You’ve Got One Big Customer. Now What?
When one customer dominates: Are you seeing real product-market fit or just a mirage?
I see it all the time in early-stage companies: one dominant customer and some signs of product-market fit (PMF).
On the surface, this can feel like success—cash is coming in, usage is growing, and the team is busy. But scratch a little deeper, and critical questions emerge:
Is this true PMF?
Is this situation necessarily “bad,” especially if that one customer is producing cash flow?
What should be done to fix this spike and achieve broader PMF? In other words, how do you smooth out the revenue curve?
Let’s unpack each of these questions.
Is This True PMF?
No — this isn’t product-market fit. At least not yet.
Real PMF is about consistent, repeatable demand from a broad set of customers in your target market. It’s about a product that solves a clear pain point for many, not just for one outlier or visionary customer who happens to "get it" early.
When one customer dominates – that is if one customer accounts for more than 30–40% of your revenue or usage – several risks are in play:
The product may have been custom-built to fit one customer’s specific needs, which may not generalize to the broader market.
The customer may be “ahead” of the market, willing to pay for something others are not ready or able to adopt.
The team may be spending outsized energy in engineering or servicing this customer, slowing down broader product development and go-to-market efforts.
This may be a consulting project or one-time/one-use customer situation not building a market.
PMF is about market pull, not single-customer pull. Until you see demand from multiple customers with minimal handholding—and ideally with some organic inbound demand—you’re not truly there.
Is This Situation Necessarily "Bad"?
Not at all. In fact, it’s common—and sometimes necessary—on the path to real PMF.
Early-stage companies often need one or two anchor customers to validate the product and fund initial operations. A strong early customer can:
Provide cash flow that reduces reliance on dilutive funding.
Act as a proving ground for your technology or business model.
Help you understand deeper customer needs and sharpen your value proposition.
The danger lies in getting stuck here—building a “custom one-solution shop” rather than a scalable product company.
If one dominant customer persists too long, you risk:
Technical debt from one-off features.
Cultural drift toward service delivery.
False signals to investors about true market demand.
· Sometimes seed funding is spent on this one customer situation and there is insufficient funding to expand the aperture of the customer base.
So no, this situation isn’t bad—but it’s transitional. You must treat it as a bridge, not a destination.
What Should Be Done?
1️⃣ Acknowledge the Stage You’re In
First, be intellectually honest about where you are. Having one dominant customer is not a crime—but pretending it represents full PMF is dangerous. Recognize that you are in pre-scaling PMF search mode.
2️⃣ Build for Scale, Not Just for the Anchor Customer
Be deliberate about what you say “yes” to. Some requests from the dominant customer should be treated as paid services, not as core roadmap priorities. Build your product for the market segment you want to serve—not just for today’s largest customer.
3️⃣ Prioritize Pipeline Diversity
Your next priority should be landing customer #2, #3, #4—ideally in different segments, different geographies or with different use cases to validate repeatability. Even at the cost of short-term revenue, moving from one to many is how real PMF emerges.
4️⃣ Smooth Out the Revenue Curve
Work toward reducing revenue concentration over time:
Set OKRs/KPIs around customer count, revenue diversity, or % revenue from top 1–3 customers.
Develop channel and marketing programs that bring in new demand.
Consider pricing and packaging adjustments that appeal to a broader set of customers.
5️⃣ Communicate Transparently with Stakeholders
Investors and board members know this dynamic well. Communicate openly:
“We are moving from a phase of anchor-driven revenue to market-driven growth. Here is our plan to diversify revenue and validate PMF.”
This transparency builds trust—and demonstrates that you are operating with strategic clarity.
Final Thought
Having one dominant customer early on is neither uncommon nor inherently bad. The key is to recognize it as a phase or a distortion your revenue curve, not a signal that you’ve already nailed PMF.
The companies that break out are those that learn, build, and intentionally expand their customer base until true market pull emerges.
Treat your current situation as a platform for growth, not a false summit. That’s how you turn an early spike into a sustainable, scalable business.