How do you find your ideal customers? Surprisingly, this is a challenge that
many founders have because they start off with a huge vision and need to break
it down. That means finding a market that’s serviceable and available in order
to break down the big vision into what is actually achievable right now.
Dominate a small market first
It’s important for all founders to understand that the startups that are growing
the fastest are not actually targeting the biggest market in one go. They're the
ones that identify key initial niches that are more likely to sign up for the
products of the startup than the mass market. It’s only over time that they
start to get better at building their brand, gaining notoriety, improving
customer loyalty, and building a go-to-market team that can help them tackle the
Technology scales, go-to-market doesn't
The one thing that many startup founders realize, especially when they have a
technological background, is their thinking is scalable. In most cases, a
startup’s technology could be used for all kinds of segments. But what they
learn over time is that technology scales but the go-to-market doesn't. Even
with a large total accessible market, it's always best to first focus on one
serviceable and obtainable niche. This helps to give a startup initial
credibility and initial fans. Once that first niche has been established, it’s
possible to grow from there.
What benefits are customers looking for
The key question that founders should ask themselves is what benefits customers
want. Also, what customers have the biggest pain point that your startup can
help to solve. Trevor Lain of LexAlign is a great example of a founder who went
through this process. Trevor knew what his product offered but didn’t initially
understand the pain point of customers or what features would push customers to
Almost every product or service goes through this process, even the iPhone. When
the iPhone first came out, it didn’t have mass appeal the way it does today.
There were certain customer segments that gravitated toward the iPhone much
faster. But over time, it found mass appeal.
Niche down to grow with more power
Aayush Jain of Green Deck experienced this process first hand. Green Deck could
help a variety of retailers but chose to focus on online fashion retailers
because they had to make hundreds or thousands of decisions about pricing.
Naturally, one fear that many founders experience, including Aayush, was
narrowing down too much. However, when you focus on a particular niche, it’s
easier to become the only game in town for those customers. In a way, this is
what can empower a startup to become successful.
Finding underserved segments
Even if the market appears crowded, it’s possible to find a segment that’s been
overlooked or is currently underserved. For instance, Forecast out of Denmark is
one of many project management software companies. But co-founder and CEO Dennis
Kayser saw that there was an opening in the market for companies that focus on
more complex needs, which is what became Forecast’s focus.
Go big or small - not both
Another key question for founders is whether to go big or go small. For example,
should a startup in the B2B space focus on SMBs or large enterprise clients. Of
course, there are a variety of factors that will go into that decision. But
above all, it’s important to not attempt to serve both, which can be a recipe
for disaster for a startup.
In one instance, Fredrik Thomassen, the CEO of Superside, recognized that their
use case was best for large customers. On the other hand, Niels Martin Brochner
of Contractbook recognized that large enterprises would have a long sales cycle
with his startup, so in the time it took to land one big client, Contrabook
could have sold to thousands of SMBs that were being underserved. In some cases,
it’s about being able to recognize where you can help people the most.
Embracing customers' view
Finally, founders need to recognize that customers may have a different view of
their company than they do. Sebastiano Bertani of Tanaza realized that customers
saw his startup in a different way than he initially envisioned. When he
embraced the vision that customers had, Tanaza started to find early adopters.
Ultimately, finding your ideal customer is about honing in on the niche that
your startup can best serve in the short term. If you can’t do that, sustaining
success long term will be next to impossible. If you find that niche, you will
find your fans and early adopters. They will become the champions for your
startup, enabling you to solidify your standing with that niche and expand from
there to new markets.
Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the