How to Scale from 0 to 1,000 Customers (Without Breaking Everything)

Desiree: Hey everybody, this is Desiree Echevarria with Close, and I'm joined again today by Steli Efti, co-founder and CEO of Close. Today, we're talking about customer acquisition, acquiring your very first customers. Let's get started. How does the customer acquisition strategy evolve?

Desiree: I'm a B2B SaaS founder. I have zero customers. I need my first ten customers. How do I get them?

Steli: Well, the first 10 customers, by any means necessary, right? You should probably assume that you're going to have to do a bunch of manual work, things that don’t scale. Of course, it'd be nice if you could just set up a few ad campaigns and—boom—start acquiring customers at a perfect customer acquisition cost, scaling beautifully. But that’s not possible or feasible for most people. Many painfully realize that after banging their head against the wall for months, sometimes heartbreakingly. You should take a pragmatic approach: I've built something for a specific customer. Hopefully, I know who that customer is and how I'm solving a specific pain point for them.

Steli: If I have that clarity, who do I know? Who is that customer? Can I call them? Visit them? Go where they hang out? Talk to them personally? Can I convince them? If I don’t know these customers personally, who do I know that might know some? Maybe I know somebody. If I sell a sales tool and don’t know sales managers, maybe I know engineering managers. I could reach out to friends who are engineering managers and ask, "Hey, do you have a sales manager at your company? Here’s the cool thing I’ve built. Could you make an introduction?" I talk, I learn, and I see if what I’ve built is valuable.

Steli: You should try anything and everything, and you should keep it as intimate as possible. It’s totally fine if this isn't scalable at the first 10-customer mark. It’s totally fine if you are heavily involved. You want to be contextually knee-deep in the customer acquisition process, not formulating a perfect acquisition strategy from some high tower and handing it down.

Steli: It’s not just about getting somebody to say, "Yes, I want your solution and I'm ready to pay for it." Everything they say around it—before, after, and in between—is gold. For the first 10 customers, the main goal is not revenue, especially in SaaS but in any industry. The goal is insights. You want to understand how they speak about their problems, how they respond to how you talk about your solution, their facial expressions, their likes and dislikes, their sensitivity to price, and what other companies and competitors come up for them. You really want to ask lots of questions and learn.

Steli: Yes, you want their money as a strong signal that what you’re building is valuable and that there’s a specific customer you could build a business around. So money is important, but it’s not just about the money. It’s about insights and learning. You want to get as close as possible to the lowest-hanging fruit in your network. Be intimate in the customer acquisition process. Don’t worry about scalability. Talk to these people, ideally in person or virtually. Interact with potential customers. Don’t just pay somebody else to deliver customers and revenue. In the early days, you want to be involved and learn as much as possible.

Desiree: Let me ask you this: what kind of customer or business is going to be enthusiastic or willing to work with a brand new startup, knowing they are one of the first 10 customers? Almost like beta testing. What level of comfort are you seeking in those first 10, and are people responsive to it?

Steli: You know, it really depends. Of course, people are responsive to it. So let's kill the idea that people don’t want to buy if nobody else has bought before. If that were true, no new business would have ever existed after some companies were established. Every day, someone buys a product that has never been sold before.

Steli: You can do it too. Now, what kind of buyers will purchase something that doesn’t come from an established brand with a lot of social proof and history in the market? Well, there are a variety of potential buyers. The best buyers for you early on are the ones with the strongest pain and who are most ignored by the marketplace. A buyer or potential customer that is frustrated and in pain about their problem, with no one solving it, will be interested in anyone that truly cares and delivers the right solution. It won’t matter if they're your first or tenth customer if they can be convinced that this will solve their problem. They’ll be ecstatic.

Steli: So, sometimes it has to do with the level of pain a customer has or how undervalued or ignored they are by other companies in the space. That's likely your best buyer. There are also other buyers who are excited by being early adopters. Some people love to buy the newest product, the cool, shiny thing. They want to be the first and feel like they’re at the cutting edge of innovation. They’ll be enthusiastic about talking to you, giving feedback, and playing around with your product. Maybe they’re product or tech enthusiasts.

Steli: These people are good but also pose a danger. You want to be careful because they might be more enthusiastic about giving feedback and playing with something new than truly solving the problem your solution addresses. This means they might not translate to hundreds or thousands of other customers. But early adopters are still out there. Then there are people who know and trust you from your prior career—friends, coworkers, or people who’ve used other things you’ve developed. These might be a great group of early buyers.

