How to Get Your First Customers | Startup School

Youtube URL: https://www.youtube.com/watch?v=hyYCn_kAngI

Host(s): Gustaf Alströmer (Group Partner, Y Combinator)

Guest(s): None

Podcast Overview and Key Segments

Overall Summary

Gustaf Alströmer explains how early-stage startups win their first customers. He urges founders to “do things that don’t scale,” lead sales themselves, and learn fast by talking to users. He covers the startup curve, founder-led sales, how to write cold emails, build a simple sales funnel, prioritize easy wins, and charge from day one. He shows why tracking funnel metrics matters, how to work backward from revenue goals, and when to avoid free trials in B2B. Case studies include Brex, Stripe, Front, and Amplitude. He ends with tools, resources, and a reminder: outbound sales is a numbers game, and the founders’ hustle creates the first wave of growth.

Reference

• Do things that don’t scale: Manual, unscalable work to get early traction (e.g., hand-onboarding users).
• Startup curve: A journey with launch, trough of sorrow, wiggles of false hope, and product-market fit.
• Product-market fit: When a product satisfies strong market demand.
• Prospecting/lead generation: Finding people or companies to contact.
• Sales funnel: Steps from lead to closed customer, with drop-offs at each stage.
• CRM: Software to track leads, stages, and conversions.
• Early adopters: People who try new products early and give feedback.
• Onboarding: Helping new users get value fast after they sign up.
• Churn: Customers who stop paying or using your product.
• Product-led growth (PLG): Product usage drives acquisition, conversion, and expansion.
• SEM/SEO: Search engine marketing/optimization for paid and organic traffic.
• Qualifying questions: Questions that test fit, urgency, budget, and decision power.
• Money-back guarantee: Paid trial with refund if not satisfied.

Key Topics

Do Things That Don’t Scale

Gustaf stresses that growth will not happen by itself. Early wins come from manual outreach and personal onboarding. Founders must do uncomfortable work: call prospects, run demos, and collect feedback. The goal is to learn what to build and how to sell by being close to customers. You cannot code your way into traction in isolation. This mindset speeds discovery, sharpens the value prop, and builds early trust. It also reveals real blockers that long-term scalable channels cannot show yet.

The Startup Curve and Founder Resolve

Most startups face a surge at launch, then a long trough. Many die due to slow iteration or giving up. Founders who push through, ship improvements, and listen to users reach product-market fit. Gustaf highlights that at each stage, founders drive outcomes: switch markets, change pricing, rework onboarding, and refine messaging. The curve is a reminder to keep learning, move fast, and stay close to users.

Founder-Led Sales: Why and How

Founders must sell first. You learn the customer, the problem, and what “good” looks like. You cannot outsource sales before you know the script, objections, and price. If you know the problem, the market, and your product, you can sell. Passion for solving customer pain is contagious. Only after repeated success should you hire sales. Until then, sales is part of the product discovery loop.

Writing High-Impact Cold Emails

Keep it short (6–8 sentences). Use plain text, no jargon. State who you help, the problem you solve, and the value. Add social proof (YC, past roles, logos if you have them). Link to a simple site with clear screenshots. Consider a short video or GIF that shows value in seconds. End with a clear call to action: quick call, demo, or self-serve signup. Brex’s early YC email worked by creating urgency, clarity, and a strong value prop.

Building and Tracking a Simple Sales Funnel

Map simple stages: list leads, outreach, responses, demos, pricing, closed-won, onboarding. Use a spreadsheet or a simple CRM. Track counts and conversion rates at each step. Note drop-offs. This shows where you are weak (e.g., great opens, poor closes). It also lets you forecast how many outreaches you need for a target number of customers. Data turns guesses into a plan.

Prioritizing Easy Wins and Early Adopters

Your first customers should be your easiest. Start with your network and startups. They decide fast, have fewer blockers, and like new tools. Most people are not early adopters. Do not try to convert everyone. Send more targeted outbound to find the few who are ready to try and buy. Qualify early. Move on from slow or poor-fit leads. It is okay to say, “Let’s revisit in six months.”

Charging and Pricing from Day One

If they do not pay, they are not a customer. Price tests value. Avoid free pilots in B2B. Use a money-back guarantee or allow a monthly opt-out from an annual plan. Raise price until customers complain but still pay. Charging early brings focus, filters weak leads, and funds growth. It also reveals what features matter most.

