This article first appeared in Silicon Prairie News in 2017.
It astounds me when a want-to-be entrepreneur spends the better portion of a meeting talking about their solution. When asked, “Who is your buyer?” they stumble and fumble through the response.
Shouldn’t this be one of the easiest questions asked of entrepreneurs?
Shouldn’t we understand the person, organization, pain point we’re selling to inside and out?
And, shouldn’t we be able to name more than one person or company?
Last fall, we took a step back, assessed the ecosystem’s true strength and sustainability of startups, ultimately determining a merger of support organizations was necessary. At the time, and in large part still today, the No. 1 problem we saw and continue to see is the lack of product-market fit. This issue has resulted in zombie companies that have hung on for years — literally years! — with small gains, if any, in user growth, customer revenue and other signs of life.
We have to solve this as an ecosystem.
Name Your Buyer
To combat this lack of customer targeting and segmentation, we included a critical outcome as part of our application phase: List 20 potential customers to validate your concept against.
Think of it as a starting point for what will become your CRM later. Think of it as lead development and sales nurturing. Think of it as de-risking your venture. This list – complete with names, titles, email addresses and phone numbers – is one of the most foundational elements of any newly hatched venture.
As an ecosystem, we urge everyone to start with two questions: What problem are you solving and who are your first 20 customer targets? Please, challenge aspiring entrepreneurs to think with their buyers/users/customers in mind first.
Scrutinize Your List, Mentors are not Scalable Customers
The list is complete. You have a much better idea of who will help you validate or invalidate the concept you’re pursuing. Before you press send on that email asking for a customer discovery interview, make sure everyone on your list actually fits your segment.
More often than not, entrepreneurs try to bulk their list with mentors or “smart people.” The reality is, especially in the concept phase, mentors don’t provide much value in validation unless they are also in your target customer segment. If everyone on your list matches with your defined customer segments, congratulations. If not, be ready to defend why those outliers are not within the defined segments.
This post is one of a three-part series on The Startup Collaborative’s strongly held first principle of closeness to customers.