Define Your Customer
All Things Venture #061
Three years ago, I almost quit my job at Deloitte to go full time on my own startup. At the time I was wholly unprepared and naively overconfident, but I did have the common sense to go meet with a friend who had already taken the plunge. We met up at a restauraunt in New York for brunch, and he dropped some knowledge on me for around 45 minutes. One of the things I remember him sharing was something along the lines of this:
Define who your customer is and really know what they want
It was a such simple perspective that back then I was probably like,
Define my customer? Pshhhhh, easy. Done and done. My customer is a [insert age year old] who lives in [insert y metropolitan city] and make between [a income] and [b income] per year.
It was a classic what I’ll call, “learned at a lecture” response. An academic framing/perspective, that while useful, only goes surface deep. I wanted to write today’s article, because earlier this morning I was in a board meeting where we talked about defining our customer, and how doing so can have a cascading effect on the strategic decisions you need to make next. Since I have entered the world of startups, defining your customer, or more concretely, defining your ideal customer profile (ICP) has been a recurring process/procedure. My personal perspective is that while yes, an ICP does contain demographics, it more importantly understands the needs or problems of a customer.
For example, a consumer startup in the travel space may start out with an ICP like this:
Our customer is 25 - 30 year old living in New York City earning between seventy-five to two hundred thousand dollars per year.
This is great! This tells me who you want to target, where they are, and how much they make. Awesome. But it misses a truly critical point of marketing for startups. Why do they want your product? What do they need from you? What problem do you solve, and when can you solve it? It is always going to be easier to sell someone an umbrella when it’s raining, and they’re about to get soaked walking down Houston street than when it’s a sunny day and they’re happy as can be. When you put your product in front of your customer, is almost as important as who your customer is. Let’s revist that ICP for a travel startup:
Our customer is 25 - 30 years old living in New York City earning between seventy-five to two hundred thousand dollars per year. They work in a time consuming job and are in relationship. They need our business after they have purchased a flight for their trip, but between two to four weeks before they go on the trip. They need information that is accurate, personalized, and delivered quickly. They want to have their input acknowledged and interact with a peer .
See how different that ICP is? The first one is good, but the second one is great, and it can get even BETTER if you develop processes and feedback loops that allow you to constantly refine that ICP and add additional ICPs depending on the product you sell. Marketing is an unloved, but extremely valuable function within startups, and I’m of the belief that nailing your ICP can be a critical prerequisite to truly finding product-market fit. I don’t necessarily want to be in the business of selling ice to eskimos. I want to be in the business of selling high margin, battery powered space heaters to those mofo’s. (Yeah, yeah the igloo could melt but you guys get the metaphor).
Anyways, hope you guys have a great rest of the week. Per usual I’m open to critiques on anything I share. Take care, and let’s all build something people want (and nail our ICPs!!!!)