• Eric

Good Vision Is Only Half the Battle

As much as it's fun to dream big, for so many startups and entrepreneurs, you have to walk before you can run (or operate your rocket ship).


More importantly, you have to know who you serve.

So many entrepreneurs have the desire to be the next Steve Jobs or Mark Zuckerberg. How about you build a company that generates $100,000/yr - enough to pay yourself - then consider conquering the world.

Me: So tell me your idea.


Friend with billion dollar idea: We're going to be X but for Y! It's going to be huge!


Me: Ok, but who are your lead users? What group of people are you going after first?


Friend: Well everyone can use this!


Me: Everyone? I mean, not everyone drinks Coke... Some people use Bing... (for whatever reason...) And they have HUGE marketing budgets. You're resource constrained. Who are you going after first? Who has the biggest need for this?


Friend: Uh... Let's get the check...


So you've told me Step 500, but what about Step 1, 2 and 3?


Many startups like to speak in generalities, not specifics. They'll be happy to spout off metrics yet might not be able to answer simple Econ 101 type questions. Heaven forbid they talk to potential customers.


An honest entrepreneur will tell you who is at the top of a customer (or potential customer) list, and isn't afraid to call them and be told their idea is awful.


But there is a lot of cheerleading in Silicon Valley. It's pretty poor form to offer any constructive criticism.


So if you want to cut through the theatrics and actually build a business, what's the single most important thing you can do?


Make a List, Check it Twice


One of the most useful things I've ever done as an entrepreneur is make a list of my top-50 customers. I even ordered it from 1 to 50 on a variety of factors (ease to contact, complexity of decision-making to get to yes, likely contract size, perception within the industry - you want the sexy ones).


This worked for the b2b company I was building, but it's also applicable to b2c products and services. How exactly are you going to target Facebook and Google Ads on "Everyone"?


Make a list of VERY SPECIFIC cohorts of people and test how well they respond to ads about your product, even if it only leads them to a landing page for email addresses and preorders.


When you're small, you're really resource constrained. You can't afford to be something for everyone. You need to specialize. Otherwise, you'll be eaten alive in customer acquisition costs compared to big brands.


More importantly, you'll only kind of solve the problem most people are seeking you out for.



Make a specific group of people REALLY REALLY, INCREDIBLY Happy!


Initially, you want to make a small, reachable group of people really happy because you solve a huge, but specific problem for them.


Take Facebook for example (Bear with me).


At age 19, in his dorm room, Mark Zuckerberg didn't have "connecting the world" in his mind as FaceMash's scope (as it was called then). He simply wanted to stalk the cute girls in his dorm and classes, or perhaps figure out who that "Ashley" he met at the party was and try to follow up.


He only targeted Harvard with the initial launch of FaceMash, originally billed as "Hot or Not... but for Harvard" (sounds more like a college sophomore than tech billionaire right...?). But the brilliant thing is that Harvard only has ~7000 undergrads. That's a pretty tractable number to reach, and many of them shared the same problem/concerns that Mark did. Grab 5 friends and stick a flyer in every bathroom stall on campus.


Ideally pick a demographic that has adjacencies


Facebook worked where MySpace and several other social networks failed because he happened to target a demographic with a ton of adjacencies.


From Harvard, Facebook expanded to other schools in Boston and schools in the Ivy League. Kids who care what Harvard kids are doing. From the Ivy League, Facebook really scaled by literally performing the same services for every post-secondary institution. Copy. Paste.


For the first year or so, Facebook was really designed to connect with people solely at your school, but then the floodgates opened once they realized people wanted to stay in touch with friends after school.


Who else cares about what college students are doing?


Their younger brothers and sisters in high school.


Their parents.


BOOM - two more huge, influential demographics.


Up until 2008-2009, Facebook didn't really have a way to make money. It was treated as a hand-wavey "eh, we'll figure it out" sort of question.


Thankfully, the people who most actively used Facebook (college students and now young millennial professionals) were also an incredibly attractive demographic for advertisers, and Facebook entered the ad market. Now he's explaining this (obvious?) business model to congress.


So for you, with a great idea, don't only think specifically about a specific group of people you need to make happy (Step 1). Think about who they interact with, or more importantly, who follows what they do (Step 2). This should help you bring your business and marketing plan into far more specific territory. One channel or a set of product decisions may work for one group, and a completely different set is appropriate for their parents, or children, or coworkers from another department. Rather than a one-size-fits-all product, you now have "product lines tailored to your needs"


This is how you bring your business plan into reality. With a list of potential customers or highly targeted demographics you can now hit the pavement and get sales, one person/buying decision at a time.


Yes, it's a slog.


Yes, that's business.


But by focusing on the few people that matter, you no longer waste time on activities that don't drive through to your (now much simpler) goal of making a few people really happy rather than trying to please everybody.


That's sanity.


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© 2018 by Eric Boromisa.