A tech startup’s biggest challenge is acquiring new customers. This can be solved by creating the best product possible and ensuring your MVP is well-aligned to your ideal customer prospects (ICP).
Once you have a high-quality product/service that people want to buy, then it becomes easier for them to connect with your company through word of mouth and online marketing strategies.
Acquiring funding from investors will help grow and scale your business at an accelerated rate so you reach more potential consumers than ever while also having enough room in the budget to hire skilled tech workers who play important roles like web design and app development.
All the above are necessities, but if you’re just starting out, I recommend you keep it simple and not do all of this!
Why?
My sales experience has taught me that focusing on the customer and their needs is paramount to a successful business. It’s important for companies to not just prioritize user engagement, but also provide high-quality support when needed. By serving customers proactively, they will reward your company with loyalty and productivity in return.
Companies that prioritize customer satisfaction and loyalty tend to be more successful than those where it is not a focus. According to research, companies who put customers first see revenue 2.5 times faster than the industry average as well as 5x higher returns over 10 years.
Additionally, if you give your customers an experience they will remember positively (therefore likely becoming repeat buyers), there’s a likelihood of spending 140% more compared with those who didn’t have such an impression on them. ^2
As you grow your tech startup, focus on growing the number of customers that use your product. Start with just ten initially and then expand to one hundred when it is time to scale up. Revenue will come on its own!
Start with the tools and resources you have now
At the beginning of your business, you should find out what customers would want to buy from you and why. Surveys, BETA customers, direct outreach, etc. all work. Then build that product for them instead of going through a needless optimization process just so they can have it at an extremely low cost.
Wanting to be the next Uber is fine, but you can’t do it by doing what Uber does now. You need to follow in their footsteps when they were still new and inexperienced. That’s how you learn the skills that are necessary for your level of business development at this stage.
Before Uber found its footing, before the world knew them as a company that had grown to become an industry leader, they struggled too. They started where they were at – learning how to walk first then growing into something amazing.
There are many major barriers to starting a tech, SaaS business. For example, I have deep expertise in the tech market – this allows me to understand whether there’s enough demand for these products and if any problems exist that need solving.
Find a problem your startup can solve
A successful tech startup business can’t be one where you don’t make your customers happy. You need to fulfill their needs for them to feel satisfied. Before you give them the solution they require, though, it’s important to know what problem is making them unhappy – and this was exactly how many of today’s top companies became popular when they were still small businesses. These few companies investigated large groups or even entire market segments and identified unmet demands shared by everyone.
Customers want to have a positive, unique experience with your product or service. They’re not just looking for something that does what it’s supposed to–they expect you and the people they work with at your company to go above and beyond their expectations to provide them value from using/purchasing from you!
Uber started out by solving a very specific problem: people were having difficulties finding taxis at large events and concerts. This was when Uber first saw an opportunity to grow, as they offered something that no one else could provide in the area.^1
A billion-dollar business starts with 1% unsatisfied customers. Identifying this demographic and developing a product that satisfies their needs is the first step to creating your million (or even billion) dollar idea.
By focusing on neglected sectors ripe for disruption, startups can make sure they get their first customers. This will mean ripping out revenue streams from big businesses that aren’t being focused on as much anymore.
Make it easy for customers to like your product
If your product isn’t easy to use, it’s essentially useless. Even if you add on new features but don’t address design or user experience because of limited resources, all that work will be for nothing, and you’ll end up turning away customers instead of gaining them.
UX patterns are important in the early stages of product development because they ensure that you don’t lose customers and waste resources. If you neglect this area, there’s a greater chance someone will not use your services or platforms, or worst, believe that you should compensate them for the disservice your business gave.
Make it easy for customers to use your product
Product usage must be clear to customers, leading them towards a better understanding of how your product will benefit their needs. To ensure that users can easily access your offerings, you will need to include video tutorials, interactive guides, and tooltips. If your customer is frustrated with their experience of using the software, they might reject it.
By creating a different onboarding experience for each customer, the user’s first time using your product will be much more memorable. You can segment customers based on their level of expertise and then set up every type of user with their appropriate process to use when they start out.
The goal is to highlight how your business is better than the competitor. If you’re convincing people to switch over from their existing products, point out some benefits of switching and why they should do it.
If consumers are attached to a competitor’s product and are concerned about changing from what they are used to, address this by saying that current customers aren’t going through many changes because instead of making it seem too drastic or scary let consumers know why change isn’t as bad as they might think.
If you already have contacts in your industry, more than 50% of your problem is solved. Building good relationships takes a lot of time. Being connected with people who are open to helping and promoting your business will save you valuable time and money.
Hide your strengths behind weaknesses
When you first start a business, it’s not necessary to have every element perfect. Customers only need your company to meet their expectations and perform well. While being excellent from the beginning isn’t required, evolving is expected over time.
To make your business more persuasive, try not to show any vulnerabilities. Instead of revealing what you’re weak at, focus on telling people about the strengths that exist in your company and give examples for each one.
Airbnb was not able to provide customers with a large inventory of places-to-rent when they first started. To fix this, the company did not show any property listings and instead asked people for specific information that would be available within 24 hours.
In the past, this process allowed the company to acquire customers while saving on technology costs; however, their current method no longer works the same way as anyone can now easily book a house to rent online.
This situation demonstrates that though technology assists in speeding up business processes, it is not solely responsible for the change.
Entrepreneurs should consider opening their doors to open-minded individuals who are willing to support new businesses. These people tend to use services that aren’t readily available elsewhere, so catering to them will greatly benefit your business.
Essentially, once your product, service, or SaaS changes people’s lives for the better they will surely be willing to pay. Don’t worry if less than 10% of customers will leave companies within the first year, you probably won’t be big enough to hit the scale phase until later anyways.
Edward Golod
Further reading:
1. The Right Way to Get Your First 1,000 Customersomers
2. There is no better “growth hack” for SaaS than talking with your customers by Nichole Elizabeth DeMeré
3. Product Adoption Guide: How to Improve SaaS Customer Adoption by Nathan ALtadonna