- Single time I get brought in to diagnose a SaaS business,
adopt SaaS business that maybe doesn't have the right growth
or they need to actually get growth going
and get their revenues flowing,
the first question I ask is,
what is your ideal customer profile?
Now, before you roll your eyes,
before you say, "Yes, yes I got it,
ideal customer profile, I got it",
I'm gonna give you the three ways
you can use an ideal customer profile
to actually drive growth for your SaaS business.
Three actually stories that I'll share
with you in my SaaS journey in this video.
Intro.
(upbeat music)
What's up everybody, welcome to Unstoppable.
I'm TK, and on this channel,
I help SaaS star founders like you
navigate the path to the next stage of growth,
navigate the path to product market fit.
I bring you an episode three times a week, every week,
so if you're new, welcome.
Be sure to smash that subscribe button
and that bell icon so that you get notified,
and also, if you're coming back, welcome back,
really great to have you here.
If you're looking to drive growth for your SaaS business,
one of the things that you've probably heard a million times
is you gotta have your ideal customer profile.
You know, other circles, in other marketing circles,
they call it the dream 100 even.
So all this might be familiar,
and you might be thinking, "Yeah, I got it."
And maybe you checked off the box on it.
One of the most misunderstood things
about the ideal customer profile strategy or tool,
whatever you wanna call it, is that it can be used
at different stages of the SaaS business in different ways.
In fact, I've used them in three wildly different ways
that I'm gonna walk you through.
One of these ways is gonna actually
help you use the ICP in a whole new way
for your SaaS business to actually accelerate growth.
So if you're excited to dig in,
go ahead and smash that like button and let's dig right in.
Okay, so the first thing,
the first way you can actually
use the ideal customer profile tool
is not to look at it as your ideal customer profile,
this super large TAM that you need to go after.
Not in that big, heavy way, but to think about it
in terms of your initial customer profile.
Your initial customer profile
is a very small group of people
for whom the problem you're solving is super urgent.
They actually have budget to solve the problem,
they're not broke and they're early adopters.
That's your initial customer profile.
A lot of times I'll work with SaaS founders,
and I've made this same mistake.
When I was starting ToutApp, I'm like,
"Oh, we gotta go after a really large TAM,
we gotta like make sure we apply
this technology that we have
to as many groups of people as possible,"
and we're like, "Let's go after PR people and HR people
and salespeople and biz dev people."
I kept going crazy.
And that was my ideal customer profile, right?
It was like people that we're outward facing
and had a lot of emails to send.
But we then honed in on an initial customer profile.
And initial customer profile were people
where they really needed to send a lot of emails,
and it was an urgent problem for them.
They actually had money to spend, they had budget
and they were willing to be early adopters.
And that ended up being salespeople for us,
and only salespeople, it was inside salespeople,
and not just inside salespeople, it was SDRs.
We niched down heavily
and created this initial customer profile
and I was screaming and yelling on the way to doing it.
My mentors helped me get there,
my coaches helped me get there.
But once I did, it was super uncomfortable,
but it was actually the thing that unlocked our growth.
Everything became easier.
And so if you think you've done an ideal customer profile,
I would challenge you to actually think
about your initial customer profile instead
and niche down even more.
Three things, remember, it's people with the urgent problem
that have budget and are early adopters,
'cause that's what's gonna work well
for you in the early days.
The second way you can use an ICP,
by the way, we used that for ToutApp
in the early days, it was amazing,
and then it allowed us the right
to go after other verticals like truly inside salespeople
or customer success people and biz dev people.
The second way to think about your ideal customer profile,
and actually to apply the ideal customer tool,
is around market segmentation.
So, I'll share this story with you
to kind of explain what this second one is.
We were building out ToutApp,
we had done our initial customer profile.
We raised a million, we got to a millionaire
and we got to a millionaire and then said,
"Okay, let's go raise our series A."
We raised a $3.3 million series A
which seems super small in today's terms.
We raised our series A and then
we did 300% growth that year.
We did 300% growth that year
and then we raised our series B.
It was backed by Andreessen Horowitz,
our series A was by Jackson Square Ventures,
and we raised 15 million.
