The Startup Advantage: 3 Benefits of Having Few Customers

As the leader of any early stage startup, it is likely that your primary goals will include growing your customer base, and increasing the adoption of your product. As such, you may be dismayed when you find yourself with a really small customer base. Don’t worry! Having few customers may actually be a source of competitive advantage. Here’s why:

1. You’ll Fail in Obscurity: Launching your product to a small customer base allows your failures to be contained within a small subset of the larger community of your current and future customers. This makes it a lot easier to bounce back from set backs. However, things become quite different when you attempt to launch your product with a lot of fanfare, and to a large customer base. If the product fails, the failure is big, and public. Worse still, you may have just turned away a substantial part of your target market, and may be unable to successfully stage a comeback.

2. You’ll Learn Faster: if you’re organization is like most others, the first version of your product will be far from awesome. This is where having few customers becomes pure gold. The relatively small size of your customer base will allow you to develop close-knit relationships that will allow you to quickly learn what customers like and – more importantly – what they hate about your product. This quick feedback loop could be leveraged in your product development iterations, to crank out an ideal product faster than your competition, who may posses a less agile feedback loop, resulting from having a large and aloof customer base.

3. You’ll Pacify Irritated Customers Better: Having a small customer base means that you can apologize personally and profusely to your customers when the inevitable product set backs occur. You can also use relatively fewer resources to make things right. This ‘personal touch’ may help to pacify, and ultimately retain your customers. However, you may not have this option available when you have an extensive set of customers.

Eric Ries does a good job of explaining these benefits in his TechCrunch interview.

Image by inmar.com

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