Lenny's Newsletter · Product & Work
TIER 5 2022-07-12
 Welcome to part two of our six-part series on kickstarting and scaling a consumer business. If you’re just joining us, here are links to previous posts, and a sense of what’s ahead: - **[Step 1: INSIGHT: Come up with your idea](https://www.lennysnewsletter.com/p/kickstarting-and-scaling-a-consumer)** - **Step 2: AUDIENCE: Identify your super-specific who** ←This post - **[Step 3: HOOK: Craft your pitch](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-consumer)** - **[Step 4: REACH: Find your early adopters by doing things that don’t scale](https://www.lennysnewsletter.com/p/consumer-business-find-first-users)** - **[Step 5: RETAIN: Iterate until enough people stick around](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-consumer-9c8)** - **[Step 6: SCALE: Build your growth engine](https://www.lennysnewsletter.com/p/growth-engines)** **The main question we’ll be answering in today’s post:** Why (and how) do you target a very narrow set of early adopters? Let’s get right into it.  In January 2010, when Ben Silbermann launched Pinterest, his initial growth strategy was to target his techie friends. He first emailed friends to let them know about his new site that lets you organize and share the things you love. “What’s the point?” they all asked. He then emailed all of his co-founders’ friends on the East Coast. No one cared. He emailed everybody he knew from his last job at Google, and all of his wife’s friends at Facebook. > #### **“No one really got it, to be totally honest with you. But they were also very polite about it. ‘This looks interesting. Very interesting,’ they’d say.”** He then started spending time at Apple stores, where he switched the default home pages on every laptop to Pinterest.com and stood in the back saying, “Wow! This Pinterest thing is really blowing up.” Didn’t work. Ben started to realize that maybe tech people had no interest in what he was building. But there was an unexpected demographic that seemed to get it, as Ben shared at a [talk at Startup School](https://www.ycombinator.com/blog/ben-silbermann-at-startup-school/): > #### **“There was a small group of people who were really enjoying it. Those folks would not be who you’d think of stereotypically as early adopters. They were folks I grew up with. People that were using it for regular life stuff: What is my house going to look like? What kind of food do I want to eat?”** On a whim, Ben decided to attend a conference in Salt Lake City called Alt Summit, a large female-focused design and blogging conference. He walked the halls pitching Pinterest and began to see a bit of interest. Eventually he met a woman named Victoria Smith who had a blog called SFGirlByBay. She quickly saw the potential of Pinterest, and they decided to collaborate on a promotion: Victoria created a Pinterest board with all the things that mean “home” to her and then tagged other bloggers to do the same. Each blog had a small but rabid fan base, and their audiences loved it. They *got* Pinterest. Soon they started to use it for all kinds of other things, and just a year later, Pinterest was at over a million users. Throughout this journey, the product itself didn’t meaningfully change—the audience did. Ben initially assumed that a new tech website would resonate with tech employees. Instead, 30-something female bloggers turned out to be the ideal early adopters. **When deciding who to go after when just starting out, it’s important to be super-specific. You need to find your “super-specific who”.** As [Andy Johns](https://twitter.com/ibringtraffic/status/1258817334342381575?s=20) (former growth leader at Facebook, Twitter, Wealthfront, and Quora) put it: > #### “When it comes to the question of the target customer, the most common mistake is the definition is too broad. It must be almost comically narrow, to the point where you may be misunderstood for such a narrow focus. > > #### At Wealthfront, our initial target customer was an engineer at a pre-IPO tech company, typically between 25 and 35 years old, less than $1M net worth, and had a personal preference to delegate money management to a trusted third party.” [Michael Seibel](https://www.michaelseibel.com/) shared the same lesson from his time