
Ask HN: Subscription web sites: How did you get your first customer? - bkovitz
Question for techies who started a web business with a subscription revenue model:  How did you get your first customer?<p>I'm asking because I'm a typical shy coder: cranking out truckloads of Python code is not a problem, but socializing and having a big network of business contacts is. I'm still grooving on David Heinemeier Hansson's speech at Startup School, and I want to go the subscription route.  And I believe that nothing will drive the evolution of a site better than having customers.  How to get those early customers, though, looks right now to be a dark mystery.  How have other techie folks overcome this problem and gotten those first few customers?
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whyleyc
Offer a compelling free service that reels users in and then sell added-extras
in the subscription account that they can't live without - aka the "freemium"
model.

This is what 37Signals do so well, we operate a similar model at Zamzar and
more recently Animoto seem to have struck gold with this approach - with them
you can cut a 30 second video mix of photos and music, but if you need more
time you have to pay.

~~~
petercooper
Seconded. This is what I did with a company I started three years ago (and
sold, at a good profit, last year). The audience was there, and they were used
to getting similar services for free. By having a few extra killer features
and being more innovative generally, 5% of free users converted to paying
subscribers.

Sadly this percentage was far too low for it to become a 'big' business and my
knowledge of how to grow a company was very poor back then (I used to believe
you got the product right, then sold it.. no sirree, that's not how big
business really works).

~~~
bkovitz
What were the services and new features? And of course, how did you find those
first few customers, so you could tell that they really liked the new services
and features well enough to pay for them?

~~~
petercooper
Good questions. It was an RSS filtering, reformatting and republishing
service, so the audience was mostly geeks and what I call "media geeks"..
people who run Web sites who wanted to republish blended feeds on their
sidebars, stuff like that. One important unique feature in our case was that
NO "Powered by Whatever" nonsense was added into the republished versions
people put on their sites. Secondly, we let people blend feeds, rather than
just republish a single one (this was very new in 2005!). We also supported
filter by query, stuff like that. Oh, and perhaps biggest of all was allowing
users to ENTIRELY change the template, free-form. We had predefined templates,
but gave the user TOTAL control over the output.

I'm not really sure about how those people found the service. There were a few
minor writeups on reasonably unpopular blogs at the time, but 100 signups a
day were coming in so I didn't care. Unfortunately I focused on the technology
instead of the business so never bothered to keep track of it.

~~~
trevelyan
>> (I used to believe you got the product right, then sold it.. no sirree,
that's not how big business really works).

What would you have done differently in retrospect?

~~~
petercooper
I'll say what I'd do now, and what I'm about to do on the "next" thing, having
gained quite a lot of education and mentoring on the "business" side of things
since then.

I'd start selling. Day one. Even if the product or service I'm selling still
needs to be developed, I'd work out who wants what I'm developing, what
they'll pay for it, and how I can sell to them. Once I have the product
working in a saleable form (think 37signals "Getting Real" levels of "done"
here - not perfectionism at all), I'd switch 80% of energy to selling it. Cash
is king. With cash coming in, I can pay other people to do the grunt work as
well as work on improving the product.

But.. selling is absolutely key. Last time I focused on making a kick ass
product, and it worked, but I didn't know who the market was, and all the
sales were from luck alone. I didn't sell the product whatsoever. It sold
itself, but that's not a good strategy unless you have a mass market product.
If you have a niche product, you need to be selling it yourself from day one.

I would highly recommend a book called "Ready, Fire, Aim" by Michael Masterson
( [http://www.amazon.com/Ready-Fire-Aim-Million-
Agora/dp/047018...](http://www.amazon.com/Ready-Fire-Aim-Million-
Agora/dp/0470182024) ). It outlines the whole process of successfully
generating a high revenue business from start to finish, and is written by
someone who has launched several businesses that have gone on to reach 8 and 9
figure revenues.

------
jakewolf
Adwords! It's converting profitably for a subscription site I'm helping out
with. Can't wait to qualify for Google CPA -
[http://adwords.google.com/support/bin/answer.py?answer=60150...](http://adwords.google.com/support/bin/answer.py?answer=60150&ctx=sibling)

~~~
bkovitz
Wow, so AdWords has actually worked for a subscription site. Is this how you
got your first customer, or how you expanded the business after the initial
few customers?

I'm looking for how to get that evolutionary-feedback process started.

~~~
jakewolf
Launch site, no inbound links, nothing indexed in google, buy ads, get
subscribers. Now, 6 months later, pages are getting indexed and starting to
rank higher for keywords that actually convert. About about 40% of signups now
come from adwords the rest organic.

Putting videos on youtube proved to be a quick and dirty way to get visibility
in search results while the site was nowhere near the top 500 in search
results.

Only problem is it's a small, niche market and it's hard to get much quality
traffic. Still, an extra 2-3K a month is always nice to have around.

