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It’s not easy going from a beta or entry-level product to a mature enterprise solution in the absence of funding, but it can be done and is part of entrepreneurship. In all honesty, you might not have a choice.
Take my company for example. We grew early on through our ability to add marketable features quickly and without external funding. We didn’t have the excess revenue to build critical items, but our CEO found some handy ways to get the job done without completing a VC round. As a result, we’ve found that you don’t always need outside funds or a bank loan to expand your product range. Instead, you can turn customers into investors.
Here are a few tips on how to do that.
Related: Think you need venture capital to start your business? think again
1. Never give an outright no to what your product or company can do
Instead of saying “no, we can’t,” respond with an optimistic “maybe.” When a customer asks for a feature, it means they have an issue that needs to be resolved. They may be willing to pay upfront subscription fees to offset the new feature build. Complete this negotiation. It could be a win-win situation.
2. Respond with the sales team, not the tech team
Tech workers typically have long catching up to do, and they won’t mince words about what you currently offer or don’t offer. On our team, programmers and even programmer founders typically give a resounding yes or no.
These all-important builders of the actual product often work in a binary world and don’t always have soft skills or an entrepreneurial mindset. Let your sales team—who live in the wild world of instinct and opportunism—explore ways to keep the conversation from hitting a wall.
3. Make sure your customer stays close
Turning customers into investors can be as simple as knowing that when you build a new feature for them, they’ll stay.
If they’re not willing to commit – either in writing or paying upfront when you use it – don’t waste time building just for them. Their unwillingness to commit can signal that they don’t need the solution that badly. That’s not a good reason to invest in this new feature until you’ve gathered more evidence of demand.
Related: Actually, you don’t need VC funding to be successful
4. Get proof that others want the feature
It’s not enough that just one customer wants the new feature. Your basic goal should be to prioritize high-quality builds that many people will use. Find out if the newly requested feature catches the interest of your other paying customers. Send polls and make calls. Just because a customer is willing to pay and commit does not guarantee the investment will be worthwhile.
Practical examples to consider
Riot Games wanted to use our SaaS product alongside a new version of Google Cloud Dialogflow, a conversational AI framework. After analyzing 1) the breadth of our team, 2) demand from other customers, and 3) the amount Riot Games was willing to invest up front, he decided to give the integration the green light. The situation met all the criteria, and the amount paid in advance for construction turned the client into a kind of “investor”.
Here’s one more thing: The University of Birmingham needed a way to add our chat messenger to Canvas, a leading platform for online classroom environments. So we sprinted to create a botcopy/canvas integration. At the time, we had never heard of Canvas but found it to be one of the world’s most popular online classroom suites. As a result, we found that our other educational customers would be interested in this integration. Additionally, it wasn’t difficult to build the integration quickly, so we didn’t need much upfront to implement it.
See also: How to Drive Growth – With or Without VC Funding
However, I recommend offering such a service on a case-by-case basis. No founder wants to be labeled as a service agency or generate disproportionate revenue from service work, which could be a red flag in VC due diligence. But early on, providing occasional services is a smart way to fill the tills with new features and ensure your most important customers are getting the highest and best value from your product.
Also, most customers love it when you go the extra mile for them to develop new features or offer value-added services. They enjoy knowing that they have influenced your product – it makes them feel like part of the family and they are more likely to stick around and recommend others. More importantly, this approach may be the only way to generate income if you’re small and new. It’s a way to pave your way to the $1 million that many VCs want to see.
Best of all, once you reach that predictable level of sales, depending on your overhead, you can turn down VC terms you don’t like. To this day, remember that you already have investors: your customers.