The right buyers are those who genuinely need your solution and evaluate their investment in your … [+]
Clearly defining and identifying the first buyers is a critical step for early-stage startups. Your first buyers are the turning point of your startup from just an idea into a real venture with real customers. Besides validation and revenue, they participate in building an early network of customers who can draw subsequent business.
Technically, anyone who commits to your product early on counts as one of your first buyers. However, are all of your first customers the right buyers? To answer this question, ask why those customers committed. Do they really need your solution or are they supporting you? Are they buying the product or investing in you?
Support and investment are great and will keep pushing you forward, but they are not always in your startup’s favor in terms of validation and growth. No startup has ever maintained growth by primarily relying on support and not on value creation.
The right buyers are those who genuinely need your solution and evaluate their investment in your product just like any other purchasing decision they make. Here’s how to ensure that your first buyers are not just sympathizing but actually buying your value proposition.
1. They Want To Buy Your Solution
Sales and entrepreneurship go hand in hand. The best entrepreneurs are great salespeople. In the early stages of a startup, sales is a double-edged sword. You need to listen but also have to sell. Finding the balance is key.
Great salespeople can drive sales even for products that don’t exist. While revenue is one of your strongest validation signals, ensuring that your buyers are committing because they want to solve a problem is validation in its strongest form.
2. They Are On The Market For A Solution
Your first buyers have an urgent unresolved problem and they are not just aware of this problem, they have been actively seeking the best solution. This indicates an impartial assessment of your startup idea as people are already looking for a solution.
First and foremost, are there successful competing products? This is the first signal that the problem you are looking to solve is worth solving and can turn into a successful startup. Second, are competitors’ customers sharing their thoughts and experiences? If many of your competitors’ customers are expressing their dissatisfaction, you know it’s an important product for them.
Are those customers on the market for another solution? Your job is to interview your potential buyers, collect data and use public information to learn more about your target customers’ behavior and need for an alternative solution.
3. They Have Explored Alternatives Already
Have competing products failed to meet customer demand? Are you introducing a product in a market with limited options? How are your customers solving this problem today? You know it’s an urgent need when your buyers are tired of existing products and have created their own solution, whether it is by repurposing an existing product to solve a different problem or combining different products to get the job done.
For example, Excel can be used to solve countless problems. Many startups have created billions of dollars in market value just by introducing a solution that, at its core, is an Excel template.
Acquiring your first customers becomes significantly easier when you approach those who are already looking for your solution. This will not only help you differentiate between the supporters and the real buyers, but also attract real fans.
4. They Are Demanding
If your first buyers are only participating to support your venture, it is likely that their feedback will be vaguely encouraging, not always timely or in the desired format. The real buyers will get upset if your product doesn’t work or meet their needs. They will send you detailed comments, requests, and make sure they hear back from you.
Lastly, you should be able to clearly describe the demographic, psychographic, and behavioral attributes of your ideal buyers. While you may be targeting different segments, your buyers’ profile from each segment should be the same. This is a key indicator because next time you get a lead that doesn’t seem to fall under your ideal group profile, you should ask, are they supporters or a new group of ideal buyers?