I’m a big fan of Steve Blank’s definition of what a startup is;
…an organization formed to search for a repeatable and scalable business model.
One thing I find myself talking a lot about lately is the “repeatable” part of the definition, and how important it is. While most founders understand that it’s important to get customers, fewer fully understand the value of multiple customers.
Having multiple customers show that you have figured out how to repeat your sales process. One time is chance, two is coincidence, third time is some proof of repeatability. And it’s proof that you understand what you are doing, and that you can do it again.
Thus, I would much rather invest in a company with 10 customers, each paying $1k, than 1 customer paying $20k (everything else equal). The former is a company that’s learned to repeat something, the latter has not.
This is also why it’s not always a good idea to start up by selling to large corporates (unless you have done such sales successfully before). The sales cycle is longer, meaning you are less likely to prove repeatability before you run out of cash.