@ycombinator's Group Partner Gustaf Alströmer @gustaf just presented to 10k+ @startupschool attendees about the "most common question from founders": 🙋🏽 how do I get my first customers? it's part of @startupschool week 4 📝 sharing my notes:

Gustaf will cover this topic for all kinds of companies - whether you're B2B or B2C. He's advised hundreds of companies on growth. This is a brand new talk with examples from recent YC companies. Highly actionable!

today's agenda doing things that don't scale sales (B2B and B2C) other ways of getting customers

the most important essay on this topic: do things that don't scale by @paulg about the early days of @airbnb a lot of would-be founders believe that startups take off or dont but actually startups take off because founders make them take off

many founders who haven't worked for a startup think that growth will take care of itself this is not true @gustaf got into growth after he realized that this is not true

great products are not magically discovered the founders who internalize this, are the ones who succeed

startups don't take off themselves they take off because founders manually recruit customers but many founders refuse to acknowledge it because it's difficult

avoid the temptation of focusing on new features when you should be doing things that don't scale realize that it comes down to you doing sales and wanting to succeed

here's a great visualisation most companies go through something like this timeline for startups

first you launch - on product hunt or hacker news that buzz wears off then you enter the trough of sorrow, where many companies give up and don't move fast enough some move fast enough - they release improvements and listen to users

or they become a victim of the crash of ineptitude those who avoid that have a chance at product market fit

if you don't know how to do sales, you have to learn it

like any skill, don't complicate it too much that'll make it more difficult than it needs to be let's simplify it: first, founders must learn to do sales and talk to customers

you can't know what to build OR sell if you can't understand you customers don't hire a sales team until you know how to do it yourself you won't know the product is bad unless you've tried selling it

learning sales is probably the easiest function to learn from zero many YC founders have done it and become good at it if you know the market and product then the customer will think of you as an expert

loving customer problems is infectious and they will be able to tell

Example 1 - @brexHQ W17 recruited from their own YC batch - customers who needed credit cards. they asked them what was the MVP and then signed them up. v1 was very simple - customers had a virtual credit card. manually onboarded each customer. didn't wait for an app.

this was what their first physical card looked like

and their email to batch mates it was a bit long but it worked

a great sales email: + should be short + clear language + address a problem + no HTML + mention you're the founder + social proof + link to website + call to action

the concept of a sales funnel, simplified in founder speak: 1/ make a list 2/ email them 3/ schedule demos 4/ give a price & close 5/ onboard your customers 6/ generative revenue 💰💰💰

when targeting your customers, there are some standard things to track - a lot of CRM software comes with that out of the box @gustaf recommends using a simple CRM solution you can outsource once you've defined a process

where to find your customers? try to get warm intros through people you know. + friends / personal network + co workers + people you don't know

if you spend time at a big company, then use that network - it's an advantage, use it go to where the people you want to sell to are hanging out - it could be @linkedin, @reddit or @discord in person events are great too but less common post COVID

most important advice: first customers should be your EASIEST this is not the time to bite off the hardest ones to close

make the process as easy as possible for you you don't have time to chase every lead you're so early, just pick the ones that are likely to close

find a way to figure out the easy ones: start with a big list of potential customers prioritize the ones that are giving answers that indicate that they may close don't be afraid to let go of customers that are unlikely to close take advantage of your network!

sell to startups is the easiest category - specifically if they sell software big companies have red tape and bureaucracy that slow you done startups are quick to make decisions that's why the recommend selling to startups at YC

another piece of advice - remember that most people are not early adopters. you have to bypass them you have to send hundreds of emails - not because most get upset - but because they just don't care and don't want to try something new

when he was at @airbnb he was an early adopter - he doesn't mind the risk of trying new things average outreach on linkedin will not hit an early adopter. you have to seek them out

charging - it's attractive for you to offer your product for free but if you don't charge then they are NOT A CUSTOMER and you DO NOT HAVE A COMPANY

customers paying you money is a sign of you providing real value figure out what the price should be if they don't want to pay then you should move on to the next customer fire the ones that don't fit

exceptions: money back guarantee (b2b) or free trial with credit card (b2c)

your first sales meeting should be mostly listening not pitching ask about their problems ask qualifying questions plan a clear next step

qualifying questions are important: what is the problem you're trying to solve? why is it important for you now? not in 6 months? do you pay for software that solves this problem now? are you the decision maker? or is it someone else? multiple?

end the meeting with a call for another meeting or some kind of commitment. make sure that happens in the meeting it's easier to ignore the request later if you send it by email

most founders get this wrong: working backwards from your goal with a sales funnel you have to understand that each step in the funnel has a drop off at the start, you don't know these conversion rates you need to be taking notes and tracking these conversation rates

his advice - use a simple CRM software that automatically tracks these conversion rates many founders hit a wall (the red example) and then conclude that they should move to marketing or some other tactic. that is the wrong conclusion.

a good summary of this lecture here:

this table summarizes different target groups for YC and non YC companies + their initial sales method

example email that led to a $72k/ year contract

another good one

founders don't send enough outreach because they're not working backwards from goals

there is another talk's worth of content on other sales methods but even if you end up like @airbnb growing through search, referrals, ads... those are end states they didn't start that way