First customers, visionaries and business models

Now that we have a prototype of sorts (plenty of internal testing still required), we are starting to shop the concept around to a number of prospects.This is our customer development phase. We have a product, now we need to find someone willing to use it.

When speaking to our first customers, we are trying very hard to resist selling anything other than the prototype. When asked “Can it do this?”, the answer is usually “Yes it will be able to do that in the future”, rather than “Yes, let me go away and add that on for you”.

Ultimately, we are trying to sell the customer what we have right now. If they are not interested, we move on until we find someone willing to accept our existing list of features.

It would be easy to come back from a customer visit, add all the features that they thought would be helpful and then revisit the same customer. We have decided not to do that for a number of reasons:

  1. The features we add now may not be what the majority of the market really wants.
  2. Adding features before we have actual customers doesn’t allow us to really test whether the product is going to be useful or not.
  3. The kind of customers we want at this stage of our development are not the kind of people who wait 6 years before buying an iPod. We need early adopters willing to take a chance. We want visionaries.

If in the next month or two we cannot find anyone willing to buy into the vision, well then we go back to the drawing board and add some more “must have” features. Until then, we keep looking.

We recently pitched a potential customer on the benefits of our software as an event management tool. They were looking to run a national charity event, and needed to progress from their existing manual process that had served them for the last 12 months.

We ended up missing out on the job due to price. The customer decided that their return on investment (ROI) over 3-4 years would be better served by paying a large amount of money upfront (with our competitors), than paying a small percentage for the life of the product (us).

We missed the job, but we learnt a lot about our potential customers. Do I really think this customer will still be using our competitors’ software in 4 years? No not really, but it is great to know that some customers are interested in their ROI over that kind of time frame.

So missing the job didn’t cause us to rush back to the office and instantly throw out our pricing structure. It simply increased our knowledge of our customer base, therefore getting us closer to landing the first one.

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