Steli: Even if it's not a direct relationship, it could be indirect. As I mentioned earlier, let’s say I have a good friend who is the head of engineering at a software business and I’ve built something for the marketing department. Maybe someone in marketing will listen to me because my friend is respected and has high authority. That person might say, "Hey, if John or Phil says I should listen to Steli about his new solution, I probably should." Sometimes it's credibility through your past experience, a direct relationship, or indirect relationships like this.

Steli: It can also be affiliation. Maybe you both worked at a big tech company, like Google, or went to the same college. You could say, "I’m building a solution for sales managers. You’re a successful sales manager—could you give me a few minutes to see if my solution is interesting to you?"

Steli: So those are some people who might want to buy from you, even early on, and could be part of your first 10 customers.

Desiree: Yeah, that’s a great insight. It’s like the ultimate referral—people who’ve worked with you or are invested in your success want to see you succeed with this cool thing. Okay, so that’s your first 10 customers. You can’t do that forever. How do I go from 10 to 100?

Steli: Yeah, things change, right? Once you get your first 10 customers, you’ll probably have some variety. It won’t all be the same type of person, position, company size, or industry. With the first 10 customers, you want to learn how to speak about your solution, who has the problem, and who has it the most. Start gaining insights and experiences to get early people excited enough to give you money.

Steli: Now that I have 10 customers, can I go from 10 to 100? The journey from 10 to 100 changes. Obviously, I can’t keep doing this where I personally acquire every customer. So, now I’ll do a few things. First, I’ll try to teach what I’ve learned to at least one other person. Can someone else acquire customers by doing what I do or a variation of it? We're trying to see if the way I’ve acquired customers can be replicated. Even if it’s not exactly the same in terms of conversion rates, can someone who isn’t me acquire customers for this solution?

Steli: That insight alone is crucial—it’s a milestone indicating there could be big success or a viable business in the future. So, what you’ll typically do between 10 and 100 is bring in someone else to help with selling. You'll teach them what you’ve done to sell.

Steli: And you'll probably tell them to follow along the path that seems most repeatable to you, the most promising, and target the type of customer that seems most exciting. You'll still work alongside that person to see if someone else can sell as well. Then, as you both start selling more and try to figure out repeatable ways to sell, you'll realize that you can't just sell to your mom and dad forever. After your mom and dad, you’ll need to sell to someone they know, and then maybe someone they know.

Steli: As you talk to these people, you’ll ask them, "How do you buy other products when they don’t come through referrals? What blogs do you visit? What YouTube channels do you read? Do you ever click on ads?" You're trying to learn what other ways are available to reach people like them and show them your solution. If they think your solution is great, how can you find others who need to know it exists?

Steli: You'll start finding ways that are more repeatable and scalable, going beyond your immediate network. At the same time, you’re trying to see if someone else can replicate your activity and generate similar results. It doesn’t have to be perfect, just has to work. Then, as you start doing more marketing—whether it’s events or cold outreach—some activities will generate better results. You'll lean into those activities. Maybe cold outreach on LinkedIn works better than other channels, so you’ll double down on it, improve it, iterate on it, and grow that acquisition model. It might be something different in your industry, but you'll focus on the winners and double down on those activities.

Steli: Even from 10 to 100 customers, you’re still learning. You’re not at the point yet where you can say, "We know everything there is to know, we have a perfect product-market fit, and now it’s just about scaling." That’s very unlikely. You’re still in the early days, and learning should still be a crucial part of everything you do.

Steli: As you acquire those 10 to 100 customers, most businesses experience a broadening of the variety of customers and the feedback they receive. Some customers will love a feature, while others will hate it. You'll learn more about the preferences of different customer sizes and types, how they pay, their budgets, how quickly they churn or cancel, and the level of support they need. This learning will inform your customer acquisition strategy.

Steli: By the time you have 100 customers, you'll have hopefully identified your ideal customer. There will be many types of customers buying from you, but some will see more success with your product than others. Among those who have the most success, you’ll also need to consider which are easiest to acquire, the cheapest, and which type scales the most. Maybe you have some great customers, but there aren’t enough of them in the world to scale your business. This will inform who you should focus on as you think about the future.

Steli: During the 10 to 100 customer phase, you’re trying to find repeatable activities, bring in at least one other person to help with customer acquisition, and develop an ideal customer profile along with the best acquisition channels to scale the business.

