Its First Year, This Startup Struggled to Get 75 Clients. Five Years Later, They Have 18,000. Here's How They Did It. Financial planning startup Facet knew they were targeting a huge untapped market. But getting clients wasn't as easy as they hoped.

A great business idea is worth nothing, until you can find paying customers. But how?

Here's a start: Think like the founders of Facet. It's an online financial advisor platform that spent years (and multiple pivots) figuring out how to get members. Now it has 18,000 of them, and brings in $35 million in annual recurring revenue.

Facet was partly born out of a new rule issued in 2016 (but ultimately never implemented) by Obama's Department of Labor. It required financial advisors to become fiduciaries (meaning they must act solely in their clients' best interests). What caught the attention of Brent Weiss and Anders Jones was a number they saw in the public comments: The planning industry said this would make services too expensive for 8 million people currently using advisors.

Weiss was a financial planner; Jones an investor. And both had already been wondering about a more affordable solution. So with a third cofounder, Patrick McKenna, they launched Facet, which offers planning services by fiduciaries for a flat annual fee, rather than traditional (and more costly) commissions. All they needed now were customers.

Related: Getting New Customers Is Hard!

Tactic 1: Please, anyone!

In December 2016, Facet registered with the SEC — and a ticking clock began. The government requires fiduciaries to have at least $100 million in assets or clients in 15 states — typically five in each, or 75 total — within a year. Facet had neither.

At first, the founders figured it would be easy: They'd buy clients from other financial advisors! After all, services were about to become more expensive, and advisors would lose clients — so why not sell them to Facet? "Just about every one of them was like, 'Great idea…oh, but not my clients,'" says Weiss.

Soon the founders were scrambling, frantically calling friends, family — just about anyone. "We'd go, 'We'll give you a discount. We'll do great things for you. But we need to hit this number,'" says Weiss.

Related: Not All Clients Are Good for Business. Here's How to Find the Ones Who Are.

Tactic 2: A new B2B channel

Facet scored 84 clients in the first year, allowing it to squeak by the SEC rules. Looking back, Jones says, they should have abandoned the original plan sooner. "If we'd set up success criteria and said, 'OK, out of 20 people, one of them has to convert in six weeks,' we could have quickly realized that this was not the right channel for us," he says.

Over the next two years, the founders explored other ways of finding clients. One idea: What if they partnered with employee benefits and 401(k) providers, as well as large companies that offer those perks? As workers save money, the theory went, Facet could help them plan what to do with it. "Again," says Weiss, "all the signals were, 'This is a great big market.' But there was just no engagement."

Related: 6 Key Factors in Attracting High-Level Clients

Tactic 3: Straight to consumers

Finding those first customers through someone else — a financial advisor, a benefits provider, or a company — didn't seem to work. But in late 2018, they switched to a direct route: "We would get a list of a thousand [potential customer] names and just start cold-calling," says Weiss.

Person to person, they could fully explain their value. And it worked! At first they spent a few thousand dollars a month on buying leads. A year later, they were spending 15 times as much.

Today, rather than betting on just one customer acquisition strategy, they're constantly experimenting. "Don't be afraid if that first client doesn't come from where you want it to," says Weiss. "It's like in science: Most discoveries aren't made from the tests being run. They come from the — pardon my French — Oh shit, what was that?"

Related: The 7-Step Guide To Finding the Right Clients and Avoiding the Ones Who Waste Your Time