Michael Seibel - How to get your first ten customers?

[Music] My name is Michael Seibel, and I'm a partner at Y Combinator. One of the questions we get all the time is, how do you find your first 10 customers? Well, to start, hopefully, you're solving a problem that either you have or someone that you know has. So, your first customer, your first couple of customers, should be folks that you know. That's what's ideal.

Second, YC's advice is always to find 10 people who love your product and to do that in a way that doesn't scale. So, you should be thinking that your first 10 customers don't have to come from some elaborate advertising scheme or some viral growth mechanism. You should probably be hand recruiting them.

The next thing to keep in mind is that there is no benefit to you to make those first customers hard-to-get customers. So, you should be looking for customers who intensely have the problem that you're looking to solve, are willing to work with an early-stage startup, and generally are willing to pay to solve the problem that they have.

One thing that a lot of founders make a mistake about is that they target customers early who are too hard, who don't want to pay, who aren't interested in working with early-stage companies, who don't actually have the problem; they just kind of think that they might have the problem, might have the problem in the future. You actually get no benefit from targeting customers who don't intensely have the problem you're trying to solve or targeting customers who honestly are not going to be the initial folks who love your product.

Next, you should charge your customers. One way that you know whether your customers actually have a problem is to charge them money to solve it. If your customers are pushing back to you and saying, "Oh, I would use this, but only if it's free," that's kind of telegraphing to you that they don't actually have the problem you're trying to solve.

Oftentimes, founders think that they have to close the first 10 customers who walk in their door, and you don't. You actually have to do something called qualifying customers. So, for the people who are walking in your door, the people that you're hand recruiting, you should typically have four to five questions that you ask them to understand how intensely they have the problem that you're trying to solve and how willing they are to move quickly.

Only the customers who are qualified, who answer those questions correctly, should you aggressively be trying to get to sign up. The other customers, it's totally okay if you let them go for now and you focus on them later.

So, final takeaway: one, you should know at least your first customer or your first couple customers personally because they're people that you talk to, are new to actually solve this problem. Second, there's no benefit to targeting hard-to-get customers first. Go after the folks who are willing to pay, who want to work with the startup, and have the problem so intensely that they're willing to use a product that's an MVP, that's an early product.

Charge the customers; use that as a signal for the intensity of how much of a problem they have. And then finally, make sure you have four to five qualifying questions so you can filter customers who are interested away from customers who are just browsing but who won't actually close. Good luck!