~~~
kirubakaran
_> an extra 2-3K a month_

This is what I am trying to do. Please share any other tips that you have
please.

------
run4yourlives
I don't know you, and I could probably churn out a bunch of semi-valuable
tips, but instead of doing that, I'm going to suggest the following: Find a
partner that has the business skills you lack in marketing/sales/promotion.

I think you'll be much better off with someone like this worrying about these
problems while you handle the technical realities. Once you get customers, the
problems of getting them will seem trivial to the problem of keeping them.

Good luck.

~~~
bkovitz
We may well bring in a partner who has more sales skills.

However, I'm not looking for tips or advice (right now), I'm just looking for
stories of how techie types with subscription web sites actually got their
first customer.

------
matthewking
Open your product to beta testers, and hopefully once the beta period stops, a
certain percentage of the testers will have built a reliance upon your
software, and sign up to the paid account.

You can also use the testers for testimonials etc for your site. A referral
fee will then help push your current customers to recommend it to their
friends.

It'll be a lot easier to find people to sign up for free, then it will to sign
them up immediately for a paid account.

You can then convert them later :)

~~~
bkovitz
How did you find your first beta tester?

~~~
breck
Find an active community website(call it X) that is related to your product
and post some messages in the boards offering a free trial to X members. For
instance, if your product is for investors, post some messages on Fool.com or
MoneyMakersGroup. If your product is for gamers, maybe something on the IGN
boards. For hackers, this site would do. For car buffs, maybe CarForums.net.

If it's a B2B offering, find a related vertical and look for forums or
industry websites for that vertical. Again, offer a free trial or some kind of
benefit to entice these customers to sign up and keep them satisfied while you
work out the bugs.

Generally there are very active and loyal members at these sites that are very
interested in new tools that would appeal to their niche community.

~~~
bkovitz
These sound like fine ideas. Are they how you got your first customer? How did
that happen? I'm interested in hearing the story from start to end.

~~~
breck
Yes, for a project I'm currently working on. It's targeted toward consumers in
a small niche medical community. I Google'd until I found a handful of active
forums for this niche. Then I posted to the most active one. I offered a free
year's trial to the first beta users. I got 12 from that site. Then after a
few days I repeated that process on another forum and got 8 more. I'm working
out a lot of bugs but having real users is great. So far they've been active
and enthusiastic with feedback. I'm not sure whether this is the right niche
for my product, but am improving it a lot with their help. I haven't charged
anyone yet(in fact, haven't even setup the payment system yet), and may run
into difficulty when I do launch the public product since it seems consumers
are very reluctant to pay for things online. But that's why it's great to have
beta users from my target market who can help me get the product to a point
where it's good enough to charge.

~~~
bkovitz
Wow, so you got your initial users by posting on-line! That's interesting. So
far, I had been assuming that we would have to work through our networks of
friends and/or make cold calls. Cold-calling is probably the hacker's worst
nightmare, but I've been revving up: "I can learn to do ANYTHING!!"

------
izak30
My product is based on a subscription model. Here's what we did. First: Make
something that people want and would be willing to pay for. Second: Tell
everyone you know that's what your doing. Ask people who they know that might
be interested. People are usually willing to help and give you a name or two.
Third: Don't count-out old-school marketing. Cold calls, business events, etc,
go to them. Meet your competitors, usually they won't be adverse to this and
you shouldn't be either, you can always learn something from them.

Know your competitors very well, and know what they do well and what they do
poorly (or at least what you do better). This is important.

Third: Have a working demo. I don't give away free trials, I have a demo. This
may or may not work for your product.

Fourth: Follow up with everybody, always send thank you notes, and follow up a
week later, every week until they give you some straight answer.

I'm a coder who is very new to sales, but I've had some good people around me
that were quite good at sales. Meet those people, show them your product, ask
for some help.

~~~
bkovitz
What did you make that people wanted?

~~~
izak30
We have a hosted content management system at Servee.com Keys: If you're in a
market where there are many competitors, separate yourself by doing SOMETHING
better (price, features, experience or a combination) Designers like it, so
they sell it to their customers; They like that they can give their clients
full content control and powerful tools, but not design control. End-Users
like it, because we test it on people that have very minimal computer
experience. This means it becomes very intuitive to use. Our UX is excellent.

~~~
bkovitz
Thanks for the info! Interesting how you found a way to differentiate yourself
from competitors.

------
bayes
I'm sure this is hopelessly old-fashioned, but we advertised. Our web business
is aimed specifically at artists, so we advertised in print magazines aimed at
artists, handed out fliers at art exhibitions etc.

