Blog / Machine learning

How we built a successful beta programme for our B2B start-up

Creating a beta programme is a tough undertaking. Making strong choices early about who you want to participate can go a long way to making sure it works out great for everyone.

17 December 2015

How we built a successful beta programme for our B2B start-up

I have spent the best part of a year working hard with my colleagues on building up a selection of beta customers for Ravelin, our start-up focused on preventing fraud for on-demand businesses. For most businesses the hardest part is getting those initial customers. The received wisdom is that no-one wants to go first and so it can be very difficult to persuade established businesses to commit the time and resources to a beta programme that may not have any immediate pay-off for them.

So how do you go about getting businesses to come on board at this critical stage for a start-up? We thought it might be useful to share some of our experiences.

Your founding team is your sales team

Beta customers, smart ones at least, are buying into the founding team at least as much as they are into the product. Therefore do not be tempted to professionalise the selling of the beta programme or hire a salesperson too soon. It is vital that the founding team get first hand experience of what customers require and it is essential to the product development process that these requirements are unfiltered.

Focus on the right companies (and be opinionated about who they are)

It’s tempting to allow anyone willing to participate to join a beta programme. But remember what it is that you are trying to do – you are trying to validate that your product is right for the market you are seeking to enter. Therefore create ideal customer profiles and go after them! Allowing in customers that don’t really fit the profile means risking creating or skewing a product towards a market you are not seeking to enter or building it in a way that won’t scale.

As an example, we found a great company in a market we knew who were very keen to join the programme. However they had very specific ideas on how our product should solve their issues based on their previous experiences.

We realised after a few sessions that in order to satisfy their needs we would end up building a bespoke version of our product, using an approach we didn’t agree with and that wouldn’t scale. So we made the difficult but correct decision to respectfully walk away from the deal.

This also has the added benefit of making your pitch to the potential beta customers more convincing as you can usually articulate very specifically why your product is right for their business.

Shake down your network (and your investor’s networks) shamelessly

For a large part of the beta programme you are unlikely to have a completed product and you are reliant on persuading companies to buy in to your vision. This requires trust and referral is the fastest way to create that trust. Networks certainly have their limits in terms of size and are no substitute for eventually creating an inbound marketing channel and a professional sales network when the time is right. But for the purposes of creating a beta programme with sufficient participants to get feedback but not too much to overwhelm the team, an existing network is absolutely the best place to go fishing.

Investors too are a great source for leads. And the joy is that they do not even have to be your investors.

It’s great due diligence for a potential investor to make an introduction to a portfolio company simply to test your mettle and see how good your pitch is. If successful they get to assess how well you implement. So don’t be shy in asking for introductions, it works for both parties even if they never invest in your company.

One word of warning though. An introduction from an influential and trusted third party (e.g. an investor) can have the unintended psychological impact of making everyone try too hard to make the deal work. We have been introduced with all good intentions to companies who simply do not have sufficient fraud exposure to need our product. It happens. Due to a combination of eagerness on our side and politeness on the the other significant time was wasted before we mutually shook hands and realised there is no point in taking it further. The sooner the lack of mutual fit is realised the better, even and especially where there is a perceived external pressure to make the deal work.

Don’t be afraid to talk about price

In order to validate the market fit for your product, it is important to not just determine whether the product works but that it works at a price that the market will pay (and generates enough income for your business). Therefore, while we don’t and won’t charge our customers while the beta programme is in place, we have commercial terms agreed with each of them and each understands what the product will cost when live.

Discussing and agreeing commercial terms has definitely made some of the negotiations more difficult and probably slowed down getting some of the beta customers on board. But it has definitely been worth it, not just because of the revenue reassurance but because it signals the right level of intent on both sides and allows us to test our pricing and contract terms.

What’s next?

Our intention is to remove the beta tags on our product in Q1 2016 at which time we will also talk publicly about the companies in our programme who are happy for us to do so. We’ve been really privileged to build the product alongside these customers and to have made it so much better than we could possibly have conceived without them. In fact every element of our processes, from APIs through to the dashboard, have been altered and improved by contact with the external world.

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