I'm the first one to be critical of any start-up I'm currently working on. From my experience with start-ups there is always challenges, unique to each, that are just a huge struggle to overcome. At my startups I always develop according to 'lean start-up methodology' which, if anyone is interested in learning more about in relation to their start-up or idea, I'm happy to sit down with you and talk it through - just ping me an email.
I can do a lean canvas model for my latest startup in about 10 minutes ... but the one box we struggle with is customer segment ie who is your target market?
Target market was described to us by a fantastic mentor, Mark Godenho as a decision made by 'drawing a line in the sand' between who you would focus on as your customer and who you wouldn't. The key part, he said, was that customer segments were facts while your target was a decision made by the people in the company based on what they thought was best.
I understand more and more each day the importance of having a target market. It guides the company and gives it focus on every decision. From the wording you use on the website right through to the people you reach out to in order to further your company. But here's the problem I have, the idea of target market being a decision rather than something being guided by the market seems risky to me.
I was walking to the office yesterday when I saw this ute parked on a construction site ...
"Building the future of Christchurch"
It says on the side of the vehicle "Building the future of Christchurch". So what? Well, for those of you who don't know - I'm currently based in Dunedin ...
Christchurch has major construction work at the moment, it's in the midst of massive earthquake recovery. This construction company probably saw a good opportunity to target Christchurch as a market and do some significant branding around that. As a large company it's probably not a big deal - the costs of removing this message in the future will be an minor expense. As a start-up, however, changing messaging because your customers ended up being different to what you expected is a major cost and time sink. Imagine having a very targeted message on your business cards and marketing collateral in the early stages, only to find out that your customers weren't who your originally thought. And most of the time the messaging isn't the only thing that will need to change. Significant parts of the product which have been built for a specific target market will also need re-thinking.
At SuchCrowd (my current startup) we've made an active choice to let our target market be guided by the market rather than our decisions. We have people approaching us wanting to use our service for all different types of events. Coding workshops through to circus performance ... can we build something great for all of them? Maybe not. Will our lack of focus mean that we can't serve anyone effectively? Maybe. But so far that hasn't been the case. One thing that is clear to us is that if we are very specific about our target market we would lose customers. As a start-up in the early stages when we are revenue and growth hungry this is a decision that we vote against.
I'd love to hear some thoughts on this though! Has anyone else had significant problems identifying their target market and what decisions did you make? Do you think not having a clear target market is a terrible choice? Most of all, if you did make a decision, how did you make it? I'm keen to hear!