We raised 15 million and then we like
loaded up on salespeople, we loaded up on man who,
loaded up on the company, and a year and a half later,
the space got so crowded, so complicated,
we weren't able to raise a series C.
We were stuck and we were almost died,
like it was like the worst thing ever.
It was like the worst year of my life.
We had a board member leave,
the SaaS comparables in the public markets took a nose dive,
our valuation to what we could raise
to our growth rates weren't matching up
and I thought I would have to shut down the company.
And we went back to the drawing board.
We went through a really tough period where we said,
"No, I will not let this die, I will turn this around."
And we went into the data and we actually looked
and redefined our ideal customer profile based on the data.
And what we did, was we looked at
where do we make the most money?
Where were our customers most successful?
What can we actually do to continue to drive growth
with a smaller team, because we had to cut back our expenses
because we weren't able to raise right away?
Long story short, we ended up turning the company around,
we ended up having two of our
biggest quarters in company history
and then we ended up exiting the company.
And while we were exiting, there were VCs coming in saying,
"Hey, we wanna invest now
even though we didn't wanna invest before."
and I was like, "I'm done, like,
we're exiting, this is over."
How did we do that?
We actually applied the ideal customer profile exercise
except what we did, was we looked at the market segments.
What turned out was in order to scale ToutApp so fast
with the 15 million I raised,
we actually spun up multiple growth engines,
and that's a lesson I learned the hard way.
You need to have one growth engine,
you need to call us on one growth engine.
And so we had something for the self-service business,
we had the small business market,
we had the mid-market, we were going after enterprise
and we were creating this corporate market.
It was a mess, and what we said was,
"You know what, let's recreate our ideal customer profile
on a specific market segment.
Let's cut all the people that are related to
any market segment that's not
related to our core market segment",
which was the enterprise.
"Let's double down on the enterprise,
let's increase our prices and let's just sell."
And we did that through this ideal customer profile exercise
and everything just clicked once again.
We literally ran a turnaround on that company.
We almost died and then we turned it around
and had incredible, incredible success
and then we were able to exit, it was amazing.
But I don't wish that on anyone
'cause that was like one of the worst years of my life,
but you know what they say, like,
you don't learn from all your successes,
you really learn from all your failures.
That's when you really learn the true lessons
and the big lesson I learned was,
man, you gotta get your market segment right,
you gotta get one growth engine.
So if you have revenues and you're looking to scale
maybe to three million or 10 million,
the one thing I'll tell you
is really hone in on the market segment that's best for you.
Hone in on that one growth engine.
I have a third story for you.
This goes into the Marketo story
on how we did a two year transformation
and led to the sale of, for $4.75 billion, to Adobe.
And guess what, an ideal customer profile
was core to that transformation.
But before I go into that,
let me just pause here for a second.
If you're starting to see how an ideal customer profile
is just not some checklist exercise,
it's not a roll your eye thing,
it's a very, very powerful tool
that can be used in different ways.
If you're starting to see that,
go ahead and smash that like button
so the YouTube algorithm knows
that you're getting value from this video.
Comment below and tell me how you're using the ICP tool,
and if you're thinking of using it
in a whole new way, I wanna hear from you.
If you are in that process
where you're thinking about
the growth strategy for your business,
I have a five point growth strategy guide.
I'll link to it below and I'll tell you
more about it at the end of this video.
But let's go to principle number three.
Principle number three, okay, so it was Marketo.
I joined fairly early when, so they bought ToutApp.
Vista bought Marketo, they took them private
and they brought in a new CEO,
the entire executive team pretty much left
and the new CEO said, "Hey we gotta
get some more talent in here,
we gotta get some more acquisitions in here."
So one of the things they did was they bought Tout
and I joined the executive team as VPS strategy.
And one of the things that the entire team did early on,
credit goes to Vista as well, was they did an ICP exercise
and long story short, Marketo ended up
with a two year transformation.
It returned an insane amount of money back to the investors
and we sold to Adobe for $4.75 billion.
The secret big part of it was the ICP exercise.
With Marketo, it was slightly different
because it was a different scale SaaS business,
so you might be shocked, like, "What's the secret?
It's like you did an ICP thing."
It's like, no really, this is why I'm
such a big believer in ideal customer profile
and using it in the right way
and the different ways you can use it.
