Beyond the Pitch
Rev1 Expert Report: Helping Entrepreneurs Close the First Customer
Execs from Leading Venture Development Firm Reveal Top Tips to Help Startups Master Sales
Columbus, OH—August 1, 2016—As every entrepreneur knows, it’s not enough to have a good product – you must also have a customer who wants it. In fact, more than four in 10 startups say a lack of market for their product was the reason their company failed, according to a study by CB Insights. That is why Rev1 Ventures, the seed-stage venture development organization, today released its top advice for the best way for entrepreneurs to close their first customer and start out on a path toward sustainable success.
The Rev1 team is seasoned and experienced. As a result, Rev1 takes a truly unique approach to working with its portfolio companies by providing both the capital and the strategic resources to help them with the critical first phases – including the best ways to approach, market and close the first customer. In fact, as part of Rev1’s innovative First Connect network, the company is dedicated to helping its startups connect with first customers and is on target to assist the portfolio in closing $1M in contracts in 2016.
“Sales is all about closing deals, and that’s what really matters in the first years of a startup’s life,” said Greg Pugh, SVP of Customer Acquisition for Rev1 Ventures. “In order to be successful, entrepreneurs must believe that in a startup, everyone sells – including the founder. By building selling into the culture of the company from the start, closing the first customer will be easier, and closing the next customer will be second nature.”
According to Steve White, CEO of Clarivoy, a Rev1 portfolio company, “Rev1’s First Connect network was an important component of our early success. The program helped us build the foundation to help us scale, including how best to sell. Rev1’s relationships and market insights enabled us to win our first national customer in a relatively short amount of time. That business led to more opportunities with other prospects in the market, and proved we were ready for prime time.”
“Inking the first deal is one of the most challenging, gratifying and defining experiences for a new company,” said Tom Walker, president & CEO of Rev1 Ventures. “It is often a stage that can be over-looked at the initial phases of product and company development, and is one that can be met with many future hurdles if the right customer and terms are not set from the start. Having invested in hundreds of early-stage companies and as an entrepreneur myself, I wish I would’ve had more early insight into the best ways to approach first customers, which is why our team is sharing the knowledge now.”
The Rev1 team is sharing its top advice for selling, so that more startups can benefit from their unique approach to closing the first customer and beyond:
- CEO Tom Walker says: Never take any meeting with a potential customer for granted. Do your homework. When you’re working on your company’s first sales, you may spend a week studying the customer and the competition just to prepare for a 30-minute call. Over time, your customer and industry knowledge will build, but problem solving and preparation, those will always be the keys to successful sales.
- SVP of Customer Acquisition Greg Pugh says: Be bold and ask obligating questions of your prospects in order to understand their intentions and your opportunity for working with them and growing with them. It also helps you identify the early adopters – the visionaries and technology enthusiasts. Those are the customers who take a risk when no one else will. They help you make your product what it needs to be. They give you credibility, and often times, they become your friends.
- EVP of Investments & Venture Acceleration Wayne Embree says: It’s when you really understand your customer’s business that you can sell to them. They will trust you because you demonstrate that you actually recognize that their business is more than the problem that you are trying to solve. When you put it in terms of how your product makes their relationship to their customers better, that will secure them to you as a customer.
- Managing Director of Ohio TechAngel Funds Parker MacDonell says: Look for prospective first customers who have a track record of doing business with early-stage companies. Ask someone who knows you personally to introduce you to someone she or he knows personally at the prospect company. That removes some of the uncertainty the prospect might feel at doing business with a young company led by an entrepreneur whom they’ve never met.
- Chief Marketing Officer Kristy Campbell says: Your first customer is extra important because you’ll need them as a reference to land your second and third customer. So it’s critical your product or service can provide the value required to ensure they come away from the process as an active advocate for your work.
Rev 1 has helped make Ohio a growing hub of startup activity – CB Insights recently named Rev1 Ventures as the most active Venture Capital firm in the state of Ohio. In 2015 alone, Rev1 attracted nearly $100M in capital to the region, and its portfolio generated $162M in revenue and created nearly 300 new jobs just last year. For more insights from Rev1 Ventures, visit https://www.rev1ventures.com/blog/
About Rev1 Ventures
Rev1 is a seed-stage venture development organization that combines investment capital and strategic services to help entrepreneurs build products people want and companies that succeed. Our seasoned, data-driven team delivers early market validation for startups, helping them lay the foundation for scalable growth with the skills to evolve their product, sell to customers, and build the right team. Rev1 manages a continuum of investment support from corporate, community, and innovation partners, as well as the Ohio Third Frontier. For more information, visit https://www.rev1ventures.com.
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