- At the heart of every single great SaaS business,
every single great SaaS go-to market strategy
is the ideal customer profile.
I've worked at companies upwards of 500 million ARR,
and even in those companies, in those stages,
a properly done ICP actually helped unlock growth.
And, also in early stage companies.
an ICP exercise works every single time
to accelerate the growth of your SaaS business.
But, here's the big question,
everyone thinks they have an ICP.
How do you actually build a proper ICP?
What's the difference between just a wishlist of customers
you'd like to have,
versus a proper and effective ideal customer profile?
On this episode,
I'm gonna walk you through the three principles
you absolutely need to know
on how to drive and create a proper ICP
to kickstart growth for your SaaS business.
Intro.
(upbeat music)
What's up, everybody?
Welcome to Unstoppable, I'm TK.
And, on this channel,
I help SaaS founders, like you,
grow your SaaS business faster
with an unstoppable strategy.
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I drop an episode every single Sunday
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with the TK energy.
Now, if you're already part of this community,
if you're part of my coaching programs,
my people, it's really awesome to see you over here.
Also, we just hit 25,000 subscribers.
I know it's like a big number, but it's a small number,
but it's a meaningful number to me,
because it means that so many people
are following this channel
and growing their SaaS businesses
with an unstoppable strategy.
So, thank you for being part of this.
Thank you for watching this.
This is one of the best things that I do,
and it's really meaningful to me
that we're helping so many people.
So, thank you.
Now, speaking of 25,000 subscribers,
one of the most successful episodes that I've ever done
on this channel was about two years ago.
I did episode explaining everything that I know
about an ideal customer profile
and the importance of an ideal customer profile.
It's one of our most watched videos.
I'll link to it below.
You don't have to go right now.
But, since then,
I've worked with over 250 companies and founders
to help build out their go-to market strategy,
and execute on that strategy,
and scale their companies.
And, since then I've learned a thing or two about ICPs.
I've learned a thing or two
about what it takes to actually make them effective
and where a lot of people just go wrong.
So, in this episode, I wanted to do a remix.
I wanted to actually walk you through
the three principles that you absolutely need to know,
now that I've worked with so many companies,
that you actually need to know,
so that you can build an effective ICP
and kickstart the growth of your SaaS business.
So, if you're excited to dig in,
go ahead and smash out like button
for the YouTube algorithm.
It really likes it when you do that.
Let's go to principle number one.
So, principle number one
is you need to have one ideal customer profile.
The word one is highlighted for a reason.
I get this is one of the top questions
I get a lot with start up founders,
especially in the early stages.
They're like, hey,
can I have multiple ideal customer profiles?
And, the answer is you can do whatever you want,
but if you want to increase your likelihood of success,
you want to have one ideal customer profile.
The moment you have multiple ideal customer profiles,
what you really have is multiple ideal customers,
but none of them is really a profile,
and it's not really ideal,
and you're not making choices.
You're not making decisions.
And, so it's really hard to go focus
a go to market strategy to drive growth
if you don't get specific about who you're targeting
and you're not putting in the thought process
around what makes for an ideal customer.
The moment you're creating multiple ICPs,
you're essentially hedging.
And, that usually leads to a prolonged period of time
where you don't really know what's working
and what's not,
because you're trying too many things.
And, then you might actually chase after the wrong market.
So, a lot of things can go wrong,
but if you get disciplined about one ICP
and you run a focus test
to really figure out how to make that work,
you can either validate that this works and iterate on it,
or you can realize, you know what,
this is not the ICP we need to be going after,
and you can go spin up another controlled experiment.
Now, are there exceptions to this rule?
Absolutely.
If you're part of a later stage company
and you've got a core ICP that's working
and now you're looking at what are the other areas
we can expand into,
then it makes a ton of sense to put a dedicated team
to a brand new expansion area,
a brand new expansion ICP.
Once you've done the research and said, look,
this is an area we really want to go into and target.
So, let's go figure out how to go after these folks.
So, principle number one
really is get into the discipline of actually establishing
one ideal customer profile
versus multiple ideal customer profiles.
