Your Customer Is Not Everyone Who Needs Your Product

How to Choose the First Customer and the First Market You Can Win In?

Today, you can buy a book, a phone, baby diapers, furniture, or even garden supplies from Amazon, but the company that wanted from the start to build a massive online store didn't start with everything.

It started with books.

Bill Aulet, professor of entrepreneurship at MIT, uses Amazon as an example of what he calls a beachhead market strategy, or Beachhead Market Strategy — choosing a narrow market initially that you can focus on and win, then using what you learned and the infrastructure you built to expand into other markets. (entrepreneurship.mit.edu)

Jeff Bezos  didn't start with books just because his ambition was solely to become the world's largest bookstore. He started with a specific market because he needed a starting point.

This is one of the most common problems companies face when building a Go-To-Market Strategy:

When I ask a founder, "Who is your customer?", the answer is often: "Anyone who needs the product."

While this answer might be theoretically correct, it is practically worthless commercially. Your customer, especially in the beginning, is not just anyone who needs your product, but the customer who, once your message reaches them, will definitely buy your product. 

Hence, the question shifts to: Who is the customer you should start with?

The difference between these two questions can be the difference between a company that learns quickly and builds a market, and a company that spreads its resources across ten types of customers without understanding any of them well.

A big market does not mean starting with the entire market

It is natural for a founder to want to prove that the opportunity is large.

"My product works for restaurants, hotels, and hospitals," or "The service is suitable for small, medium, and large enterprises," or "The app is for anyone aged 18 to 55."

The problem is that a wide range of potential use cases does not mean all these customers are equal as a starting point.

Suppose you developed inventory management software.

It could be used by:

• A small retail shop.

• A restaurant.

• A retail chain.

• A distributor.

• A manufacturer.

• An e-commerce company.

Six markets that could benefit from the same technology, but once you look beneath the surface, you will find roughly six different business models.

A small shop owner might decide to buy in a single day, but is very price-sensitive. Meanwhile, a large chain can pay much more, but the purchase decision might pass through IT, procurement, finance, and management. A factory's problem might be more urgent, but it requires integrations with legacy systems. A restaurant might quickly understand the product, but believes Excel or their current system "does the job."

Same product.

However:

Different problem, different value, different price, different sales cycle, different acquisition cost, and a different message.

This is why MIT's Disciplined Entrepreneurship framework emphasizes market identification and segmentation, followed by selecting a Beachhead Market at the beginning of the company-building journey, before moving on to defining the user persona and calculating market size. (entrepreneurship.mit.edu)

Focusing initially, therefore, is not a compromise on ambition.

It is prioritizing ambition.

Before Choosing the Customer: Three Terms That Do Not Mean the Same Thing

There are three concepts that are sometimes used as if they were one and the same:

Market Segment, ICP, Buyer Persona.

However, distinguishing between them is crucial.

Market Segment

It is a group of customers who share characteristics, needs, or behaviors that make engaging with them commercially relatively similar—such as restaurant chains owning 5 to 20 branches.

This is a Segment.

Ideal Customer Profile (ICP)

It is the customer that best aligns with your product and current circumstances.

In B2B, this usually describes the company type, size, industry, nature of the problem, budget, purchasing process, etc. For instance, it could be a restaurant chain with 5–20 branches, currently relying on manual inventory processes, suffering from high waste, and having a central operations manager who can make the purchase decision.

Modern definitions of ICP from Salesforce and HubSpot focus specifically on customers most likely to buy and get continuous value from the product, rather than just any prospect theoretically capable of using it. (HubSpot)

Buyer Persona

Now we get into identifying the individuals within this customer organization.

• Who will use the product?

• Who feels the pain point?

• Who approves the budget?

• Who can derail the deal?

In the previous example, it might be:

• The Operations Manager is the Champion.

• The CFO is the Economic Buyer.

• Branch Managers are the Users.

• IT can veto implementation.

This is why MIT distinguishes in venture evaluations between the user, economic buyer, influencers, champions, and veto holders within the buying process. (entrepreneurship.mit.edu)

In short:

Segment tells you: Where do we play?
ICP tells you: Which type of customer within this market do we target?
Persona helps you understand the individuals we must deal with to complete the purchase and usage.

This distinction is critical because you might target the right person inside the wrong company.

But How Do You Choose Your First ICP?

Here begins the harder part.

Because choosing the ideal customer shouldn't just be based on the question:

Who will pay the most?

Nor:

Where is the largest number of customers?

Nor even:

Who suffers the most?

There are six tests I find most useful when selecting a starting point.

Is the Problem Clear?  Problem Clarity

The first question isn't whether the customer has the problem, but whether they themselves know they have it.

What's the difference? ... The difference is huge.

There is a problem the customer knows about and is actively seeking a solution for right now, and there is a problem that requires three meetings and a 40-slide presentation just to convince them it exists.

In both cases, your product might be useful, but the cost of market entry is entirely different.

The more you need to educate the market before selling to it, the higher your customer acquisition cost and the longer your sales cycle. That's why a customer who can describe the problem in their own language is usually an easier starting point than a customer whose problem you have to explain to them before presenting the solution.

Is the Problem Painful Enough?   Urgency

Having a problem, feeling it, and understanding it doesn't mean a market exists. Personally, I have dozens of problems I wish had better solutions, but I won't pay for a solution to most of them today.

This is a common mistake founders make. During customer interviews, they ask if the idea would be useful to the customer, and the answer is "Very!" So they take this answer as an agreement to buy the product if available... but the market doesn't pay just for the idea that a product is useful.

The market usually pays when the gap between the current state and the desired state becomes significant enough to justify the money, time, change, and risk.

