10 common startup mistakes: #2 everyone = my customer

June 23, 2017 by Lee Erickson
The second installment of a 10 post series on common startup mistakes. Mistake 1, 2, 3, 4, 5, 6, 7.

No one sells to everyone. Especially startups.

While it may be exciting to think about selling to the masses, startups rarely have the resources, capital, or expertise to pull it off. Plus most businesses that sell across multiple target markets didn’t start out that way. (Remember, Amazon started selling only books).

Successful startups work to clearly identify a niche market where they can learn fast, refine their solution, and maximize their limited resources. This key learning can then typically be applied to expanding your reach to other customers.

¬† Why wouldn’t someone use my product? Everyone can.
~ 250 hopeful entrepreneurs

So what’s a startup to do?

Talk to potential customers. Lots of them.

Your 1st step is to verify your assumptions about the problem and who has it.

To do that, you must engage in customer discovery – specifically talking with individuals who you believe would be your customers to better understand the problem or job they are trying to accomplish, what they are doing now to solve it, how that’s working, and what motivates them. (You should already be doing this to avoid common mistake #1.)

After talking with a number of potential customers (can vary from 30-100+ depending on what you’re doing), you should look for patterns around different needs. These patterns often indicate unique segments of the market.

The next step is to identify the characteristics of the customers in each group to better define who they are, where they might hang out (virtually and physically), and the value that you can provide to them.

More than demographics.

Truly understanding your customer means that you know more about them than just their age, gender, or education.

Successful startups can paint a picture and a detailed story about their target customer. The more you understand the needs, emotions, motivations, challenges, concerns, and issues your customers have, the better you will be at being able to create a compelling product they won’t be able to live without.

You should be able to clearly articulate:

  • Why they have the problem/need that they do.
  • What the root cause of the problem/need is.
  • What they have done to try to solve the problem or meet the need.
  • What motivates them to do this.
  • What challenges or barriers they have encountered.

But I’m having a hard time finding potential customers to talk to them.

I hear this quite often and it can be difficult. But, if you’re struggling to find potential customers to talk to about their needs, then you won’t be able to find them to sell to them.

Probably best to figure this out before you spend time, money, and resources to build a solution for a group of people you can’t find.

Resources to check out:

There are a number of tools that you can use to capture the insights that you are finding from your customer discovery process. Documenting this for your team is critical to getting everyone on the same page about who you are serving.

COMING UP: MISTAKE #3…my friends = great cofounders

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