04/05/2018

The Secrets to Landing Your First Customer

Author: Carter Krach
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The Secrets to Landing Your First Customer

Ask Questions, Hold Eye Contact, Don’t Blink
The Secrets to Landing Your First Customer
It was 1996, in the very early days of the internet, and I was the CEO and one of seven founders of a brand new company called Ariba. We were taking on the antiquated, paper-heavy procurement process and attempting to bring it onto the world wide web. If we succeeded, we would be the first company to establish business-to-business electronic commerce. The potential was huge, but we were swimming in uncharted waters.
We had a great founding team, including our CTO who was a former VP of Engineering at NeXT where he had worked under Steve Jobs. I said to him, “Hey, we have an offsite coming up. I know we’re one week old, but we need a prototype. He responded, “I’m not going to do a prototype until we go out and we talk to customers.” So I asked, “How many?” And he responded, “60 to 70.” I said, “What questions should we ask them?” And he goes, “You figure that out, you’re the CEO.”
So we asked them two questions.
The first question was, “How are you handling the procurement process now? Their answer was usually along the lines of, “Oh, it’s a long, paper-based process. It takes forever. It’s a mess. So then we asked, “What would be ideal? Their responses became much more thoughtful and detailed: “Oh, it would have a walk-up user interface, you could parametrically change the business rules, it would be integrated with the financials, it might use this new thing called the internet to hook up with suppliers. By the way, what are you guys building?”
This was the question we’d been waiting for. “Funny you should ask, because that’s exactly what we’re building.
After talking to those 60 potential customers, we were able to easily establish the required specifications for a viable product with real market value. A few weeks later, we brought 12 of those potential customers together, and we had them present their ideal solution to our entire company (all 10 of us), and then we asked them to combine their ideas into one product. With just a few small requests, we had arrived at the early specifications for Ariba.
Our next step was to reel in our first actual customer. We told the prospects, “We’ve established a new corporate account program, and we’re ready to select three customers to become a part of it. Once you’re in the program, we’re going to work with you to tailor the product to fit your needs, and we’re also going to give you a discount on your contract. In exchange, you’re going to market the product through your own promotional channels. About ten of them jumped at the offer — and we eventually ended up turning all of them into customers.
However, it wasn’t as easy as some of the younger founders thought it would be. Fortunately, some of us were battle-scarred old guys (late 30’s) who understood that just because the prospects gave us enthusiastic verbal agreements, didn’t mean it was a done deal that they’d sign the purchase order on the dotted line (I wish we had DocuSign back then.) Sure enough, right when we got that first customer close to the boat, they said. “Tell me about your other customers. So I looked them right in the eye and said, “That’s the good news. You’re going to be our first, and we’re going to take special care of you.” I held their gaze and tried not to blink. After a quick beat, they responded. “Oh really? That’s cool. And the rest is history.
Now, I think there are a lot of takeaways from that strategy, but the number one principle is that people are inclined to support what they help create. We had just given these customers the opportunity to design their ideal product, and most of them were more than a little intrigued.
People also love to skate to where the puck is going to be. Ariba was the first enterprise application launched on the internet, and our prospective customers were able to see our processes and work ethic first hand. The experience really drove home the point that a category leader isn’t necessarily defined by size, but by momentum. Today, there is $1.3 trillion of commerce going through the Ariba network on an annual basis, which is more than Amazon, eBay, and Alibaba combined. We created a truly built-to-last company, and it all started with a few simple questions.