How to Get Your First 1000 Customers
This early stage growth advice is probably useless, but here goes anyway.
This is a repost from an old article I wrote. Think of this as the Taylor’s Version while I reclaim my IP from Medium. So read this and imagine it’s 2022…
This growth advice is probably useless
Startup advice often takes the form of vague, unbearable, humble-bragging delivered in a series of tweets from people who reply to Elon like they grew up together. And when it’s not delivered in soundbites stolen from someone else, it’s lectured in short meetings with first year VCs who arrive late, leave early, and keep name-dropping founders they met (walked past) at WebSummit.
But apart from the genuinely useless stuff (Have you tried word of mouth?) the real reason growth advice doesn’t always land is because it’s just so different from one startup to the next.
If you get a few beers into anyone at an early stage startup, they’ll share the harsh truth which is that we’re all just wandering around aimlessly in the dark, desperately trying to not to look silly. It’s stressful. No wonder Peter Thiel gets blood transfusions from teenagers. I need some of that.
Growth is hard
My background is in product marketing. I’m not a growth marketer and I haven’t done marketing at an early stage startup before. So while I’ve had plenty of experience rolling out products at companies like Wise and Monzo, I’ve never done it from a standing start.
Learning how to grow has been a really uncomfortable experience for us, and for me personally. We made a lot of mistakes, made wrong assumptions, and measured our work in the wrong ways. We’ve been fortunate to experience lots of product love from early customers, so we discovered early on that the product was right, but that our approach to growth was wrong.
Tom Blomfield wrote a really detailed post about what growth looked like early on at Monzo. It’s so good, not because of how useful it might be for you, but because it debunks a lot of the mythology around their growth. “Insane word of mouth” is partly true, but not without dozens of somewhat successful or altogether failed growth experiments.
We got a lot of things right, but we didn’t get everything right. It’s impossible. So I’ll share what we’ve learned about growth, so that you can hopefully apply some of the same principles to your own startup.
What we’ve learned about growth
Yonder is a high research or ‘considered’ purchase
Credit cards are rarely impulse purchases. And honestly, they shouldn’t be. It’s important consumers spend time understanding the benefits, fees, and how they work so they can make informed decisions. Customers will read reviews online, go to your Instagram, check your LinkedIn, read articles, watch YouTube videos and speak to their friends before they decide what is right for them. It’s vital you understand these purchase journeys and build your strategy around supporting them.
And even before they think about researching your product, they’ll need to hear about it a lot. This is why brands spend a lot on advertising.
Focusing on one growth channel and ignoring everything else doesn’t work
This is the one bit of growth advice we got a lot. It’s all over Reforge, and honestly, it sounds quite reasonable. Resources are tight in a small team, so prioritisation makes sense. But you’ll find that it just isn’t enough. You need to try a lot of different things, fairly quickly, to continue to grow month on month.
We saw quite strong word of mouth early on and invested heavily into improving that experience for customers. But it just wasn’t enough. We needed to be testing and experimenting in order to work out what to do next and how to supplement what was already working.
Invest in both short term and long term growth
There is quite a bit of research out there around how many of potential customers are actually in market at any given time. We reckon it’s about 5% for us, meaning 95% of potential customers don’t need our product right now. This means that unlike many consumer products, it’s vital we build brand and awareness for when they do enter the market for a credit card. We need to focus more on making it clear what we do and what we stand for, rather than directly pushing people to sign up.
Brand building helps to create demand, earn share of market/voice, and help drive emotional attachment to your brand. Short term marketing captures that demand with more rational decision-making. Unsurprisingly, you need both.
Abandon your assumptions
This is really important. Don’t assume anything about growth until you start to see it for yourself. Don’t assume what CPA you may get, don’t assume what marketing channels may work, don’t assume that your growth will look or feel anything like any other product out there.
We wasted a lot of time trying to fit our thinking around growth to our assumptions. We assumed we would be able to acquire customers at a certain CPA. We assumed our product was so good people would sign up when they first heard about it. Your assumptions will lead you down the wrong path.
Here’s exactly where our first 1000 customers came from
This is sort of in chronological order, but some of it was simultaneous or happened over the course of the last six months. Order is important for the first 3–4, but after that it’s just how you prioritise them yourself. I’ll be as transparent as I can and add some thoughts as to how we did each part.
15 — Employees
Easy one for you here. Get your whole team signed up and using your product long before you tell anyone else about it.
100 — Close friends and family
You could break this down into two groups if you wanted. We initially did a ‘significant others’ or ‘best friends’ group which got us another 15–20 customers. You can then expand that out to 4–5 of your really, really good friends who will try it just to support you.
This is when it comes time to fire up WhatsApp and let everyone know. It’s okay to be shameless with people you know because most people want their friends, colleagues and acquaintances to succeed. Your conversion will be much lower for this group.