at Justin.TV (60-second clip): [Watch on YouTube](https://www.youtube.com/watch?v=C27RVio2rOs) As did [Andy Rachleff](https://mixergy.com/interviews/wealthfront-with-andy-rachleff/) (co-founder of Benchmark): > #### “If you want to build a big business, you don’t go after the big market first, because those people only buy based on references, and you don’t have the references. You need to create a beachhead, a niche you can dominate. Through references, you grow from that niche of early adopters.” As did [Paul Graham](https://www.paulgraham.com/): > #### “Usually your initial group of users is small, for the simple reason that if there were something that large numbers of people urgently needed and that could be built with the amount of effort a startup usually puts into a version one, it would probably already exist.” [April Dunford](https://www.lennysnewsletter.com/p/positioning) (author of *Obviously Awesome*) calls this your “customers who care”: > #### “There is likely a wide range of buyers that care about that value, but certain customers care a lot more than others. What are the characteristics of a customer that makes them care a lot about your differentiated value? That gives us an idea of who our best-fit customers are. Your best-fit target customers are customers that really care a lot about your unique value.” And [Julie Supan](https://review.firstround.com/what-i-learned-from-developing-branding-for-airbnb-dropbox-and-thumbtack) (GTM advisor to YouTube, Airbnb, Dropbox, Discord, and Thumbtack) calls this your “high-expectation customer”: > #### “The high-expectation customer, or HXC, is the most discerning person within your target demographic. It’s someone who will acknowledge—and enjoy—your product or service for its greatest benefit. > > #### They look things up. They research things. And they have ideas for new types of products or services that can help them save money, gain time, get healthier, or make their team more productive. If your product exceeds their expectations, it can meet everyone else’s.” Nearly every successful consumer company nailed their super-specific who (though not always right away). Here are a bunch of examples:  ### How they found their super-specific who Yelp started very broad and quickly found one specific group that was most drawn to its product: > #### “Early on, we found that females ages 25 to 35 were the most active Yelp users. It’s not because we chose to focus on them—more like that’s who Yelp most strongly resonated with in the early months. We were neutral in our initial outreach (just friends and friends of friends), and then the first super-active users who had happened to be in that demographic—a disproportionate amount of 25-to-35 females. It was more just an observation of who it resonated with than an a priori idea we came in with.” > > #### —[Russel Simmons](https://www.linkedin.com/in/russel-simmons-9562/), co-founder and ex-CTO of Yelp Cameo started off by focusing on B-list athletes because the idea itself was inspired by one—and it turned out to be a great target: > #### “The way the company started was [Steven](https://www.linkedin.com/in/stevengalanis) and [Martin](https://www.linkedin.com/in/martin-blencowe-b1768114a) were chatting at a funeral, and Martin was talking about how he recently became an NFL agent, managing [Cassius Marsh](https://en.wikipedia.org/wiki/Cassius_Marsh), and was trying to find him brand deals. They decided to start a company where for X dollars you can do Y activity with Z athlete—for example, go golfing with Michael Jordan, invite Serena Williams to your daughter’s birthday, etc. > > #### This evolved into what Cameo is today, starting with Cassius and some former Duke athletes we knew. We quickly went into additional verticals, but now that we’ve had time to tune the platform and develop the brand, athletes are again one of our strongest verticals.” > > #### —[Devon Townsend](https://www.linkedin.com/in/devspinn), co-founder and CTO of Cameo Netflix went after online DVD fanatics because that’s who they suspected would benefit most from unlimited DVD rentals: > #### “[We’d] realized, early on, that the only way to find DVD owners was in the fringe communities of the internet: user groups, bulletin boards, web forums, and