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When does a startup become a business? After getting a paying customer. Without a paying customer you don’t actually have a business, no matter how much effort you’ve spent on the product. Without a paying customer, all the ideas are pretty much hypotheses.

That’s why, in my opinion, getting your first customers is the single most important things most startups can do. So why not start with that? What is the point of building a product if no one is going to pay for it?

How we pre-sold our product

This year I had a fun experience of pre-selling features that haven’t been built yet. By that time we already had an MVP of our product Renta, and a customer who was interested in using it. At the same time our software didn’t have a feature that was really important to him (our app wasn’t integrated with the CRM system he used). So we offered our client to pay for the development of this feature in exchange for using the software free for life plus premium support.

The client was really happy with the deal. He received the feature he needed by paying less than others would pay for using it over time.

Furthermore, the whole idea for Renta came from the service my co-founder was already getting paid for by his clients. His prototype did pretty much the same things our app is doing, it just wasn’t automated.

As a result of the pre-selling we received:

  • Money for the development.
  • An insight on what features are actually important in the product.
  • New feature that other clients could use which greatly improved our product.

How can you use pre-selling?

Sounds good, but where does it apply?

1. When you have an existing product and want to add new features and/or pivot to a similar product. If you’re not sure whether you should add a specific feature, just ask your clients to pay for its development, but on good terms for them. Your clients should be somehow rewarded for paying in advance, e.g. by a huge discount. But if no one agrees to pay for the development, there is a good chance no one actually wanted this feature badly enough.

2. When you don’t even have a product, just an idea. Having paying customers before even starting the development is a great way to start a business. We did it with our app Renta by selling the prototype to a client and actually making a profit from this deal. Plus, pre-sales can be a way to fund the development without venture capital. And if you do want the support of VCs, having paying customers before even having an MVP would be a huge validation of your project they would love to hear about.

Сonclusions

I don’t see pre-selling as a mere tactic. It can be a strategy behind your whole business. When applied right, pre-selling can serve for both validation and funding. Plus it’s fun and forces you to actually deliver the product your promised. Use this strategy right and never again you will make something no one wants!

 

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