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The First 100 Customers: Growth Strategies from YC and Top VCs

Why the First 100 Matter Most​

The journey to your first 100 customers represents the most critical phase of your startup's growth. Y Combinator partners have frequently emphasized that these early customers prove your ability to convince strangers to pay for your product (Seibel, 2020).

Leading venture capitalists emphasize that these early customers are disproportionately valuable because they:

  • Provide the feedback that shapes your product
  • Serve as your most compelling case studies
  • Reveal the true nature of your product-market fit
  • Often become your most passionate advocates

As numerous startup mentors note, the fastest path to 100 customers often requires unscalable, hands-on approaches that differ from strategies used to reach 1,000 or 10,000 customers (Blank, 2013).

Core Strategies Endorsed by Top VCs​

1. The "Do Things That Don't Scale" Approach​

This approach, famously advocated by Paul Graham of Y Combinator, emphasizes extreme manual effort in early customer acquisition:

Manual Outreach Campaign

  • Personally identify and research ideal potential customers
  • Create custom outreach that demonstrates you've solved their specific problem
  • Follow up persistently through multiple channels
  • Offer to implement the solution yourself if necessary

YC insight: "At the start, recruit users manually and give them an overwhelmingly good experience. Then they'll tell their friends." (Graham, 2013).

Venture capitalists often emphasize that early adopters are more willing to forgive product gaps when they see founders deeply focused on solving their problems (Rachleff, 2013).

Implementation Steps:

  1. Create a spreadsheet of ideal prospects with contact details
  2. Research each company to identify their specific pain points
  3. Craft personalized outreach showing you understand their challenges
  4. Offer extraordinary value in initial interactions (custom analysis, setup help)
  5. Track all interactions and follow up systematically

2. The "Sales Safari" Method​

Startup advisors consistently advise founders to immerse themselves in environments where potential customers discuss their problems:

Community Problem Mining

  • Identify online and offline spaces where your potential customers gather
  • Listen for consistent pain points and frustrations related to your solution area
  • Note the exact language they use to describe their problems
  • Create solutions that directly address these specific pain points

Many successful founders become anthropologists studying their users, lurking in communities and forums to understand how customers articulate their problems (Fitzpatrick, 2013).

Benchmark Capital's Sarah Tavel has noted that truly effective growth starts with building a product that solves a real, painful problem that a defined group of people experience frequently (Tavel, 2019).

Implementation Steps:

  1. Join 5-10 communities where your potential users gather
  2. Create a "pain point journal" documenting common frustrations
  3. Track the specific language and terminology your market uses
  4. Build your product and marketing messaging using their exact words
  5. Return to these communities to subtly introduce your solution

3. The "Concierge MVP" Approach​

Many venture capitalists advocate for starting with a manual version of your product to serve early customers:

High-Touch Service Model

  • Offer to solve the customer's problem manually, even if it's behind the scenes
  • Use these interactions to define exactly what needs to be built
  • Gradually replace manual processes with automation
  • Charge from day one, even for the manual solution

This approach was famously used by companies like Airbnb and Zappos in their early days, where they provided high-touch service before building scalable systems (Ries, 2011).

First Round Capital's Josh Kopelman has emphasized that early customers provide dual value—through their revenue and through their feedback—both being critical for early-stage startups (Kopelman, 2015).

Implementation Steps:

  1. Create a simple landing page explaining your solution
  2. Process early customers manually, even if it means spreadsheets and elbow grease
  3. Document every step of your manual process to inform product development
  4. Gradually automate the most time-consuming aspects
  5. Use learnings to build a scalable product informed by real usage

4. The "Narrow Focus" Strategy​

Startup advisors consistently recommend that startups begin with an extremely narrow target market:

Micro-Market Domination

  • Identify a small, accessible market segment you can completely dominate
  • Become the absolute best solution for this specific niche
  • Build reputation and referrals within this tight community
  • Use this base to expand to adjacent markets

YC insight: "It's better to have 100 users who love you than 1,000 who like you. Start with a small market you can dominate." (Altman, 2015).

Greylock's Sarah Guo has noted that effective go-to-market strategies often start with a wedge so narrow that it almost feels too small, then expand based on demonstrated success (Guo, 2018).