all of the other digital watering holes where enthusiasts met up.” > > #### —[Marc Randolph](https://en.wikipedia.org/wiki/Marc_Randolph), co-founder of Netflix, from *[That Will Never Work](https://www.amazon.com/That-Will-Never-Work-Netflix/dp/0316530204/ref=nodl_)* Instagram went after designers interested in photography with a large Twitter following, because those are the people they wanted to set the tone for the platform: > #### “The founders picked their first users carefully, courting people who would be good photographers—**especially designers who had high Twitter follower counts**. Those first users would help set the right artistic tone, creating good content for everyone else to look at, in what was essentially the first-ever Instagram influencer campaign, years before that would become a concept.” > > #### —[Kevin Systrom](https://en.wikipedia.org/wiki/Kevin_Systrom), co-founder and CEO Wealthfront went after young engineers at pre-IPO tech companies: > #### “We started with young people in tech and we started with engineers in tech, and then they told the product managers and the biz dev people and the salespeople and then they told their friends who they went to college with and might be lawyers or doctors. They told their friends about it locally and then they told their friends about it nationally and they just kept growing through word of mouth. > > #### We also learned that employees of enterprise software companies were not good targets because they were older than people who worked at consumer internet companies.” > > #### —[Andy Rachleff](https://mixergy.com/interviews/wealthfront-with-andy-rachleff/), co-founder Discord’s super-specific who was comically narrow: > #### “Discord’s initial wedge was quite narrow: a tool for Final Fantasy XIV gamers—an MMORPG with only 4 million registered players.” —[Olivia Moore](https://readlaunched.substack.com/p/-how-discord-dominated-gaming) Substack went after successful online writers it suspected wanted to spend more time writing and less time dealing with email tools: > #### “It all started with Bill Bishop, author of [Sinocism](https://sinocism.com/), who I knew from my days as a reporter in Hong Kong (and later, a visiting reporter in China). He had been publishing Sinocism as a free newsletter for five years, and I was a reader. In 2017 he started telling his readers he was going to put up a paywall. This was around the time that Chris [Best] and I were talking about starting Substack. I asked Bill if he’d be interested in being Substack’s first publisher, and he said ‘Sure!’ So we built the first version of the product to suit his needs and iterated from there.” > > #### —[Hamish McKenzie](https://www.linkedin.com/in/hamishmckenzie/), co-founder and COO Finally, TikTok had a genius framework for who to go after and how to win them over: > #### “In the early stage, building a community from scratch is like discovering a new land. You can give it a name: America. You want people from the existing platforms (i.e. Europe) to migrate to your country. Instagram is Europe. Facebook is Europe. > > #### The economy in Europe is very developed, and in your country there is no economy. How can you attract people to come in? In Europe, the social class is already stabilized. For the average citizen, for citizens of Germany or France, they have almost zero opportunity to go up in the social class. But now you have a new land. America! A.k.a. TikTok. > > #### Initially the majority of the wealth should be distributed to a small number, to make sure new people get rich. These people became a role model for people living in Europe. ‘This is just a normal guy, he went to America, and he became super-rich. I can do the same!’ > > #### And then lots of people came to your country, and you grow the population, you grow the economy.” > > #### —[Alex Zhu](https://news.greylock.com/productsf-2016-b753fa9159b8), co-founder of Musical.ly and ex-president of TikTok Spend time promoting your product to the wrong people and you’ll waste your time or, worse, go nowhere and give up. But if you can identify the right early users for your product in time, you’ll find that everything gets easier. > #### “If you can find a market that really wants your product—if the dogs are eating the dog food—then you can screw up almost everything in the company and you will succeed.” > > #### —[Andy Rachleff](https://en.wikipedia.org/wiki/Andy_Rachleff) ### **How to identify your super-specific who** To help you identify your own super-specific who, start by taking your best guess at the following five questions: 1. **Who are three real people you know who will be** ***exceptionally*** **excited about what you’re building? What do they have in common?