How many customers means success?
Submitted by Mike Rothman on Fri, 2006-05-12 14:03.
As I'm heading into the homestretch of the week, let me paint a bit of perspective about success - from the vendor's viewpoint. Of course, success for an end user is not having anything break or become compromised. I'll get to that in another post later.
But in vendor-land, there is always a rush to claim success - especially in a new market. I was being briefed by a company in the identity management space earlier this week and they said, "we have a lot of customers." So I asked, "how many is a lot." The answer was 130. I laughed. That's not a lot.
It made me think back to my days at TruSecure. When I joined there were probably about 400 customers of the risk management programs that we offered, and we thought that was great. But then the CEO, John Becker reset our expectations VERY quickly. His last company, Axent, had over 10,000 customers. So until we had 10,000 customers - we couldn't really say anything about the number of customers. Not to him anyway.
I look at companies like Check Point and Citrix with hundreds of thousands of customers and that is a LOT of customers. But not 130, even in an early stage market.
Having been an entrepreneur, I know that getting the first 10 customers is brutal. And then you build towards 100, and then 1000 - one customer at a time. Yet even the number of customers can be deceiving relative to "success." An enterprise-focused company can have 1000 customers and do a lot more revenue than an SMB-focused company with 30,000. I've lived that movie in the anti-spam business as well.
So what's the point of all this? It gets back to the whole claiming leadership thing. This vendor tried to convince me they were the leader in their space with a touch over 100 customers. Maybe they are, maybe they aren't. That statement didn't really resonate with me because I look at it from the end user's view. Ultimately, their prospects only care if the vendor has customers that LOOK like them.
If I'm a credit union, I want to make sure any vendor I pick has credit union customers. I don't care if they've sold to every utility company on the planet. If they don't specialize in solving the problems of my business - it's not interesting. There are some products that are more horizontal and apply to everyone, but there is still some uniqueness to my business. At least, the prospects believe that. No one wants to think they are just like everyone else.
I'll keep making the point until I'm blue in the face. The only thing that matters to customers is if you solve their problem. All this other stuff (leadership, customers, financial strength, etc.) are intangibles that may swing the deal in your direction if you get to that point. But telling a prospect you are the leader of anything before you convince them you can solve their problem is bass ackward.
But in vendor-land, there is always a rush to claim success - especially in a new market. I was being briefed by a company in the identity management space earlier this week and they said, "we have a lot of customers." So I asked, "how many is a lot." The answer was 130. I laughed. That's not a lot.
It made me think back to my days at TruSecure. When I joined there were probably about 400 customers of the risk management programs that we offered, and we thought that was great. But then the CEO, John Becker reset our expectations VERY quickly. His last company, Axent, had over 10,000 customers. So until we had 10,000 customers - we couldn't really say anything about the number of customers. Not to him anyway.
I look at companies like Check Point and Citrix with hundreds of thousands of customers and that is a LOT of customers. But not 130, even in an early stage market.
Having been an entrepreneur, I know that getting the first 10 customers is brutal. And then you build towards 100, and then 1000 - one customer at a time. Yet even the number of customers can be deceiving relative to "success." An enterprise-focused company can have 1000 customers and do a lot more revenue than an SMB-focused company with 30,000. I've lived that movie in the anti-spam business as well.
So what's the point of all this? It gets back to the whole claiming leadership thing. This vendor tried to convince me they were the leader in their space with a touch over 100 customers. Maybe they are, maybe they aren't. That statement didn't really resonate with me because I look at it from the end user's view. Ultimately, their prospects only care if the vendor has customers that LOOK like them.
If I'm a credit union, I want to make sure any vendor I pick has credit union customers. I don't care if they've sold to every utility company on the planet. If they don't specialize in solving the problems of my business - it's not interesting. There are some products that are more horizontal and apply to everyone, but there is still some uniqueness to my business. At least, the prospects believe that. No one wants to think they are just like everyone else.
I'll keep making the point until I'm blue in the face. The only thing that matters to customers is if you solve their problem. All this other stuff (leadership, customers, financial strength, etc.) are intangibles that may swing the deal in your direction if you get to that point. But telling a prospect you are the leader of anything before you convince them you can solve their problem is bass ackward.
Thomas - I hear what you are saying and there is some truth in it. To make the point again, I view all of those as intangibles that can push a customer to pick one vendor over another, if the vendor solves the customer's problems. Selling to Citi or Chase is a great validation point, but not necessarily for smaller credit unions. They tend to be a tightly knit community and the reality is what they have to do is usually quite a bit different than a Global 10 financial.
Maybe I didn't make my point effectively. There are tens of thousands of potential customers out there, so it just kills me for someone to claim "leadership" when they have 100 customers. We all know it's not a real market until there is both competition (so more than one vendor) and a couple thousand customers that have implemented something.
So my point was to not get the cart before the horse and have the vendor focus their efforts on communicating their value propositions more effectively, as opposed to patting themselves on the back about how many customers they have.