Entrepreneurs like to imagine themselves in the spotlight: the objects of customer adulation. For a new business, that's the wrong perspective. Instead, startups should direct the spotlight toward their clients. Invest significantly in turning your first customer into a star and reap the rewards of an enthusiastic ambassador and ally.
That strategy paid off for Bondilyn Jolly, owner of NMD Inc., in Slidell, Louisiana. "It's a funny story how I started the business," Jolly told us when we visited the company's brightly decorated, bustling headquarters. "I am actually a classically trained musician." After studying at the Ithaca Conservatory and teaching music for several years, Jolly moved to southern Louisiana with her husband, who had been transferred there.
It was the middle of the school year, and with no teaching jobs available Jolly volunteered to help out a local gym with an online marketing campaign. "It was the late '90s, so this was kind of new," she said. "It was a huge success, and within six months I had so many people asking me to do the same thing for them that I started a business out of a spare bedroom in my home."
Lacking a technology background, Jolly was limited in how much she could grow. But once she hired a full-time developer and a graphic designer, NMD began bidding on more sophisticated work. After a lengthy courtship, a local government agency signed a contract for a revamped software platform for its constituent communication strategy. The growing business was eager to show what it could do on a larger scale.
"And, a week later Hurricane Katrina hit. That was a really insane time for us," Jolly recalled. "We had six feet of water in our offices. But--I tell you what--we made that contract happen. And the software platform that we developed is the largest and most comprehensive of its type in the United States."
Jolly then followed the economies of scale strategy we explained in an earlier column. Building the platform from scratch required significant investments in development and programming. But once NMD had the platform working for one client, the costs to adapt it for additional customers was minimal. So Jolly chose another promising vertical: real estate. "We saw an opportunity because there were no solutions as comprehensive as ours supporting the needs of the real-estate space," she said. "But it is hard to stand out as a small technology vendor. "
NMD needed someone it could turn into a rock star. Jolly targeted a business development consultant for RE/MAX who was new in the organization and trying to make a name for himself. For this single client, NMD created an entire communications platform, web-based marketing campaign and outreach program. "We took him from obscurity to being the number one franchise sales executive in the entire RE/MAX universe within 10 months," said Jolly. "That immediately caught the attention of RE/MAX corporate, who wanted to know what this guy was doing! It's now been rolled out through their entire North American organization."
Of course, Jolly was taking a risk. One struggling individual couldn't foot the bill for an entire new platform customized for the real-estate industry. So, in building the platform, NMD was really making an investment. "We did it as a loss leader," Jolly said. "Our deal was this: if we make you a rock star, we want you to walk us into conversations with the right people. We made him a rock star, and he was our champion."
The lesson: The best early investment your company can make may be in furthering the career of your first customer. So choose that customer wisely. Identify someone whose problem you can solve--and whose reputation and prospects will soar once you've solved it. Even if you lose a little on that deal, you'll more than make it up when your rock star sings your praises to other potential customers.