** 2. **Of your existing users, who are** ***happiest*** **and** ***most committed*****? What do they have in common?** 3. **Who do you know whose life will become** ***instantly*** **better once they use your product?** 4. **Who do you know whose life will become** ***instantly*** **less painful?** 5. **Who’s asking to** ***pay*** **for this product**? > #### “Some prospects will say, ‘Yeah, your stuff is cool,’ but others will jump out of their chair and yell, ‘That’s *amazing* — I need that right now!’ You are going for the second group.” > > #### —[April Dunford](https://www.aprildunford.com/post/startup-market-segmentation-how-to-select-a-target-market), author of *Obviously Awesome* A few examples of *good* and *bad* super-specific whos:  > #### “Who are the most desperate customers?” —[Michael Seibel](https://www.michaelseibel.com), head of Y Combinator Let’s get even more concrete. Take out a piece of paper (or [make a copy of this template](https://docs.google.com/document/d/19k7oXAYb9qkra6FTUMPljW75YZfUfWEr0eTITZvDe6s/edit)) and write your best guesses of these six attributes of your super-specific who, based on the exercise above: 1. **Age range** 2. **Job title** 3. **Interests** 4. **Where they live** 5. **Where they spend most of their time, online and offline** 6. **What is most important to them in this product** Aim for *three* very specific characteristics of your ideal early adopter. For example: - **[Wealthfront](https://wealthfront.com/):** (1) 25-to-35-year-old, (2) engineers, (3) at a pre-IPO tech company - **[Yelp](https://yelp.com/):** (1) 25-to-35-year-old, (2) women, (3) in cities - **[Cameo](https://www.cameo.com/):** (1) B-list, (2) football players, (3) in Chicago - **[Instagram](https://www.instagram.com/):** (1) Designers, (2) interested in photography, (3) with a large Twitter following - **[PayPal](https://paypal.com/):** (1) Small to medium businesses, (2) on eBay, (3) who are power sellers - **[Strava](https://www.strava.com/)**: (1) Pro and serious amateur, (2) cyclists, (3) who want to visualize their activities - **[Atlys](https://www.atlys.com/)**: (1) Non-U.S. citizens, (2) living in the U.S., (3) going to Europe for a vacation Start simple. You can get more specific as you uncover which types of people get most obsessed with your product. [Again, here’s the simple template](https://docs.google.com/document/d/19k7oXAYb9qkra6FTUMPljW75YZfUfWEr0eTITZvDe6s/edit?mode=html) (which includes pieces from future posts) to help you consolidate your thoughts:  If you’d like to go deeper, here are some of my favorite guides for coming up with your super-specific who: 1. [Find your HXC](https://review.firstround.com/what-i-learned-from-developing-branding-for-airbnb-dropbox-and-thumbtack#:~:text=global%20mobility%20services.%E2%80%9D-,Find%20Your%20HXC,-It%E2%80%99s%20no%20exaggeration) by Julie Supan 2. [Ideal Customer Profile (ICP): How to Create a Comprehensive Customer Profile](https://www.mykpono.com/ideal-customer-profile-icp-how-to-create-a-comprehensive-customer-profile/) by Myk Pono 3. [Ideal Customer Profile (ICP) template](https://docs.google.com/spreadsheets/d/1QZ8sNT7aP3TWHDsrK8k1vN_HDohxQUQaPok1BfVh0Uo/edit#gid=0) by Patrick Campbell 4. [GTM nirvana](https://docs.google.com/presentation/d/1M_j0F-IuqgaGfHPfvOh1ssBudpA_Wyp6VoHA46uOr80/edit#slide=id.ga6fcfd8bcf_2_93) by Caroline Clark ### What if you get it wrong? It’s not the end of the world. But it’ll waste time, and may make you feel like no one wants your product. We already saw what happened when Ben went after the wrong initial target market for Pinterest (tech people vs. female bloggers). The product seemed like a failure until it didn’t. But once he figured it out, it worked. Udemy spent months going after the wrong audience, until they finally cracked it: > #### “It