How to choose a CRM for a startup: what you need now and what can wait

Most founders put off choosing a CRM until the moment they realize they've forgotten to follow up with a promising lead. That's usually the right moment. Before it, a spreadsheet or your inbox is enough. After it, every lost follow-up is lost revenue.

The good news is that a startup's first CRM needs to do very little, and the free plans from the major vendors do most of it. The risk is buying too much: a complex system with features you won't use, which nobody keeps up to date. This guide covers what a first CRM must do, what can wait, and how to choose and set one up.

Do you need a CRM yet?

A spreadsheet works when you have a handful of conversations and you remember them all. You need a CRM when any of these is true:

• you're running outbound and replies arrive faster than you can track them,
• you've lost track of a follow-up you meant to send,
• more than one person talks to prospects or customers,
• investors or a cofounder ask what's in the pipeline and you can't answer quickly, or
• you need to see where deals stall.

For most B2B startups, that's within a few months of starting to sell.

A spreadsheet that works until then

If you're not ready for a CRM, a well-structured spreadsheet does the job for the first few dozen conversations, and makes the move to a CRM easy later. Use one row per deal, with these columns:

• company and contact name,
• email address,
• source, such as cold email, referral or inbound,
• stage,
• date of the last conversation,
• next step and its date, and
• notes.

Sort by next-step date every morning, and you have a simple follow-up system. The weakness is that nothing is captured automatically. Every email and meeting has to be logged by hand, and that's usually what breaks first.

What a first CRM must do

Ignore the feature lists. A first CRM must do four things well.

Capture contacts and conversations automatically. It should connect to your email and calendar, log emails and meetings against the right contact, and create contacts from people you email. If logging takes manual effort, it won't happen.

Show your pipeline. A simple board of deals by stage, so you can see what's moving and what's stuck.

Remind you to follow up. Tasks and reminders tied to each deal or contact.

Let you get your data out. Clean export to CSV, so you're never locked in.

Everything else is optional at the start.

What can wait

• Email sequences and automation. Useful once you have repeatable outbound, but your cold email tool may already do this.
• Detailed reporting and forecasting. Worth it with a sales team, not with a founder selling alone.
• Marketing automation. Separate from sales, and usually a later need.
• Custom objects and complex permissions. Valuable as you scale, overkill at five deals a month.
• Integrations with everything. Connect email, calendar and perhaps your cold email tool. Add others when a need appears.

Free plans that are enough to start

Two major CRMs offer free plans that cover a small founding team.

• HubSpot's free CRM supports up to two users. It's the most widely used free CRM, with email logging, a deal pipeline, tasks and a large set of integrations. Paid Starter seats are listed at $20 a month, with first-year discounts for new customers.
• Attio's free plan supports up to three seats, 50,000 records and three objects. It builds your contact list from your email and calendar, and its flexible data model suits teams that want to shape the CRM around how they work. Plus costs $35 per user a month billed annually, or $44 monthly.

Pipedrive has no free plan, but offers a free trial. Its entry Lite plan starts at $14 per seat a month billed annually, and it's built around a visual sales pipeline, which many salespeople like.

Our comparison of HubSpot, Pipedrive and Attio covers prices at three and ten seats, and what each free plan stops at.

How to choose between them

Three questions narrow it down quickly.

Who will use it? If it's mostly founders who live in email, a CRM that builds itself from your inbox, such as Attio or HubSpot, keeps the work down. If you're hiring salespeople who spend the day moving deals, Pipedrive's pipeline-first design is built for them.

What else do you need soon? If you'll want marketing email, forms, a help desk and a website on the same platform, HubSpot's breadth is an advantage. If you only need sales, a focused tool can be simpler.

How will it grow? Look at the price of the plan you'll need in a year, not the free plan. HubSpot's Sales Hub Professional, for example, costs $90 per seat a month billed annually plus a one-time $1,500 onboarding fee. Attio's Pro plan costs $79 per user a month billed annually.

Setting up your pipeline

Keep the first pipeline simple: five or six stages that reflect real steps in your sales process. A common shape for a B2B startup:

Define what moves a deal from one stage to the next, in a sentence each, so the pipeline means the same thing to everyone who looks at it. Always record a reason when a deal is lost. Those reasons are the most useful sales data a startup has.

Getting your data in

Start clean rather than importing everything you've ever touched.

• Connect your email and calendar first, so new conversations are captured.
• Import active prospects and customers from your spreadsheet, with the fields you'll use: name, company, email, stage and source.
• Leave old, cold contacts out unless you plan to email them.
• Agree a few rules, such as how companies are named and which fields are required, before more people start adding records.

Keeping it useful

A CRM is only as good as what's in it. Three habits keep it accurate:

• Update deals after every meaningful conversation, even with a single line.
• Review the pipeline weekly, moving or closing stale deals.
• Set a next step on every open deal, with a date. A deal without a next step is a deal you'll forget.

If the team doesn't use it, the CRM is too complicated. Remove fields and stages until people do.

Tracking customers, not just deals

A CRM isn't only for selling. Once a deal is won, the same record is where you keep track of the customer: who your contacts are, what they bought, renewal dates, support conversations and the next check-in. For a startup, existing customers are the best source of referrals, case studies and expansion revenue, and the CRM is what stops them being forgotten while you chase new deals. Add a simple customer stage or a separate list for active customers, with a renewal date and an owner for each.

Connecting it to your cold email

If you run outbound with a tool such as Instantly or Smartlead, connect it to your CRM so that replies, and the leads behind them, appear as contacts and deals without copying by hand. Many cold email tools offer native CRM integrations, and automation tools can fill gaps. Our guide to cold email for B2B startups covers the outbound side.

Mistakes founders make with a first CRM

• Buying for the company you hope to be. Enterprise plans and complex setups slow a small team down, and nobody keeps them current.
• Too many fields. Every required field is a reason not to update a record. Start with the handful you actually use.
• Too many stages. Ten pipeline stages blur together. Five or six, with clear definitions, are easier to keep accurate.
• Not logging lost deals. Without reasons for losses, you can't see what to fix in your product, pricing or targeting.
• Treating it as a database, not a habit. A CRM works when it's part of the weekly routine, not when it's filled in once a quarter.
• Locking in without checking export. Make sure you can export contacts, companies, deals and notes before you commit.

When to upgrade

Upgrade when a paid feature clearly saves time or money:

• the free plan's user limit is blocking a new hire,
• you're sending sequences or follow-ups by hand that a CRM could automate,
• you need reporting for investors or a board, or
• you need permissions to separate teams or territories.

Until then, the free plan and good habits will take a startup a long way. Our guide to founder-led sales covers the weekly sales routine a CRM should support.