The 7 Pillars of Customer-Led Growth
Why the founder of PartnerHero says to build In-N-Out, not McDonald's
How can a startup remain unique and beloved by customers even if everything about their product is copied? Why do Californians go to In-N-Out right when they get off a plane after returning home instead of McDonald’s?
Serial founder Shervin Talieh has figured it out.
He’s bootstrapped PartnerHero to $100 million in revenue with 100% of their customers being inbound.
He calls it customer-led growth, and it’s a foundational mindset shift you can apply to your startup (the earlier the better).
We sat down this week to unwrap his framework and this week’s post details the 7 pillars of customer-led growth.
Read Time: 05 minutes
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The 7 Pillars of Customer-Led Growth
Start With Your Customer, Not Your Product
Most advice tells founders to start with a problem, but Shervin recommends starting with a customer instead.
Instead of creating a business around a product that you then need to find the right customer for, create a business to serve the needs of a specific type of customer that you want to serve.
For PartnerHero that’s businesses like Loom, Airtable, Udemy and others of all stages that Shervin calls “new economy businesses” — startups that aren’t hooked on cheap money and take a stand on social issues.
These are the partners he and, by extension PartnerHero, want to work with and help feel less pressure to only be vessels for capital chasing a return.
Regardless of who your target customer is, when you start your business from identifying that persona it trickles down and causes you to think differently about everything from the rest of your foundation to how you handle churn.
Being Customer-Led is Foundational
Many of the fundamental characteristics of the universe were determined in the first single second that it existed.
Every startup has a “big bang” too — the early days of genesis when foundational decisions are made that are hard or impossible to reverse later.
Being customer-led is one of those.
If you see your business goals and your customers' goals as separate things or at odds with each other then you’ll be incentivized to set up structures, metric targets, and processes to primarily support your business metrics rather than the success of your customers.
The larger your company becomes the harder it is to reverse course.
Build In-N-Out, Not McDonald’s
Most founders think of customer success as a reactive process that you’re in the weeds addressing when it comes up.
Shervin says it should neither be reactive nor proactive — it should simply be constant and inherent in how founders approach everything they do. It should be encoded at the cellular level.
When we chatted he brought up the example of In-N-Out burger — a cult-favorite regional burger chain, primarily in California (they’re delicious).
They’re an opinionated company:
They pay best-in-class salaries
They don’t use delivery apps
Every location has very long drive-thru lines
Their menu is extremely simple
They don’t chase trends
Everything about their approach has been copied by various other burger chains, and yet they keep growing and building customer love. For many customers it’s the first place they go when they get off a plane in California.
Why? Why isn’t McDonald’s or Five Guys or Shake Shack quite the same?
In-N-Out knows their customer. They’re not trying to hack their way to maximize the number of burgers served. They’re trying to deliver the best experience to a specific type of customer.
Since they think about this on a first-principles, foundational level it’s evident in everything they do and it feels cohesive. Anyone copying them simply feels like an inauthentic copycat.
Given a choice between authentic and copied, customers will always prefer authentic — and they can always tell.
There’s power in staying focused on your customer and vision.
Customer Success, Not Contract Success
When companies talk about customer success what they’re often really talking about is contract success.
Their focus is on making sure the customer continues to be a customer with an active contract — ideally a contract that’s growing in size.
The ironic thing is that the best way to ensure that actually happens is by ensuring your customers are thriving. Not only will this build affinity for your product but also they’ll simply have the ability to do more.
Customer Metrics, Not Product Metrics
Similarly, customer-led startups should care about their customers’ metrics first and foremost rather than optimizing for internal product metrics.
It doesn’t matter whether a customer is using your product more often if that customer is going out of business.
But if a product manager is measured by how well their area of ownership performs then they’re incentivized to deliver results on that even if it’s at the detriment of customers and the KPIs they set up may distort or at best be an imperfect proxy for what customer needs really are.
(Not all companies treat product management this way but many do.)
There’s definitely a contrast between product-led growth and customer-led growth here. In Shervin’s words, “PLG asks how can I get a somewhat-viral, free version of a product out there with minimal cost while subverting IT procurement.”
For customer-led businesses the only internal metric that matters is net revenue retention. And, if you’re selling to B2B companies, ironically their NRR should be your primary focus — over even your own.
Don’t Sell — Match
Customer-led companies don’t supplement churn by ramping up acquisition. They want partners for life, not customers.
A good way to ensure this happens is to mutually vet each other at first rather than just try to sell your product.
Common advice says to get everyone to try your product and then expect some percentage to stick around. Shervin says you should implement a formal “matching function” upfront, where either party may learn it won’t be a good fit.
It’s mutual discovery, not sales, and with zero posturing.
Shervin even recommends that, if at some point a customer-led company realizes it’s no longer the best fit to serve a customer’s goals, then it’s their responsibility to gently transition the customer to someone else.
The pressure to sell in order to make payroll and cover expenses is an existential motivator. Shervin acknowledges that. But he made the point that culture leads and success follows.
If a founder genuinely cares about their customers’ success or failure and proactively asks about it then good things will happen. This is the approach I’m taking with Megaphone — I want our users to have their posts go viral every time and generate massive follower growth for them.
Ask High Order Questions
Typically founders will do customer discovery work up until they have the insights they need to improve the performance of their own business.
But for customer-led companies, Shervin recommends remaining in that curiosity-driven discovery phase for longer — and starting from higher order questions.
Instead of asking what a customer does or sells, ask a founder why they are in business in the first place. Ask an employee why they joined this particular company.
They may respond generically at first but dig deeper. If they say they resonated with the mission, ask why. What’s driving them?
Now you’ll understand more deeply how your product or service impacts them and their own work or mission.
This also extends to how to prioritize your own time. If a customer wants to spend time with you, what’s more important than that?
Shervin still meets every new hire at PartnerHero even though they’re now at 3,200 employees. He still visits customers IRL.
That type of devotion isn’t customer empathy — it’s being customer-led.
📚 Founder’s Library
Shervin and his team go deeper on why startups need a customer-led growth strategy here.
It’s worth a read — our chat left me thinking more founders should consider whether they’re as focused on their customer as they think they are.
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