In Crossing the Chasm, Geoffrey Moore describes the gap in the adoption curve, where the marketing effort needs to be changed to appeal to the Early Majority, when most of the Early Adopters have been acquired.
In talking with one of the older fledglings, I realized that there is a similar gap earlier along the curve, between the initial customers and the bulk of the early adopters.
Here’s the pattern I see: The startup launches their product, tapping their network for the first set of customers. With that hurdle behind them, they set up a sales process and started winning customers one by one. This is the type of business that needs hundreds of customers per year, not tens of thousands, and thus all looked good.
The problem came that at the end of the year, they hadn’t closed as many deals as projected.
You have do more than build it before they come. Tweet This Quote
Looking at the sales funnel, the end-to-end process looked quite good. Over ten percent of the customers they talked to did indeed close. Those customers were almost universally satisfied. The sales did take longer than planned, and thus cost more than expected, but most every startup plan is flawed in that way.
The real problem here is quite simple: They simply hadn’t talked to enough potential customers. From the data, this seems like a business that would have closed eight times more customers if they had talked to ten times more potential customers (eight times, as inevitably that ten percent close rate would drop).
Enough entrepreneurs these days have watched Field of Dreams to know you have do more than build it before they come. But it seems not enough have made it that far to know that if you want more customers to come, simply ask more potential customers to come.
To have a successful startup, don’t just always be closing, always be hustling to fill the top of your sales so that you never run out of customers to close. Tweet This Quote
Unlike Geoffrey’s gap, this is one that is easy to cross. Buckle down, put your shoulder into it, use whatever brute force tactics you need to create a list, and talk to those potential customers.
To have a successful startup, don’t just always be closing, always be hustling to fill the top of your sales so that you never run out of customers to close.
This originally appeared on Luni’s blog.