was really hard to get our first active instructors; I spent hours every day on Skype calls with all sorts of people—book authors, entrepreneurs, professional poker players, even someone who called themselves a ‘witch’ and who believed she was trained in black magic! While some of these folks created courses, it was basically useless—and just a really extended version of customer development. > > #### After we manually created some successful courses and we had proven the value of teaching a course in the first place, we then went to some experts in programming, technology, and entrepreneurship and convinced them to teach courses. It was enough to convince two more instructors to join—Zed Shaw and Bess Ho. They were more successful than our previous instructors, so that helped us convince 5 to 10 more to join that summer.” > > #### —[Gagan Biyani](https://www.linkedin.com/in/gaganbiyani/), co-founder of Udemy Typeform saw early success going somewhat broad, but their lack of focus led to growth stagnating a few years in: > #### “In the beginning, our focus was deliberately very broad as ‘democratizing data collection for everyone.’ The benefit is that it cast a wide net and gave us a huge TAM [total addressable market], but our positioning mostly attracted SMBs [small and medium-size businesses]. > > #### The market perception is that we offered some value to everyone but that we didn’t go deep enough in any single use case to offer a ton of value to anyone. > > #### We enjoyed hypergrowth during the first 3-4 years of our journey, but at some point growth slowed and we realized that what had gotten us that far wasn’t going to get us to the next level. > > #### It was at this point that we dug deeper into our data and decided to focus our GTM strategy on specific personas with specific JTBD [jobs to be done]. We realized that our most valuable persona in terms of usage and LTV was a marketer using Typeform to grow their business.” > > #### —[Cristina Apple Georgoulakis](https://www.linkedin.com/in/claki/), ex-Global Head of Customer Engagement at Typeform The faster you can nail your super-specific who, the better everything will go. Remember: 1. Try to make it almost comically narrow 2. Aim for three very specific characteristics 3. Start simple. You can get more specific as you learn more. And then once you have a sense of the *who*, the next step is to figure out *what* to pitch them. And that’s exactly what we’ll be covering in the very next post. Stay tuned! ### 📚 Further study 1. [My simple B2C GTM template](https://docs.google.com/document/d/19k7oXAYb9qkra6FTUMPljW75YZfUfWEr0eTITZvDe6s/edit?mode=html) 2. *[Crossing the Chasm](https://www.amazon.com/Crossing-Chasm-Marketing-High-Tech-Mainstream/dp/0060517123)* by Geoffrey A. Moore 3. [Positioning](https://www.lennysnewsletter.com/p/positioning) by April Dunford 4. [The High-Expectation Customer](https://review.firstround.com/what-i-learned-from-developing-branding-for-airbnb-dropbox-and-thumbtack) by Julie Supan 5. [Ben Silbermann at Startup School](https://blog.ycombinator.com/ben-silbermann-at-startup-school/) by YC 6. [The Sharp Startup: When PayPal Found Product-Market Fit](https://medium.com/craft-ventures/the-sharp-startup-when-paypal-found-product-market-fit-5ba47ad35d0b) by David Sacks 7. [The “thin edge of the wedge” strategy](https://cdixon.org/2010/12/26/the-thin-edge-of-the-wedge-strategy) by Chris Dixon *A big thank-you to [Cristina Apple Georgoulakis](https://www.linkedin.com/in/claki/) (Typeform), [Devon Townsend](https://www.linkedin.com/in/devspinn) (Cameo), [Gagan Biyani](https://www.linkedin.com/in/gaganbiyani/) (Udemy), [Hamish McKenzie](https://www.linkedin.com/in/hamishmckenzie/) (Substack), [Michael Horvath](https://www.linkedin.com/in/mtkhorvath/) (Strava), and [Russel Simmons](https://www.linkedin.com/in/russel-simmons-9562/) (Yelp) for contributing to this post 🙏* ### Next week: HOOK—Crafting your pitch 🥁 Subscribe to make sure you don’t miss it. ### 📣 Join Lenny’s Talent Collective [Join Lenny’s Talent Collective](https://www.lennysjobs.com/talent/welcome) to start getting bi-monthly drops of world-class hand-curated product and growth people who are open to new opportunities.  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