Who is your customer? How to find it out

Who is your customer?
- Everyone.

You don’t understand the problem you’re solving until you realize who you are solving it for. Very often startup founders think about this question like about a checkmark to their business plan before going to investors, without diving into the question enough.

Let me show you some examples of good target audience definition.

Examples of good target audience definition

Case 1. Young mothers. Women 21 - 35 y.o., who want to keep in shape, but don’t have a lot of time for this. They value mobility, affordability, flexibility.

Case 2. Young people with diabetes. 18 - 35 y.o. They need to follow the treatment procedures (not forget about it + do in time) and want to do it fast and unnoticed. They value communications with friends and family, privacy, efficiency.

Case 3. Experienced stockbrokers. 30 - 50 y.o. Spend all their time doing business, don’t have enough free time for family and friends. Value speed, efficiency, quality.

Do you feel how specific these audiences are? Can you literally feel their work day, their problems, thoughts, needs? This is what distinguishes well-defined audiences from “general” audiences. This is the type of definition you need to achieve for your startup.

You can say that “potentially everyone has these needs and your audience is all mature people.” I can give you an example. Who uses Facebook today? Everyone. From school kids to engineers, and from businesspeople to grandparents. But let’s rewind back to 2004 when Facebook just started at Harvard University. First users were students who wanted to connect with their friends online. The membership to the site was restricted only to Harvard. And it was the right move.

The Diffusion of innovations can help us understand how it works. The first who should come to your product are Innovators. They are looking for something new and cool, they are tolerant to bugs and can give honest and constructive feedback. The Majority - are people who are looking for solutions and convenience. That’s why they are not-tolerant to bugs, and if something doesn't work, they get rid of the product and never come back. In the case of Facebook - students were Innovators, who were the part of the product growth, with their feedback, thoughts and usage patterns. The Facebook which we have today is the entirely different product (than it was 15 years ago), with the focus to Majority, satisfying the needs of both businessmen and grandparents. If you want to know more about The Diffusion of innovations, we suggest you visit our special directory.

So, for you, it’s critical to identify who the Innovators for your product are. Don’t know how to do it? The next chapter can help.

How to identify your customer

For several years working with startups, we found several precisely good questions that help our founders determine their target audience.

Q: Who is the ideal customer?

Hint: find people who are literally suffering now without your product.

Q: How often do they have a problem?

Hint: Uber vs. Airbnb. How often do you need a taxi? How often do you need to rent a flat?

Q: How intense is the problem?

Example: Uber. You need transportation daily. Sometimes you need it so urgent so that you can pay any money.

Q: Who is getting the most value out of the product?

Example: carshop websites. They are terrible, and everyone is dreaming of creating their own carshop website with perfect UI and straightforward UX. But few know that the real users of these websites are sellers, not buyers. They use a website every day, running a business and making money on it. Buyers use it once in a blue moon when something is broken in their lovely car. That’s why all processes and UX are explicitly made for sellers and their needs, helping generate more money. Buyers' needs go after.

Q: Are they willing to pay?

Hint: starting with a higher price is always better than starting free. If people have an extremely tense problem, they probably think “That’s a deal!” If you give your product for free, people start thinking "where is the catch?", or even "this is something low quality." When you take money for your product, you validate 2 points at once: a) Customer Demand; b) Business Model. Very often entrepreneurs think that free price will help them get more customers, postponing the meeting with reality.

Q: Which customers should you go first?

The answer is unexpectedly simple - the easy ones.
Too simple? Ok, let me explain.

It’s painful to admit (and a lot of founders keep disputing about it), but usually, MVP means a bad product. Yes, BAD, let’s be honest to ourselves. So, you need to find customers, who are okay to use a bad product. To make it possible, it should be desperate customers.

If you are doing a six-month conversation with a company (for B2B), definitely, they are not desperate. Your future customers literally have to suffer without your product. And when they see it - they should say, “Finally! Can it do this, no? Ok. No that? Ok. I hope, it will be in the future. But what I have now is already great!”

Who’s business (B2B) is gonna out of biz without using your product? Think about this. They are your first customers.

Summarizing

You have not a perfect product. At any moment of time. A young product can’t satisfy the needs of all the market. And you don’t need all the market at the start. Identify who is your ideal customer. You need to find people, who are literally suffering now without your product, because substitution that they use are bad, take a lot of their time, incomplete. People, who really have pain, they will pay you for a solution, and tell what you need to add to the product to make it better. People, who look like interesting, but not sure, are not your ideal customer. Leave them for later, when you have a critical mass of ideal users.

- Who is your customer? Everyone?
- No, we focus now on high school students, who are looking for a summer job.
- Alright.