can I build it? Can I grow it? Customer/market risk involves asking: Do they want it? Will they pay me? Are there lots of them? Trawl sites like ProductHunt and AppSumo to learn which features or products get the most upvotes or engagement - but recognize that desk research will only tell you so much. You still need to go out there and talk to potential customers.
  • Segment your customers. Not everybody will want to solve the same set of problems in the same way. A CTO, CMO, and developer all need data — but each of them needs analytics for different reasons. James’ job was to tailor the product experience to each of them. E.g., “What’s the one aspect of your business or role that you wish you had more insight into?” If they indicated they wanted more in-app analytics, he’d show them how to hook their app to PostHog and start collecting that data. If they wanted to track their web traffic instead, there was a way to do that in PostHog - and he’d highlight that instead. Personalization isn’t just a buzzword - it’s absolutely crucial when pitching.
  • Follow the money. B2B products require a different sales approach to B2C products, with the former involving several stakeholders and the latter typically just one. Know who controls the money and tailor your pitch to them. E.g., “Who would be the right person to speak to about this at your company? If not, would you be willing to make an intro?”

More ways to get your first few customers

We’ve discussed 6 ways we got to customer #10: mining previous workplaces, plumbing the phonebook, joining the right communities, setting daily meeting goals, filtering your prospects, and framing each conversation properly. Here are a few more to add to your toolbox.

Ask your friends, and their friends, and their friends

Depending on your network, your friends and their friends can be a great source of early customers for your product. Not only can they vouch for you when you’re not in the room, but they’ll essentially act as 24/7 customer acquisition machines for your product due to their proximity to (and hopefully support of) your product and team. Again, build bridges — they come in handy when trying to get a startup off the ground.

Blog or create content

Ads are pushy, but stories are compelling. Published content - whether written or spoken - gives investors and customers insight into how you develop your product, how you hire, how your pricing works, and other pertinent information. This is powerfully effective as good content attracts the kinds of people who want to work with you or for you.

Traffic is crucial to getting eyeballs on your product and driving subscriptions in the early days, so optimize your website for search and create relevant content that resonates with your users — don’t just write to pad a word count.

Writing is also a forcing function on your thinking process. Better writing leads to better thinking, which sharpens your communication skills and improves your product planning. Make it a habit for every member of your team (not just the founders) to contribute to your blog, YouTube channel, or online community periodically — once a month is good. They can write about some aspect of their role and share it with their networks to attract new customers and build their individual content portfolios.

At PostHog, we use our blog to tell our company story, announce new Product updates, and talk about startup life and culture - like with this post. Get on social media and connect with other founders in your space and potential customers. We’re on Twitter and LinkedIn - connect with us!

Join the right online communities

Being active in the right online communities gets you seen by the right crowd. A good rule of thumb is to go where problems are discussed online. Communities include GitHub, StackOverflow, Reddit, Quora, ProductHunt, and Slack communities are all great places to start. Engage with other members, help them solve their problems, and post about your product where appropriate. This is one of the highest-leverage tasks you can perform in the early days. Community visibility pays for itself many-fold down the line.

Send cold emails

Yes, it sucks, and you'll get rejected a lot - but you'll also get a few interested recipients that you can convert into paying users. There are a few ways to improve your odds of landing new customers via cold emails, including:

  • Write a killer headline: Your headline is 80% of the entire message. You want to go for a mixture of intrigue + directness + a clear call to action. Use tools like Headline Analyzer to test the best subject lines. E.g. “Verified results: 40% less in-game lag - chat Tuesday?”
  • Keep it short and sweet: Nobody wants to read a missive. Get straight to the point.
  • Write like a human: The more natural and conversational you sound, the more likely you are to get a response. At PostHog, we see a ton of cold emails each month because all emails sent to hey@posthog.com go to the entire team. Take it from us: a clear ask, short email, and good spelling and sentence structure all go a long way toward being taken seriously.
  • Tie your pitch to a specific problem they face: The more granular you can get regarding their pain points, the more likely you’ll get a positive response.
  • Close with a small, specific ask: This is the crux of the entire email - the action you want them to take. Is it to check out your demo video? Sign up for a free trial? Schedule a call during the week? Be specific - and limit your ask to one thing.

Cold emails are an art and a science — and you’d do well to master them if you want to scale your user acquisition efforts. Here’s a simple example:

Hi {name},

My name is James Hawkins, and I’ll keep this quick.

I’m the founder of a software tool that gives SaaS teams real-time analytics into every aspect of their product. It’s called PostHog, and I think you’ll like it based on your recent interview with Techcrunch about lacking visibility into user behavior.

If this is something your business needs right now, could we schedule a 15-minute demo next Tuesday (3 pm your time) for me to show you the product?

— James H

The above example is short, sweet, straightforward, and links to both the product’s website and the founder’s LinkedIn page. Those last two are important because the more you build out your online presence, the less you have to describe yourself or what you do in emails. Always let your product and brand speak for themselves.

Give away stuff for free

Free is the 2nd best word in the dictionary (right after ‘paid’) and giveaways can help lower the barrier to entry for new customers. You can offer free beta tester access, free trials, free merch for performing certain actions (like the PH swag we give our contributors), and free points, usage quotas, or extra features for a limited time. Be generous with your product in the early days — remember that you’re trying to convince strangers to take a chance on you and part with their cash for it. Give them a small taste now to hook them in for the long haul.

Keep the beta signups limited and invite-only

Scarcity is a powerful tool, and limiting access to a product for a limited time can boost signups significantly. Just ask Clubhouse, the online audio streaming app that crossed 2m users as of writing and raised $100m in funding after a protracted invite-only period of user acquisition. You can leverage network effects and virality to grow your early subscriber base in the same way.

Run ads

Lastly, you can run paid ads to acquire new users through social media and search channels. Facebook gives you access to 2.7 billion people, Twitter to 330 million users, Linkedin to 740 million users, and Instagram to 1.1 billion users. Google is another juggernaut that can expose your brand to new users through search and display ads, and you can run ads on other online websites like Reddit and Quora or offline venues around town. Your success with this approach is limited only by your budget and creativity.

The first 10 users are the hardest

Unless you’ve magically built a viral product that sells itself, early user acquisition will be challenging. The good news is that the next 10 users get easier to acquire than the first 10. Your efforts compound on themselves, so try as many approaches as you can and watch your customer base grow.

And because we’d be remiss if we didn’t plug our own product, you can track all that user activity, traffic, and revenue using PostHog’s product analytics suite. See the full list of features here and sign up for a free trial today.