Who are these 100 people?
Last week’s post was on being in love with the problem where I discuss from my experiences, how that is important when building your business. I mentioned finding 100 people that you speak with that have the same problem and are willing to pay you to solve it. While they may have the same problem, the solution they seek may not be the same. I only speak from my experience failing numerous times that has gotten me to this point. Defining this ideal customer profile takes iteration and time. While you may have some idea of these people, you will still need to get to a stage where there is a commonality between these customers. Here are a few areas to think of when defining your ideal customer profile: Let’s take an example of an ICP: Founder of a SaaS business (1-50 EE) in USA/ Canada at the seed stage that does not have a background in sales. Here are the components: • Title: Who is the buyer of your product? NOT the business, but the person at the business that is making the purchasing decision. In this example, it is a founder. • Type of business / Industry: You need to know the overall industry at the onset that you are targeting. In this case, you are going ‘kind of’ broad but this will help you to niche further down as you have conversations. In this example it is SaaS. • Location: Where are your buyers located? In this example, it is USA/Canada. • Funding/Revenue: Do they have the money to buy your product? In this example based on my business model; pre-seed/seed/Series A stage companies could have the money to buy my product. Hence, in this example, it is a founder of a Seed-funded business. • Headcount: If you are selling a typical SaaS product then identifying the company size is particularly important. The need for a 50-100 employee count company is VASTLY different from a 200+ employee size organization. In fact the sales cycle is also different touching numerous personas. In this example, it is a company that has 1-50 employees. • Background: Who are these buyers, what type of background do they have, are they someone who is a technical person or has a product development background? By defining certain characteristics, you will be able to further niche down. In this example, it is a founder that does not have a background in sales. • Problem they ‘could’ have: What are you really solving for? Is it a vitamin (nice to have) or is it a pain killer (must have)? While for some it could be a vitamin and for others a pain killer, it is important to broadly know the challenge they face. Don't stop if for a few it is a vitamin in your initial conversations. In this example, it is the challenge founders face to sell their product or solution. • Sales cycle: This is what a lot of founders don’t think of when starting up. If you are building a product that is focused on an enterprise then their sales cycle is fairly long. Depending on the product, it could take 9-12 months to get your first sale. Do you have that type of bandwidth and funding to wait for a year? If you do, then great, but if you don’t, then you need to further refine who you are building towards. Next post: The email I used to get interviews with prospects to learn more about the problem they face.