Recently, I read something on Linked that said you know you have achieved product-market fit when the cost of acquiring your customers is less than the value of the customer themselves (aka LTV > CAC). And let’s be clear, early on, your customers are very valuable, but they also cost a fucking lot. Not only because it’s hard to get them, but also because they will quickly start asking for things that cost a lot of money. It’s not just the cost of acquisition, but also the cost of support. And, if you’re like most successful founders and entrepreneurs, you’ll do *anything* for your early adopters. Anything.
But what happens when, one day, you wake up and realize the cost of continuing to support those customers is more than they are truly worth? What if the things they’re asking for aren’t helping your larger market, or aren’t lining up with where your product is heading?
This is where you have to get comfortable, for lack of a better word, with nuking them.
I bring this aphorism out in two different situations, both of them equally important:
- When I’m discussing whether or not a product should launch. Founders often worry that if their product isn’t perfect yet, people won’t think it’s good enough and won’t like it. To them I say, run the math. How many people do you think will use your product in the first weeks after launch? First of all, divide that by 10. But for the sake of argument, even if you get everyone you think you will — let’s say 1,000 people week one — if those 1,000 people are your biggest concern, what does that say about your potential market size? If your first customers are desperately precious, you don’t have a market and you should go launch a different business. If you have millions of potential customers, why do you care so much about the first 1,000? Bottom line: it’s always harder to launch than you think, and you’ll only get a few customers to start. If you lose them, who cares. By the time you have enough customers that it matters, you’ll have had weeks or months to improve your product.
- When I’m trying to get someone to recognize that early customers make really lousy ongoing customers. While it’s true that Early Adopters are your biggest advocates, your marketing rocket fuel so to say, they also feel a sense of entitlement and ownership over what you’re building. They think that, because they were here first, you should listen to them and do what they want. That becomes a problem when there are 1,000 of them, and still 5 million customers you haven’t acquired yet who want something else entirely. Your earliest customers are with you when you’re still drunkenly stumbling towards product-market fit, and what ends up achieving that fit in the sober morning light rarely completely satisfies the needs of your drinking buddies. When they realize you’re no longer solving their problems, they’ll be pissed. You need to let them go so you can focus on the people you’ll make happy moving forward.
A final note about how to go about this, and that is to say, just do it. Your early customers aren’t your ex. When you break up with a person, you do it with a face to face conversation (if you’re a good person). But with customers, you have to weigh if you ever want to squarely tell anyone, especially in business, that you no longer care about them. To be fair, it won’t stop them from feeling that way when they realize you’re no longer answering their emails, but that shouldn’t stop you from doing it. There is no way to let them down easy, and you shouldn’t feel like you have to. Chances are, they’ll be fine. While we all want to be the hero in our own stories, the fact is, we overvalue ourselves (and our products) in everyone else’s lives.
People will function without you. People will be ok. People who aren’t, aren’t reasonable. So don’t bother trying.
— Eric Marcoullier
I’m a bit of a people pleaser and this lesson took me a long time to really embrace. Thankfully, in my years as a coach I’ve been able to help a number of founders make this transition as they scale their business to a much larger market. Want to know more? Just email me at email@example.com or drop by my coaching site.