~~~
bkovitz
Thanks! What web business is it?

~~~
bayes
Nothing very interesting to the high tech sophisticates of Hacker News, I
suspect. We're a one stop shop for artists who want their own websites - we'll
register their domain name, sort out their hosting, give them access to our
CMS so they can create and maintain their website. But the point of my post is
that as long as you KNOW WHO YOUR CUSTOMERS ARE, you can be creative and find
cheap ways to reach them. It costs us almost nothing to get some postcards
printed up and spend a few hours enthusing about our service to artists at a
local exhibition. And I'm sure you can do the same, even if your service is
less tightly focused. If it's aimed at students and young people, think about
legitimate ways (that won't get you thrown off campus) of handing out fliers
to students at your local university. Then think about how you enthuse and
incentivise your friends and friends of friends to do the same thing at the
universities and schools they go to all over the country. If it's aimed at
small businesses, write to or call in at one hundred local small businesess.
It may sound hopelessly inefficient and low-tech, but it will get you your
first customers. And we've found that word of mouth does work (despite what
Seth Godin says). The other thing I can't emphasise enough for a subscription
service is that it needs to be REALLY easy to sign up for and try out - Paul
Graham has written an essay on this I think.

~~~
bayes
Realise that may not be very helpful if you're shy. That's probably a whole
other issue to work on.

~~~
bkovitz
I've actually had some success on the shyness front. I did two things here:
took a course on improvisational comedy, and hung out with some pick-up
artists who showed me how they start conversations with women. These things
got me into the mindset of "when something looks like I couldn't possibly do
it, _test that hypothesis_." Last Saturday, I actually got a date by walking
up to a woman on the street and asking her! Later that night, I had dinner
with her and her family. Even a year ago, this would have been unthinkable.

~~~
bayes
Well done - that's impressive.

------
clintavo
At the risk of stating the obvious . . . .

Don't build your app and then look for your first customer.

Find your customer first, find a need, and then build an app that fills that
need.

Listen carefully to things people you know say, if you're paying attention,
you will hear tons of needs waiting to be filled.

------
there
i posted here on hacker news and got 3 subscriptions out of it when my product
first launched.

<http://corduroysite.com/>

------
aneesh
Are you solving a real problem for someone? Whose problem are you solving? You
should have a flesh-and-blood person you can point to (not just "surfers", or
"facebook users"). If you don't actually know someone who has that problem,
how do you know people are willing to pay for it?

So I'd say you have to know your first customer, and build from there. If you
don't personally know them, go to a meeting, conference, or mixer and meet
them. As uncomfortable as you may be, just do it, or find a partner who is
good at it.

Maybe for a free site like facebook, you can "build it and they will come",
but if you want people to pay you, you have to get up from your computer and
sell your product.

------
brlewis
My first customer was not a paying customer. It was probably my 4th or 5th
that actually paid. The first people are really beta testers.

I knew people liked it when they asked what it cost.

Disclaimer: I'm still a long way from profitable, and I'm not totally
committed to the subscription model. In 2007 my subscription revenue was
$70.50 and ad revenue was $2.05.

~~~
bkovitz
Thanks! Interesting data point that you didn't charge your first few
customers.

What is your site?

~~~
skmurphy
With respect, you can't call someone a customer if they are not paying you.
There is an enormous difference between a user and a customer (or a prospect
and a customer). You should reserve the use of "customer" for folks who are
actually paying you. Giving a service away doesn't create customers (it may be
a part of your customer creation process but they become customers when they
pay you). If a "beta customer" does not pay you they are not a customer (yet).
There are distinct methodologies and processes for customer development in the
same way that there are for product development: one excellent book on
Customer Development is "Four Steps to the Epiphany" by Steve Blank, which is
chock full of practical advice on developing early customers.

~~~
brlewis
I think it depends on the demographic of your prospects. For some demographics
"user" and "customer" aren't so far apart.

~~~
skmurphy
If you are selling advertising then your customers are your advertisers, not
the audience that you supply them. Users may be customers in larval form, but
it is a significant step for a subscription model business to convert a user
to a customer. Many startups fail to pay attention to this soon enough (e.g.
before they go broke).

------
aantix
Find the biggest communities dedicated to the niche your software services.
Big Boards is a good starting place. <http://www.big-boards.com/>

Then jump into the forums and start posting responses. You don't want to come
off spammy, but definitely try to slip in references to your site whenever
applicable.

------
skmurphy
The teams I know that were able to attract early customers had a sales pitch
(a clear benefit, demonstrable difference from alternatives, and a reason to
believe) and were "open for business" (had a company and a way to accept
payment). It's hard to tell where you are in the cycle but those would be two
places to start.

