Founders and product leaders at startups and early-stage companies know all about the need to build MVPs -- minimum viable products -- at the beginning stages of their company trajectories. Before loading on additional benefits and use cases, start with a version of your product with just enough features to be attractive to, and usable by, a specific early customer. This helps validate your product, create initial revenue, and develop a feedback loop for insights to guide future product evolution opportunities. Focus your efforts on the MVP, make it successful, and then start building and scaling.
So why do so many of these early-stage companies take the opposite approach to the segmentation and marketing of their products? I can’t tell you how many times I see companies in these early phases targeting their product to multiple disparate audiences. They throw them all against the wall and see what sticks, adding the varied audiences to their pitch decks, their website, their collateral.
For example, I’ve worked with healthcare start-ups that target providers, patients, payors, employers, and beyond -- all at once. It’s almost easier to identify whoM they don’t target vs. who they do.
Now, you might think it makes sense to appeal to as many different types of customers as you can at first to keep your options open and to see what works. Or that excluding anyone who might be interested in your product would mean losing a potential sale.
But the truth is, this un-focused approach creates a number of big problems.
Firstly, to put it bluntly, it’s a lazy approach to strategy. Being strategic is all about making choices about your actions. As economic theorist Michael Porter says, the essence of strategy is choosing what not to do. By choosing not to choose, you’re not being strategic.
Secondly, different audiences will have different needs, preferences, and customer journeys -- so a one-size-fits-all approach will fail.
It’s unlikely that early-stage companies can take the time to fully understand these different consumers. But it’s especially unlikely they can create the different types of messaging and offerings to get all these different types of consumers to consider and buy from them.
Which leads to the last, and most important problem this unfocused targeting approach creates: It diffuses a company’s already limited and strained resources. Because both time and money are especially scant, developing strategies and assets for multiple audiences is likely unaffordable.
Instead, startups should begin by focusing on MVAs: minimum viable audiences. Identify the best target for your product who can help you begin to build your business. This is the group that represents the most attractive segment, which can be accessed most easily with your current product and company, and that offers enough revenue to grow the business.
Then ruthlessly learn about, understand, and build a marketing system to engage your MVA. And for now, disregard the multiple different audiences who could also be targeted, just as you have the myriad other attributes you could have added to your MVP. With this strategic prioritization, you are ready to drive more powerful and effective marketing and revenue generation.