Who Are Your “1000 True Fans”?

In 2008 Kevin Kelly wrote an article that made a big splash: 1000 True Fans. It has only gained traction over the years and an updated version of it was included in Tim Ferriss’ Tools of Titans. Almost two decades later, it still has plenty of lessons to offer for business owners who want to think more holistically about their customer base.

The Premise

Taylor Swift has over 240M followers on Instagram. Suffice to say that if she even had 1% of those followers as a musician, she would have been successful. Kelly starts his essay by pointing out that to be a successful creator (for our purposes, business owner) you don’t need millions of fans (customers). What you need are true fans, fans who will buy almost anything you produce.

Kelly then went on to make the case for 1000 true fans spending $100 per year to get $100k in revenue. But people immediately saw the possibilities:

• You could get more fans
• You could raise or lower the annual ask
• You could adapt this to anything; some solopreneurs thought in terms of “10 true clients”

Who Are Your Fans?

It’s one thing to have paying customers, it’s another thing to have fans. How can we think about this in the business sense? Business fans are:

• Advocates: they are speaking about your products and services actively and will sometimes go the extra mile and do an email or text connection with the brand and a potential customer.
• Loyal: they refuse incentives, sometimes even lucrative ones, to switch away to a competitor.
• Spenders: they will pay for your premium service and are often open to other things you have on sale, even if they only have a tenuous need for it, because they think about getting it for someone else so that person, too, can connect with your brand.
• Reliable: ask them to participate in a social media campaign or survey or to write a Google review, and they’ll execute, with even less follow-up necessary than with some of your employees.
• Long-term: they may need to move out of your geographical area to churn, if you provide a local service, and even then, they often serve as a funnel for leads years after they have left.

What to Do With Fans?

Now that you know what qualities fans possess, can you articulate the CAC and LTV of your fans? Have you identified who they are demographically? If you can’t identify these questions, you can’t answer the 1000 True Fans question posed to your business. Let’s start with the first question.

What’s Your CAC and LTV?

Let’s look at two well-known companies to give us context for customer acquisition cost (CAC) and lifetime value (LTV):

• Starbucks CAC: $1000, LTV: $14,000
• Amazon Prime CAC: $300, LTV $2000

Those are awesome CAC to LTV ratios. Whatever you think of either of those companies, zoom in on these ratios for a moment. Think about what they imply:

Because the lifetime value of a given customer is so many multiples more than the acquisition cost, the companies can focus on delivering long-term value while still maintaining aggression in the original acquisition.

What is your CAC to LTV ratio and what does that imply about the present and future of your business?

What’s the Avatar of Your Fans?

Going back to Starbucks for an example here, one of the avatars for that brand is the “busy professional.” Here’s what Starbucks knows about that customer:

• Likely white-collar, living in an urban setting, who may stop by for a daily visit
• Middle-aged (average age of a Starbucks customer is 42)
• High-income (average of $90,000/year income)
• Values convenience and quality: uses the mobile app to order ahead and/or may occasionally use Starbucks as a remote office
• Has some social awareness and values Starbucks’ efforts towards sustainability and sourcing

Build Your Fanbase

Kelly ends the essay on a hopeful note, pointing out that while 1000 True Fans may not matter to large corporations, they can provide a real living for a small business. More importantly, small businesses are local and nimble enough to cater to True Fans in a way that big companies simply can’t.

So, armed with this idea, how many true fans would you like to have for your business? Then, how many more would you like? Where do the avatars for your business work, live, and play? Are you meeting them there? What would business be like if you weren’t just catering to “customers” but to people genuinely excited about your brand and how you do what you do?

Imagine the possibilities.

If you want further help thinking about the 1000 True Fans concept in relation to your business, we have hundreds of years of business ownership experience among our advisors here at Apex. Send us an email today.