Who Is the Perfect First Customer? [video]

Line of people standing, one wearing yellow coat

It might not be who you think.

Many entrepreneurs, especially those who are new to the industry or have never started a company before, struggle when it comes to dealing with their first customers. It’s not that they can’t find anyone interested in buying their products or paying for their services—which would be an entirely different problem—but rather when to approach potential buyers and what to offer them.

Should they reach out to customers as soon as possible with their idea, before they even start building anything, or should they take their time to create the perfect product and wait to find customers for it?

The answer is simple: neither.

Entrepreneurship is not like most businesses. You aren’t selling tires or pizza, where your customer is clear-cut and right in front of you. Founding a company is an iterative process that is constantly in flux. This can be challenging, but it is also the great advantage of working with a small, high-growth team. When sales aren’t rolling in as expected, or revenue targets aren’t being met, startups are nimble and flexible enough to make adjustments on the fly and address the needs of the market. Larger, more established firms don’t have this luxury.

This starts on day one, and the first few customers are critical for setting the tone of a startup’s future product development. They are a founder’s partner as much as they are customers.

Tyson Clark, partner with GV (formerly Google Ventures), who also spent time as a partner at Andreessen Horowitz, gets asked this question all the time and knows exactly how new founders should proceed with their first customers.

Clark, incidentally, spent years in the United States Navy, serving on fast attack submarines as both a nuclear propulsion officer and Navy scuba diver, so he’s a very strategic guy.

Jeff HarbachEntrepreneur LogoThis story was a guest column by Kauffman Fellows CEO Jeff Harbach in Entrepreneur. Jeff Harbach (Class 16) is President and CEO of Kauffman Fellows. Jeff has been an entrepreneur and investor since 2002, and was Executive Director of the Central Texas Angel Network (CTAN), based out of Austin, TX, from 2011–2013, where he served his fellowship. He has led multiple startups, including two 7-Eleven stores, a luxury furniture store and interior design firm, and a private country club golf network. He was also an angel investor himself with the Vegas Valley Angels. Jeff holds a BS from Brigham Young University and an MBA from the University of Texas, Austin. jharbach@kfp.org