So you’ve hit the 1,000 customer mark: Congratulations! You’ve made it further than many startups ever dream of going. But you and I both know you’re not done yet, so what’s next?
- 0–10 was all about leveraging your network.
- 10–100 was all about identifying and doubling-down on your ideal customers.
- 100–1,000 was all about metrics, KPIs, and segmentation.
But … now what?
Moving beyond the 1,000-customer mark will be different than anything you’ve done before. Your growth so far has been the result of a hyper-specific focus on a niche.
Future growth will be about expanding that focus and investing in potential. You’ll be entering new markets, both locally and internationally, and will need to turn a critical eye towards your sales process.
Ready for the next big jump? Here are four steps to grow sustainably beyond your first 1,000 customers.
Step 1: Segment your customer base
Start by separating your current customers into two categories: Top-tail and long-tail.
- Top-tail customers are your largest customer group; the customers you specifically marketed and sold to in the initial growing phase.
- Long-tail customers are customers outside of your initial target market; usually early adopters who stumbled across your product and found a way to make it work.
If you’re at the 1,000 customer mark, your initial market is probably nearing saturation. You might still get some new sales out of it, but to really grow, you’ll need to expand into new markets. Here’s how to find them.
Step 2: Identify high-potential markets to experiment with
Let’s take a closer look at your long-tail customers.
First, group them together by market. For example, “Healthcare,” “Marketing,” or, “Legal.” Alternatively, if you’re looking to expand internationally, those markets might be countries.
Now prioritize those groups based on the value they generate for your company. You can measure that value in a number of ways. For example:
- Money: The amount of revenue they generate for your business, measured monthly, quarterly, or annually.
- Lifetime value: How much revenue you get from customers (on average) from the moment they start paying you, to the moment they stop.
- Size: The overall size of customers, measured in revenue, customers, or employees.
- Channel: How customers found your product. For example: Facebook ads, word of mouth, cold outreach, or content marketing.
- Acquisition cost: How much do you have to spend to acquire new customers? Keep in mind that even “free” exposure, like content marketing, has a price tag (often measured in time).
The groups that provide you with the greatest value are your high-potential markets; or industries and locations likely to generate increased revenue if you invest in them.
Don’t focus on today’s reality. Focus on future potential!
Choosing your next market isn’t as simple as “the one with the most customers or revenue.” You need to look at potential, not just reality.
For example, imagine you have two high-priority markets: Construction and pharmaceuticals. You have 20 customers in construction and three in pharmaceuticals. What’s the best market to expand into?
It’d be easy to assume that construction is a more viable market. But what if pharmaceutical companies pay more and are more likely to buy? Or what if you’ve already tapped the construction market, and aren’t likely to expand it further?
That’s where step three comes in.
Step 3: Run experiments and find winners
Remember those product/market fit tests you performed in the early stages of your startup? I hope you took notes, because you aren’t done with ‘em yet.
Once you’ve identified a handful of high-priority markets, perform validation tests to ensure there’s a lasting demand for your product.
This ensures you avoid a common mistake for many first-time entrepreneurs: Biased market investment, which happens when a founder discovers two high-potential markets: one they’re excited about and one they’re not. Instead of taking the time to validate the markets, they over-invest in the one they want and ignore the one they don’t.
It doesn’t fucking matter if you’re “excited” about a market or not
How you “feel” about a particular market shouldn’t factor into your decisions. Growth beyond 1,000 is about chasing potential, and potential should be reason enough to be excited. And if it isn’t? Get over yourself.
Your time and resources are more precious than ever, and need to be invested in markets with the highest possible ROI.
Step 4: Bet the house on the winners
Once you’ve identified your new market(s), it’s time to start investing in them.
No surprise, this is where most startups get stuck. They knew everything there was to know about their initial market, but now they’re entering uncharted territory and don’t know what to do.
You don’t need market expertise or experience
Here’s the good news: No matter how different two markets are, they’re both after the same thing: Using your product to solve their problems.
Sure, they might have two different problems that require two entirely different workflows, but that’s okay. You can learn about that, just like you learned about your first market.
Don’t make the mistake of assuming you need to be an expert in a market before entering it; you don’t. You don’t need to hire experts, either.
