Pagos’s First 100 Customers: Why Enterprise Buyers Who Build In-House Are Your Best Prospects

Pagos’s First 100 Customers: Why Enterprise Buyers Who Build In-House Are Your Best Prospects

Most founders assume their easiest customers will be those without existing solutions. Companies who don’t understand the problem yet. Buyers who haven’t invested in the space. Wrong.

For Pagos, the easiest customers were companies sophisticated enough to have already built internal solutions. They’d invested engineering resources. They understood the problem deeply.

“Some are extremely well funded or have a lot of resources. So they have maybe built something in house that’s actually been the easiest group because they know what they want and we can show pretty quickly that we can do it better,” Klas Bäck explains.

In a recent episode of Category Visionaries, Klas Bäck, CEO and Co-Founder of Pagos, a payments operations platform that’s raised $44 million in funding, revealed why targeting sophisticated build-versus-buy customers provides the fastest path to product-market fit.

The Counterintuitive Customer Strategy

Conventional wisdom says target customers without solutions. No switching costs. No existing tools. No internal teams to convince.

This logic fails for sophisticated enterprise products. Companies without solutions often lack them for good reasons. The problem isn’t painful enough. They lack sophistication to recognize it. They’re organizationally unable to implement.

Companies that built in-house tools have passed the ultimate validation. They recognized the problem was important enough to dedicate engineering resources. They got organizational buy-in. They proved they can implement solutions.

When Pagos engaged these customers, sales cycles shortened dramatically. No need to establish problem validation—they’d already invested in solving it. The only question: can you do this better than our internal team?

Why Build-Versus-Buy Customers Convert Faster

The speed advantage comes from eliminated friction. With unsophisticated buyers, you’re selling at multiple levels. You’re selling that the problem matters. That software can solve it. That your solution is right. That they can implement it.

With build-versus-buy customers, most of this is pre-validated. “They know what they want and we can show pretty quickly that we can do it better.”

This changes the conversation fundamentally. Instead of education, it’s evaluation. Instead of proving value in abstract, you’re showing concrete improvements over their existing baseline.

The sophistication gap matters. These customers understand nuances. They know what good looks like. They ask the right questions. They recognize value immediately.

The Learning Velocity Advantage

Sophisticated customers accelerate product development. When someone has built a solution internally, they’ve discovered all the edge cases. They know where solutions break. They understand what features matter.

This compressed learning matters immensely. Every customer conversation either validates your roadmap or reveals gaps. Sophisticated customers reveal gaps immediately because they’ve encountered them building their own solutions.

Less sophisticated customers can’t provide this feedback. They don’t know what they don’t know. They think feature X is critical based on theory. They might miss feature Y entirely.

The build-versus-buy customer has hit all those use cases. Their feedback is based on production experience, not hypothetical needs.

The Credibility Multiplier

Landing sophisticated customers first creates powerful social proof. When you close a company that built an internal solution, you’re not saying “Company X uses our product.” You’re saying “Company X built their own solution, then switched to ours.” The implied validation is substantially stronger.

This matters particularly for emerging categories where early buyers take risk. When sophisticated companies with internal alternatives make that bet, it reduces perceived risk for everyone else.

How to Find Build-Versus-Buy Customers

The challenge is identification. Companies don’t advertise they’ve built internal solutions. They’re not actively searching for alternatives.

The answer lies in domain expertise and network. Klas came from PayPal, where he experienced the problem firsthand. He knew which companies were sophisticated enough to have built solutions.

“In the beginning it’s a little bit of a brute force like okay, who should we go after?” Klas recalls. “I literally went through every single person that I was connected with on LinkedIn who are a good fit.”

This network-first approach only works if you’re solving a problem you’ve experienced personally. Without domain expertise, finding build-versus-buy customers becomes substantially harder.

The Three-Tier Market Structure

Pagos discovered customer sophistication stratified into three tiers. The first tier—companies with existing internal solutions—became the beachhead. “That’s actually been the easiest group because they know what they want and we can show pretty quickly that we can do it better.”

The second tier had awareness of optimization opportunities but no existing solutions. The third, and largest, didn’t yet grasp the complexity. “Payments, is a weird combination of a little bit of finance, lots of technology and very complicated domain knowledge,” Klas explains. “Like, surely it can’t be that complicated. It’s like, no, actually it’s very complicated and it’s hard to do well.”

This reveals a go-to-market strategy: Start with tier one. Use their feedback to refine the product. Use their success as case studies. Then expand to tier two. Eventually, create the category for tier three.

The Practical Playbook

For founders building sophisticated enterprise products, the Pagos approach offers a playbook:

Target customers who’ve already invested in solving the problem. Leverage domain expertise to identify them. Position as superior to their internal solution, not education about why they need one. Use their sophisticated feedback to accelerate product development. Convert their commitment as social proof for less sophisticated buyers.

This inverts typical enterprise sales. Most founders start broad, trying to educate a large market. This starts narrow, targeting the most sophisticated segment first.

When This Strategy Works

The build-versus-buy strategy works best in emerging categories where sophisticated companies have built internal tools because no commercial alternatives existed. This describes many B2B infrastructure plays where the product category is obvious in retrospect but didn’t exist as a defined market beforehand.

It requires founder domain expertise. You need to know who the sophisticated players are and have credibility to engage them. It requires a genuinely better solution—you’re competing against internal engineering teams, not just weak commercial alternatives.

But when these conditions align, targeting build-versus-buy customers provides the fastest path to product-market fit. They validate the problem, they accelerate learning, they shorten sales cycles, and they create credibility for broader market expansion.

The companies that seem hardest to sell—those with existing solutions—often become your easiest customers. Because sophistication shortens everything.