Why do customers buy a product or a service? How can you create a growth machine that finds those customers? Whether you are new to Lean Startup and Business Development frameworks, or a sales pro, the workshop will help you understand the anatomy of business development and growth. PART 1 In part 1 of the talk, we will provide you with overarching framework to think about your business, your product / market fit, and your customers, including the type of customers you are targeting: Whales, Elephants, Deers, Rabbits, Mices or Microbes and why that matters. We will also cover some systematic business development processes to help you find the right customers. PART 2 After the break, in part 2, we will have several business development mentors you can approach and consult with your business challenges. The talk is primarily aimed at businesses that are building a product, though most of the concepts can be applied to business who sell Services (their time).

1. YOUR NEXT TECH PARTNER
www.slash.co
Prepared for: STARTUP JUNGLE workshop, Cambodia
HOW TO GET
YOUR FIRST 100 CUSTOMERS?
Last updated 12 March 2018

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7. Getting your first 100 customers
through
Marketing and sales
7

8. 1
Business Models
2
Lean Startup
3
Growth
AGENDA
8

9. “People hire a product or
service to get a job done”
- Clayton Christensen
9

10. 10

11. 11

12. Are you in the product or in the
service business?
Service = sell time to solve a job
Product = sell a ‘thing’ that solves a job
12

13. www.slash.co
YOUR FIRST 100 CUSTOMERS
8 ways to build a
$100m business
Definition:
ARPA = Average Revenue per Account.
Average metric (ignores conversion rates, how active users are, churn rate etc)
13

14. Who are you hunting?
Flies?
Mice?
Rabbits?
Deers?
… or microbes ... or elephants? 14

15. 1
Business Models
2
Lean Startup
3
Growth
AGENDA
15

16. 16

17. 17

18. minimum viable product
18

19. Lean Startup Way
19

20. “Entrepreneurship in a lean
startup is a series of MVPs.
Each MVP is designed to
answer a specific
question” (hypothesis)
– Eric Ries
Minimum viable product
20

21. 21

22. 2 Key Assumptions
Value hypothesis
Tests whether a product or service really delivers value to
customers once they are using it.
Growth hypothesis
Tests how new customers will discover a product or service.
22

23. Value hypothesis
We believe that people want a platform to connect with their friends.
Growth hypothesis
We believe that Facebook can become a social network for
everyone, with growth driven by viral word-of-mouth.
Example Facebook
23

24. Focus:
1. State the top 3 problems
2. Customer prioritize problems, and add or rephrase problems
3. Have customer describe how they solve the problem today
Optional:
4. Very briefly describe how you might solve the problem
5. Would your approach solve their problem
6. Would they use your solution if it were free?
7. Would they pay $X/year?
8. Ask for referrals to other customers
Customer interview: problem validation
24

25. The search for a product-market
fit can be long and painful.
Be smart about it.
25

26. The Startup Curve
26

27. Bi-Polar Experience of Entrepreneurship
27

28. 28

29. Read up
29

30. 30

34. 34

35. 1
Business Models
2
Lean Startup
3
Growth
AGENDA
35

36. GROWTH IS WHAT YOU DO
36

37. PRODUCT + USERS
= GROWTH
37

38. MYTH: Product-driven businesses don’t need sales
Top 36 SaaS companies: for every $1 PRODUCT, $2 SALES & MARKETING
http://www.heavybit.com/library/video/benchmarks-for-xaas-businesses/
38

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YOUR FIRST 100 CUSTOMERS 3
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YOUR FIRST 100 CUSTOMERS 40
1. PAID – Buy users for less money than they earn you
2. VIRAL – A user brings you more users
3. STICKY – users never leave
3 WAYS TO GROW COMPANY

41. www.slash.co
YOUR FIRST 100 CUSTOMERS 41
Proven, but needs scale and lots of money
1. Sales people
2. Physical Stores
3. Search, display ads
4. PR and marketing
PAID GROWTH

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YOUR FIRST 100 CUSTOMERS 42
This is a product strategy.
Slow. Potentially huge.
VIRAL GROWTH

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YOUR FIRST 100 CUSTOMERS 43
VIRAL GROWTH

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YOUR FIRST 100 CUSTOMERS 44
1. You must have design and tech in founding team
2. Prioritize growth over everything (even revenue)
3. Virality must be core to your product
4. Metrics are KING
5. ‘Word of mouth’ is NOT a strategy (it’s a bonus)
VIRAL GROWTH

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YOUR FIRST 100 CUSTOMERS 4
5
STICKY GROWTH
“Once a customer shows up, they never leave”
STICKY GROWTH

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YOUR FIRST 100 CUSTOMERS 46
Product and channel centric.
Focus on retaining existing customers.
Can be cheap and fast.
Right option for 90% of the companies?
STICKY GROWTH

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YOUR FIRST 100 CUSTOMERS 47
1. RETENTION is everything
2. Current customers are more important than new
ones.
3. Get traffic and subscribers.
4. Give free gifts and value. Over-deliver.
5. Convert subscribers to paying customers.
6. Retain, up-sell, get referrals
STICKY GROWTH

