#33: How To Build The Right Product And Identify Your Ideal Customer Profile

Big Announcement: We are opening up our next founder led sales accelerator that will begin on 1/25/24. These have been a massive success since first launching. This is a 60 day program, that dives super deep into building out consistent lead gen and fleshing out a fully functional and repeatable sales process, with the goal of helping you find strong indications of PMF and scale up quickly to $1M in ARR. There are limited spots available. We typically fill up within 11 days of announcing. Do not wait. To learn more you can book a call with me here. 

Read time - 3.5 min

Today I’m going to discuss how you should think about building a product, and the fastest way to identify your ICP.

Identifying the right buyer personas is one of, if not, the most important parts of the process that needs to be understood in order to find indications of PMF and collect the data you need to figure out which direction to move with the product.

The quicker you identify your ICP, the faster you will scale and begin to see success. As conveyed numerous times in these newsletters, startups fail for 2 reasons. (1) They don’t have enough repetitions (lead gen) coming in. (2) The leads that are coming in they burn through because they have no sales process fleshed out.

Don’t be that founder. If you follow these newsletters you won’t be.

Don’t find customers for your products, find products for your customers.

~Seth Godin

When identifying your ICP it comes down to 4 fundamental components that need to be thoroughly understood.

1. High Pain

   Do they have a bum knee or a broken leg? With a bum knee you can get around. With a broken leg, you’re incapacitated. How do you tell the difference between the two? By understanding how the market is currently addressing the use cases you are potentially solving for. You should always be thinking about speed, efficiency, effort and economics when delivering value. In other words, at what speed can you deliver value compared to what exists? How much more efficient is it? What effort is required by the user/buyer? What is the cost compared to how the market is solving it? You should always be optimizing for these things. A byproduct is an amazing CX.
   
   

2. Buying Power

   If you’re trying to sell into a space where the ICP has no money, or has not been conditioned to buy products, you’re in for a long road ahead. This is fundamentally the most important thing you need to understand. Don’t invite them to the dance if they can’t afford the price of admission. In other words, selling a $300 monthly recurring subscription to a HVAC owner whose average ticket is $3k, economically makes sense, whereas selling the same service to a bagel shop owner might be tough. I love products that are simple to understand, fill a huge need in the market, are economical, and the buyer is maybe 1 or 2 people.
   
   
   

3. Easy to Identify

   Your ICP should be easy to identify and target. In other words you need to understand where they live, where they congregate, what groups they are a part of, what social platforms they are on, etc?

   
   A B2B example would be platforms like: LI, reddit, quora boards, private slack channels, or bookface.
   

   A SMB / B2C example would be: FB groups, chamber of commerce directories, industry specific associations, networking events, etc. Your ICP should not be difficult to find/target.
   
   
   

4. Growing Market / BIg TAM

   I can say through experience the clients that I worked with that have had the most success, and scaled quickly, were always the ones who were in a growing market with a huge total addressable market (TAM). Not to say you can’t have success if your TAM is not big, because you certainly can, but it’s a lot easier when you have a massive market to tap into. You want to be sending out thousands of prospecting emails weekly to see what comes back so you can start to refine messaging and understanding what’s hitting. That’s very difficult to do with a small TAM. The market should be growing fast and poised to keep growing for the foreseeable future. Marry those two together, along with building a quality product and you’ll have a ton of tailwind.

   
   Examples would be, AI (everybody and their mothers favorite), Cyber security/compliance, Ecommerce, Renewable energy, Digital health, Home improvements, etc…

If you follow these four components and do the work to nail each, you will find indications of PMF and be able to adjust your sails based on what the market is telling you. Winners focus on winning. Losers focus on winners. Focus on winning.

 
That’s it for today folks.

See you all next week!

Darren

P.S. If you’re interested in learning more you can book a call with me here.