Corey Capasso is 25 and he’s already founded four startups.His first startup idea came to him in class one day at the University of Wisconsin. He watched fellow students chew on their pen caps, and he figured the experience would be more enjoyable if the pen caps were flavored.
It turned out flavored plastic didn’t exist. Dentists had been trying to create it for years, but to make plastic you have to heat it, and the high temperatures cooked out any added flavoring.
Capasso and an advisor found a way to invent and patent flavored plastic. They started a company called Add the flavour, which is now a 20-person mouth guard operation in Connecticut.
Meanwhie, Capasso moved on to other ideas. His biggest success to date is Spinback, a company he and his friends from Wisconsin sold to Buddy Media in a mostly-stock deal. They made out well when Buddy Media was acquired by Salesforce for $689 million earlier this year.
Capasso has made his startups successful by being scrappy. In Spinback’s early days, it was Capasso’s job to land the startup’s first big-name clients.
But getting Wal-Mart, Coke or Nike to use a startup no one’s heard of is a daunting task.
Ultimately, Capasso utilized his professional network to get leads that, after a lot of work, turned into deals. Eventually top 10 Internet retailers and companies like Anthropologie were using Spinback.
We asked Capasso to pass along his best, detailed advice on how to nab big-fish clients when you’re a tiny, insignificant startup.
Here’s what he had to say:
1. Don’t let your eyes be larger than your stomach…at first.
“Before you land your first big client, you need to know your product/offerings, sales process/cycle, product performance, and pricing cold,” says Capasso. “The best way to do this is by trial and error, not in a vacuum. Start off with the bear minimum viable product and build as you go using customer feedback. Don’t start by spending too much time on the product, over-building, and recreating the Taj Mahal.”
2. Assuming you have your beta/version 1 product, the fist step is to understand exactly who your clients are.
“For Spinback, we were building a b2b enterprise SaaS company that sold to online retailers, so we had our hit list nailed down to the Internet Retailer 500: the top 500 online retailers ranked by revenue,” he says.
3. The second step is to understand how the clients operate and get some initial feedback on the product.
“We went to every VC we knew, every advisor, and anyone else we could think of and asked for a friendly introduction to an online retailer so we could vet out the product, sales process, and find out what clients were willing to pay,” says Capasso. “In short, we wanted to know in detail what it would take to get a deal done.”
4. Don’t go whale hunting with a .22 pistol. Reel in a few small deals before trying to attract the bigger fish.
“Once you are ready to sell, it’s easy to feel super excited and want to sign up the largest possible client,” he says. “But 99% of the time it is a step by step process to get there. You need to start off with a few small clients. Then you’ll be able to further test the product for scale, build out a solid use case, and eventually have an an easier sell.
“Even though I really wanted to try and sell to the biggest possible client at first (in my case it was Amazon.com), you will get to the big fish quicker if you round up a bunch of small guys, get a proof of concept, and then leverage that data to land a big client. At Spinback, I started by cold calling #500 on the IR 500. We landed someone in the bottom 20 for $100/month. We focused on the product performance and data for 30 days from that first client, and built out a case study that we could leverage up the food chain.”
5. Arm yourself with a case study.
“After that initial client, I kept climbing up the IR 500 from the bottom, and signed up four more clients: one at $250/month, $500/month, $750/month, and $1,000/month,” Capasso says. “From this, we gained a much better understanding of the sales cycle, but our pricing was still in the air. We kept selling like it was do or die, and then signed up 3 more clients at $2,000/month $2,250/month, and $2,500/month.”
6. Use early clients as guinea pigs.
“By testing out different types of pricing on different clients, we eventually figured out a pricing methodology, and then we continued to climb the IR 500 like climbing a rope that was dipped in gasoline, the bottom just got lit, and you were only 1/100 of the way to the top.”
7. Be prepared to pull all-nighters.
“During working hours it was nothing but giving demos, late evenings – early mornings (1am-4am), prospecting and, right before everyone started their day (7am – 9am) it was sending out emails,” Capasso recalls.
8. Finally, when the process is down to a science, you’ll hook a big client.
“Within the next 6 months we replicated that process, become smarter with every new deal. We came to better understand our clients and tweaked the product as it was necessary,” Capasso says.
“We had our initial sales process down to a science. From October of 2010 to April of 2011 we had roughly 20 signed clients, our biggest being one of the top 10 largest internet retailers in the world and had a six figure annual contracts.”
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