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How we got our first 1,000 customers

How we got our first 1,000 customers

It was September 2017. We were two months into building OpenPhone, and we were ready to launch our beta and get our first customers.

I knew that acquiring customers wasn’t going to be as easy as the old adage, “build it and they will come” — and yet, most of the other advice I found on getting your first 100 or 1,000 customers was pretty useless. It was tailored to companies that already had signs of product-market fit, or an existing audience to market to. We had neither.

When I spoke to other startup founders, many seemed to skip over vital early steps or jumped straight into the later stages of growing your customer base. Everything sounded pretty neat and scalable.

For us, getting our first 1,000 customers was messy and not scalable. None of the steps we took came out of an online guide.

So, in case you’re in the same spot now, here are a few things we did — along with what I might do differently if I were starting over.

But first, let’s set the stage

Before we dive into it, let me introduce us so you have some context on what we were trying to achieve.

OpenPhone is the modern phone system for businesses. It works through an app on your existing devices.

  • We started out as a single-player, $10/mo product with a free trial. If your SaaS product is priced closer to $100/mo, you can still use ideas from this post to help you get your first 100 customers.
  • We’re a Y Combinator company and got into YC with ~60 paying customers. So our journey from 60 to 1,000 customers happened during our YC batch.
Mahyar Raissi and Daryna Kulya, co-founders of OpenPhone, in front of the Y Combinator sign

Alright, let’s get into it.

Stage 1: 0 to 1,000 beta (free) users

Like most SaaS products, we started out in beta.

However, unlike other startups, we weren’t in private beta. There was no waitlist, no need to invite friends to gain access, and the product was free. If you signed up for the beta, you were in immediately.

This meant the pressure was on to find our first beta users. We got to our first 1,000 beta users through two methods.

OpenPhone website circa winter 2018. We only had an iOS app back then.

OpenPhone website circa winter 2018. We only had an iOS app back then.

Posting in Facebook groups

My co-founder Mahyar was first inspired to build OpenPhone from his experience building software for contractors at Joist. He saw the struggles small business owners faced when using their personal phone numbers for work. When we launched our beta, we figured small business owners would be our primary audience, so I was on the lookout for where these folks gathered.

I quickly noticed there were lots of Facebook groups for founders of all sorts of businesses — from construction and retail to real estate and trucking.

I joined and posted in 62 groups.

This was my first post in a local Toronto-based group for startup founders. Many of the folks who found out about us then are still customers today.

posting in the Toronto Entrepreneurs of Passion and Purpose Facebook group

Some of my posts brought us 100+ beta users. Others got me kicked out of the group and temporarily banned from Facebook. I quickly learned that self-promotional posts didn’t work on Facebook groups (or really anywhere). What worked far better was engaging group members in actual conversations.

My best-performing posts had a simple structure:

  • Describe the problem you’ve identified (using your personal phone number for business sucks).
  • Ask if folks have run into this problem. Ask how they’re solving it. Start a conversation.
  • Ask folks to comment if they’d like to join our beta. Don’t include links in the post, as they look spammy and sales-y.

I found if you focus on driving actual engagement and value for readers, you’ll see better results. Start a conversation rather than using your post as a loudspeaker.

Encouraging word of mouth

Most people think of customer experience as a separate function from marketing, and it is — but customer experience is also the engine that drives word-of-mouth marketing. So, from the very beginning, we gave our beta users a memorable experience that would get them to tell their friends about OpenPhone.

We did this in several ways.

  • From day one, we established a personal connection with users by letting them text us directly from the app. We provided support exclusively through text and it was a novel way to build a deeper connection with our first users, all while using our own product. This also allowed them to get end user’s experience that they’d be providing their own customers.
Providing customer support via text in the early stages of OpenPhone
Product email update

Between our Facebook group marketing and word-of-mouth, we grew to 1,400 beta users over the course of five months. At this point, we knew it was time to make the switch to acquiring paying customers.

Stage 2: 0 to 100 paying customers

Once we’d gotten the product to where we needed it, it was time to make the move to a paid subscription. This had always been the plan, but we were also influenced by YC partner Yuri Sagalov during a conversation we had with him:

“How will you know who really needs your product if you don’t charge for it?”

So that was our first step. After giving our beta users plenty of notice, we launched our $10/month plan. 60 beta users converted to paying customers, which I thought was a good start. We knew people would pay for the product.

But where would we get the rest of our customers?

It was time to expand our strategy.

Posting on Reddit

Inspired by the early results we got from Facebook groups, I wanted to check out Reddit.

I was surprised to find how active subreddits like r/smallbusiness and r/Entrepreneur were. Once I spent some time there, I noticed which types of posts were getting traction and tried to emulate them.

