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Acquiring Reference Customers

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FountainBlue's High Tech Entrepreneurs' Forum on the topic of Acquiring Reference Customers with Chuck DeVita, Growth Process Group Inc.. Please join me in thanking our sponsors at Fenwick & West for their support at this event and for the series. We would also like to thank our facilitators for this event for sharing their perspectives and thoughts on a critical subject for every company, acquiring reference customers:

 

 
  • Facilitator Chuck DeVita, President, Growth Process Group Inc.
  • Panelist Steve Blank, Commissioner at California Coastal Commission, Lecturer at Stanford University, Graduate School of Engineering, Director at IMVU
  • Panelist John Hall,Managing Director, Horizon Ventures
  • Panelist Alok Srivastava, CTO at SalesEdge and previously Director of R&D for Oracle's Collaboration Services group
 
Below are notes from the conversation, and we invite your questions, comments and insights.
 
 
Thoughts on Acquiring Reference Customers
Questions to ask yourself when seeking reference customers:
  • What problem are you solving for the customers?
  • What's your value proposition (see notes from previous session)?
  • What do you want from early customers? Revenue? Referencibility? Repeatable and Scalable Sales Process?
  • What type of product do you have - enterprise, consumer?
  • How will it be distributed? Sales, marketing, channels, support, etc.,
  • What channels should you utilize initially and later?
  • Are you prepared to go to market?
  • Why will decision-makers buy your product? What is their pain?
  • Who will you sell to? Do they have the budget, political power and ownership to be the 'EarlyVangelist' within the corporation? Will they be willing to take the risk by standing behind your offering?
Advice for Acquiring Reference Customers
  • Consider the needs of the market, product and decision maker and aim for the 'sweet spot', the intersect between the three.
  • The development team should also feel a responsibility for acquiring the reference customers.
  • Seek annual subscriptions rather than the more traditional licenses. Companies seeking traditional license models are not getting funding and companies with monthly subscription plans have too much overhead in collecting fees monthly.
  • Recognize that only 1 in 20 enterprises will buy from a start-up, so have realistic expectations. Find the risk-taker, the 'EarlyVangelist' within the organization who will be your internal advocate.
  • Identify prospects who have the pain (sense of urgency, even perhaps to the point of creating a make-shift solution), are willing to take the risk, have the budget. Don't target customers where you need to educate them on the need for your product.
  • Sell the vision of the founder, but dumb it down, express it with simplicity and clarity to your target customer.
  • Understand the difference between the 'discovery' phase where you have one customer and are starting to understand their need, the 'learning' phase, where you have 4-6 customers and start to understand the market, and the 'execution' phase where you have more than 20 customers and focus on the right product to the right market with a professional sales team. Hire the right team to support each of those phases.
  • After acquiring your customers, move from being just a vendor to a listed supplier to a solution provider, a trusted solution provider and finally a mission critical partner, where you may understand your customers' needs more than they do.
  • Be passionate about your solution, but equally passionate about serving the needs of your customers.
  • Issues are generally more about customer acceptance and market adoption than technology issues.
  • Parallel the product development cycle with the customer development cycle, going from discovery to validation to creation to Company building.
  • Have measurable check points for both the product development and the customer development cycles.
Additional Information
  • To receive notes from yesterday's presentation, please send an e-mail to Chuck Devita, cdevita@growthprocess.com from your work e-mail address.
  • Find out more about Growth Process Group's AlphaDeal Program, http://www.growthprocess.com/alphadealprogram.asp, where tangible results include:
    • Reference Customers
    • Sales Pipeline Development
    • Channel Programs
    • Repeatable Sales Process
    • Market Research & Development
    • Validated Market Strategy  
Additional Resources

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