It doesn’t matter whether you’re expanding from tech to construction or America to South Korea; you have access to the resources you need to gain leverage. Here are two strategies to help you get started:
- Your early adopter customers in the new markets. Your customers are market experts. Have a question about this market? Just ask them! Reach out and say, “We want to invest more in your market. Would you be willing to hop on a quick call with us to answer a few questions as a trusted expert?”
- Domain experts for hire. Book some time with an industry expert. With the right questions, you can learn most things you need to know in a matter of hours. Just follow the 80/20 principle.
If you’re honest with yourself, you probably weren’t an expert in your initial market right away, either. And even if you were, you probably still learned a lot. This is no different. Treat it like a learning process and you’ll do fine.
Example: ElasticSales was entering new markets within days
We used to run a huge outsourced sales services company selling for over 200 different startups in hundreds of markets we weren’t experts in. How did we onboard new sales reps to these new products and markets? Within a day. Wanna know how? Check out our new sales rep onboarding hack here.
Adapting your sales process
The sales process that worked in America might not work in Germany, just like the sales process that worked in the tech industry might not work for the construction industry.
It’s usually best to treat new markets like a fresh launch. Eliminate all assumptions and develop a sales process unique to the market. Been awhile since you created one? Here’s a quick review:
- Do a full walk-through of one close.
- Establish qualifying criteria.
- Create a sales script.
- Establish a conversion funnel.
- Optimize implementation, then ...
- Iterate, iterate, iterate.
Accomplish this by segmenting your sales team. Select a few salespeople to take full responsibility for the new market or, even better, bring in new hires with relevant experience.
Then, give them full reign over the sales process. They can start with whatever system you’ve used in the past, but expect them to tweak it (or even overhaul it) as they run tests, track sales data, and talk to prospects.
Depending on how different your new market is, you may not have to change your process at all. Or you may have to rework it entirely. As long as you’re attentive to your data and sensitive to your market’s needs, you’ll find the right approach.
4 costly mistakes you should avoid when scaling internationally
For the most part, expanding into new countries follows the same principles as new industries. That being said, there are a few specific and very costly mistakes you might want to keep in mind if you’re considering international expansion.
Mistake #1: You think bigger is better
Just because one country has more customers than another doesn’t necessarily mean it’s a more viable market. At a minimum, be sure you also measure the average lifetime value of customers from each country, and how many prospects within each country match your specific customer profile.
Mistake #2: You’re translating your website
Instead of spending an insane amount of money and time on translating your website to a new language, updating currencies and other local data points, just start by creating a localized version of your current website that includes testimonials and case studies from local, recognizable customers in each location you serve. Then, redirect traffic from those countries to this new (lightly) localized site.
Mistake #3: You’re opening an office in each country
The days of needing an office in each country are over. Instead, follow in Twitter’s footsteps and plant your offices in locations with a high multi-national population, such as San Francisco or Berlin and start expanding around the world with locals from a single location.
Mistake #4: You don’t pay attention to politics
Some locations, such as China or Europe, have strict privacy laws that can make expansion difficult. When considering investing in a new country, look closely at what it’s going to cost you in time, energy, and revenue. In the end, some countries might be more trouble than they’re worth.
The real (unsexy) secret to scaling your startup to 10k customers
Reaching 10 customers is exciting. 100 is exhilarating. 1,000? That’s a milestone few startups ever hit. But if you’re the kind of founder who lands 1,000 customers, you also know it’s only the beginning.
A lot is going to change in the coming weeks, months, and years. But one thing must never change: Your devotion to your customers. No market, no matter how high the potential, is more valuable than the customers in it.
Remember: If it wasn’t for each individual customer, you wouldn’t be where you’re at now. Continue to treat them amazing, ensure that you are delivering success to them, obsess over deepening your understanding of their unique problems and challenges and you’ll take the current success you have and scale it to its full potential.
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Podcast: Beyond 1000 Customers – How to Expand in New Industries and Countries
This post was inspired by a conversation Hiten Shah and I had on our podcast, The Startup Chat. Listen to it here!
How to get the first 10 customers for your B2B SaaS startup
In the early stages of your startup? Your business isn’t ready for the strategies above. Start here instead.
Early B2B SaaS growth: How to go from 10 to 100 customers
10 to 100 is one of the first real test of a startup’s sustainability. Learn to pass the test here.
5 metrics B2B startups need to focus on to scale from 100 to 1,000 customers
The leap from 100 to 1,000 is all about metrics, KPIs, and segmentation. Learn how to use data to fuel growth here.