How do you handle the “how many customers do you have?” question when you are a start up?

In practice, it works this way:

Customer #1: Yes, you are the first customer. I'll give you the product for 90%, it's a great deal

Customer #2: We have customers. For instance, see customer #1. Pay full price.

Customers are usually not stupid. Giving away the farm to the first buyer is a wise investment and the price to pay to start a business. You can fight to avoid it, or just get it over with.

1. De-emphasize the importance of a big client-base: Companies with a big client base can't provide the individual attention you can provide. A big company doesn't care if they lose one customer, but you have to care!
2. Use former co-workers, managers, teachers and friends as employment references.
3. Do not use any kind of fraud, like using references that cannot be checked. This will come back to bite you. Be Honest! Your reputation is at stake.
4. Stress exactly what it is that you can do for your customer, to help him achieve his objectives.
5. Emphasize whatever positive attributes you do have: Education, Professional Experience, Licenses/Certifications, special training or unique skills.

Good luck!

Focus on how many people have used your product or service (some may not have only tested).

Mention any background you or others in your company have had with similar products/industry. If one of the Google guys left and created their own search engine, even if I was the first person to try it, I'd bet it would be pretty good.

Show them the benefits of doing business with a startup.

Using our contacts, try to pick a decently famous company ( it can even be a startup - like Dropbox for eg;). Get them on as your customer. Companies like them would usually not take time to say a yes / no since they are small (but popular, that's the key!).

Once you have a company like that as your client, you could talk to more people and say - we have Customer 1 and are talking to a lot of companies like Customer 2, Customer 3, etc. [ nope this isn;t a lie - you are indeed having a conversation with them]

That's enough - it would catch the attention. The point is, most big companies would like to hear a few popular names before signing up, this is the last step to close the sales cycle.

Don't lie. I think that if you are asked how many customers you have you can't say you have more than what you really have. Now, having said that, you can say "less than 100" or "only a handful" (a handful is not 1, so if you only have 1 don't say that).

In some cases you should just come out and say "we're a software startup, trying to grow profitably and right now we have one company that was so impressed with our product they signed up to be the first to use it. I would love to have you onboard as well" or something to this extent.

When people ask about how many customers, they are worried about something. Before you answer the question, try to find out why knowing this is important. Are they concerned whether your product is viable or stable? Are they worried you're not going to be around tomorrow? Have they had issues with startups before? Or do they only want someone else to validate that what you say your product can do is actually true?

Finally, one way of answering is "we don't disclose who our customers are or how many we have, is our company policy". This answer, however, may just make them think something's wrong.

Number one thing you should do is go out and find someone you can give you product to for free or at a highly discounted rate (mentioned above).

This will allow you to test the product and get good ideas of what your industry is looking for. A big mistake developers make is that they design a software that they would use, which most times NOT what the mainstream will want to use.

Thanks