Working Backward from Goals with Funnel Math

Set a target (e.g., 10 customers). Use actual funnel conversions to work backward to outreach volume. Example: 500 emails → 50% opens → 5% replies → 50% demos booked → 20% closed. That yields 2 customers. If you send only 100 emails with similar rates, you might get zero. Track your real rates and adjust plan and messaging. Make the math visible to avoid false conclusions like “sales doesn’t work.”

Running Better Demos

Founders should run demos. Start with questions to qualify pain, urgency, and decision power. Show how your product solves their exact pain. Focus on outcomes, not features. Keep it short and interactive. Confirm next steps at the end: timeline, stakeholders, pilot scope, and pricing. Then follow up fast and guide onboarding.

Case Studies and Proof Points

Brex signed its first 10 customers in the YC batch with a minimal product (virtual cards). Henrique onboarded users himself. The email used urgency and a clear value prop (no personal guarantee, startup-friendly underwriting). Other companies like Stripe, Front, and Amplitude began with outbound emails and product-led loops. The pattern is clear: founders drove early sales with direct outreach and hands-on support.

Tools and Resources

Start simple. Use apollo.io for data and sequences, close.com or Pipedrive for CRM, and hunter.io for email discovery. Read Founding Sales for a practical playbook. Follow Lenny Rachitsky’s newsletter for go-to-market benchmarks and case studies. Tools help, but founder effort and tight feedback loops matter more early on.

Early vs. Scalable Channels

At scale, growth may come from SEO, SEM, referrals, or PLG. But those do not create your first 100–1,000 customers. Early, use manual outreach, personal networks, and communities where your users gather. These channels let you learn fast and talk to users. Later, you can invest in scalable channels with confidence.

Key Themes

Founder Ownership Drives Early Traction

Core point: Founders must do the manual work that unlocks early customers. Sales and user talks are two sides of the same coin. Doing both informs product, messaging, and pricing. Outsourcing early sales hides this learning. Quotes:

• “Startups don’t take off by themselves. Startups take off because founders make them take off.”
• “You should not hire a sales team until you know how to do sales yourself.”

Outbound Is a Numbers Game

Core point: Most recipients are not early adopters. Expect low response rates and drop-offs. Use funnel math, track conversions, and scale outreach to hit goals. Do not quit after too few emails. Quotes:

• “You cannot close five customers from 10 leads, it’s not possible.”
• “The reason you have to send hundreds of emails is… most people are not early adopters.”

Charge Early to Prove Value

Core point: Free pilots blur value and delay learning. Use money-back guarantees or monthly opt-outs to reduce risk while keeping revenue discipline. Raise prices until complaints rise, but buyers still pay. Quotes:

• “If you don’t charge your customers, they are not a customer and you don’t have a company.”
• “You should not offer free trials in B2B sales.”

Prioritize the Easiest Customers First

Core point: Go after the path of least resistance. Start with your network and startups. Qualify hard. Drop slow movers. This speeds learning and builds momentum. Quotes:

• “Your first customers should be your easiest.”
• “Don’t be afraid of letting customers go.”

Work Backward From Goals With Data

Core point: Track each stage of the funnel. Use real conversion rates to plan outreach volume and improve weak steps. Data prevents false narratives and guides focus. Quotes:

• “You don’t know your sales conversion rate… that’s why you need a CRM to keep track of it.”
• “You sent too few emails… you can’t draw the conclusion that sales is not working.”

Key Actionable Advise

Key Problem

You are not getting first customers.

• Solution Founder-led outbound with a tight, simple sales funnel.
• How to Implement Build a lead list. Send 6–8 sentence cold emails in plain text. Run discovery-led demos. Track stages and conversions in a CRM. Iterate messaging weekly.
• Risks to be aware of Fatigue from low response rates. Over-customizing for one lead. Avoid both by qualifying hard and focusing on patterns.

Key Problem

Leads won’t convert, and sales feels slow.

• Solution Prioritize easy wins and early adopters. Drop slow, poor-fit leads.
• How to Implement Qualify on pain, urgency, authority, and budget. If a deal drags after 2–3 calls, pause and revisit later. Focus on startups and your network first.
• Risks to be aware of Missing a big account. Balance by keeping a small long-shot queue, but do not let it block momentum.

Key Problem

No clear value signal because product is free.

• Solution Charge from day one with risk reducers.
• How to Implement Use a money-back guarantee (30–60 days) or monthly opt-out on annual plans. Increase price until customers complain but still pay.
• Risks to be aware of Pricing too high too soon. Watch conversion and churn; adjust with clear thresholds.