48. Lifetime Value of Customer (LTC)
= revenue measured over 12 months
KEY METRICS
48

49. Customer Acquisition Cost (CAC)
= cost measured over 12 months
KEY METRICS
49

50. LTV / CAC > = 3X
CAC Payback <= 12 months
with:
LTC = Lifetime Value of Customer (typically measured over 12 months)
CAC = Customer Acquisition Cost
GUIDELINES FOR SUSTAINABLE BUSINESS
50

51. Getting your first 100 customers
through
Marketing and sales
51

52. Early adopters / evangelists
52

53. Get your first 100 early adopters
Characteristics of early adopters
They have actively been looking for a way to implement a solution
They have put together a piecemeal solution
They have or can obtain a budget to spend on a solution
Identify channels
• How are they currently solving the problem?
• Are any of these behavior externally observable? List behaviors.
• Define the right channels to start
GET OUT OF THE BUILDING!
53

54. Channels to find early adopters
1. Content Marketing
2. Biz Dev and partnerships
3. Referrals
4. Events
5. SEO (search engine optimisation)
6. Email
7. PR
8. Bloggers
9. Celebrity endorsements
10. Social Media
11. Competitor’s clients
12. Guérilla techniques
13. PPC (pay per click)
Later:
MVP:
54

55. www.slash.co
YOUR FIRST 100 CUSTOMERS
8 ways to build a
$100m business
Definition:
ARPA = Average Revenue per Account.
Average metric (ignores conversion rates, how active users are, churn rate etc)
55

57. YOUR FIRST 100 CUSTOMERS
HUNTING
MICROBES & FLIES
● Strategy:
○ Many active users to download +
subscribe your app.
○ Strategy #1: viral / social product (e.g
Instagram, Snap, Telegram etc)
○ Strategy #2: lots of User-Generated
Content (UGC) > lots of SEO > virality
(e.g Yelp, Brainly)
● Monetization: advertisement, data
● Examples:
○ Whatsapp: ~$0.1 ARPA / year
Microbe
$1’s ARPA
Flies
$10’s ARPA
57

59. YOUR FIRST 100 CUSTOMERS
HUNTING
MICE & RABBITS
Mice
$100’s ARPA
Rabbits
$1000’s ARPA
● MICE:
○ 1M users who spend ~$100/year, sign up
~10-20M users (depending on conversion)
○ Some VIRALITY (e.g social sharing, “powered by”)
○ Examples: EVERNOTE, MAILCHIMP
○ Maybe: e-commerce. But requires huge funding
to get 1M users.
● RABBITS:
○ Most international SaaS ($50-100/month ->
$1000/year). 100k paying users -> 500k-2M free
users or trial signups.
○ Usually little virality, and paid marketing
○ Growth? It is hard.
■ Inbound Marketing
■ OEM (get product distributed by big partners)
59

61. YOUR FIRST 100 CUSTOMERS
HUNTING
DEERS & ELEPHANTS
Deers
$10k’s ARPA
Elephants
$100k’s ARPA
● DEERS:
○ 10k customers @ 100k ARPA, with 100k business leads.
○ Similar to hunting rabbits. A good ‘inside sales’ (from
the office) force may support to grow!
○ Option to pay commission to channels.
○ The best deer hunters? Rabbit hunters who become
Deer hunters.
● ELEPHANTS:
○ Large enterprise clients (SalesForce, SuccessFactors etc)
○ You ‘only’ need 1000 customers with $100k spent.
○ 2 steps:
■ Good solution for big problem experienced by many
enterprise clients. Need a LOT of money for Product-
Market fit
■ Build enterprise field sales team. Requires millions to
finance the sales cycle
61

63. YOUR FIRST 100 CUSTOMERS
HUNTING
BRONTOSAURUSES
& WHALES
Brontosauruses
$10k’s ARPA
Whales
$100k’s ARPA
● BRONTOSAURUS:
○ 100 customers of $1M ARPA
○ Sales strategy! Example: Veeva and Workday
○ Strong background: 20+ years of experience selling
enterprise software, domain expertise and an extremely
strong network in your target industry. Otherwise, start
with smaller animals.
● WHALES:
○ VERY large enterprise or government clients
○ You only need 10 clients ... Unique solution, sales,
reputation!
○ Example: PALANTIR
63

64. Most common Cambodian hunting
strategies?
Flies and Mice for B2C?
Rabbits, Deers for B2B?
Why limit yourself to Cambodia?
… but that’s for another talk!
64

65. Getting your first 100 customers
through
Marketing and sales
65

66. #2 WHAT DO YOU
HUNT?
RECAP
#1 YOUR PRODUCT
MARKET FIT?
#3 YOUR GROWTH
ENGINE?
66

67. NEED HELP?
CONSULT OUR MENTORS
OFFICE HOURS:
after break, till 8pm
67

68. www.slash.co
YOUR FIRST 100 CUSTOMERS 6
8
CONTACT US
Andries De Vos, CEO
andries@slash.co , + 65 8428 1451