“Sounds interesting, send over your deck and let me take a look at what you’re doing,” he said. When you get one of those as a 1st time founder, your heart races. This could be the first investor and they know people, which means more investors. I hurriedly sent it over and thanked him.
About two days later, he emailed me and asked if I had traction. “No, not yet” I responded. I knew then that he would pass. While disappointed, he offered sound advice: “Get that first dollar of revenue! Also get some testimonials. Build proof from others that it’s valuable. That’s all revenue really is!”
That was literally the first email of the day. I quickly jumped into action. Well, first, I panicked.
How am I supposed to get customers with none of the tech capabilities or marketing dollars to acquire them? Granted, I knew about bootstrapping, but I was strapped for cash. The little I had went into building this product and keeping my head above water.
When I need to think, I go for a walk and listen to music. Walking to Lake Merritt, I asked myself, “What can you do now?”
It started with the basics. What is FENDR? It’s a way for car crash victims to navigate their car accidents from start to finish. The starting point will be helping them after an accident, but what are your customer’s needs towards the end of the customer journey map?
I found the nearest park bench and wrote down the ideal customer – one who would ideally use our services from beginning to end. Our ideal customer would need a personal injury attorney, medical service(s) which would vary based on impact the accident had on them, to fight traffic citation, perhaps, and to review their current policy after an accident to keep their rates within a target range. After an accident, victims’ premiums can increase anywhere up to 10% – 20% based on various factors.
I reflected on my time as a teacher in Atlanta. There was a strategy called, “Do now,” that would get students active for the day’s lesson. I quickly realized I needed to become a student of the insurance industry and act now.
I also needed to move out of the idea phase and “Do now” to earn customers. I decided to contact individuals I interviewed previously. Immediately, I reached out to Sarah, a colleague involved in an accident almost two years ago.
I asked about her current premium. At the time, she was paying $350. I asked her a few questions about her driving record and other data points. I asked if she’d be willing to have me review her current policy and I offered to assist. The goal was to lower her monthly payments. After using some of the strategies – they sent over a new premium. The offer was $200 a month!
Sarah was ecstatic. To be frank, I was too! Then, I told her to wait. I asked if she signed or committed to the new premium yet. Fortunately, she did not. I had her send it to a competitor and ask them if they could beat the offer; they did by $50.
Within three days, Sarah went from paying $350 a month or $4,200 annually to $1,800 a year. Honestly, I was not expecting that much savings myself. However, the next question she asked caught me completely off guard. She asked, “How much do I owe you?” It felt great!
If I’m completely honest, the strategies implemented for Sarah were done for the first time. The goal was to improve the strategy by the third customer and begin charging. Immediately, I knew with that amount of savings, other customers would also jump at the opportunity.
Within minutes, I had my first paying customer. I’ve shopped with countless small business owners and now understand why they hang their first dollar earned. It’s a badge of honor and humbling. It takes a lot to get there but one yes is all it takes.
Now, I began reaching out to not only accident victims but consumers whose rates have increased because accidents cost consumers, even those not involved in auto collisions, about $200 annually. I kept working to find accident victims throughout various stages of the customer journey.
I met two accident victims in a collision. I assisted them with finding an attorney (note: truly research attorneys you’re interested in working with), receiving medical assistance (one victim was without health insurance with a pre-existing condition), and gathering their police report.
My last customer, I assisted with finding a suitable car loan for their new car after an accident. Founders, avoid a mistake I made early on – standing in my own way. Your customers’ needs are diverse. While there may be some overlap with the services they use, your customer may need a new solution you’ve yet to solve.
Take on the challenge.
Customers appreciate transparency. I explained to Sarah that this is a new venture and I’m still learning. To show appreciation, I offered to do the service at an introductory price since she was one of my first customers. Not only did she like the price, but she was also excited to learn about my business.
There is often a disconnect between consumer/manufacturer. We see relationships as transactional. I get it. I’m trying to prove this concept and get more customers so I can receive funding. But what did Sarah need? Sarah is a mother and wife and commutes 3 hours roundtrip to work. She saved more than $2K annually to take care of her family.
Learn about your customer and what motivates them. Sarah was an anomaly. Granted, I have saved customers money, but Sarah’s savings are impressive.
I really enjoy various headphones and go to several electronic stores to see what is on the market. However, the store I frequent sells home appliances, televisions, computers, etc. Did the store limit themselves to one type of consumer? Of course not.
On social media, I hear financial experts discuss different revenue streams. When starting a business, always think of multiple ways you’ll bring revenue to your business. I thought my focus should only be victims recently involved in an accident. However, by meeting customers where they were, it validated FENDR’s premise.
Founders, think of how to recruit customers now. If you’re providing a service to the public, where can you find your customers? What can you offer them now to validate your business model? The services you provide may change once you truly enter the market. Circling back to what the investor said, build proof from others.
Note: To review your current policy and see how to lower your monthly/annual premium contact me on Twitter, @JohnCBaldwin5.
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