How to define the target customers
Part 1 of PMF narrative
Dear Budi: In your post about the PMF narrative, you mentioned about the components to think. Can you share how to define the target customers? For context, I’m starting a new initiative this quarter and feel like I could start using the framework you share. Thanks!
When it comes to customers, many product managers don't realize they can choose customers, just like how customers choose the product.
A product team with clear target customers will have an easier way to a) talk to a specific group of users to understand their problem in a profound way, b) design a practical solution that fits the customers, and c) plan a communication narrative that's compelling because you can be specific.
1. Why: A product will likely attract a specific group of people.
If you open a buffet restaurant, who will probably come? A heavy eater would. You should design the products for a particular group of customer with specific needs. Which leads to the following question: Where should you start?
2. Start with a qualitative hypothesis.
Define it qualitatively first. PM should develop a hypothesis of the potential customers with a problem their product can solve. Maybe after talking to a few customers, you'll get a sense, "This customer, Gabriel is the perfect customer for our product idea." Try to write what this customer is. What's their motivation? What's their current workflow? What's their most significant pain?
3. Big market, but focus on a small audience.
A startup must target a big market. Your goal is to build something a lot of people want. However, when you start, do things that don't scale. If you're making a new product from zero-to-one, it's best to focus on a small group of users while still figuring out what works for that target market. As the Co-Founder of Airbnb, Brian Chesky, mentioned that one of the best piece of advices he got from Paul Graham, “It’s better to have 100 people love your service than a million of people are kind of like your service. Turned them into the advocate" [1]
Related: Do things that don’t scale.
4 Utilize the qualitative hypothesis for research.
PM can use this qualitative hypothesis for an early discussion with the design and research team. Use it to spark the initial meeting on how we can find these people. You want to start interviewing or make a contextual inquiry so you can understand what's their workflow. This workflow and nuances are valuable for consideration when designing the solution later.
5. No middleman
PM should spend their time talking to users. Don't rely on any research team to hand you a research report. In my experience, joining the field study or customer interview has been the most valuable activity to sharpen the strategy. During the observation, you'll catch nuances and context that will help you shape the strategy—no need for a formal research report. Remember to separate needs and wants during the discussion with them.
6. Build a direct relationship
Suppose you can exchange phone numbers or email to contact the customers quickly. I find it valuable because whenever I have a small question, I can call them for 10 minutes and get valuable input. It's important to note that asking a series of good questions that don't lead you to bad data is essential.