Key Problem

No visibility on what to fix in the sales process.

• Solution Instrument the funnel and work backward from goals.
• How to Implement Track opens, replies, demos booked, close rate, and time to close. Set a customer goal (e.g., 10). Use your real rates to set weekly outreach targets.
• Risks to be aware of Vanity metrics. Optimize for closed-won and activation, not opens alone.

Key Problem

Users sign but do not use the product.

• Solution Hands-on onboarding.
• How to Implement Guide setup live. Share a short checklist and a 2–3 minute video. Confirm first value moment in the first session. Schedule a 2-week check-in.
• Risks to be aware of Over-investing in low-fit users. Qualify before onboarding.

Noteworthy Observations and Unique Perspective

• Letting prospects go speeds success. Quote: “It’s been great… we should talk again in six months.”
• Startups are the easiest first customers due to short decision cycles. Quote: “Startups have short decision-making lines.”
• Early scalable channels rarely work for first users. Manual outreach is the right start. Quote: “They didn’t start by running Google SEM or Google SEO.”
• Sales skill is learnable for founders who know the problem deeply. Quote: “If you know the problem… you can learn [sales].”

Companies, Tools and Entities Mentioned

• Companies: Y Combinator, Airbnb, Brex, DoorDash, Front, PlanGrid, Stripe, Amplitude
• Platforms/Communities: Product Hunt, Hacker News, TechCrunch
• Tools: apollo.io, close.com, Pipedrive, hunter.io
• Resources: Founding Sales (book), Lenny Rachitsky’s Newsletter
• People: Paul Graham, Trevor Blackwell, Gustaf Alströmer, Matilde Collin, Tracy Young, Steve Jobs, Lenny Rachitsky

Linkedin Ideas

Title: Why Your First Customers Must Be Your Easiest

• Main Point: Early wins come from easy, high-fit leads. Start with your network and startups.
• Core Argument: Speed and learning beat logo-chasing early on.
• Quotes: “Your first customers should be your easiest.” “Don’t be afraid of letting customers go.”

Title: Stop Offering Free B2B Trials—Do This Instead

• Main Point: Use money-back guarantees or monthly opt-outs to test value and get paid.
• Core Argument: Payment is the clearest signal of value.
• Quotes: “If you don’t charge… you don’t have a company.” “You should not offer free trials in B2B sales.”

Title: Outbound Is a Numbers Game—Do the Math

• Main Point: Track funnel conversions and work backward to set weekly outreach targets.
• Core Argument: Without enough volume, you will think sales “doesn’t work.”
• Quotes: “You cannot close five customers from 10 leads.” “You sent too few emails.”

Title: The One Email That Can Launch Your Startup

• Main Point: Short, plain-text emails with clear value and social proof win replies.
• Core Argument: Simplicity and clarity beat design-heavy messages.
• Quotes: “Write your email in plain text only.” Brex YC email example.

Title: Founders Must Sell Before They Scale

• Main Point: You cannot hire or outsource sales before you know the script.
• Core Argument: Sales and user insights are inseparable early on.
• Quotes: “You should not hire a sales team until you know how to do sales yourself.”

Blog Ideas

Title: The Founder’s Playbook for First Customers

• Main Point: A step-by-step guide to founder-led sales, from cold emails to onboarding.
• Core Argument: Early traction is built by manual, focused execution.
• Quotes: “Startups take off because founders make them take off.”

Title: From Zero to Ten Customers: Working Backward With Funnel Math

• Main Point: How to set realistic outreach targets using conversion data.
• Core Argument: Data-driven sales planning prevents false negatives.
• Quotes: “You don’t know your sales conversion rate… that’s why you need a CRM.”

Title: Pricing Early: Why Free Pilots Hurt B2B Startups

• Main Point: Charge early with risk reducers to prove value and learn faster.
• Core Argument: Payment clarifies product priorities and filters poor-fit leads.
• Quotes: “If they don’t want to pay… move on to the next customer.”

Title: Cold Email That Converts: Lessons from Brex’s Early Days

• Main Point: Anatomy of a winning outbound email and why urgency and clarity work.
• Core Argument: Short, targeted messages beat long, generic pitches.
• Quotes: Brex beta email highlights (limited spots, clear value prop).

Title: Early vs. Scalable Channels: What to Use When

• Main Point: Manual outreach and communities first; SEO/SEM and PLG later.
• Core Argument: Early learning demands conversations, not clicks.
• Quotes: “They didn’t start by running Google SEM or Google SEO.”