Earning the right customer
A founder found a way to earn credibility before approaching the customer they wanted most.
The situation
I spoke recently with the cofounder of a company developing technology for the steel industry. The founder shared this story because they thought other hardware founders in the network might learn from it.
The company didn't originally set out to serve the steel industry. It began with a broader idea around carbon utilization, but as the founders spoke with more potential customers, they kept refining where the technology created the most value.
Over time, one market consistently stood out.
Steel manufacturers had a significant problem the technology was well suited to solve, and the founders became increasingly confident that this was the market they wanted to build the business around.
The plan
Once the market became clear, the commercialization path seemed straightforward.
The team would continue developing the technology, raise enough capital to build a pilot system, and deploy it with a steel manufacturer. A successful deployment would provide the validation needed to expand across the industry.
As they continued those conversations, however, they realized they had a sequencing problem.
Steel manufacturers believed in the concept, but they weren't ready to become the first deployment. Investors, meanwhile, wanted stronger market traction before committing additional capital.
The company needed to find a way to generate both.
Where uncertainty remained
Rather than changing markets entirely, the founders started looking for another path.
They identified a much smaller customer segment with similar technical requirements but a much lower barrier to adoption. The deployment wouldn't define the business, but it would allow the team to build the technology, gain deployment experience, and demonstrate traction.
Inside the company, though, this became one of the most debated decisions.
Every engineering hour spent supporting this new customer was an hour not spent building directly for the steel industry. Every dollar invested raised the same question:
Were they reducing uncertainty for their long term customer, or simply making progress somewhere else?
What needed to be proven first
The founder described the smaller market as a foothold, not the destination.
The goal was not to build the business around the new customer segment - it was to only generate enough technical, operational, and deployment evidence to make the steel industry more comfortable becoming the next customer.
The same evidence would also strengthen the company's fundraising efforts. Rather than solving two problems independently, the founders were looking for proof that reduced uncertainty for both customers and investors.
If the work being done moved the company closer to its long term market, it was worth pursuing. If it didn't, it risked becoming a distraction rather than progress.
The pattern
This situation comes up fairly often in hardware when selling into risk averse industries.
The ideal customer isn't always willing to become the first customer.
That doesn't necessarily mean a company should pivot its underlying technology.
Another strategy is finding an adjacent customer that helps reduce the right uncertainties while continuing to move toward the market the company wanted to serve from the beginning.
The difficult part is making sure today's progress still matters for tomorrow's opportunity.
If you're in a similar spot
If you're considering an adjacent market or an early deployment outside your long term strategy, it can be useful to ask:
Will this make my ideal customer more likely to say yes, or am I simply creating another product to support?