The Startup’s Guide to Demand Generation: From Your First 10 Customers to Your Next 1,000

January 23, 2018

Editor’s Note: This guest post was contributed by Ashu Garg, General Partner, Foundation Capital, and co-authored by Jason Seeba, VP-Marketing, Dynamic Signal. 

Talk around what entrepreneurs need in order to succeed usually focuses on lofty abstractions like grit, or hustle, or luck, or a unique and compelling insight. But when you get down to brass tacks, the one thing that no B2B business will make it without … is customers! That’s why Demand Generation—marketing efforts to drive attention and interest in a company’s products and services in order to acquire customers—is something that all founders need to have a solid grasp of. Demand Gen is what turns your good idea into a sustainable business.

As companies grow, however, their marketing priorities have to evolve. What guided you to your first ten customers will be different from what will get your next hundred, which will be vastly different from how you attract your next thousand. As career marketing professionals, we hear from freshmen (and seasoned) entrepreneurs all the time: How in the world do you find those early adopters of your product? Once you do, how do you build on that success?? Then, how do you scale those efforts into a repeatable process???

As a service to enterprise founders, we’re going to break down how startups should approach Demand Gen at different scale points—and what failure (aka #ScaleFail) looks like when they don’t.

CRAWL (0-10 Customers)

It’s very early days for your startup. You barely have the tech, you maybe have a product, and you need to find your first customers. At this stage, Demand Gen typically consists entirely of executive outreach, i.e., the CEO trying to find leads and close deals. If s/he has never done this before, here’s how to approach the process:

  • Create an early profile of your ideal customer—the prospects for your product. What do the first few people that will pay enough attention to adopt your product look like? Compile a list of people that fit the profile and now you have your targets. Start with a list of a thousand names and set up 100 conversations.  Personalizing the pitch will help you cut through the noise – and the early conversations will help you refine the profile going forward.
  • Pound the pavement. Cold call if you must, but warm intros from VCs and friends are much more likely to yield solid prospects. Invest time in building relationships with people who can become advocates for your product both within their companies and with others in their industries. These people might not (yet) be be the most powerful executives in a company, but many times they are the ones with strong operational chops. (Pro-tip: People, not companies, buy software. Find the person in the company who is willing to talk, to take risks—and sees bringing in your technology and making it successful as a way to grow her/his career . Think of it as selling promotions, not software.)
  • Figure out—with businesses—how to find a problem that people will prioritize solving: Is there an obvious need to be satisfied? Is it an unknown problem that you can show them they have? Find people in companies that could eventually buy—though right now you just need people who want to build the solution with you. Close with the promise of a mutually developed product.
  • #ScaleFail: Failure at this scale point is that you just don’t get anyone’s attention. And by anyone’s attention, we don’t mean journalists’ attention. Journalists are not customers. Press matters a little in the beginning, but it doesn’t turn into deals. And it won’t do you any good to launch on TechCrunch or Product Hunt, then disappear. Often when companies struggle with Demand Gen at this stage, they think that the problem is marketing, when it’s really product-market fit. They didn’t find a problem that’s worth solving or the right people to partner with to build the product with.

WALK (10-100 Customers)

Your company has made it past its infancy. You have actual customers and revenue. You’re a real-life business. Congratulations! But now comes the hard part (actually, all the parts are hard)—in order to stay in business, you need to find your next hundred customers. You have some money and some marketing resources now. But they’re limited resources. At this stage, the challenge is to work with what you have to develop a basic model for successfully engaging with many potential customers. Begin to scale your Demand Gen efforts.

  • Hire your first head of marketing. And make sure it’s someone with a bias for action—someone willing to experiment with different channels, tactics, types of content, etc., to uncover who your customers are and how to reach them.
  • It’s time to incorporate a basic tech stack. Add Salesforce and Marketo or Hubspot.  With a CRM and basic marketing automation (and someone who can effectively use them), you’re setting the stage for scalable execution as you grow.
  • Find your tribe of customers. Use their stories to grow your business. Go where they are—or create the community for them around the problem you’re solving (not just your solution) if it doesn’t yet exist.
  • Identify what works for you. Find that one thing that will help you most effectively acquire customers—be it a specific acquisition channel or tactic, a killer outbound SDR team, or a specific vertical where you can drive an outsized impact. You’ll have to experiment, but when you find where demand is strongest, double down.
  • #ScaleFail: You never find that one thing that really connects with potential customers —that one key that unlocks Demand Gen for your company. You understand the problem, but aren’t able to find the right channel or audience to deliver your solution to.

RUN (100-1,000 Customers)

Your company is really starting to find its stride. You have more customers than any one person can keep track of. You have a much larger budget. And most importantly, you now have real DATA on your customers and your marketing activities. It’s time to marshal all these resources and see how far your company can really go. It’s time to build the machine that drives your business. To do that, at this scale point, Demand Gen is about two things: data and systems.

  • Data. Learn from and apply data to scale and perform in more advanced ways. Take the wealth of data that you possess (close rates, performance of channels, etc.) and use it to understand each channel and customer, and to optimize each step of your process. Move from hiring generalists to hiring specialists.

Use your data to take smart risks. Now that you know how to acquire customers in a more predictable way, you might, for example, take 10% of your program spend and try a new tactic.  Be an early adopter yourself and take a risk on a not-yet-proven Marketing technology to try to get an advante. It’s exploring a totally different acquisition channel or more deeply segment your marketing efforts by vertical or company size.

  • Systems. At the 0-10 stage, everyone was figuring out everything about the business, including Demand Gen, together in the same room. As your company has grown, so too has complexity. As your teams have multiplied, execution becomes more complicated. Now, not everyone is even in same building or city, and you have hired guns who have no institutional memory or intrinsic commitment. At this juncture, you have to formalize systems and processes, and create efficiencies within those processes.

Definitions become critical. You have teams of teams of teams—they need to be speaking the same language. What is the definition of an opportunity? When do we move from Stage 2 to Stage 3? Now there’s too much content, and information transfer is a challenge. Teams should be putting in the effort to communicate clearly and at scale—whether it’s a service level agreement to help align your sales and marketing teams, or a consistent playbook and pitch for your SDRs.

Simplification is critical. Look for ways to reduce complexity and increase predictability.

Simplify processes and goals, remove complexity and confusion as barriers to growth. Cut it down to the things that matter. How do we ramp SDRs quickly? How do we add salespeople efficiently? (Pro-tip: Remember all those fields people hastily added to Salesforce—take the time to get rid of them and simplify the experience for people using the system.)

  • #ScaleFail: You don’t get the efficiencies that should come with scale. You don’t deal well with complexities—in fact you do worse. And you fail to activate your base: to use your customers and their stories to become your salespeople.