- How do you get your
first 100 paying customers? Now I'll be honest, the first time I went
through this journey, it was a complete mess, I didn't really know what I was doing, but having gone through it multiple times and I'll explain what the
two different times were, I'm gonna walk you through
the three principles that I learned that if
you actually employ, you'll be able to get to your
first 100 paying customers a lot faster, intro. (upbeat music) What's up everybody,
welcome to Unstoppable, I'm TK on this channel, I
help SaaS founders like you accelerate your path to
the next stage of growth with an unstoppable strategy. If you are new to the channel, welcome, be sure to hit the subscribe
button and that bell icon, I drop an episode like
this three times a week, all with actionable strategies to help you grow your
SaaS business faster. If you are part of my SaaS
go-to-market coaching program, if you're part of this
community, welcome back, it's really great to see you over here. So I went through the first
100 customer journey twice at ToutApp, my last SaaS business. The first time was when
we got to 100 customers on our self-service business,
that's how we started off, as we started to grow, as
we raised venture capital, we started to go up market, we sold into mid-market and enterprise, and then we hit our first 100 customers under that side of the business, the sales-driven side of the business, and in both cases I learned a ton. And so I'm gonna walk you
through my three principles that you absolutely need
to learn, need to know as you're navigating this journey to your first 100 customers, and hopefully this will help
you navigate that path faster. So if you're excited to dig in, go ahead and smash up like button and let's go into the first
thing you need to know. Okay, so I put this into
a little spreadsheet and printed it out
because one of the things that you absolutely need to understand, and it's kind of obvious
when I pointed out, but we don't think about it
this way in the beginning, is there is a lot of different ways to get to 100 paying customers. So for example, with 100 customers and I printed out this little spreadsheet, so it's easy to kind of
illustrate the point, you can do 100 customers at $30 per month, that's what we did at ToutApp
on our self-service business. Salespeople were paying us $30 a month to use our sales engagement product, and at $30 a month, you
will get $3,000 per month with 100 customers, and you will have ARR, yearly recurring revenue, annual recurring revenue of $36,000. If you do 100 customers
paying $100 dollars a month, then you get to 120K ARR, if you do 1000, then you
get to 1.2 million ARR. So you can start to see 100 customers could mean a lot of
money for your business if your pricing model is right, and it's really, really
easy to forget that, you know, your pricing models
are really gonna dictate how quickly you're gonna grow. If you are trying to
bring on 100 customers and they're paying say even
$9 a month or $15 a month, you're gonna need a lot of customers to actually go through your
sales and marketing funnels and actually convert to paying you money. On the other hand, if you
actually kind of go down the list over here, let's just
say you have 100 customers paying you $500,000 per month, which is, I don't know
what you're selling, but if you figure that out, good for you, then you are at an incredible ARR, right? So why do I say this? The main reason I would say this, is the first principle I really learned, is you really gotta hone
in on what is the urgent and important problem that you're solving and what is the business
value that you're delivering, and based on that business value, you need to understand what
your pricing is going to be. If you are pricing at $30 a month, your path to 100 customers
is gonna be wildly different than if you are say
charging $10,000 a month. Now mind you, if you
just get eight customers at $10,000 per month, very quickly, you are already at a million ARR, and that means you can start
to think about your series A and, or even profitability. So what you charge is determined by the amount of business value
you're actually delivering, and so the more you can charge, the more your average
customer value is going to be, and the easier relatively it may be to actually get to your first million ARR, which is really the goal of this, right? So the first principle here
is just kind of do the math, on what your pricing model is gonna be, how do you actually drive up that price so that you actually need fewer customers to hit escape velocity,
that million, 2 million ARR. Now you wanna get to 100 customers and you're charging a very high ACV, it'll probably take you a much longer time because the more you charge, the longer the sales cycles are, the less you charge, the
shorter the sales cycles are, or rather if there is no sales cycle, it's more of a marketing process, but you just need more volume of people. So there's no perfect answer to this, you've just gotta find out
what is the business value you're delivering and what your pricing is and how do you optimize for that, because that will determine
everything else that you do. Now, if you are thinking
about your pricing model, you're not quite happy
with your pricing model, you're starting to realize, oh okay, 100 paying customers or a
million ARR or 3 million ARR or whatever the goal is right now for you, we need to figure out what this row is and how we should charge. You can check out this video
I did on pricing strategy, you don't have to go right
now, I'll link to it below, but you should check
it out right after this because if you get your pricing right, and you actually optimize
how much you're charging, everything's gonna become
a lot easier for you. So once you've done that, really the second thing you
really have to get sorted for getting your first
100 paying customers is awareness, right? You wanna actually figure out
awareness, how that works. Now there's a small caveat here, there's like almost a little
dotted line over here, you need to make sure your
product strategy is right. So every SaaS business
essentially has three pillars, there's market, product and go-to-market. The market has urgent
and important problem, the product solves that problem, the go-to-market actually gets
people to get understand it, see it, and buy, right? So you wanna make sure if you're
gonna get to 100 customers, you probably need to make sure
that your product is solid, you're solving this problem
in a compelling way, customers are able to
activate, like all of that, so that's kind of like a,
