What I mean by "Killer Customers"

I find myself inventing terms sometimes, and lately I’ve been using the term killer customer as a parallel to killer applications. Today I thought I’d share with you what I mean by it and why it’s a good term to have in the back of your mind when considering start-ups.

A killer application is that thing about your product that is so awesome that it just compels people to buy it. It’s that first application of the technology that proves its worth. For example last year I came to talk with a student at the University of Oslo who had worked with some other people to create a software that reduced lag in networking. It would only have to be installed on a server and it would use some previously unused capacity to send redundant information and thus reduce lag significantly. My first thought when I heard about this was: “Give it to me! I’ll make us all millionaires”. Unfortunately (for me) it turns out it was open source, and the code was already meant to be implemented into the Linux kernel. But that’s really besides the point, the point is that I could see a killer application at once. Online gaming. Everyone that has ever played a MMO over a bad connection with loads of packet loss will understand why this is a good idea.

With this in mind, it's easy to imagine a killer customer: World of Warcraft. If this technology hadn't been open source it’s likely that they would gladly pay a lot to have it implemented. And with Blizzard on board it would just be a matter of calling those other MMO games to stack up the other millions. When that market is saturated you could go after video streaming, stock market information, and so on. A great opportunity.

The killer customers, thus, are the obvious customers that will give you cash flow quickly. Sometimes killer customers are those that need your product badly, and that will be glad to pay for it. Other times it may be someone that agrees to let you use them as a reference. For example I once met up with a start-up in Houston that was a spin-out from a major oil company, the company had extremely low market risk because the oil company had committed to being its customer should it succeed in productizing their technology. Having killer customers reduce your market risk, and will give you a much easier time getting funding and getting people to trust that your company will succeed. You don’t need to call them killer customers of course, just remember that the first customer is extremely valuable!

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