50 — Facebook groups and online forums
We had been quite involved in Facebook groups from the beginning. It’s where we found research participants. Be as honest as possible in these places, no one likes be sold too hard on something. We went with a “we’re Aussies and we made this product for other Aussies in London. Would love for you to give it a go if you’re interested” and it’s a much more honest.
One area where many startups do well is on Twitter. I can’t stand tech Twitter so I stay away from it, to the detriment of finding some early adopters. Worth it.
250 — press and media coverage
Once you max out everyone you know, and everyone your investors know and every contractor and partner you work with, it might be time to see if you can expand your awareness through some press campaign. This is infinitely easier if you are VC-backed and have raised some funding. Read my post below on how we approached this and how you can replicate our strategy. This was an important part of our plan because we really wanted tech early adopters, so getting coverage in places like Sifted and TechCrunch was important.
400 — Word of Mouth (paid and unpaid)
We were lucky to have quite strong word of mouth early on from our early adopters who were begging us for a referral code, even if there was no incentive. Some people just love sharing new products with their friends.
We then launched an unofficial referral program, where we created shortlinks for about 150 customers manually while we built a proper referral program in our app.
We eventually launched Yonderpasses, our referral program, and have since iterated it several times to make it easier and more effective when sharing with friends.
100 — Paid content and partnerships
This one may be a bit niche to our industry, but there’s some strategic value in working with content writers. We sponsored some posts on credit card points comparison sites like The Points Guy and God Save The Points. The benefit is two-fold; readers are always in market for new card so the conversion is quite strong (even if they’re not a sticky) and being covered on these sites is great for organic SEO and long term brand building. The coverage is a bit like a rubber stamp that you’re real and worth a look, and the content exists online forever. So whenever someone googles your brand these articles will pop up. They support potential customers on their purchase journey, because like I mentioned above, customers do a lot of research before they sign up.
We also worked with the dating app Thursday for a bit. Again we saw great awareness (our web traffic 10x one week!) and top of funnel interest but pretty poor conversion.
100 — Content
I broadly categorise content as anything we produce on the internet for free. Social media, LinkedIn posts, and anything else we produced. We really got our LinkedIn game sorted out early and we’ve had a lot of success there. If you’re transparently sharing your story, people will become interested in what you’re doing.
I had the whole team publishing content online and getting comfortable with building their voice. Our designer Craig wrote a banging piece on user research that got syndicated across some well-known design publications. This kind of stuff is free and great for employer brand even if it doesn’t drive much growth.
300 — Aggregators
Financial aggregators, websites that compare financial services, are an important growth channel for consumer financial products. We really underestimated how difficult and how much time it would take to get these working well for us. We’re live on a few sites now which helps to convert bottom of funnel customers with high intent and high eligibility.
150 — Pure, unadulterated hustle
There is no replacement for getting after it. We hustled so hard. We spoke at events, chatted people up at pubs, and told every person we ever met. We worked hard to convert people who we stuck or just didn’t make time for it. I’m really proud of the team for this, and I’d say there’s at least another 100 customers in other buckets you could put down to the hustle here. They don’t mention this kind of stuff in the Reforge growth courses, and there’s no replacement for it.
I remember bugging a friend multiple times to give it a try. Eventually he did, loved it, and referred four other people in a week. The compounding effects of your hard work will really pay off.
What didn’t work
The beauty about some growth experiments that don’t work is that there’s almost always some immeasurable brand benefit that comes as a nice silver lining. If nothing else, you got your brand in front of some new people who might keep you in mind for when they need your product.
Sponsoring newsletters
We sponsored a couple newsletters, which on the surface looked like a winner given their audience and our product. We saw fairly high clickthrough rates, but low conversion. I think this falls into the brand building bucket and we’d likely supplement with other stuff in the future.
Instagram influencers
They’re great at creating native content, but I suspect influencers will more likely form part of our content strategy than our acquisition one. They are cautious to over-sell to their audiences, so the content that is really engaging isn’t really going to convert customers. Likely will work better with some paid social advertising running alongside.
Flyers on the street
We did some flyering around East London and didn’t see much of an uplift from it.
Facebook, Instagram and TikTok advertising
This was great for top of funnel stuff, but the conversion to paying customers was really poor. They’re obviously super valuable growth channels for some brands, but for a new credit card it just wasn’t right for us. We found that the quality of customers that did convert was also considerably lower than other acquisition channels. So not only was the conversion low and the cost high, the churn rate on the customers we did acquire was much higher.
In summary, growth is hard and this is all probably quite useless
Try lots of things. Work really hard. Don’t assume what worked for your competitors will work for you. And really understand your customer purchase journeys so you can be smart about where you spend your precious capital. You’ll get there.
Come find me on LinkedIn if you want to chat about any of this. And if you’re in London and want to try The World’s Best Lifestyle Credit Card™ then you can check out Yonder here.