kind of an assumption here to get to the 100 paying customers. And you may not be perfect
for your first five customers, but you need to keep
focused on that to make sure customers are successful
using your product, otherwise all this other
stuff you're gonna do to get more attention and get more people
checking out your product, they won't stay, and
so then it won't work. So product is important, but I didn't wanna go into
details on that on this video, I'll probably cover that in another video if you guys are interested,
let me know in the comments. The second thing that you
really need to figure out, is based on how much sure charging and who your customers are, how are you gonna get awareness for these 100 paying customers? Now, generally speaking, if you're driving a sales-driven process, your conversion rate
is gonna be roughly 20% from an opportunity, which means that, out of all the opportunities
that get created, 20% of them will close
to become customers. So the number of leads or
users you're gonna need is a much higher number, so you will probably wanna
start to do the math on, all right, how many leads do we need to actually generate 100 customers if our close rate is 20%? If you're doing more of
a self-service business, ToutApp, for example,
converted users to paid at 8%, so if new users signed
up and started a trial in the self-service business, 8% of them would actually
swipe their credit card at $30 a month. And so we actually kind
of knew how many leads our users would have to generate for that side of the funnel. So you'll wanna start to understand, all right, how many leads do we need? How many users do we need to generate to get to our goal of 100 customers? And based on that, you'll wanna figure out how to drive awareness with these people. Now, in this channel, I've done
a bunch of different videos on how to get awareness,
but for ToutApp for example, in both the self-service business and the sales-driven business, we followed a very specific
formula for driving awareness. We started with communities and social, we were selling to salespeople, so we said, okay, where are
salespeople hanging out? They're hanging out on LinkedIn, they're hanging out in
groups at that time, LinkedIn had groups, so
there were physical meetups, there was AiSP, it was an association where they held meetups, so we hooked into those communities and on social to drive inbound
demand into our funnel. The second thing we did
is we found influencers. Now influencers typically you
think of Instagram models, I'm not talking about
that unless you'd B2C, but I focused on B2B, and
B2B in every industry, there's actually
tastemakers, there's experts, there's trainers, and what we found, was there was a huge
number of sales trainers. There were people talking
about where sales is going, how to do sales effectively,
and so we actually hit them up, we gave them our manifesto and said, hey, here's what we're doing,
here's why this is important, we'd love for you to incorporate
this into your training, talk about this, give our
manifesto out for free and also refer us, and we'll
give you advisory shares for doing that, and that
was a really great way to drive growth because we had people that were already hooked
into our customers, training our customers
to actually recommend us, and it created this big movement
around sales engagement, sales acceleration, whatever, we went through different
names in the early days, it's sales engagement now. The third thing we did was
we knew our ideal customers were also hanging out in marketplaces, every sales person had a CRM, and so we'd pick the top
three CRMs that we could find that had marketplaces and we went to them, again, either got listed
on their marketplace, or went approached them and said, hey, here's our manifesto, can you share it with your customers, we're totally complimentary, and that allowed us to
actually get users as well. Once these three started to work, honestly these three
things really drove growth for our self-service business. Then we made the shift, we
raised our series then we said, okay, we need to do more outbound, and the reason we wanted to outbound, is we revamped our ideal customer profile, we knew we wanted to go
after larger customers, we didn't wanna wait for
sales people to discover us, we wanted to go after large teams, so we made our list of dream
100 customers we wanna have, and we actually spun up outbound. We did cold calling, cold emailing, and we started reaching
out to these people, again, we give them our manifesto, we shipped them a copy of our books and then called them up
and emailed them and said, hey, let's talk about,
this is really important, you need to make this
transformation for your sales teams and that got growth going as well. And then finally, all the way at the end, once all of these things
were were humming, we had honed in on our message, we honed in on our manifesto, we honed in on our ideal customer profile, and that's when we turned on ads, but truly we didn't spend a lot on ads, most of our demand, for both businesses, getting to 100 customers came
through these two things. So that's the first two things
you really wanna hone in on to get to your first 100
customers, that's what we did, in both businesses that we built, the self-service business and the mid-market enterprise business. You need to make sure you
get your pricing right, because there's different ways of getting to 100 customers, and it's gonna be different based on what your pricing is, right? So get your pricing right, figure out how much business
value you're driving. And one thing I talk about in
this channel all the time is, we tend to under charge for our products, we just do because we built it ourselves, we're artists in a way,
we undercharge for it, so you really wanna figure out how you can charge more and drive more, I'll link to that video below,
around pricing strategy, you should definitely check
that out after this video. And then second figure out which ways you can actually drive awareness around what you guys are doing, starting to build that trust, starting to get your brand out there, starting to educate the market and that way they enter
and become leads or users, and then essentially
go through your funnel. Now, before I go into the third piece, there's an important third lesson learned, third principle here, let me
just pause here for a second. If you're starting to
see the value in this, on just approaching 100 users
on a very principled way, can I just get a yes
in the comments below, that way I know from you, and it just means a lot to our team when we hear from you
