You Need to Own the Risk

We’ve got a bunch of founders trying to make their first sale. This is a big moment. 

Your first sale will come with more baggage than my wife and I just schlepped through Newark for our ten day trip to California with two kids under three (on day seven we had a genuine conversation about whether it was less hassle to just move to Manhattan Beach rather than fly home).  

You're wrestling with the imposter syndrome that comes from doing anything ambitious, the queasiness that comes from putting a price on a product you yourself made and the whipping you're inevitably giving yourself for not starting a blog or podcast or email list five years earlier so that you'd already have an audience.  

You'll agonize over all the risks that don't matter and ignore the only one that does: the risk the customer feels the second they seriously consider your product. 

Risk isn't static. It ebbs and flows based on context, like sandpipers running up and down the beach ahead of the tide. To get early sales, you'll need to understand your customer's Risk Context. 

That context, for you, is made up of two variables - trust and urgency. Eventually it'll include envy and status, but for your first customer it's just about the first two. Entrepreneurs tend to miss this altogether. 

Here's what I mean.   

I got a cold email the other day for an AI tool that'll help pre-filter my inbox. It'll read through every inbound note I get and ping me with a summary every five hours: here are the emails I got, here are the ones I should respond to (with drafts of my potential responses already written), here are the spam emails they suggest I delete, and here are the newsletters they've summarized and suggest I unsubscribe from. 

Super compelling.

The CTA was that I'd get the service free if I was one of the first 100 signups, and that I should act fast because they had a big pre-launch waitlist. 

Your job as an entrepreneur is to get into my head at that exact moment. What am I weighing when making the decision to fork over my email credentials? What's my Risk Context? 

The company seemed to think I was worried about price - that's why they made it free. But price is very rarely a deciding variable. It's just a reflection of trust and urgency. It likely won't motivate your first customer. Only urgency and trust will. Here's what they might look like: 

Urgency: If I was getting 10,000 emails a day and my job depended on me pre-sorting these because there's no way I could ever handle them on my own, I'd pay a big premium to a company I'd never heard of to do it for me. The urgency would influence trust and price - that's the hassle premium. 

Trust - If I had a very specific use case - say, I was a doctor and my email was private. If you said you build a HIPAA compliant AI tool you'll build trust with me through the specificity of your offering. I read "AI email tool," I immediately think "well I can't do that because of HIPAA," and you say you're specifically built with HIPAA in mind in the second sentence of the email. Now I'm interested and am happy to pay a premium. 

Find urgency, message for trust

Urgency is based on customer segmentation. You need to choose customers that feel the pain of the problem you're solving disproportionately and have clear, obvious, visible, measurable, earth-shaking consequences to not solving it. 

Trust comes from thinking about the specific risk your customer feels in the moment and throwing it on your shoulders rather than theirs. 

If I use this "free" AI tool to sort my email, I'm shouldering all the risk. If they screw up and send an email to all my contacts or delete my outgoing messages or any of a thousand other things that could feasibly happen with a beta product, I'm totally screwed. I could write a bad review, but they'd likely just delete it. If they don't show me they're going to own the risk, I just won't buy their product. 

But, for good entrepreneurs, this is the opportunity to build trust. 

The first sentence needs to be the problem I'm dealing with - I'm overwhelmed with email, it's pulling me from real work, AI has made your email near unusable with all the inbound, etc. The second sentence is shouldering the risk. "I know you're worried about the implications of a beta product managing your email, so here's what we do..."

The first sentence gives a specific problem, the second sentence gives even more proof that I've thought a ton about the customers problem and what their fears around it are. 

If the second sentence is, "and it's free for you, so join!" I just read that as the founder taking themselves off the hook even more. Don't blame me if it doesn't work, I didn't even make you pay for it. 

Something like "we backup all your emails before we touch them, guarantee we can restore your inbox within 30 minutes if anything goes wrong, and never send an email without your approval" might de-risk. But even that feels a bit risky to me still. They likely need a customer with more urgency to start. 

How to Find the Risk 

A great way to find this risk is to hop on a zoom with a cold customer and show them your website or cold email and ask them about their hesitancy  - what immediate reason popped up for not trying this? Then, figure out a way to own that risk. You won't get customers until you do. 

Another useful exercise is to look at any product you were an early customer of and figure out how they owned the risk. 

The risk to your product is the reflexive risk your customer feels. Plan for it.