First Customer: Living in His Customer's Basement to $100M | Qualia

He lived in his first customer's basement for a year. Nate Baker found Qualia's first customer by wearing a Stanford sweatshirt to a conference. That customer, Barry Feingold, didn't just sign up—he taught them the industry, made intros to competitors, and let the team live in his basement. In this episode, founders will learn how to find their first customers through network-based selling and multi-year upfront contracts. Nate shares the brutal early days: building for months without talking to customers, getting their first customer's software shut off overnight, and plateauing at $45K ARR because they didn't respect sales as a skill. Their VP of Sales told them: "I've never seen such a gap between great product and incompetent sales execution." Within 12 months, they went from $45K to $3.5M ARR. Today, Qualia generates over $100 million in ARR with 600 employees and has raised more than $200 million to transform the home buying process. This episode is brought to you by: 💖 Gearheart → Book a free consult and get the first 20 hours free 🔑 Key Lessons 🎯 First Customers Must Come From Your Network: Nate says your first 10 customers must come from in-network sales—cold outreach rarely closes when you're asking someone to trust an unproven system of record. 💰 Multi-Year Upfront Contracts Bring Cash Forward: Qualia offered 5-year contracts paid upfront at 80% discounts, aligning incentives and generating meaningful early revenue. 🏠 Embed Yourself With Your First Customer: The first 25 Qualia employees rotated through Barry's basement learning the industry—"you have to be so in it" to build great software. 🗺️ Geographic Focus Beats National Expansion Early: Qualia stayed focused on Massachusetts for the first year, building deep relationships before expanding state by state. ⚡ Crisis Creates Your Most Productive Moments: When Barry's vendor shut him off overnight, Qualia had to deliver—it became their most productive month ever. 🔧 Engineers Must Respect Sales as a Skill: At $45K ARR, the founders thought product would speak for itself. Hiring a VP of Sales unlocked $3.5M ARR in 12 months. Chapters Introduction and what Qualia does How Nate picked the title software market at 21 with no experience The academic approach to market selection (and why it was a mistake) The real problem: coordination across multiple stakeholders Finding first customer Barry Feingold at a conference Living in Barry's basement for a year When Barry's vendor shut him off overnight How long it took to ship the first version Why narrow geographic focus beats national expansion early Early customer conversations and what they actually needed How to get customers to pay before you've built the product The multi-year upfront contract strategy Network-based selling vs cold outreach for first customers The wake-up call: "Great product, incompetent sales execution" Moving upmarket and the "you don't understand Texas" objection Strategy for geographic expansion state by state When Nate realized they had real traction How the opportunity looks today with AI Lightning round 💌 Get weekly 5-minute SaaS insights: https://saasclub.io/email SaaS Club Programs Join the SaaS Club founder community: https://saasclub.co/plus Build your $10K MRR SaaS: https://saasclub.io/launch Scale from 6-figures to $1M ARR Faster: https://saasclub.io/mastermind Get 1:1 async coaching from Omer: https://saasclub.io/accelerate Resources Full show notes: https://saasclub.io/467 Subscribe to the podcast: https://saasclub.io/subscribe