The Jobs to Be Done framework, popularized by Clayton Christensen's work, goes beyond demographics and focuses on understanding what the customer is trying to accomplish in a specific circumstance and why they "hire" a product or service to do that job. (Harvard Business Review Store)

That's why two customers might look very similar on paper, yet one is an excellent ICP and the other is weak.

Not because their ages or company sizes are different, but because the context that made the problem urgent is different.

Can and Wanting to Pay?  Ability & Willingness to Pay

These are two different things. A customer may desperately need your product but lack the budget. Or they may have the budget but see insufficient value to pay you. Therefore, measuring customer attractiveness solely by the size of the problem is a mistake.

A commercially viable customer lies at the intersection of:

Need × Urgency × Ability to Pay × Willingness to Pay.

Willingness to pay itself may reveal market segmentation that doesn't show up in traditional demographic data; HBR discussed how variations in willingness to pay can uncover distinct segments even within what appears to be a single market. (Harvard Business Review)

So the key question isn't: How much can the customer pay? Rather: Does the economic or practical value they receive make the price logical to them?

Can You Reach That Customer?  Accessibility

You might have a great ICP on paper yet fail to build a business around it, simply because you don't know how to reach them economically.

Imagine a product priced at EGP 5,000, but acquiring the customer requires a sales rep, three visits, a demo, approvals, and two months of follow-up. In this case, the problem is no longer the product, but the Go-To-Market Economics.

On the flip side, a smaller segment might exist where customers are gathered within a specific association, marketplace, geographical area, or distribution channel, making them much easier to reach.

This point is often missed because companies ask "Who needs the product?" instead of asking "Can we reach them efficiently?"

 What Is the Customer Doing Now?  Existing Alternatives

When you ask a founder about competitors, they will often name three companies, but the most important and hidden competitor might not appear in any competitor analysis. It could be:

• Excel.

• WhatsApp.

• Pen and paper.

• An employee performing the process manually.

• Or simply: "We've been doing it this way for a long time and there's no problem."

This competitor is the Status Quo, my friend, and understanding it is key to selecting an ICP.

Because a customer who has a problem but is relatively satisfied with their current alternative is much harder to win than a customer whose current way of doing things has become unbearable.

Therefore, you must seriously consider: What will the customer use if they don't buy our product? And what needs to happen for their current alternative to become insufficient for them?

Perhaps opening a fifth branch.

Perhaps labor costs increased.

Perhaps a new regulation came into effect.

Perhaps operational volume grew larger than Excel can handle.

Sometimes the ICP itself doesn't change.

What changes is the moment the customer becomes ready to buy.

Do We Have a Real Chance to Make Them Successful?  Probability of Success

This is perhaps the most overlooked point. The best initial customer isn't necessarily the one who can pay the biggest bill. It might be the customer for whom you can achieve the best result, because early customers don't just buy from you.

They are a primary and crucial source of:

• Learning

• Case studies

• References

• Product feedback

• Credibility.

Imagine a startup with a product that can be sold to a 50-employee company or a 20,000-employee multinational. The multinational is extremely attractive revenue-wise, but might require security requirements, integrations, procurement processes, and custom features beyond the startup's current capacity.

Winning the deal might look like success, until you discover you spent the entire year building a product for just one company that cannot be repeatedly sold as-is to other customers.

Bessemer advises early-stage companies to define not only the customers they want, but also the types they will not focus on, ensuring the product strongly fits the ICP without attempting to serve the entire market from day one. (Bessemer Venture Partners)

Therefore, the focus must shift from searching for the biggest customer you can convince to buy your product, to asking: With whom do we have the highest probability of building repeatable success?

Careem Didn't Start with Everyone Who Needed Transportation

This concept is clearly visible in Careem's story. Today, it's easy to look at the company as a consumer ride-hailing app, but it didn't start that way.

An INSEAD case study documents that Careem started in 2012 as a web-based car booking service targeted at corporate clients, before later evolving into the app-based service consumers know today. (INSEAD Publishing)

Mudassir himself—the founder of Careem—explained that the first version targeted consulting, law, and accounting firms, before the company launched the app to the broader market about a year later. (The National)

Thus, Careem's logical starting point was a recurring problem, a clear need, a well-defined business customer that could be reached directly, frequent bookings that allowed the company to learn from usage, and an initial customer scope narrower than trying to convince the entire population of a whole city from day one.

Then, after building operational and market capabilities, the circle expanded. This is the essence of a beachhead.

Start somewhere you can learn and win, not from everywhere you hope to reach one day.

The First Customer Is Not Necessarily the Final Customer

This is an essential point. When we say choose an ICP, we don't mean marry it forever, because in the early stages you are testing an ICP hypothesis.

Then the market tests it. You might start with SMEs and discover that the mid-market is better; you might enter via the restaurant sector and then discover a stronger opportunity in hotels; or you might discover that the user you expected to be the decision-maker isn't the actual buyer at all.

Even Bessemer notes that companies on their journey to product-market fit may continue testing their identity and ICP before deal and customer patterns become clearer during scaling. (Bessemer Venture Partners)

In other words, the ICP is not a truth discovered once; it is a hypothesis that becomes more accurate with data.

Don't Look for the Biggest Market… Look for the Best Entry Point

Even after choosing the right customer, a more critical question remains: Is the market we chose truly large and attractive? Or did we select a good customer within a limited commercial opportunity?

And this is the topic of the third article in the "From Idea to Market" series.

The market is large… but is there space for you inside it?

How do we move from TAM, SAM, and SOM on a pitch deck to understanding the real commercial opportunity?