As a founder, you might have an amazing business idea and the technical skills needed to build your product. However, none of that will be useful without one vital thing: clients.
The EWOR team sat down with Mike Mahlkow, Co-founder and CEO at Blair. The company provides financing for students to attend educational institutions in the United States. Thus, making it easier for them to obtain income share agreements (ISAs). Blair was founded in 2019 and raised money from high-profile investors in the U.S. after going through Y Combinator.
During the pandemic, Mike and his team had to change Blair’s business model from a B2C to a B2B approach. “We used to go straight to students, now we go to schools directly,” he explained. So far, the company has raised equity and $100 million in debt from a global asset manager, as well as a $3.6 million seed round from Tiger Global.
While Blair is incredibly successful now, none of that would have happened without people who wanted the company’s service. We asked Mike some questions about how he secured Blair’s first clients, and how he knew his idea was a good one.
How to Secure Your First Clients
“The very first thing we did was to go to college campuses and just talked to everyone we could find who would listen to us,” Mike explained candidly.
He and his team went up to students, asked how they financed their education, what they thought their options were, and then told them about Blair. After getting a bit of interest and knowing some people recommended the company to friends and siblings, it was safe to say Blair’s concept was sound.
Mike also mentioned that they used advertising, especially Search Engine Ads (SEA) to secure clients. “We were going after the keywords that were performing best, and trying to get a certain number of students on the website in a capital-efficient manner,” he said. Using cheap keywords was a good way of building traffic without spending too much money.
As well as word of mouth and advertising, Mike and his team tried other things like partnerships with school clubs or sponsoring small events at universities. “In the early days, it’s just a lot of legwork,” Mike confessed. “You just have to try things out and see what sticks.”
Finding Out Whether There Is Demand
Knowing if a product will work can be hard if you haven’t done any marketing before. We asked Mike how he knew the concept behind Blair was sound.
“If you’re unsure about whether you are solving a problem, you need to talk to the people who you think you’re solving the problem for,” he explained. ” Try to figure out who your target customer is, talk to them, ask them about their problems, try to understand them, and they will tell you all you want to know.”
In addition to customer interviews, it’s crucial to build small tests and MVPs, or unfinished versions of the products you envision, to figure out demand. That way, you can see whether people are engaging with it, using it, and signing up for your product or service.
Building a Good Customer Funnel to Get Clients
We asked Mike for his opinion about building customer funnels. We also asked whether there is a specific part a new company should focus on particularly. He prefaced his answer with the caveat that currently, no one really agrees what the funnel is.
There are many ways of construing it, for example:
Awareness > consideration > conversion > loyalty > advocacy or more technically someone arrives at your site > someone clicking on the sign-up button > someone actually signing up > someone paid for your product/service > someone going premium > someone renewing their purchase.
As well as these different approaches to the customer funnel, Mike explained that, “There’s a big difference between B2C and B2B funnels. Even inside B2B, there’s a big difference between selling to start-ups, enterprises or governments. Depending on who you sell to, your strategy changes a lot.”
From there, it might seem daunting to create your funnel for your business. Mike had a crafty solution to that problem. As he put it, “I think the smartest way to do it is looking at your specific situation, then find funnels by companies who are similar to yours and try to emulate that.” From there, you can adapt that model to your exact needs.
When choosing which part of the funnel companies should focus on, attention to the current data is important. “Look at the data and the drop-offs inside the funnel and optimise the ones that have the most leakage,” he explained. “If 100% of everyone who visits your website signs up to your service, then you don’t need to optimise anything there, theoretically. But if no one is converting from the freemium to the premium tier, that’s what you should have a look at.”
These insights are incredibly valuable as a founder. Mike also passed on the following piece of advice: “Use your first customers as your partners to make your product better.” Treat them as an extension of your product team, and learn what they like and dislike. You can either talk to them directly or track their behaviour online.
Building and Maintaining a Great Relationship With Clients
It’s all well and good acquiring these first customers, but how do you ensure they remain loyal? Mike had some great insights on the topic:
- Listen to them. This means talking to clients regularly, having check-ins, and talking about the product and the problems they are facing. It might be best to set a process up for that, advised Mike, otherwise, it can easily be forgotten about.
- Solve their problems. “Try to understand what their actual needs are, and try to solve them,” the CEO said simply. Use their insights and needs to keep making your product better over time.
Mike left us with one last piece of advice: “Sometimes, customers are actually bad customers. If they’re wasting your time, if they’re not valuable in terms of insights or money and are actively negative to your team or company, you can fire the customer.” With that,