Asks HN: Solo founders-How to respond when customers ask how big is your company
I've built an MVP and am talking to a prospective customer. They would be my first customer. They're asking how many people are in the company and I don't know how to respond to that in a reassuring way. It's just me.
Some background is I've built a pretty niche / domain specific product, so there's actually no one else doing what I'm doing. The MVP works. I don't have any customers yet (some trialing).
63 comments
[ 4.0 ms ] story [ 128 ms ] threadGood luck on your project. Getting this kind of interest is a good signal!
One of our licensees had a lawyer who asked us to put our source code in escrow, in case we got acquired or went under. It was a little embarrassing for her when I explained that they already had our source code, which was integrated into their platform during our pilot. Sometimes the concern is like this, just a box-checking exercise not based in reality.
In b2b you never say no, always have an option for what they're asking and charge more for it.
Best way is to just say "It is company policy and I am afraid we cannot work around that. I am happy to discuss alternatives" and go from there.
Tips?
Then, stick to it and don't try to justify it too much.
This was a somewhat recent revelation for me, and it totally works.
"Well, we don't really want to work on this or agree with the approach, but pay us double our normal rate, and we'll do whatever you want."
Typically that will end the conversation, and in the rare case they do move forward, being paid handsomely is really nice
You need to be honest about your company size, but turn it into a positive, such as sole developer, backed by a third-party support package (assuming you have one), or that the company is expected to grow fast, so they wont be relying on just one person to fix things etc.
Pitch it really well, and depending on the type of customer, they may even end up wanting to invest in your company to help you scale up faster than you could expect (yes, I have seen that happen with start-ups).
Don't be afraid of awkward questions like these, as they will crop up, and each time you gain experience in handling the RFP style enquiries, and with experience comes improved skills to close those sales deals.
Then listen. Sometimes it is just a casual question. Sometimes it is a checklist. Also depends on how large the customer itself is.
You can also make this a plus by adding "You get direct support from the founder and will never have to talk to a robot" if they have any further concerns/objections.
I have lost like 2 deals out of 1000s where the company size was a potential issue and that too I am guessing because they never told me specifically but I guessed based on their questions/concerns.
But truthfully, you really do need at least 2 people as a bare minimum to sell a viable product.
Lots of customers will want some assurance that if you die in a car crash on the way home, there is someone left to continue on with.
Don't do that. Unless you don't care about your reputation.
> But truthfully, you really do need at least 2 people as a bare minimum to sell a viable product.
When did this become an immutable law?
> Lots of customers will want some assurance that if you die in a car crash on the way home, there is someone left to continue on with.
One can also figure out a business continuity plan. Place code in escrow, subcontract some of the work, avoid writing software that only runs when a specific person is constantly tending to it.
Not true. Fine to be a solo entrepreneur, especially for more senior founders. YC may want multiple founders, but they cater to first-time founders.
> Lots of customers will want some assurance that if you die in a car crash on the way home, there is someone left to continue on with.
Another person involved does not improve the chances that the company will survive if you get hit by a bus. Releasing all the code as Open Source, or providing the source to existing customers is a much better way to mitigate risk.
I was responding to "if you die in a car crash on the way home, there is someone left to continue on with." Which seems pretty clearly attached to survival.
Doesn't help most customers because they lack the expertise to use it. Most people looking to buy software are not in the software development business and don't want to be.
subcontract some of the work
What about the rest of the work?
avoid writing software that only runs when a specific person is constantly tending to it.
If it is a hosted solution, someone needs to tend to paying the bill. If it is not, someone needs to tend to support and make adjustments when needed.
The quick, simple, easy, all purpose answer to this line of questions for a small startup is, "My partner can take care of it".
The point of that analogy is to get people thinking about business continuity (https://en.wikipedia.org/wiki/Business_continuity_planning) and how to mitigate various types of risks. The keyword being mitigate. One cannot eliminate risk, and no sane customer expects their use of a client or software to carry 0 risk.
If a vendor tells a client that nothing can disrupt their ability to deliver their product, they are either lying, or have failed to understand the risks their company actually faces.
And the final point, "my partner can take of it". That addresses only one, frankly minor aspect of business continuity, which is "what happens if someone important becomes incapacitated". The number products that failed because someone important literally died (not just left the company) is probably extremely minute. There are way bigger risks a company should focus on mitigating first, including:
- software fails to meet regulatory compliance (if applicable)
- company fails to manage finances properly and has to close shop
- someone important leaving the company
Can some of these be mitigated by adding another partner? Depends on what they bring to the table.