Other founders weren’t interested in hearing a sales pitch; they wanted to hear about our journey. It was clear that I had to tell my story.

One of my first posts on Reddit
One of my first posts on Reddit

I also set up alerts for relevant industry and competitor terms using Notifier for Reddit. This way, it was more natural for me to talk about OpenPhone as a solution, since I was joining conversations that other folks had initiated on relevant topics.

Commenting on a topic in Reddit

Soon though, I realized that to build trust within communities I couldn’t just self-promote. I needed to create value. So I looked at the questions founders frequently asked on different forums and wrote posts on Medium (like this one) to answer them.

I also joined multiple subreddits and contributed to discussions on topics adjacent to business phone solutions and OpenPhone. These weren’t self-promotional, but instead sparked discussions about business phone topics, from why you shouldn’t use your personal number for business to debating if you even need a phone number on your website.

Posting in Facebook groups

You didn’t think I abandoned my Facebook groups, did you?

I didn’t. However, I did evolve how I interacted with these groups.

Instead of simply posting about OpenPhone, I contacted Facebook group admins and offered to run Q&A sessions for their members on topics like customer engagement, building stronger customer relationships, and, of course, effective communication.

These sessions helped me build relationships with group admins and resulted in them sharing OpenPhone with their communities organically. Kathy Cruz, owner of Savvy Shopkeeper was one of the first to feature OpenPhone on her blog for fellow boutique shop owners.

Stage 3: 100 to 1,000 paying customers

In May 2018, we got accepted to Y Combinator and moved to the Bay Area. That’s roughly when we crossed the 100-customer mark.

During the first week of the program, Michael Seibel (Group Partner and Managing Director of Y Combinator) asked us why we weren’t signing up our batchmates to use OpenPhone. That’s when we realized: we’d been so focused on acquiring small business owners as users that we never stopped to consider startup founders as potential customers.

That’s when we started to focus on cold outreach. In particular, emails.

Sending cold emails

Getting our YC batchmates to sign up was easy. We saw each other often during in-person events and we were naturally interested in what others were doing.

Cold emailing other startups was slightly less successful, but part of that was due to how I first approached it.

I went from sending 0 to 1,000 cold emails per day. They weren’t personalized or segmented, and as a result, they weren’t very relevant to the recipients on the receiving end. My messages would often end up ignored or in someone’s spam box.

Then I started breaking customers down into segments and sending them relevant emails. Not surprisingly, our response rates went up.

I used PersistIQ which did most of the heavy lifting while allowing me to personalize each email. If you’re looking for a lighter tool, check out YAMM.

Cold email example
One of my better emails
Cold email with a little more personalization
Another one with a little more personalization

You do have to invest more time into your cold outreach when you personalize your emails. However, the return on investment in terms of customer interest is worth it.

Understanding our customers

One of the things we learned during YC was that we needed to invest in understanding our customer segments in order to acquire and build product for folks who need what we’re building the most. Using Typeform, we created a simple survey for our customers and connected it to Slack. You can check it out right here.

Customer survey result from Typeform displaying in Slack

We asked our users a number of questions, but the one that proved most useful to us for identifying our ideal customer was, “How disappointed would you be if OpenPhone didn’t exist?”

Once we could identify who would be most disappointed if our service wasn’t around, we could better understand a few things:

  • The customer personas who needed OpenPhone
  • The industry they belonged to
  • The product features they benefited from most

The survey results helped us refine messaging on our website and email copy and guided us in choosing which audiences to approach going forward.

Breaking into media

We were fortunate to announce our participation in Y Combinator’s Summer 2018 batch on TechCrunch. That was our first piece of major media coverage, and it resulted in a significant traffic spike and an influx of customers.

I can say the same about our launch on Product Hunt.

OpenPhone being featured on ProductHunt

Although we landed on the fourth spot for the day, we got consistent traffic that surpassed that of TechCrunch and landed us many customers we’re still serving today.

Google Analytics showing traffic generated from ProductHunt outnumbered TechCrunch

Many folks argue that getting press isn’t a viable customer acquisition strategy, but it was crucial in helping us get in front of potential customers.

A lot of our success came down to the fact that our ideal customers were startup founders. They were already reading TechCrunch and Product Hunt daily, and our product spoke directly to their pain points.

If you choose to go down the media route, get targeted. Focus on the media sources your audiences naturally tune into rather than the national news sources.

Encouraging word of mouth

We’d already experienced the phenomenal power of word-of-mouth marketing during our beta phase, so we knew that customer experience was worth investing in.

However, interestingly, building an experience worth talking about is both easy and hard.

It’s easy because the status quo is usually pretty low, especially for products entering mature industries.

