How to Land That All-Important First Customer
BY Minda Zetlin
No track record? No problem. Here's how one fledgling start-up signed up 40 Fortune 500 companies as customers.
If your company makes 99-cent consumer items, it should be easy to get customers to try one. But what if you have a brand-new product aimed at major corporations? Large companies are famously risk-averse, and few will take a chance on an unknown.
That was the conundrum facing Josh Green, founder and CEO of Panjiva, which connects corporate purchasers with more than 1.5 million suppliers across the globe. (The name is a play on the ancient single continent Pangaea.) Formerly a corporate purchaser himself, he knew how badly manufacturing firms need reliable information on suppliers in other countries.
But when the company launched in 2009, it was very hard to get going, Green recalls. "People said, 'You're a small company. We've never heard of you. We have armies of people all around the world charged with collecting insight about the supply base. Why should we trust you?'" The timing didn't help. "It was a very dark time in the economy and there weren't a lot of companies actively looking for new suppliers," Green recalls.
Panjiva's outlook improved when it managed to sign up one Fortune 500 company. "For most of 2009, that one customer was what we had," Green says. And that was enough to start building a solid business. Today, Panjiva has more than 4,000 clients, 40 of them in the Fortune 500. So far in 2012, Panjiva customers have bought an estimated $60 billion in products from companies they found through the service.
Here's Green's advice for tiny start-ups looking to land mega-corporations as customers:
1. Get out there!
An invitation to speak at an industry conference, back when Panjiva was still a prototype, made all the difference. "We were approached by folks who said, 'This is interesting—can you do it in our industry?'" Green recalls.
"In retrospect, the lesson is that you have to get in front of as many people as possible," he adds. Only the rare corporate risk-taker will give an unproven service a try, and the more exposure you get, the more likely you are to find these free thinkers. "It has as much to do with who they are and how they think about the word as it does with you and how you sell them."
2. Ask for a meeting before you have a product.
"One thing that's very powerful is to say, 'I'm looking to build a product and I'm not yet ready to sell it, and I'd love to get your advice on what I should be building,'" Green says. "The visionaries you're looking for are very likely to take those types of meetings. They get bombarded by salespeople all the time, but they don't get asked to discuss ideas."
3. Don't exaggerate.
Be very conservative in the claims you make for your new product. "If you're a young company and you say you're going to turn lead into gold and don't acknowledge the challenges of really delivering value, you'll lose credibility very quickly," Green warns.
4. Join the community.
"Anybody starting a business is operating within a community that can be defined in a variety of ways," Green notes. "A restaurant is in a physical community. If you're starting a B2B site, you're in a community of professionals. The key is to get to know the individuals in that community. Very quickly you will start learning who is influential and you'll start building relationships that will lead in a lot of directions. They can lead to speaking opportunities, customers, and partnerships. Don't be shy about reaching out to people, even if you've had no contact before. And don't be shy about asking for introductions."