π¦ 3-2-1 Traction: finding your next 10x customers
Also in this issue: finding your first 100 customers; deciding how to much to raise; the art of the simple; how AI will change the startup process; and focus.
Hey friend π
This is 3-2-1 Traction β 3 ideas from me, 2 quotes from others, and 1 question to help you focus in your journey to find traction.
ICYMI: This Wednesday, Iβm co-hosting a 90-minute masterclass on how to design products that get customers to beat down your door. Join us for a deep dive into proven product design strategies, practical insights, and a collection tools.
Itβs called The Startup Product Playbook.
3 ideas from me
one: first, find customers.
The startup process is simple:
Find customers with a problem
Solve it for money
Scale and exit
The problem? Most founders skip the first step!
They find one customer or two or a handful who have the problem, they build it, they make a couple of early sales, and thenβ¦ they stall out. Because they donβt have any more customers to sell to. Not because they donβt exist β they might! β but because they never found them.
Find customers with a problem οΌ Find a market with a problem.
And preferably a large and growing market!
Before you do anything else, find 100 customers who love your solution.
two: how much money should you raise?
Ideallyβ¦ you should raise however much you need to reach reach profitability, because then youβll never have to do it again! π
But thatβs not always an option β particularly for deep tech, which almost always requires follow-on funding. So, how much do you raise?
Instead of profitability, target how much you need to get to your next funding round β when you expect to need funds again. Whatβs the milestone youβre expecting to hit? Then, work backward to today.
(Hint: use innovation accounting)
three: make it simple, get it right.
I once heard legendary chef Jacques Pepin talk about the evolution of a chef.
In the early days, a chef is always looking for what more they can add to the plate. But a mature chef is always looking for what more they can remove from the plate.
The mark of an insecure chef is a plate drizzled with balsamic reduction, masking whateverβs underneath. Because creating an extraordinary dish isnβt about quantity of components.
Itβs about high-quality components, practiced technique, and a memorable experience.
By the way, Iβm talking about your startup.
2 ideas from others
Steve Blank on the potential of AI, and how it will revolutionise the Lean Startup:
Iβm surprised no one has done a parody of actually reviewing a three-month-old babyβ¦ and saying all it does is poop in its pants, and it canβt even finish complete sentences, rather than going, βHoly shit! This is like the first week of this thingβs life!β and we really donβt realize it.
Eric Reis in The Lean Startup on getting lost in the weeds:
[VC investor Shawn Carolan said], βStartups donβt starve; they drown.β There are always a zillion new ideas about how to make the product better floating around, but the hard truth is that most of those ideas make a difference only at the margins. They are mere optimizations. Startups have to focus on the big experiments that lead to validated learning.
1 question for you
If you have `n` customers today, where are you getting `10 x n` customers tomorrow? Todayβs execution for tomorrowβs strategy should look different than todayβs execution from yesterdayβs strategy.
And thatβs it! See you on Thursday for a deep dive into pirate metrics! Iβm excited, so make sure youβre subscribed so you get it straight to your inbox:
β jdm