Why Your First Clients SHOULD Be Your Friends

(This article originally appeared on www.inc.com.)

The surprising lessons learned from a B2B Entrepreneur

 

A lot is written about the importance of your first clients in any business. There is a lot of opinion on working with friends and family too. Most business writing on the subject seems to mostly refer and apply predominantly to retail and creative businesses. It generally covers the ground on subjects such as working with people who expect stuff for free, or for fees to be heavily discounted, and not valuing your time and effort. Much of these writings tends to paint a picture of relationships that are devoid of professionalism when having your friends as business clients. Less is discussed about working in a B2B setting beyond the cliche of “there are no friends in business.”

My business partner and I founded Enshored back in 2014. We worked quickly through the “what”, and the “how” of our business–we intended to build the best operations outsourcing business for global tech start-ups. Simple. 

The next question then was who do we pitch first? Our early clients would be critical for us building out our operating processes and primary services. That was relatively easy. We analyzed our target client metrics against companies we knew well, and in most cases these were companies where we knew some of the key personnel–people we had worked with as colleagues, suppliers, or partners in the past, and then people we knew from business school, college, high school and other friends.

In our first year, over 75% of our new clients were in this “friends” bucket. Now six years later we still have “friends and family” new clients.

Here are some of the reasons why friends are great for a B2B business:

You can be totally transparent with each other

It amazes me how other companies can be successful when their client relationships are not transparent and truthful. It’s the norm everywhere else I have been–white lies to downright lies and deceit seem to be at the heart of many commercial relationships–battling to get one over on suppliers or clients is a race to the bottom. Our clients bare all, and so do we. Then we solve their real world problems with our real world company with real operational issues and solutions. It’s certainly a better recipe for success than fake it til you make it.

They will keep you laser-focused

I had a friend ask me if we could help with a very specific need. It was not in our service offering sweetspot at all. We talked it through, and realized that it would be a distraction for us to deliver, and would impact our culture and operating principles, so we moved on quickly. In our experience, it’s always, always better to be SMART than sorry.

You will both measure the value and return on investment

We never had looked on our client friends as charity cases to prop us up til we get “real” clients as they are real. Our friends are as or are even more successful than us, and that success is something we really want to be a part of. So we are able to optimize the commercial agreements for both parties. We get really great feedback on our pricing and our term structures. Our clients really share with us their cost savings and the value we bring.

You get great feedback on your processes and people

The volume of feedback we’ve had, both good and bad (as we live in the real world) has been phenomenal. While our client friends are working with us for their own business reasons first, of course they want us to succeed. So they bring a great new perspective on our interactions with their firms for us. Getting a 360 perspective on the managers we hire has been really helpful in us helping those managers be more successful, more quickly.

You get great warm introductions into their networks

It was a really welcome and unexpected stage during the first year of operations to see that our clients have been out there finding us new clients. The quality of warm referrals has been fantastic and we now are busy turning these new connections into clients and then friends.

Conclusion

Whatever product or service you deliver in the B2B space, not everyone is going to care enough about your business, or have enough time or skill to help you perfect it. For some, “ok” will be just good enough. This is really different from the B2C space when any suboptimal product gets rated by anyone with a smart phone and 5 minutes to spare.

Having a cohort of clients who can give you complete and unbiased input on your business can only help you master your operating model and culture more quickly.

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