Startup Business Models - Don’t forget Customer Support
Avoiding Common Issues in Startup Business Models - Don’t forget Customer Support
As part of the Avoiding Common Issues in Startups series, let’s talk about a very common, very large gap in a #Founder's #BusinessModel… #CustomerService.
I can’t tell you how many times I have had conversations about this in the last 6 months. It almost always goes something like this:
Me: “That is a very impressive revenue projection over the next 3 to 5 years! How many users or customers will you need to bring in that much revenue?”
Founder: “[Insert large number with at least 5 digits here].” Let’s say it is 100,000.
Me: “Very nice! That means your revenue per user is $X. How much of that is going to supporting the customers?”
Founder: “None.”
And this is where the conversation goes one of three ways…
Founder 1. “I hadn’t thought of that. We’ll need to add that.”?
This is the best scenario, because there is a realization that there is a need for supporting customers, we talk about it, add it to the budget and plan, and move on.
Founder 2: “We don’t need that, our app is so simple that nobody will have trouble with it.“
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Me: “We have 100,000 users and nobody is going to need to reach us for help? What happens when there is a server outage? What happens if we release an upgrade with a bug in it?”
At this point, hopefully, the founder realizes that we need to have some form of a contingency plan for the unexpected.?
Founder 3: “We don’t need that, we are going to solve it with #AI.”
I can hear the other mentors and advisors laughing now! We have all had this conversation in the last year. Multiple times.
This is the most troublesome. Yes, AI is great, it can resolve some problems quickly and cost effectively, and I am not taking anything away from it, but does it replace the complex reasoning and problem solving skills of a human? No, or at least not yet.?
Don’t let the length of this article or my hopefully (slightly) comical approach to it fool you. This is just as important as any other topic we cover in this series.?
Other than running out of funding, there is no better way to bring your hard earned #Traction to a grinding halt than bad Customer Service! Make sure you are considering a realistic plan to handle Customer Support needs.?
Developing a Customer Service Plan during an outage or when a problem is happening is too late! As part of your #BusinessPlan and #FinancialModel make sure you have a process (with Roles and Responsibilities defined) and adequate financial resources allocated to it. It will save you big headaches - and, maybe even your business - in the end.?
Questions? Put them in a comment below.
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11 个月Thanks for another great article, John! A clearly defined customer support model is critical to a startup’s success. In early stage startups, every single person in the organization should be involved in supporting and learning from customers.
Excellent take John! I’ve had this conversation with multiple startups recently. It’s so easy to focus on revenue and user growth, and forget the key elements (like customer support) that are necessary to keep the music playing.