and share any thoughts, insights, or questions
you have around this. Also, if you are building
out your SaaS business, if you're looking to drive growth, you're trying to get your
pricing strategy down, you're trying to get
your go-to-market down, you're trying to figure
how to drive awareness, I have my five point SaaS growth guide, I'll tell you more about
it at the end of this video and I'll link to it below as well. Now let's go to principle number
three, so here's the thing, the third thing is,
you need to figure out, are you marketing-driven or sales-driven? So here's the thing, there's
a very big difference between these two segments. So the first segment you have is this guy, and the second you have is this guy. Up to $1000, you can probably
get away without a sales team, if you're charging $1000 per month, it's very likely you can get away without having a sales team. In fact, you shouldn't have a sales team, if you're charging anything
less than 10K a month, or maybe even 5K a month. The reason is once you add up your customer acquisition cost,
which is your sales person, maybe an SDR, your ads,
your marketing budget, the amount of money you close on each deal is not gonna be profitable for you, after you pay out commission, essentially pay your
customer acquisition costs, so you'll lose a lot of money. So it's super important if you are $1000 or less, you have to figure out how
to be more marketing-driven. You have to figure out a way, so you can actually have
the product, start a trial and people can actually
get through the product and can start getting used, and then they'll swipe their credit card, and maybe there'll be a
customer success person that helps a whole bunch of
these smaller users at scale, but if you start to put
salespeople and humans over here, then your economics are gonna
be completely out of whack. So it's super important
for you to understand if you are $1000 or less, you're more gonna be
product-driven, marketing-driven. If you are $10,000, $50,000, $100,000, whatever you're charging per month, if it's in thousands of dollars, then you're gonna need sales, they're gonna wanna talk to a human before they swipe their credit card. They'll go through an entire process, there's gonna be multiple stakeholders, and so you'll wanna
make sure you understand which segment you're in. And the truth is this
decision around your pricing, it seems a little benign, but it's gonna really set the stage of what your go-to-market
machine is gonna look like, it's gonna set the stage
for how much funding you're gonna have to do,
because these two models have different funding requirements, it's gonna set the stage
on what your homepage says. So I did a whole video on sales-driven versus marketing-driven, do you have a top to sales button or a star trial button on your homepage? And a whole video on this decision, it's an important decision, so
you can check that out here, I'll also link to it below so you can check it after the video. So that's the third
thing as you're driving to your 100 users, like first, we got super purposeful about the pricing, we knew how much value we were driving. We knew for salespeople,
$1 a day, $30 a month is nothing compared to them
getting commission on a deal, so it's like, hey, let's help them, and they were happy to pay it. And we knew that for
our entire sales teams, if their average deal size was 25K and our entire platform cost 50K, then we knew that they would buy it because even if they got two
extra deals, they'd break even, but they're gonna get a lot more on that because they're gonna increase
the product productivity and the success rate for every sales rep. So our pricing kind of set the tone for the self-service business
and the enterprise business. Then you wanna figure out how
to actually drive awareness, you need the right messaging,
you need a manifesto, I talk about manifestos
a lot in this channel, we talk more about that
inside the growth guide that you can get for free and
you need to drive awareness, and once you drive awareness, people will see you,
you'll drive momentum, they'll recognize your brand,
they'll start to trust you, and then based on that, you'll enter them into your sales process. And these are the three principles that I really learned to distill, now whenever I look at a SaaS business, if someone's part of my SaaS
go-to-market coaching program, we're building out a go-to-market machine to help them grow faster, these are three things
we really, really look at because this sets the table,
it sets a clear strategy on what type of SaaS
business you're building, and then from there,
it becomes a lot easier to do all the other things. So now you know, what
are the three principles you absolutely need to internalize, solve and address as you're driving to your first 100 paying customers. And obviously there's very different ways to get to 100, depends on the
strategy on your business, so hopefully you got value,
if you did get value, be sure to smash that like
button if you haven't already. Now I do videos like
this three times a week with actionable strategies,
actionable insights from my own experience
in building, scaling, executing SaaS businesses,
I do it three times a week, so be sure to hit the subscribe
button and that bell icon, if you haven't already. And lastly, if you're
building a SaaS business, you're looking to scale
it, if you wanna go faster, I invite you to download my five-point startup growth strategy guide. It's completely free, and in it, I go into much more details on the exact strategies you need to adopt to drive your SaaS business faster, to accelerate the growth. You can go to getunstoppable.com/strategy, or you can just follow the
link below, either works. Also a link below to the
pricing strategy video, and I'll also link below
to the sales-driven versus marketing-driven video, and that way you can
check those out as well. Okay, so I think we covered everything, that's all I have for you guys today, I wanna thank you again for watching, by the way, if you got value, please share this video as
well with your co-founder or your team, a fellow SaaS founder, if you're part of a WhatsApp
group or Slack group with other SaaS founders,
please share this video, it will mean the world to me and my team, we put a lot of effort into these videos. And remember everyone needs
a strategy for their life and their business, but
when you are with us, yours is gonna be unstoppable. I'm TK, and I'll see
you in the next episode. (soft music) Then you aren't gonna be, oops sorry. Thank you for watching, and I wanna thank you for, all right, that's weird.