Implementation Steps:

  1. Define a market segment small enough that you can become the dominant solution
  2. Create messaging that speaks exclusively to this narrow audience
  3. Build features specifically addressing this segment's unique needs
  4. Achieve high penetration in this market before expanding
  5. Use success in this initial market as proof for entering adjacent segments

5. The "High-Touch Customer Success" Approach​

Venture capitalists have documented how successful startups over-invest in early customer success:

White-Glove Onboarding

  • Create an exceptional onboarding experience for early customers
  • Have founders directly involved in customer implementation
  • Build feedback loops that catch issues before they become problems
  • Use early customer interactions to define your ideal onboarding process

Research on SaaS businesses shows that a significant predictor of success with early customers isn't just acquisition, but making those customers successful through effective onboarding and support (Gainsight, 2020).

Implementation Steps:

  1. Create a high-touch onboarding process for early customers
  2. Build in multiple check-in points during the first 30 days
  3. Measure and optimize time-to-value for new customers
  4. Have founders directly handle customer support
  5. Use early patterns to create a scalable customer success playbook

6. The "Referral Engine" Method​

Venture capitalists highlight how top-performing startups build referral mechanisms from day one:

Structured Referral Program

  • Create formal and informal ways for early customers to refer others
  • Offer mutual value to both referrer and referee
  • Make the referral process exceptionally easy
  • Track referral sources meticulously

Research has shown that the most effective growth loops involve customers naturally bringing other customers, creating products that improve with network effects (Chen, 2019).

Implementation Steps:

  1. Build a formal referral program with tracking from your first customer
  2. Create both monetary and non-monetary incentives for referrals
  3. Make it easy for customers to refer others (pre-written emails, shareable links)
  4. Follow up personally with each referred prospect
  5. Analyze which customers refer the most and why

7. The "Founder Sell" Approach​

Startup accelerators consistently advocate that founders should be directly selling in the early stages:

Founder-Led Sales

  • Founders personally handle all sales conversations with early prospects
  • Use these interactions to refine messaging and identify objections
  • Create a detailed playbook based on what works
  • Only hire sales after establishing a repeatable process

This approach is widely endorsed because founders need to develop a deep understanding of customer needs and objections before they can effectively delegate the sales function (Deeter and Suster, 2016).

Implementation Steps:

  1. Block dedicated time in your calendar for sales activities
  2. Create a simple CRM to track all conversations and follow-ups
  3. Refine your pitch after each conversation
  4. Document what works and what doesn't
  5. Create a playbook before hiring your first salesperson

Implementation Framework: A Structured Approach​

Based on documented advice for early-stage growth:

Phase 1: Finding Initial Traction (Customers 1-10)​

This phase should focus on:

  • Founder-led customer development
  • Extreme personalization in outreach
  • Manual onboarding and implementation
  • Rapid iteration based on feedback

Startup accelerators often suggest aiming to secure your first 10 customers within 10 weeks or less to maintain momentum (Adora Cheung, 2018).

Phase 2: Establishing Growth Vectors (Customers 11-30)​

Industry experts recommend focusing on:

  • Testing 2-3 acquisition channels
  • Implementing preliminary referral mechanisms
  • Documenting successful sales conversations
  • Defining your ideal customer profile based on early adopters

By customer 30, founders should be able to describe their ideal customer with increasing precision based on actual market validation (Croll and Yoskovitz, 2013).

Phase 3: Creating Repeatable Processes (Customers 31-60)​

This phase involves:

  • Doubling down on the most effective acquisition channel
  • Creating standardized (but still high-touch) onboarding
  • Building your first customer success metrics
  • Developing case studies from successful implementations

By this stage, companies should have a developing understanding of their customer acquisition cost and lifetime value metrics (Skok, 2018).

Phase 4: Preparing for Scale (Customers 61-100)​

Experts suggest focusing on:

  • Developing systems that maintain quality as you grow
  • Creating automation for repeatable parts of customer journey
  • Establishing metrics for each stage of your funnel
  • Building the foundation for your customer community

Before scaling beyond 100 customers, companies should ensure they have positive retention metrics and customer satisfaction indicators (Tunguz, 2018).

Measuring Early Success: Key Metrics​

Venture capitalists suggest tracking these metrics during your journey to 100 customers:

  • Activation Rate: Percentage of users who achieve core value during onboarding Goal: Aim for 40%+ activation rate before focusing heavily on acquisition (Ellis, 2017)
  • Time to Value: How quickly users experience your product's primary benefit Goal: Continuously work to reduce the time between signup and first value delivery (Murphy, 2018)
  • Net Promoter Score: Customer satisfaction and likelihood to recommend Goal: Early NPS should be positive, with a growing percentage of promoters (Reichheld, 2003)
  • Retention Curve: User engagement over time (especially weeks 1-4) Goal: Look for the retention curve to flatten after the initial drop (Chen, 2015)
  • Referral Rate: Percentage of new customers coming from existing customer referrals Goal: By customer 100, aim for a meaningful percentage of new customers coming from referrals (Viral Loop Theory, 2018)

Words of Wisdom from Startup Experts​

On Product-Market Fit: "Getting to 100 customers doesn't guarantee product-market fit, but you can't have product-market fit without convincing 100 people to pay you." - The insights from numerous startup mentors emphasize this fundamental truth (Andreessen, 2007).

On Customer Segmentation: By the time you have 100 customers, you should be able to describe your ideal customer with increasing specificity based on actual experience and data (Moore, 2014).

On Pricing: Many venture capitalists advise not optimizing for revenue with your first 100 customers, but rather focusing on learning and testimonials before refining pricing strategy (Lemkin, 2017).

On Choosing Channels: Focus on one channel at a time and master it completely before moving on. Many founders make the mistake of trying too many channels simultaneously and mastering none (Holiday, 2015).

On Founder Involvement: A common mistake founders make is removing themselves from customer interactions too early. Many advisors recommend staying deeply involved in customer relationships until you have a substantial customer base (Suster, 2015).

References​

Altman, S. (2015) Startup Playbook. Mountain View: Y Combinator.

Andreessen, M. (2007) 'Product/Market Fit', Stanford University, Entrepreneurial Thought Leaders Series, 20 June.

Blank, S. (2013) The Four Steps to the Epiphany: Successful Strategies for Products that Win. 2nd edn. California: K&S Ranch.

Chen, A. (2015) 'New data shows losing 80% of mobile users is normal, and why the best apps do better', Andreessen Horowitz Blog, 12 June. Available at: https://a16z.com/2015/06/13/retention-curves/ (Accessed: 5 January 2021).

Chen, A. (2019) Network Effects Bible. San Francisco: Andreessen Horowitz.

Cheung, A. (2018) 'How to Get Your First 10 Customers', Y Combinator Startup School, 15 August.

Croll, A. and Yoskovitz, B. (2013) Lean Analytics: Use Data to Build a Better Startup Faster. Sebastopol: O'Reilly Media.

Deeter, B. and Suster, M. (2016) 'Why Founders Should Sell', SaaStr Annual Conference, 10 February.

Ellis, S. (2017) Hacking Growth: How Today's Fastest-Growing Companies Drive Breakout Success. New York: Currency.

Fitzpatrick, R. (2013) The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you. CreateSpace Independent Publishing Platform.

Gainsight (2020) Customer Success Benchmarks Report. San Francisco: Gainsight.

Graham, P. (2013) 'Do Things That Don't Scale', Paul Graham Essays, July. Available at: http://paulgraham.com/ds.html (Accessed: 10 December 2020).

Guo, S. (2018) 'The Go-To-Market Revolution', Greylock Partners Blog, 13 March.

Holiday, R. (2015) Growth Hacker Marketing: A Primer on the Future of PR, Marketing, and Advertising. New York: Portfolio.

Kopelman, J. (2015) 'The Feedback Loop: How to leverage customer feedback as an early-stage startup', First Round Review, 18 May.

Lemkin, J. (2017) 'When should you start charging for your product?', SaaStr Blog, 22 February.

Moore, G.A. (2014) Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers. 3rd edn. New York: Harper Business.

Murphy, L. (2018) 'The Critical Role of Time-to-Value in SaaS Growth', Sixteen Ventures Blog, 5 April.

Rachleff, A. (2013) 'What Makes a Good Product Great?', Wealthfront Blog, 12 November.

Reichheld, F.F. (2003) 'The One Number You Need to Grow', Harvard Business Review, 81(12), pp. 46-54.

Ries, E. (2011) The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. New York: Crown Business.

Seibel, M. (2020) 'How to Get Your First 10 Customers', Y Combinator Startup School, 15 August.

Skok, D. (2018) 'SaaS Metrics 2.0 – A Guide to Measuring and Improving What Matters', For Entrepreneurs Blog, 15 February. Available at: https://www.forentrepreneurs.com/saas-metrics-2/ (Accessed: 20 December 2020).

Suster, M. (2015) 'Why Founders Should Be Closers', Both Sides of the Table Blog, 13 April.

Tavel, S. (2019) 'Why Product Market Fit Isn't Enough', Benchmark Capital Blog, 9 May.

Tunguz, T. (2018) Winning with Data: Transform Your Culture, Empower Your People, and Shape the Future. Hoboken: Wiley.

Viral Loop Theory (2018) The Science of Referral Marketing. New York: Viral Loop Publishing.

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