The Power Of Referrals

I've been working on a new product that does cold email as a service.

For context, this is my ~50th "product". 0 of my other products have started out like this.

I started a few months ago and aggressively (and exclusively) targeted recent Y-Combinator grads. It's already profitable.

side note: I'm a dev. This whole "X as a service" thing is new. People talked about how much easier it is to start generating cash with services but I always brushed it off, or looked at it with some skepticism. I wouldn't say I'm a convert per se, but I can say that this quick time to revenue has never happened with any SAAS product I've worked on. Even the venture backed ones.

I got early results (with no network connections) into these companies by .... yep... cold emailing the founders.

My offer was hard to say no to: 100 free leads, 3 cold email copy variations, we'll do all the sending, and give you an update each week. I got 10 founders to say yes. I needed them for case studies (and brand). It's powerful to come to the site and see that we've really worked with a bunch of YC companies... and they were happy with the service!

Several of the free-trial offers converted to paid (at a discount). This was huge validation for me that people would pay for this service. But now that I had some cash expected to come in the door, I was a little stuck as to how to continue to grow it while keeping current customers happy.

I have two main levers I've chosen (initially) to pull as a solo founder:

1. Cold email - this works. I have solid copy that converts to meetings at a reasonable rate.

2. Content - This is not my area of expertise, though I do want to get better at it.

Turns out there's a third lever that I have very little control over ... referrals.

Yesterday afternoon one of the customers for the service pinged me and just said, "Yo, got a lead for you". It came from Bookface, YC's internal community chat. Someone was asking for essentially exactly what I offer... cold email as a service. He wrote down my site and presumably said something nice about it (I didn't see the message he sent).

About 10 minutes after he posted the response I got a meeting. 10 minutes later, I got another meeting, and another, and another.

4 meetings booked for this week from this one referral just since last night. I could see a few more trickling in today (maybe 2 more). What a score! I've never felt anything close to the power of referrals before. It's one of those things that always felt impossible to control therefore useless to focus on.

Now that I see it though, this is the way to healthy growth. It's going way above and beyond for your first few customers. I would go so far as to say you should actively try to lose money on it (from the service delivery perspective, you pay people by the hour to do the work, even if it's just you, so spend more hours on them than you could justify). If you chose your customers right, they will be highly connected in the community you want to reach, and maybe, just maybe an opportunity for referral will come up and they will recommend you.

I believe COVID is partially responsible for this. At a time when YC is all remote (unusual), people are now, more than ever relying on communities for the water-cooler chat they're used to having. Because it's online, instead of this conversation happening between a few people (asking 3 friends "hey, who do you know that does good cold emails as a service"), people are posting these on the communities they belong to and it's now seen by many. It's an unusually good time for referrals.

Hope this was helpful,

Andrew