But it’s also hard because there’s no set recipe you can follow to thrill your customers, and nobody will tell you exactly what they’re looking for — often they don’t quite know.

In the end, we found two key things that delighted customers: 1) rapid product updates and 2) timely personal support. We also just consistently looked for small, fun ways to engage our customers. (Sometimes, that meant sending a customer who shared feedback cupcakes as a thank you.)

In return, customers left us glowing reviews on the App Store, which helped attract more potential customers to our product.

Google Play Store review
App Store review

We reached our 1,000 customers by the end of July 2018. Almost four years later, I feel like our journey is just beginning.

What I would have done differently today

Of course, hindsight is 20/20. I don’t regret our scrappy tactics, which helped us grow to where we are today.

But if I were to go back in time, here’s what I would do differently.

Share our mission

Until our Product Hunt launch, we didn’t talk about our mission — not in our cold outreach nor our posts on Facebook, Reddit, or Medium.

However, as Simon Sinek says, “People don’t buy what you do; they buy why you do it.”

Quite frankly, people don’t care about your product. It’s the “why” behind your product that resonates with them, and that’s even more important if you haven’t launched your product yet.

A simple Medium post sharing why we started OpenPhone would have helped attract the right early customers. Had we combined this with a private beta approach, we could’ve amassed a significant waitlist by leaning into storytelling, keeping the product under wraps, and onboarding users gradually.

Start with cold outreach earlier

I didn’t do much cold outreach until we had paying customers. Looking back, I should have emailed a lot more people inviting them to try OpenPhone while it was in its early beta stage.

It’s so much easier to invite someone to try a free product and ask for their feedback than to sell to them. It also allows others to join your journey earlier on, which makes them more invested in your success.

Build an audience before building a product

It’s never too early to start building an audience. I wish we had been more deliberate about doing it before we had a product.

Building an audience doesn’t have to mean you become a full-time creator before launching your startup. But it does mean putting content out there regularly and engaging with readers, whether on your blog, Medium, Twitter, Reddit, or another platform.

Customers are far more likely to purchase from a person they already trust than from a new startup with no recognition or traction.

Dive into customer data sooner

When we went from being a free product in beta to a paid product, we lost 96% of our users. We should have sent them a simple, one-question survey (embedding a Survicate survey into an email makes this easy) asking why they didn’t want to continue.

At the same time, very early on, 60 people decided to pay for an early-stage product with imperfections. I wish we’d invested the time to get to know them better at that point. Insights like that would have been invaluable for us in determining who our ideal customers were.

Another way we could have done this would have been to ask users to share a bit more information about themselves during the sign-up process. Or use Clearbit. This is particularly important for a horizontal product like OpenPhone.

We eventually added these questions to our sign-up flow, but I wish we had them from day one.

We eventually added these questions to our sign-up flow, but I wish we had them from day one.

Having this kind of data would have allowed us to retroactively understand what kinds of customers had chosen to pay for OpenPhone when we launched our subscription.

Ask four key questions about your potential customers

When we jumped into customer acquisition, we were mainly operating on a hypothesis about small business owners. However, looking back, I now understand that answering these four questions is essential when brainstorming potential customers for your product:

  1. Who needs what you’re building the most? Who are all the possible users who could potentially benefit from your product?
  2. Where do these people hang out? This might include Facebook groups, Reddit, Quora, Indie Hackers, Product Hunt, LinkedIn groups, Twitter, Slack communities, meetups, incubators, accelerators, or coworking spaces.
  3. How can you reach them? When I say “reach” here, I don’t mean “spam.” How can you engage your audience in a way that builds a deeper relationship? This might be through personalized outreach, content, and influencer or product partnerships.
  4. How can you build trust with them? Answer potential users’ (and existing customers’) questions, establish a personal connection with them, and listen to their feedback. Continually improve your product to suit their needs. (The occasional cupcake helps, too.)

Once you answer these questions, you’ll easily come up with a list of channels to test and see your customer base go up and to the right.

And if you’re looking for an easy way to connect with, and learn, from your customers, look no further than OpenPhone. You can record your calls, and share them with your team.

Go from 0 to 1,000

No matter what you might hear online, finding and acquiring your first 1,000 customers isn’t a smooth experience — nor should it be. It’s all about iterating, testing, and getting to know your customers back to front.

Once you know who your customer is and what approaches work for you, then you can start to think about scaling acquisition. But for now, just focus on getting to your first 1,000.

If you have any more questions about how we got there ourselves, leave a comment below. Both Mahyar and I are happy to respond.

And if you’re curious to learn about our journey scaling customer acquisition from 1,000 customers onwards, check out the tactics we used to grow our blog traffic in the early days.

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