For them, it was really about creating
a discipline around what's an ICP deal
and what is not an ICP deal?
For Marketo, given the platform,
we could sell to a lot of different market segments,
a lot of different kind of customers.
But the truth of it was, there were
a certain kind of customers,
there were a certain type of customers
that ended up having a much higher deal size
that we ended up winning a lot more often.
The customer lifetime value was a lot higher.
Now, it may take a little bit longer,
it may take a little bit more work to get those deals
but in the net-net long-term, net-net core of the business,
they were healthier deals and they were better deals.
Now, there are other kind of deals,
this we would call non-ICP.
These were deals that were just not as good.
Like we could make some quick buck,
maybe close a deal in 30 days,
but those people might churn, they might not be successful,
the deal sizes are not that big.
So there would clearly be non-ICP deals and ICP deals.
The problem is, when you're at that scale,
hundreds of millions of dollars in ARR
and so many sales, people on a global team,
it's hard to hold people honest
to actually following this ICP rule.
And so we did this one thing
where we actually created what is
an ICP deal and a non-ICP deal?
Every deal would get rated as
is this an ICP deal or non-ICP deal?
And we would comp the rep appropriately.
So we actually implemented it
right down to the compensation plan
so that more reps would be doing ICP deals,
which was net-net.
They were incentivized to do them
because that was net-net better for the business,
which was incredibly powerful.
So, to recap, now you know how powerful
ideal customer profile really is.
So, for starters, the first principle,
think about your initial customer profile,
the riches are in the niches.
The second, think about using ICP
to drive market segmentation.
Call us into that one growth engine.
And number three, think about how to implement your ICP
if you are at scale in terms of
what's an ICP deal and a non-ICP deal
so that reps don't waste time on bad deals.
Now you know how powerful ICP is.
There's three videos I wanna tell you about
that you can check out after this.
The first video is about how to actually
build an ideal customer profile.
I'll link to that below, it's this video right here.
The second video is about how to think
more about market segmentation.
I've done a video on that and you
can check that out over here,
I'll link to it below as well.
The third video is how to actually mobilize
your ideal customer profile in something like this
all the way down to your compensation plans.
You can check that out over here, this video.
I'll link to it below as well.
So those are three additional videos
that I've done around ICP that's super powerful
and you'll get a lot of value from that you can check out.
Also, if you're looking to actually grow your SaaS business
and you wanna incorporate an ICP,
if you really wanna differentiate
its sales and marketing strategy,
then I invite you to come join
my SaaS Go-To-Market coaching program.
My SaaS Go-To-Market coaching program,
you work directly with me.
It's a coaching program where we
actually help you do three things.
Number one, we help you really hone in
on your ideal customer profile.
Number two, we really hone in on your manifesto,
which is your strategic narrative,
and number three we help you run a Broadway show
that in a differentiated way actually drives growth
and drives demand for your SaaS business.
So thank you for watching this video.
Oh, one last thing, I also have
my five point SaaS startup strategy guide,
so I'll link to that below along with the GTM program.
All these links will be down below.
I wanna give you as much resources as possible
to learn more about what you need to do,
what you need to do to actually drive growth.
And when you're ready to actually
implement these strategies, follow the link below
or just go to TKKADER.COM/GTM for my go-to-market program
where you'll work with me through my coaching program
to actually help drive growth for your SaaS business.
I hope you got value from this video.
If you did get value, please go ahead
and smash that like button.
It means the world to me, but more importantly,
it actually tells the YouTube algorithm
that this is valuable content
and that way we can actually grow our community
which really is what me and my team are here for.
And lastly, remember I drop an episode
like this three times a week,
every Sunday, Wednesday and Friday,
so be sure to hit that subscribe button and that bell icon
so you get notified when I drop an episode.
Go ahead and download my five point startup strategy guide
that we'll get on my mailing list.
I post content in my mailing list as well.
And lastly remember, everyone needs a strategy
for their life and their business,
but when you are with us, yours is gonna be unstoppable.
I'm TK, and I will see you in the next episode.
(soft string music)
So, the first thing.
Ooh, my phone's going off, let me turn this off.
Sorry.