One of the most crucial steps in building a startup is moving from merely talking to users to securing your first paying customers. Many founders mistakenly believe that having a great product is enough to ensure success. However, in the early stages, the founder’s direct involvement in selling, customer outreach, and iterative improvement is vital. This article draws insights from Y Combinator’s expert, focusing on how to bridge this gap, based on real-world examples and experiences from successful startups.
Do Things That Don’t Scale
Paul Graham, co-founder of Y Combinator, emphasized in his essay “Do Things That Don’t Scale” that in the early days, startups don’t take off by themselves — the founders made them take off. Airbnb is a prime example of this approach. Early-stage founders often believe that growth will take care of itself with a good product, but reality proves otherwise.
Airbnb’s founders, for example, spent a significant amount of time manually recruiting their first users, even personally going door to door to photograph hosts’ homes. This is the essence of doing things that don’t scale. Growth and traction don’t happen by merely writing more code or spending more time refining a product in isolation. Founders need to actively recruit customers and continuously refine their product with user feedback.
Why Founders Should Do Sales Themselves
Founders must be the ones doing sales in the beginning. Here’s why:
1. Understanding Customers
Engaging in direct sales allows founders to better understand the customer’s needs, concerns, and feedback. It is the quickest way to uncover whether the product fits the market’s requirements.
2. Ownership and Passion
Founders are more passionate about their product than any early employee or sales team. This enthusiasm can be contagious, making it easier to secure early customers.
3. Learning How to Sell
Sales is an iterative process. You won’t know what works until you start selling. By doing the selling themselves, founders learn how to pitch the product, adjust pricing, and identify the customers’ true pain points.
Take the example of Tony Xu from DoorDash, who led his company’s early sales efforts. He didn’t wait for a sales team to push DoorDash’s product; instead, he actively sought out restaurants to join the platform. Similarly, the Brex founders reached out to other startups in the YC community to secure their first customers by offering a product that met their specific needs.
Writing Effective Sales Emails
One of the most common ways for founders to begin their outreach is through sales emails. However, writing an effective sales email requires a few specific principles:
1. Keep It Short: Ideally, emails should be no more than six to eight sentences. The founders of Brex successfully onboarded their first customers by sending out concise and targeted emails, ensuring that their value proposition was clear and simple to grasp.
2. Use Clear Language: Avoid jargon and buzzwords. Speak plainly and focus on the benefits your product offers.
3. Address the Customer’s Problem: Show how your product solves the customer’s pain point. Brex, for example, targeted startups with a clear message — no personal guarantees were needed, which directly addressed a major pain point for their potential customers.
4. Plain Text Over HTML: Keep the email in plain text format. It should look personal, as if you wrote it for a friend. This builds trust.
5. End With a Call to Action: Every email should have a clear ask. Whether it’s to schedule a call or sign up for a demo, make sure your email directs the recipient to the next step.
The Sales Funnel: From Outreach to Onboarding
The sales process begins with prospecting, where the primary task is identifying potential customers. Founders can tap into various channels such as LinkedIn, emails, or personal networks to compile a list of leads. This step is all about building a pipeline of customers who may have a genuine interest in the product.
Engaging Prospects Through Outreach
After compiling a list of prospects, founders must actively engage them through outreach. This is typically done through direct communication methods like emails, LinkedIn messages, or phone calls. The goal is to capture the prospect’s attention with a message that speaks directly to their pain points and sparks interest in the product.
Demonstrating Value Through a Product Demo
When outreach generates interest, the next step is to schedule a product demo. During this demo, the founder showcases the product, provides a hands-on walkthrough, and answers any questions. This step is crucial as it allows the founder to clearly demonstrate how the product solves the customer’s specific problems.
Discussing Pricing: Validating Your Product’s Value
Once the demo is complete, it’s time to talk about pricing. Charging for the product early on is vital to validate its value in the eyes of the customer. Pricing discussions help founders understand the customer’s willingness to pay and ensure the product is perceived as a valuable solution.
Onboarding: Turning Buyers Into Long-Term Customers
After closing a sale, onboarding is the final yet essential step. Founders must guide customers through the product’s usage, ensuring they understand how to integrate it into their workflow. A successful onboarding process can significantly boost customer retention, turning one-time buyers into long-term advocates.
Charging Your First Customers
Offering your product for free or providing unpaid pilots might seem appealing, but it’s a mistake. If customers aren’t paying, they aren’t validating your product’s value. Even in early-stage B2B sales, offering a money-back guarantee is a far better approach than giving free trials. It establishes that the product is worth paying for and filters out customers who aren’t truly interested in the solution.
Founders often fear charging because they don’t want to hear “no.” However, a customer willing to pay — even a small amount — is more valuable than someone using your product for free. Charge from the start to build a sustainable business.
Work Backwards from Your Goals
Most founders underestimate the amount of outreach needed to close their first customers. If your goal is to land two paying customers, you must work backward through your sales funnel. For example, if you need to close two customers, you might need to do 10 demos, which requires sending 500 outreach emails.
Tracking this data allows founders to refine their approach, identify bottlenecks in the sales process, and ultimately improve conversion rates. Without this data, founders may prematurely conclude that sales isn’t working, leading them to pivot to other growth channels like marketing or referrals, which may not be as effective in the early stages.
It’s All About the Hustle
The success of an early-stage startup relies heavily on the founders’ willingness to hustle. As highlighted in this session, successful founders engage directly in sales, understand their customers, and are willing to do whatever it takes to get their product off the ground. Whether it’s manually recruiting users or sending hundreds of emails, the early days require effort that may not scale but is essential for long-term success.
