5 ms·
> VC's have a very strong preference for a large number of small customers over a small number of large customers, and why. This is intriguing and I would appr
by InGoodFaith 5y ago
> VC's have a very strong preference for a large number of small customers over a small number of large customers, and why.
This is intriguing and I would appreciate if possible to get any sources to read up on this?
- thrashh 5y ago“too many eggs in one basket”? Especially for a new untested company no customer is sure they actually need yet
- chevman 5y agoMakes your public metrics look better (ie "we have over 500+ customers!!!!") and also demonstrates (in theory) a more durable product. When people see small number of large customers, the implication is you are basically just running an outsourced dev/consultant/staff aug shop. Less product vision and ability to "scale".
- JumpCrisscross 5y agoAnyone should prefer lots of customers to a few key ones. The latter have more leverage. They also make one’s metrics risky, as a single defection can swing the firm from profitable to barely eking by.
- sosborn 5y ago> Anyone should prefer lots of customers to a few key ones. I think the caveat/variable is "all else being equal or close to equal." If having 10 customers will net you $10 total per month, and having one large customer will net you $100 per month, it is really hard to justify going with the $10 customers. But if those 10 customers will net you $10 EACH per month, then the 10customers is a better situation.
- JiNCMG 5y agoYeah but if 1 of your customers offers to prepaid for 10 years of service at the same price you wouldn't turn that away. Allowing you to maintain your other customers. Apple's pre-order of 3nm will get them priority as they ordered it before it was an option. (see Kickstarter)
- sosborn 5y agoAs I said, "all else being equal or close to equal."