Your first 100 customers: 🔥The Fire Strategy
Your first 100 customers: 🔥The Fire Strategy
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🔥 The Fire Strategy
Finding your first 100 customers is a bit like starting a fire.
To start a fire you need
A source of heat
Tinder
Kindle
Logs
The source of heat needs to be intense. Holding a magnifying glass up to the sun intensifies the sun's heat and can create fire. Your product-market fit is your heat source, and building a product focused on specific segments is your magnifying glass.
Now you apply your heat source to tinder. Think dry leaves and shredded paper. Tinder is used to start a fire. It's potent, but it doesn't last long. The segment you choose to go-to-market is your tinder. The goal of a tinder is to start a fire, not sustain it. Similarly, the first segment you get traction with doesn't need to be the same one that scales you to $100M ARR. Tinder segments are synonymous with "innovators" and "early adopters" on the innovation adoption lifecycle. You must start here, but it’s not your final destination.
Once the tinder catches fire, your stack the kindle on top. Kindle is harder to catch on fire, but it lasts longer. Having customer validation and referrals from your tinder segment will help your kindle segment get on board. Without the credibility of those early adopters you won't have any stories to tell the early majority, and those new customers are more likely to need convincing before they sign on the dotted line.
Successfully igniting your go-to-market is akin to the chain reaction of starting a fire .
You don't start a fire by burning a log with a lighter, so why would you start your go-to-market by trying to win the late majority with an MVP?
Skipping stages is possible, but it requires A LOT more energy to get started. Instead think about how you can kick start a chain reaction of raving fans by narrowing your focus first and creating an intense amount of value for an smaller, well connected and underserved segment.
Just like with a chain reaction, unlocking each segment earns you the right to unlock the next one. The momentum will take you along for a ride, but if you skip these steps you’ll have to build the momentum from hard work and a ton of energy.
In the early stages founders need to focus on finding their tinder segment. For Facebook it was college students, they didn't launch to the masses at once.
In Geoffrey Moore's book "Crossing the Chasm" he gives the example of Documentum.
Documentum made it easier to manage and sign documents. They had a very strong product which they inherited after spinning out of Xerox, but experienced flat revenue growth for three years straight (around $2M a year). Remember, a good product doesn't always find go-to-market success.
They hired a new CEO who began right away by focusing on a Tinder segment. They went from $2 million in revenue, to $8 million, then to $25 million, then $45 million (and an IPO), and then $75 million.
They started with the regulatory affairs department of Fortune 500 pharmaceutical companies. There was only about 40 of them in the world. They went from a potential market of 'anyone who touched complex documents in all companies" to a market of under one thousand people on the planet.
Solving a pain with the largest impact
As Moore says, it's not about the size of the market, its about the amount of pain caused. You can solve a pain really well, but if the impact of that pain is negligible then your product will go no where.
Documentum's tinder segment experienced a pain that if solved, created significant value for their customers:
"This is the group that has to get the New Drug Approval applications submitted to the hundred or so different regulatory bodies around the world. The process does not start until patents are awarded. The patents have a seventeen-year life, and at the time Documentum was addressing the market, a successful patented drug generated on average about $400 million per year. Once the drug goes off patent, however, its economic returns plummet. Every day spent in the application process is a day of patent life wasted. Pharmaceutical companies were taking months to get their first application filed—not months to get it approved, months to get it submitted! That was because new drug applications range from 250,000 to 500,000 pages in length, and come from a myriad of sources" —Moore, Geoffrey A.. Crossing the Chasm,
So, Documentum found a Tinder segment, the regulatory affairs departments in Fortune 500 pharmaceutical companies, and then focused intensely on building a product with a super potent way to solve this segment's problems.
The laser focus on building PMF for this one segment meant that once the product was up to scratch, the entire segment bought Documentum. This wouldn't have been possible if they had focused on building a product to please several tinder segments at the same time.
The mistake I see too many founders making is going to market with a general product, with a general value proposition, to a general market.
Summary
Early stage go-to-market is about:
Finding the smallest segment
With the largest pain
Where you can build the best product
And then focusing all of your energy on that segment until the ember burn brightly and catches on like a chain reaction, spreading through your market like wild fire and scaling you to $100M+ and beyond.