Desiree: Yeah, that sounds incredibly important—to always be learning. I imagine it’s so tempting as a founder to want to say, "That’s it! We figured it out. We’ve got 70 customers this way, so we’ll just copy-paste that process." But it’s important to stay open to learning.

Desiree: So now, how do you go from 100 to 1,000? It's a big leap, but another milestone. How do you scale from 100 to 1,000 customers?

Steli: Yeah, that’s usually the next natural progression. Hopefully, by now, you’ve identified a certain customer that sees a lot of value in your solution and a way to market and sell to them that generates solid success. You can see into the future and recognize that there are a lot of these customers out there. So, there’s still a lot of work ahead to market yourselves, acquire these customers, and grow the product and business with them.

Steli: From 100 to 1,000 customers, you need to step up your game and get a little more professional. With the first hundred customers, you might be able to have a very small team, and things can be duct-taped together in terms of process and approach. But once you hit the 100-to-1,000 phase, that won’t work anymore.

Steli: Now, problems will arise. What you're probably going to start doing is building a team—not just on the marketing and sales side, but you’re building out processes. You’ll need to define: what is our process? How much does it cost to acquire a customer? How do we start optimizing? You’re going to see if you can accelerate and scale, doubling down on what you’ve learned works, and then seeing how many of those customers you can acquire.

Steli: In the early stages with the first 10 customers, retention doesn’t play a huge role. You're just trying to find someone with enough pain who will pay you money. That's a great accomplishment. From 10 to 100, you'll start seeing a little churn, with some customers canceling. But you’re still early, learning what it takes to convince someone to become a customer. You’re just starting to get a taste of what it takes to keep a customer.

Steli: From 100 to 1,000, customer retention becomes just as important as customer acquisition. Now you’ve found customers who get value from your solution, and you’re doing targeted marketing and sales. But you’re also around for a longer period of time, so you’ll see what it takes to keep a customer and grow with them. You’ll face challenges because what excited them to buy your solution initially won’t always be enough to keep them. So, you’ll need to figure out how to keep customers, not just acquire them.

Steli: You might also start learning that certain customers are easier to convince but leave quickly, while others take more work to convince but stay much longer. That insight will likely inform your future strategy—deciding who to prioritize and how to focus on your solutions, marketing, and business.

Steli: Retention starts playing a big role as you learn what it takes to keep and grow with customers. Ideally, they’ll not only continue paying you but will expand, paying more for additional services, features, or users. These outcomes lead to completely different business destinies. Acquiring customers who leave quickly vs. those who stay long-term makes a huge difference. Acquiring and keeping customers sets you up to survive and thrive. But if you can acquire, retain, and expand with customers, you’re on a path to explosive growth—maybe even building a unicorn.

Steli: During this phase, you’re learning how to build a team, establish processes, and scale customer acquisition. At the same time, you’re learning more about retention and expansion. These learnings will guide decisions on how to market, sell, and continue evolving your product or service.

Steli: The period from 100 to 1,000 customers usually takes longer. The business starts scaling, you hire more people, build more processes, and hopefully keep learning as you grow.

Desiree: What are some mistakes you see founders making during the zero to 1,000 customer journey?

Steli: The mistakes are endless, but if I can boil it down to one thing, it’s not staying in learning mode long enough—or sometimes not at all. Some founders think, "I sat in a room, brainstormed, and I know who my ideal customer is. All I need to do now is raise a hundred million to acquire the customers I’ve dreamed about." They have this mindset that they already know everything, and now it’s just about spending money to acquire customers.

Steli: They stop being in learning mode and insight mode. It’s not just about looking at data and information—like a five percent click-through rate or what people say they like. That’s useful, but what you’re really looking for are patterns and insights. You want those "aha" moments: discovering hidden gems or bigger problems that no one is paying attention to. You need to recognize the way your customers talk about things or how they buy.

Steli: The biggest mistake I see is that founders and business owners don’t stay in learning mode and don’t look for insights. They just search for information or data that confirms their biases and original ideas. If you approach the market that way, you’re not going to learn. If you’re not learning, you’ll fail—maybe on day one, maybe after a hundred days, but failure is inevitable.

Steli: Another related problem is that founders pretend to be in learning mode. They’ll say, "I’m going to interview prospects and look for product-market fit," but they’re so eager to get to a stage where they can scale that they pull the trigger too early. They decide prematurely, "We’ve learned everything we needed, and we’re ready for the big next step."

