Should You Sign Your First Customers for Free?

It’s been my experience that you learn much more when serving your first couple of clients that any other point in your product’s or company’s trajectory.

Before we signed our first customer in a recent company of mine, for example, we had a data request with clean columns in a well-thought out layout. But when the first data came in from our pilot sites, our grand visions immediately deflated in exasperation. Whatever product connectors we had built had to be rebuilt. And further, over time, we learned that even the idea of sending a data request wasn’t the right approach for our customers; by our fifth customer we learned enough to just send them specific scripts that they just run on their databases to generate what we need.

Should you serve your first customer for free?
Because your first few customers will be so valuable in helping you shape your product, for the right early customer, a free pilot can be a win-win. The investment the customer makes is with their time, feedback, and patience. The value of their time cannot be under-estimated; it is a form of payment. People value their time most of all and they prove they value your product by spending time implementing and using it, even if they aren’t also paying.

Who comprise the right first set of customers? I wrote in a prior article, “Market leaders who are also Innovators are the most powerful first customers: be willing to invest as deeply as you need to sign them up — their reference-ability is what will allow you to sign Pragmatists up later on.” Also, because seeing how they use the product, getting their feedback on it, and filling in gaps with customer care is so critical early on, having your first customers local may be important.

Should you offer consulting as an early “product” while you are building your real product?
It seems like a good idea but hasn’t worked well in my experience. In my current company, we needed a few months to get our MVP out the door and wanted to start interacting with customers before then. We show those early potential customers paper versions of our product and built ad hoc analyses for them that were focused directionally aligned with the product we were building. Here are the pros and cons of that experience: