How Startups Get Their First 1,000 Customers

7 approaches to first 1,000 customers and black sheep of startups

Aug 13, 2024

Good Tuesday everyone!

If a friend asked you for the definition of a startup, what would you say?

Usual answers are along “a company in the first stages of operation”, or “something new”. These, however leave out a crucial element: a startup must have a potential to scale fast.

A new florist might have just opened in your neighbourhood. While it’s a company in its initial stages, you wouldn’t typically call it a startup because it lacks the ability to scale rapidly.

Uber increased its drivers from 5.7 million in Q1 2023 to 7.1 million drivers in Q1 2024 (25% increase). This 25% YoY increase might seem massive, however a 25% increase in customers when you only have 100 is usually a bigger challenge.

To understand how startups scale, it’s important to understand how they got to their first 1,000 customers.

Here are some ways startups acquire their first 1,000 customers:

Weekly Picks → My favourite finds of the week

Framework → 7 ways to first 1,000 customers

Case Study → Black Sheep of the Industry

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8 startups from YC’s batch of S24 that should be on your radar (My Linkedin Post)
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7 ways to first 1,000 customers

Back in 2020 Lenny Rachitsky created a framework of the most common ways the consumer apps reached their first 1,000 customers.

If you are building a startup, the key takeaway for you is that one of these approaches is going to be the right for you. The most popular, doing things that do not scale, in this case approaching users directly, either offline or online.

You can drive exponential growth by using elements from more than just one approach. For instance, you can create a FOMO surrounding your product, as well as leveraging influencers — similar to what Instagram did.

Mind, the above chart is focused on customer apps. For B2B SaaS businesses approaches, and numbers will look totally different.

The key benefit of having a B2B product is the fact your clients are usually high-ticket, therefore you do not need as many. This comes at the expense of acquisition of first customers being such a difficult thing.

According to Dan Ni, the process looks like this:

Your first 10 customers will come from your extended network — Friends, Friends of Friends, Social networks, Acquaintances, People you have not spoken to in years, Online communities you are part of.
Your next 20 customers will come from your first 10 customers. Incentivize your existing customers to spread the word about you in their network. A chunk of our initial customers at Scraper API was through referrals. We acquired high-flying users like Walmart, Samsung this way. If this is not happening, go back to your product. It’s almost impossible to get 1000 paying customers when your initial customers are not raving about it.
Once you have 30 paying customers, you start building content on your website to attract more viable customers. SEO is still a major source of traffic for SaaS companies. That being said, LinkedIn, Facebook, even Quora are still valuable.
After 100 paying customers, you can start running ads on different social media platforms and Google focusing on your audience. By now, you’ll have an idea of who your probable customers are and where they are hanging out on the internet. Through your content strategy, you will have a basic idea of what problems are the most important to your users. Use these insights to design and run ad experiments on different channels.
Dan Ni (CEO of TLDR;)

In the beginning, it’s important to focus on the quality of your product, as well as getting it in front of the first test customers. If these early adopters like your product even though it’s broken, it might be a sign you have found your product-market fit.

Early adopters believing in your product + you incentivising them = referral mechanism

It is important to underpin referrals early on, to create a potential for a faster scaling. This is the easiest and the most founding block of your growth engine you will build later on in your startup’s lifecycle.

Black Sheep of the Industry

Not every startup follows the traditional path of rapid scaling and aggressive growth. Some take a completely different approach and still emerge as massive successes. Here are a couple of examples:

Craigslist is the epitome of simplicity. While most startups poured resources into design, user experience, and marketing, Craigslist kept things minimalistic. No flashy interfaces, no big marketing campaigns — just a straightforward platform that meets a basic need: local classifieds. The result? A global success story built almost entirely through word of mouth.

Basecamp didn’t chase rapid growth. Instead, they focused on profitability from day one. Their mantra: do less, but do it better. By keeping their team small and their product simple, they built a sustainable business that delivers exactly what their users need, without the bloat. They didn’t follow the crowd, and it paid off.

Spanx disrupted the fashion industry not through tech innovation but by reinventing a simple product — hosiery. Founder Sara Blakely bootstrapped the company, initially handling everything from product development to marketing. Spanx didn’t rely on traditional startup growth strategies or tech-driven scaling. Instead, the brand grew through word of mouth, strategic celebrity endorsements, and by focusing on solving one single problem.

I have an entire case study scheduled on Spanx and Sara for this Saturday — upgrade or refer a friend so you won’t miss it.

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These startups prove that sometimes, doing things differently is the key to success. Whether it’s through simplicity, a focus on profitability, or a unique value proposition, these black sheep found their own path to scale.

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