If they want to dig any deeper, you're probably screwed and don't really have a chance at a sale anyway.
About the same result as with, "I can not tell a lie. I run this business from my basement. I know nothing about business or sales or marketing cause I'm just a nerd and I've never done this before and I'm all you got". What the customer hears is, "I'm so fired if this doesn't work out".
I know because I've been there. First rule of business ---Survival is always job #1 and sometimes it involves some compromise; particularly early on. Those who don't understand this probably shouldn't quit their day job.
Once again, is this true across the board? How about questions around data security, authentication, data storage and backups, privacy...those should have solid technical answers, not "my partners and I know what we're doing". I'd run for the hills if I couldn't get a solid answer for any of those things for important enterprise software.
> About the same result as with, "I can not tell a lie. I run this business from my basement. I know nothing about business or sales or marketing cause I'm just a nerd and I've never done this before and I'm all you got". What the customer hears is, "I'm so fired if this doesn't work out".
Would you agree there's some middle ground between "I cannot tell a lie" and "I will do anything to make sure the company survives, including lying to customers"?
Sure. But there isn't much middle ground between success and failure.
Until your small startup is succeeding, you're just a failure in progress. And statistically, failure has the better odds --- probably due to a lot of half hearted attempts aimed at the middle ground.
a. Minority Owned or SMB. Many Fortune 500 company’s have internal metrics where they try to do more business with Minority Owned or SMB businesses.
b. Bus Factor or Financial Risk. If you’re providing a service that will become core to them or poses financial risk to them if it stopped working (or you went out of business) - they are assessing how much risk you pose to their business.
As other have said, the better you can understand why they are asking the question the better you can respond.
And don’t lie.
https://en.wikipedia.org/wiki/Civil_Rights_Act_of_1964#Title...
As long as you have a long term vision of where you want to take the company (plan for the next quarter, next semester, one year plan, pipeline of possible improvements, potential pipeline of clients, hiring plan of who and when if necessary, etc.), and can communicate this in a reassuring way without puffery you can come across as trustworthy and even respectable to do business with. Customers just want to know you are the best value option within the category/niche. Part of being the best option is the reassurance that you: 1. have a product that meets their needs (product-market fit) 2. have long-term potential (so they don't have to worry about you shutting down and them wasting time looking for another alternative) <- depends on your niche 3. will be readily available to lend customer support
You can answer with the truth and then redirect that question back at them and ask things like: - what do you look for specifically in a company? - Does the number of employees affect the metrics you are trying to achieve or need help with? (the answers you get will give you a better idea of how to adapt your pitch based on their priorities, metrics, & expectations)
In the end, if they aren't happy with the truth, you get out of this all the wiser and still win. Good luck!
People don't care how big you are but what problems you solve for them
Now we are four people working full time in our company, but still... tiny but mighty.
I didn't know I had this question. (Don't have an MVP yet.)
Thank you for everyone that has given good answers!
I disagree. I've never had to lie to get a company off the ground, and if that was a requirement, I'd rather let the company die and try again with something else.
Being vague, however, is OK.
I have started two businesses that have generated positive cash flow (and sat on a board for one that didn’t), and honesty is the only right answer.
You gain trust in thimbles and lose it in buckets.
It’s how I’ve been working lately. It’s mainly me the customer is buying, but I have a team of 3-5 trusted freelancers I work with. Customers don’t seem to bat an eyelid at that proposal.
I think that at most large companies I've worked for (including my current one), there have been projects that had a key employee that would cause the project to screech to a halt if they got hit by a bus.
For the purposes of discussion, I'll agree regardless. For every product I have ever bought, I'll gladly stick my head in the sand and assume the existing employees can take over in the event a person disappears. I can't do that if it's one person.
My apologies for being unclear. I was using the terms as synonyms of each other. Every product is a project.
> I'll gladly stick my head in the sand and assume the existing employees can take over in the event a person disappears.
My point is that this even in large companies, it's is far from unheard of that the entire product relies on a single individual's knowledge. If that individual were to go away, the product cannot be changed until someone else is able to come up to speed enough to replace that person. It's probably more likely to happen in a very small company, of course, but big or small, if it happens the effect is the same.
> I _am_ <company name>. This product is my baby.
The idea being that this question is often asked instead of what the customer really wants to know: "can you do the job properly in the required time frame?" I want to cut to the real question as soon as possible and not waste time and effort on the superficial one.
Will keep you all posted!