What startup entrepreneurs are getting wrong

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http://www.tiburonconsulting.net/images/uweWagner.jpgAuthor: Uwe Wagner, Principal and Founder at Tiburon Consulting LLC, has many years of experience in sales strategy, partner management, channel operations and strategic business development.

Most startups I have been working with over the last 15 years were late starting in getting in front of prospects.

Therefore I encourage startups to get out and get a customer’s reaction from day one. You even shouldn’t wait until you have a product, just get their reaction to the general concept you plan to build and validate. A CEO of an Israeli startup once even said: If the technology you need to build your product is not available today, wait another day and it will be available. But if you haven’t identified customers yet you can sell to then you are in trouble. Don’t make anything until you sell it.

Most startups are so excited about their product and their vision that they forget to listen. But how can you find the pain points in the marketplace if you don’t listen to the feedback from the customers? Talk to prospects, reshape your idea and validate, validate, validate.

I understand that you are under pressure when you are aggressively looking for your first customers. Although it might be very tempting, try not to offer any price discounts, it may cripple your long-term pricing power. Rather offer free shipping or, if you have too, a discount on orders placed before a certain date. And if you have to offer discounts, it’s probably smart to put the terms in writing.

Do not sell to family and friends. Here is why: love, pity, or a sense of obligation do not say anything about product quality – you never know why relatives are buying from you. What you really need is candid feedback.

Instead seek strategic buyers. Ask yourself: Can this customer open new doors or provide referrals? Can this customer supply usage data that could make my value proposition more compelling? Can I use this customer for beta-testing? Is this customer guaranteeing repeated business?

Stay tuned if you are headquartered outside the United States, but would like to enter the Americas market at some stage. In my next post, I will talk about 10 questions you should ask yourself before breaking into the US market.


Please contact the author at uwagner@tiburonconsulting.net for more details.

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