Episode 082: How to Build a Customer-Funded Business With Amy Kauffman

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Amy Kauffman Givily

Amy Kauffman

Amy Kauffman didn’t use her own money or go into debt to fund her new business Givily. Instead, she went directly to her customers to fund the development of the software that she wanted to sell them.

About two years ago she founded Givily to help food and beverage marketers donate their goods and services with intention. She has developed software to help them process donation requests more easily and effectively.

Her business idea was born out of her failed business CrowdCause (think Groupon, but benefiting nonprofits as well). It gained momentum once she enrolled in The Foundation, a software development training and mentorship community. There she learned about the concept of “pre-selling” her idea and getting her target customers to fund her business.

Key UnStuckable Takeaway

Instead of traditional funding for your startup, consider partnering with your customers!

When you are starting a business, you are creating a product or service to sell of course, but really you are serving a specific community. When you take money from investors, venture capitalists, or even a bank, many times your decisions are made to serve their needs, rather than the needs of your community.

An interesting alternative to traditional funding is to get it from your core customers instead. No one is more incentivized to see you succeed than your customers and your source of funding keeps you focused on their needs.

Here’s basically how customer funding works:

1. A core group of your customers will get long-term discounts on your product or service for funding your business.

2. Your funding customers will be actively involved in the feedback process as you develop your product or service.

3. Securing funding from your first round of customers also validates your idea financially before you begin creating your product or service.

Quick Action to Get Unstuck

Talking to your target customers should be the first action you take to start your business. 

Too often entrepreneurs build their product or service for themselves and then try to sell it to their customers without any feedback. You’ll save yourself a lot of time, money, energy, and stress if you start talking to your customers first.

Remember, you are trying to solve a problem they have and are willing to pay to have it solved. Get started by:

1. Making a list of 10 potential customers who you believe have the problem you are trying to solve with your product or service.

2. Set up meetings or phone calls with them to interview them about their business and the problem you are trying to solve. Do more listening than talking. Be curious and ask “why” a lot.

3. Repeat this process until you have clearly defined a solution that your target customers are willing to pay to have solved. In fact, from your interviews, they should have told you exactly how much they are willing to pay or you should have discovered how much your solution can save them.

UnStuckable Quotes From Amy

“Your minimal viable product isn’t beautiful or glamorous, but it gets the job done and gets it into the hands of your customers really fast.”

“I just thrash my way to the goal line. Sometimes it’s pretty and sometimes it’s not.”

“If your product or service solves the right problem and you connect with the right people, who have a need for it, then it becomes a no brainer.”

“Ego is what gets in the way and causes problems. I don’t need my ego to get involved. I’m building my product for someone else to use. “

“My partners get my attention and my intention.”

“People in organizations come alive when they serve each other from a place of authenticity and generosity.”

“If you have a project that you want to turn into a business, I don’t think it’s wise to divide your attention with a couple more projects going on at once.”

“The fastest way for a human to get unstuck is to reach out to another human.”

More Habits & Actions

  • Once Amy identified her target customer and the problem she was going to solve for them, she focused on creating a minimal, viable product to start getting feedback from them immediately.
  • Her business is also “customer funded”. She pre-sold her software before building anything, so she was able to secure funding from the people who stood to benefit the most form her product- her customers.
  • Amy enrolled in The Foundation to learn how to develop a software business.
  • A lot of upfront research into her product and throughout the development process was crucial to its creation.
  • It’s important to have a clear vision from the very beginning and to know what the end goal will be when developing a customer-funded product.  It also gives Amy the confidence to clearly communicate her needs and value.
  • She was able to set up a dream sales call with 18 people representing six different companies at the suggestion of one of her potential clients because they all had a common purpose and a shared pain point. She ended up closing three of them within 30 days of the call!
  • Amy set a goal of securing 32 clients by her 32nd birthday, but decided to have the courage to abandoned her goal because it was no longer realistic and was not in the best interest of her company.
  • Creating a supportive network of advisors has been a key habit in the development of Amy’s company.

Alternative Perspectives

  • Focus on creating your Minimal Viable Product when you start your business. Get the simplest version of your product or service to market with the primary feature that solves your customers’ primary problem.
  • Taking the time to establish trust and credibility are crucial to developing successful business relationships.



First UnStuckable Interview With Amy Kauffman

Amy Kauffman on Twitter

The Foundation

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