Like most entrepreneurs, I pitch my startup to nearly everyone I meet — be it at a bar or a tech conference. Fortunately, the response is typically positive. But there are always people who stare at me blankly as I explain what I’m working on. Their responses are somewhere in between “It’s not for me” and “I don’t get it.” While it can be discouraging, I realized that getting those from time to time isn’t necessarily a bad thing. In fact, as long as you’re getting more positive than negative ones, it’s a good sign.
Hear me out. If you try to build a product for everyone — from Katie, the 18-year-old freshman in engineering to Alan, the 60-year-old accountant, you’re going to fail. To do this assumes that your marketing efforts will require no targeting. And it’s a common trap among B2C (business-to-consumer) companies because you’re selling to the general public rather than a niche type of enterprise (like business-to-business companies). But the problem is that you can’t market to everyone.
As an entrepreneur, you don’t have a marketing department that can simultaneously focus on social media, pay-per-click ads, TV, email marketing and every other option under the sun. You need to prioritize which channels get the most bang for your buck, and more importantly your time. For that to be effective, you need to tailor your message and positioning to appeal to the people on the other end of that channel. You simply can’t afford to pour gobs of money into campaigns with no goal but to be top-of-mind at the store like the commercials you see for Coca-Cola or Budweiser.
No one can build a product that satisfies everyone, even if the idea does. Take my company, Fetchnotes. People might not get it for any number of reasons — they keep everything in their head, they can’t wrap their head around how we use Twitter-style tags, etc. Those aren’t my customers. I’m not going to spend my time marketing to them because as a whole they’re not going to be very interested.
But that’s okay. As long as there are enough people that fit your target, you’re going to do much better than the everything-for-everybody product. When you narrow your focus, marketing, design, feature decisions and monetization become easier because you understand your customer that much better. For example, using hashtags to organize your notes makes perfect sense to someone who uses Twitter or even people who are generally social media savvy. Fetchnotes “just works” for them, and they love that simplicity. Since that delighted user is a lot more likely to convert to our paid plan (we have a freemium business model), I care a lot more about making them happy than the confused casual user who was never going to pay anyway.
Recently, my co-founder Chase Lee and I sat down with a venture capitalist in the area to get feedback on pricing. He started out by drawing a standard Economics 101 demand curve, and then surprised me when he crossed off the bottom-right third of it. “Don’t worry about these guys,” he said. “They’re not going to get it. They’re going to be the hardest ones to convince to open up their wallets. And they’re going to complain the most when things go wrong.” Then he circled the upper-left part of the curve and said, “These are the people you need to focus on. Make them so addicted to your product that they can’t function if it goes down for a day. They’re going to pay, and they’re easier to please because they have a vested interest in your success.”
A few months ago, a fellow resident of our incubator (TechArb) stormed up to my desk angrily and said she forgot her password. Since this was before we rolled out a password recovery mechanism, she couldn’t access her notes without us manually resetting it. “Do you have any idea what this is doing to me?” she demanded. “You got me addicted to it and now I can’t get anything done without it!”