Why Startups Love their Customers
June 7, 2012
Why Startups Love their Customers
I have a very unique perspective on the world of startups. I've built and sold a company, personally invest in startups, serve as a startup advisor and board member, work as an entrepreneur-in-residence at a VC firm, and I'm married to an entrepreneur. Plus, I'm now founder of a startup that helps other startups succeed. Despite being waist-deep in this culture, some of my biggest insights come from reading the words of other startup leaders. A few days ago in the terrific blog over at On Startups, guest poster, Paul DeJoe, wrote a piece on "What It's Like To Be The CEO: Revelation and Reflections."  I've read dozens of books and thousands of articles about life in a startup, but this is perhaps the most insightful perspective of what goes on inside the head of a founder. I felt one passage in particular to be very moving:
You feel like a parent to your customers in that they will never realize how much you love them and it is they who validate you are not crazy. You want to hug every one of them. They mean the World to you."
I remember selling to customers for the first time when I was a little boy. My family took a trip to the beach and my sister and I came back with a giant jar full of seashells. For some reason we decided to put up a card table on the front lawn and started a "Shell Sale" (say that 3 times fast!). Neighborhood kids suddenly appeared from nowhere on bikes and began handing us nickels, dimes and quarters. I was astounded by the rush of pleasure from seeing people happily pay me for what we had gathered. I was hooked on business and entrepreneurialism. Since then I've spent a career producing and selling. Most of this has involved me personally pitching a product or service to another businessperson. And even when I worked at P&G on Tide, which is bought by 50 million nameless, faceless "consumers" per year, I often read their individual letters, emails and discussion board posts to get some real-world feedback and keep my finger on the pulse of their needs and wants. But I have found that selling as a startup founder is a very different and deeper experience than working on a big brand or even in a traditional small business. As my hero Steve Blank describes in the short video below, startups are small businesses that aim to change the world... Selling Validates Your Bet on Changing the World When you aim to change the world, the odds are much longer than, say, opening a coffee shop or starting a consulting business. Not to denigrate these efforts at all, but startups represent completely new-to-the-world business models. Startups are a hypothesis, and the ability to convince customers to turn their dollars over to you for the first time is the ultimate test of your baby. Every time I win a new customer for the MVC Test I feel like a new burst of wind is in my sails. It is especially encouraging since my service really has no traditional competition or established budget to draw from--meaning that my customers are handing over "new money." Most have barely spoken with me, are already on shoestring budgets, and have no firm proof that my test output will deliver a ROI. My ability to convince them, and their happiness with the output (whether their MVC Test results are great, poor, or somewhere in between) makes me feel like I must be doing something right. This is the biggest reason why I believe most startups should begin life with a true business model, and actually charge people for the value that they are providing. There is simply nothing more powerful than market forces to hone your approach, and until you make money, you have no real market. You Gain Pleasure in Customers' Success The feeling of progress through customer acquisition motivates most startup leaders to provide impeccable levels of service. Since we feel a personal connection to our customers, and their patronage is positive feedback on our businesses, we want to do as much as possible to help them win. We begin to feel a symbiotic relationship and see our success linked to their success. I find that helping other startups succeed is 10-times more special than my previous role working with some of the largest companies in the world. Just last year I was working with the global CMO of a multi-billion-dollar consumer goods firm on a project critical for its long-term success. While it seemed sexy and was certainly an incredible challenge, I get so much more personal value working with startup founders. You see, this giant company (like most) was slow, bureaucratic, and likely to sail the current course no matter what strategy recommendations I came back with. This global CMO could fail and still move on to any number of high-salary positions somewhere else. It just wasn't personal. But working with startups is a much higher calling. These people are putting their life savings and family relationships on the line. And when you provide advice, they actually listen--and put it into action the next day! I probably work harder to craft my recommendations for startups paying the equivalent of 1% of the budget of those global CMOs, because it's personal for everyone involved. When they succeed, you feel like you had a real hand in their win. And they will often repay you with help and loyalty for life. There Really Are No "Bad" Customers Back when I was the client service leader at our digital agency, from time to time we would have a client that would put us through the ringer. I've had clients berate my team and I in public, threaten to fire us, and then go out of their way to bad-mouth us within their organizations. This can be extremely painful when you know that this can literally take food off your family's table, and seriously hurt the career of someone who really was at no fault. Whether it's a strategy consultant or a restaurant waiter, those who serve often become the scapegoats for someone else's screw up, low self-esteem or bad day. Everyone faces this at some point, but the true test comes from whether you can respond with emotional intelligence. I remember hearing about a competing ad agency that brought an old car to their parking lot one day, spray painted "CLIENTS" on the hood, and gave employees a chance to swing a sledgehammer at it to get their frustrations out. I often told this story to my staff when they were feeling at their lowest because of a challenging client. "There are no bad clients," I would repeat to my team, "They pay our salaries, and we must find a new way to crack their code." After all, the agency that pulled the sledgehammer stunt later fell off the map and became a shadow of its former self. Of course you should not aim to keep every customer. I've had to "fire" clients who treated our people unethically or refused to accept that we needed to run a profitable business, too. The latter issue is where most startups can be blinded by their love of customers. Those customers who angrily demand price or service at an unreasonable level are easy to cast aside, but we often miss the "nice" customers who simply don't contribute to the bottom line. I have a few customers that are unprofitable now and will likely never cover my investments in finding and serving them. But that's my fault. Each one is a learning experience--a chance for me to reflect, adapt, and get it right the next time. And if you provide the same, high level of service to an "unprofitable" customer you just might make up for the loss when they recommend you to a few dozen others in this increasingly small world. So I offer humble thanks to my customers, and pledge to continue a win-win relationship that leaves us all successful. And I hope you hug a customer today,too! Thank them for their support, trust and budgets--and don't forget about them when you hit the big time. You should learn more about the MVC Test here, and follow me on Twitter here. +Bob Gilbreath
Comments

2 Responses to Why Startups Love their Customers

  1. Kevin C. Cummins

    Bob.

    Great article.

    Clients to a startup or so much more than revenue, as Steve Blank will tell you time and time again….the customers should provide invaluable feedback on the product/service and shape the future deliverables.

    No wonder we love them.

    Kevin C. Cummins
    CEO, batterii

    Reply

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