I haven't written a post in awhile because I've had the flu. It has been the first time I've gotten it since I was a teenager, and it was rough to say the least. I'm still recovering. I would recommend for you to take your flu shots, but I did that - just as I have every year - and they failed to work this time.
Another question I often get asked by entrepreneurs is, "how do I win my first clients?". My answer to this isn't just "how" but critically includes "who". Allow me to explain, and let's start with who.
First, you should love the industry that you are trying to sell to, or at least deeply respect it. If you do that, you will naturally study it. As I mentioned in my recruiting post, everything is romance in the beginning. Until you actually begin marinating in the same industry conferences, newsletters, magazines, etc. that the people in your prospects attend and read, you won't know if you are passionate about that industry. If you aren't, then in my opinion life is too short and you should move on to something that is worthwhile of your energy and will actually fuel it. This U.T. Austin McCombs article captures my philosophy well, and also offers some insight into Bazaarvoice culture. Here is an exert from the McCombs article:
“If you’re truly passionate about something, you will naturally read and obsess and study it,” says Hurt, BBA ’94. “You’ll spend time at the conferences that people go to about that topic, read all the books about that topic, read the magazine articles, the news articles about that topic. Go seek out the experts. Develop a personal board of advisors about that topic. Be unafraid in asking anybody for help about whatever it is you’re passionate about.”
“Don’t just follow the script of school and exactly what you’re going to learn in classes,” Hurt says. “There could be an aspiring young student at UT who says, ‘I’m going to change the world in biotech’ or ‘I’m going to change the world in nanotech.’ And man, if they feel that way, then they better just start studying it like there’s no tomorrow. And a beautiful thing happens—if you do that for year after year after year, then eventually the student becomes the teacher.
When you do this, you will start to recognize that there are certain people in the industry that are key influencers - these are the 'cool kids' of that industry. They will serve on the Boards and Committees of the trade associations. They do this for two reasons:
- They want to be seen as the key innovators in their industry. This is good for their ego and, ultimately, their career. They get promoted or recruited to their next company much faster than the average person in their industry.
- They love their industry. And they have reached a point in their career where they, as the student, have become the teacher. This is validated by the fact that their peers have elected them to Boards and Committees.
There are also key influencers who do not serve on Boards and Committees. But they are usually frequently quoted in the press or they frequently speak at the industry events. In any case, you want to be associated with the cool kids. Everyone wants to be like them. And every industry has them.
Let me pause here and explain my own background a bit because I think it will help make my points more clear. Digital retail spoke to my passion since I was a child. My parents were entrepreneurs from the time I was born, specifically in retail and direct marketing. I programmed since the time I was seven-years old, as I explain in my blog post on why I named this blog - Lucky7 - in honor of my mother. Essentially most of my career has been about transforming retail to the digital age. Three of the five companies I've started have been in this vein: first, BodyMatrix, which was my online retailer selling sports nutrition products; second, Coremetrics, which was influenced by my experience at BodyMatrix and brought the same analytics I had developed for my own needs to retailers all over the world; and third, Bazaarvoice, which was influenced by my experience at both BodyMatrix and Coremetrics and brought the power of digital word of mouth to change the face of digital retailing forever. As digital retail was such a passion, I naturally studied it and became somewhat of an expert in it. This eventually earned me the recognition of my peers, resulting in me serving on the Board of Directors at Shop.org, the digital-focused subset of the National Retail Federation, which is the largest trade association of retailers. I was elected by my peers - mostly retailers - to the Shop.org Board for three terms over six years. Just last night I attend the Shop.org Board dinner in NYC after NRF's Big Show as an Emeritus member of the Board. Like always, it was a great reminder of how much I love the industry and also who the key influencers are in it.
The reason I tell you all of this is to make this point. In the digital retail industry, Shop.org is where the cool kids hang out. Sure, there are many other events, including eTail and Internet Retailer. But Shop.org is where you go to learn and network. It is a non-profit, unlike eTail or Internet Retailer, and it is where the highest level people in digital retail go as a result. In every industry, people are looking to connect with their peers, to learn, and ultimately not to be completely bombarded by vendors while they are at their industry's events. As a non-profit, Shop.org does the best job of this in digital retail. In every industry, there is a Shop.org of that industry and you need to marinate in it. If you are genuinely passionate about it, that will shine through and you will immediately be differentiated from the many sales people that attend these events to "pay the mortgage" (one of my favorite lines from the movieThank You for Smoking).
At Shop.org yesterday, I was spending time with two companies I'm getting more involved with - both in the "picks and shovels" space of digital retail with very compelling software solutions. One I've invested in personally, along with Mike Maples, Jr., Ralph Mack, Julie Constantine, and other prominent angel investors, and I've also agreed to be the CEO's primary mentor. The other, I'm likely to invest in and also serve as the Chairman of the Board. I was having a discussion about initial clients with their respective CEOs. The key industry influencers at Shop.org are serving on the the Board, on the Committees, or speaking at the sessions. These are the clients that they should most want to win. Everyone in that industry follows their moves. And they get their companies the best deals and services as a result.
One of the most important entrepreneurial books I've read is Crossing the Chasm by Geoffrey Moore. If you haven't read it yet, I couldn't recommend it more highly. In the book, Geoffrey describes the key segments of an industry that you are trying to win: the innovators, early adopters, early majority, late majority, and laggards. I have livedthis book - both at Coremetrics and Bazaarvoice. And the cool kids I describe above are almost always in the innovator and early adopter segments. Once you win them - and, most importantly, do a great job of servicing them and making them successful with your solution - they will work hard to help you convince the early majority, late majority, and even laggards to become your clients. It is in their best interests to do so because of the two reasons I cite above about why they want to be the cool kids in the first place.
So, as you think about winning your first clients, think about who first. Opportunity cost is very real for any stage company, but it is critical for an early-stage one. The key to success with both Coremetrics and Bazaarvoice was winning over the key industry influencers first. Then we would write case studies about our success with them, do webinars with them, ask them to speak at our client summit, help them speak at industry events like Shop.org (especially when Web analytics and online word of mouth was so new it was seen as the next hot thing), help them win industry awards, and ask them to serve as references. They were critical to winning the rest of the market, which largely followed their moves. They helped us cross the chasm.
In my next post, I'll cover how to win your first clients.