How to identify “ideal” early customers
So you have a solid idea, team, and market analysis under your belt, now it's time to accelerate the validation process. It's time to start selling.
At this point you've made some noise with a set of friends that — let's be honest — are mostly there to support you. As long as you don't charge too much (or annoy them too much), they will likely be your customers. But, they are not the early customers that matter.
Your ideal early customers will be (i.e. should be) friends and acquaintances further away from the center of your social graph. They are the people one or two connections away that want what you are offering and are willing to buy it and/or meaningfully engage with it.
But who are these people, exactly?
In the business world, there is no end to literature about developing your Ideal Customer Profile (ICP), but in the end, it comes down to empathy.
We all make decisions from the emotional part of our brains, so that's precisely where you need to connect. Depending on your business model, the process of developing empathy with your early customers is nuanced differently:
- Business-to-Business (B2B) — If you're building software for a business then it's best to hone in on the decision-maker and then build a story around this person's work life and pain points (i.e. the company persona wraps into this person's story). Is the decision maker the CFO? the CTO? Who else is successfully selling to this person? Why? How big is the company? What industry are they in? etc…
- Business-to-Consumer (B2C)- If you're building a product/service for the general population right out of the gate, then you need to carefully pick your customer segment (e.g. what slice of the population is going to buy/engage first) and then develop a profile of the ideal customer in that segment. Gender? Age? Income level? Education level? Typical vocation? Wants? Needs? Spending Habits? Tribe dynamics? Influencers? etc… In most cases you should actually develop three or more personas, then pick the one that you are going to focus on. It will change — it always does — but it's good to start somewhere. Put your empathy hat on and write a story for you and your team to modify as you go.
- Marketplace — If you're building the next Uber or AirBnB, then you have to carefully develop your profiles on both sides. Who is the buyer? Who is the seller? To win, you're going to have to focus more on the buyer side (e.g. the person buying the ride, or whatever) and ensure that your seller acquisition strategy doesn't suck. If you successfully acquire buyers, then it's relatively easy (but still not, you know, easy) to find & train people to be your sellers/providers.
When you put this process into practice you and your team will be conflicted. You'll have a bunch of competing theories about your ideal customer profile, and you'll tend to be biased after conversations with “lots of people” (i.e. like 4) who seem to confirm your theory. I'll talk about the specific nuances of surveys and interviews in my next post (subscribe to my newsletter for updates), but at this point you shouldn't let a small number of conversations unjustly influence your hypothesis about your ideal customer profile. Listen to your team and “go with your gut” for your first draft.
That being said, a smart strategy at this point is to target people of influence. If you land the leaders, you also land their followers.
- Business-to-Business (B2B) — John is a CTO of a growing, 300-employee streaming media company that is dealing with pain points around their DevOps procedures (or lack thereof). He knows he can hire expensive professionals to build a smartly architected workflow, but he also knows that if the right off-the-shelf solution exists it's a no-brainer to “buy” versus “build.”
- Business-to-Consumer (B2C) — Alexis is a CEO of a successful startup and admittedly spends way too much of her life in taxis between meetings. The process of calling a cab in the vast majority of places is terrible and inefficient, and if a simple app on her phone could hail a ride to her location for around the same price it would make her life a lot easier.
- Marketplace — Amy and Jack are upper-middle class business professionals and live close to the city. They enjoy afternoons at local dog parks with their beloved pet. They also enjoy spontaneous vacations whenever possible, but often scramble to find someone they trust to watch their dog. Edward is a freelance journalist, active blogger, and absolutely loves pets (i.e. his Facebook profile pic also has his dog in it); the idea of caring for other people's pets temporarily and getting paid for it is pretty much the best thing ever.
Again, a key thing to note about these profiles is that if you successfully reach them, you are also reaching people they influence as well.
IDEAL != REAL
Finally, at the end of the day, your ideal customer profiles will always change and will rarely end up describing your actual customers. That's OK. The practice of writing down your hypothesis and relentlessly revising as you go is the most important part. The real people who make decisions to buy/engage with what you're selling will be a complex group, but honing in early on your customer segments and profiles will help you build and market a product that people actually want.
Author's note: this post, which originally appeared on my personal site here, is part of a series of articles outlining an operational framework for building and launching a web product. Feel free to subscribe to my newsletter and I'll let you know when I publish new content. Thanks!