For startups trying to find traction and happy customers, it just doesn’t pay to try to sell to everyone in your market. Or the average customer.
For startups selling new things, market averages are meaningless.
You’re not going to sell to average customers. The typical or average customer won’t buy from crazy new startups!
When you are trying to define the 10% of the big market where you’ll find actual traction, revenue, and happy customers, demographic segmenting won’t get you very far.
Sure, you’re selling to companies of a certain size in certain regions. But that doesn’t narrow it down.
Early adopters in any market are not defined by demographics (size, age, location).
They are defined by their behaviors and beliefs. Also called psychographics.
Behaviors like these:
- Are they searching for something specific on the web or visiting relevant sites
- Have they bought something like this already?
- Do they actually go to restaurants and bars?
- Do they watch these kinds of shows on YouTube or TV?
- Do they follow specific influencers on social media?
Beliefs like these:
- I think you need to spend money on marketing. (Or not spend money)
- I’m confident about my technical marketing skills.
- I think having a repeatable process is important for successful sales growth.
- I just know I want startup funding from a name-brand VC.
The early-adopter slice of the product adoption curve is 10-15% of the whole market, depending on whom you ask.
Demographically, those early adopters look similar to other companies in the mainstream market that aren’t ready to buy yet.
But they are completely different from non-buyers in what they need to already believe and be doing to be excited about your product or service.
Where do the folks hang out who already believe and are doing what will make them ready for your new thing?
Earlier this week I wrote about The 10% Rule here.
The 10% Rule is just the Power Law times 80/20.