Steli: So, they move too quickly in terms of trying to scale when they don’t yet know enough. What ends up happening is that they waste a tremendous amount of money and time, creating all these holes in their sailboat as they sail into a destined storm. Your business isn't failing right now because your customer number is technically going up, but you're buying customers at hugely expensive acquisition costs—customers that can't see long-term success with your product, customers that churn quickly. By the time you accept that reality, you’ve already spent a tremendous amount of money and built features for customers that won’t stick with you long-term.

Steli: Then, what happens is companies, despite having $5 million or $10 million in revenue, 50 employees, or having raised $12 million in venture capital, will announce a big pivot. They’ll completely change what they’re doing, rebrand, or innovate into a totally different market. Those are signs of companies that didn’t learn enough, didn’t generate enough insights, and scaled too fast. They weren't ready to go from 100 to 1,000 as quickly as they tried, but they didn’t care—they just wanted to hit revenue milestones. So, they started acquiring customers or a type of customer in a way that wasn’t proven or sustainable.

Steli: These are the most common mistakes. Almost every business makes them in some way, especially those that fail.

Desiree: Yeah, I’ve worked at two startups before Close, one of which was early VC-funded, and it’s very clear now in retrospect that they were trying to implement a customer acquisition strategy that was outsized for where they were. It was like getting clothes two sizes too big, hoping they’d grow into them while still being so small. You could tell.

Desire: The second place I worked had the opposite problem. They scaled well but plateaued because they didn’t want to shift their customer acquisition strategy. They stuck with a high-touch sales motion when they should have shifted to something more marketing-focused. They plateaued. It's so hard to let go of the idea you start with: "This is how I’m going to acquire customers." If you deviate, it feels like a distraction. But there’s a lot to be said for doing the right thing at the wrong time. I know I’ve heard you say that before.

Steli: Yeah, and we’re not exempt from that mistake. We saw tremendous success in acquiring customers purely through content and word of mouth. Those two things are still massive channels for us, even 10 years later. But every success has the seeds of a future failure. You’re so in love with what’s working or holding onto it so tightly that you’re not flexible or open enough to reach for new things that could work equally well or help you evolve.

Steli: For us, our inbound funnel and word-of-mouth worked so well that we focused on them exclusively. We kind of knew we should build other channels, expand how we acquire customers, and increase awareness. But it took us too long because it was comfortable to stick with what worked. Building a new channel is difficult—it takes time, there’s failure and risk involved. What do you do? You half-heartedly run little experiments. "Oh, let’s try this. It didn’t work, let’s stop immediately." You don’t have the conviction to invest in something long-term.

Steli: Meanwhile, you’re holding onto things that aren’t working as well as they used to. You think, "Maybe if we just do it a little better, or wait for market trends to change," but you’re really just on a sinking ship. In a world that’s constantly changing, businesses have to stay open-minded and willing to take risks and evolve.

Steli: Most businesses plateau because what got them to that point is now limiting them, and they’re too afraid to let go.

Desiree: Yeah, great insights. Once again, those are all the questions I have. I think this is enough for people to get started, especially those who have zero customers. I heard a story about you in the early days of Close, where you guys were trying to get customers and just went to Crunchbase, looked at who had just gotten their first funding, and started calling and pitching to them. I love that story!

Steli: Actually, to round out that story—we were already a little bit known in the startup scene at the time, and I was known as a sales expert. We didn’t want that to taint the results, so we called them using a fake company name and a fake identity, like "Steve Eli," to see if people would tell us to "F off" or if they’d still want to buy without the trust factor. Within two weeks, we had seven companies say, "Here’s our money, please give us the service." That’s when we thought, "Alright, maybe there’s something to this idea." That’s how we committed to building what is now, 11 or 12 years later, still scaling and running.

Desiree: That’s awesome. I bet we could talk to you all day about your customer acquisition hacks, but I don’t think anyone has enough time to listen to it all! By the way, this is the last episode of season one of the Zero to 30 Million Dollar Blueprint. It’s kind of like the early stage season. In the next episode, we’ll kick off season two, which will focus on the growth stage—the messy middle. Let’s say you’ve got your first thousand customers. What’s next? What breaks along the way to scaling your company up? So, stay tuned for season two of the Zero to 30 Million Dollar Blueprint. Bye, everybody.

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