Who should your early customer be?

When you’re starting a new company or product, there are two wrong answers to the question “Who’s your target customer?”

One is “everyone.”

The other is “we’re not sure.”

Actually, the second answer isn’t so much wrong as it is obvious. Of course you’re not sure! You haven’t built the company/product yet! You won’t know who your actual customer is until some people have paid you and some subset of them seem particularly happy and inclined to keepgiving you more money.

But as you’re beginning to build a company or product, you’re engaging in some risk-reducing customer development, right? And to practice customer development effectively, you’ve got to pick a target customer profile — one narrow enough to be falsifiable — and then start talking to people within it.

Who should your early target customer be?

These are the three vectors that you should balance. The answer isn’t the perfect center of the Venn diagram — it’s your job to figure out the right balance of these three vectors. But this is a good way to start thinking about your specific problem and the audience you’re (probably) solving it for.

Three considerations for early customer
Market Size:  Intro to Economics: you can serve something lower-cost to a huge customer base, or something premium to a niche customer base, but niche customer base and low revenues and you’re dead in the water.

Severity of Pain: You’ve heard the saying “build a painkiller, not a vitamin”, I’m sure. So it’s worth thinking a bit about how you’d quantify pain for the possible target customers you have. If your product saves one potential audience money, but it saves another potential audience from legal risk (being sued costs money and creates stress and bad PR), that’s a consideration.

It’s also important to realize that sometimes, the customer with the most severe pain is NOT the best first market to tackle, because:

Ability to Change: is highly variable for different types of people and environments. Some potential customers are bound by financial regulations or laws, or inflexible financial budgets. Potential customers in healthcare, finance, or education, in particular, may have a pain, realize it, and desperately want to solve it, but have severe limitations on what they are able to change.

Or, limited ability to change doesn’t have to involve laws or rules. It could simply be that some conservative customer bases prefer to take a wait-and-see approach — even when their pains are great.

So — think about these three vectors, and weight them according to your best current knowledge, and use them to pick a target customer. Then get outside the building and attempt to prove yourself wrong!