The other thing that's important,
and the other reason I highlight in other words
is you wanna also think about
whether you're building a profile or just a wishlist.
Everyone thinks they have an ICP
until they go through my process
inside of my coaching program.
Then they realize, oh my God, we didn't have an ICP.
And, the difference is, a lot of times,
people just have a list of people they wanna go after
and they think they would wanted,
versus creating a true profile
where you're answering some deep questions
about why this market really needs your product.
And, so that's principle number one,
one ideal customer profile.
The second principle is, a lot of times,
founders mistake their TAM, total addressable market,
from their ideal customer profile.
And, so one of the things I always teach
founders that I work with is look,
you're building out your initial customer profile.
The reason for this is it can be very daunting to say,
you know what?
I've built this really incredible piece of software.
It can apply to so many verticals,
so many segments,
we can go take over the world,
and we should not limit ourselves
with an ideal customer profile,
and just pick one vertical, or one segment,
or get that focus.
We should just stay horizontal
and we should stay really broad.
And, if you are scaling at later stages, that is true.
It does make sense to go after a very broad audience,
'cause you have the resources to do so.
But, if you're in the early stages,
what ends up happening is founders create an ICP
or just don't create anything,
or just create a list
that is so broad,
it's not really an ideal customer profile.
What it is
is a representation of our total addressable market, TAM,
T A M.
That doesn't help you build a go-to market strategy.
It may help you build, actually raise a fundraising round,
because a TAM is so huge,
but it won't really help you get traction
in a specific market.
And, so when you're doing an ideal customer exercise,
what I always say is, hey,
go build an initial customer profile.
Initial customer profile,
think of it as initial,
because that way,
what you are training your mind to say is like, look,
once you get this profile working,
this segment of the market, working,
then no one's gonna stop you from expanding into other areas
and expanding your ideal customer profile.
But, what that also allows you to do
is get very specific about the most important
and urgent problem you're solving,
the market that needs it the most.
And, you're going after the most probable opportunity.
And, then once you start getting traction
and you start to scale,
then you can open up and expand that profile over time.
So, always think of it as an initial customer profile.
And, honestly, this problem around this...
I kind of call it the world domination syndrome,
we're entrepreneurs, we wanna build big companies, right?
And, so this never goes away, even at 10 million,
100 million, at 500 million,
you're always gonna feel like, well,
we could go after all these markets,
but almost in every one of these stages,
what's just as important
is to define an ideal customer profile,
just as important as also to say
these are not our customers.
Believe it or not, like at Marketo,
I built my company Taodab.
We're backed by, in recent, Horowitz.
We grew it.
We pioneered the sales engagement space
and we were acquired by Marketo
and Marketo was approaching 500 million ARR company.
And, even in those meetings,
I was, as we appeal strategy,
and we were having these meetings about, hey,
what do we do with our go to market?
What segment of the market did we go after?
Even then, we had to tough decisions
about who we are and who we are not.
And, one of the toughest decisions was like,
are we just gonna stay with B2B or go after B2C as well?
'Cause, it's just email, right?
But, that was one of those things
as part of our ideal customer profile,
we had to get very intentional
about what market we're gonna go after.
And, so, even if it had a 500 million ARR company,
you have to start saying no to certain profiles,
it's doubly true in the earlier stages.
And, so think of it as an initial customer profile,
you can always expand from there.
No one's gonna hold the gun to your head and say, hey,
you can't expand.
You said in your ICP, it's this later on,
when you're successful
and you're looking to scale even faster.
So, that's principle number two.
Now, before I go to principle number three,
let me just pause here for a second.
Are you starting to see the power in this?
Are you starting to see the difference
between what it means to have an ideal customer list,
or not even have anything,
and going after everyone and everyone
versus having an ideal customer profile
and having an initial customer profile,
instead of going after your town.
Can you start to see how,
if you start to make some of these strategic choices,
some of these decisions,
you start saying no to some people,
so you can say yes even more so
to certain other groups of people
and really serve them,
you can actually establish a beachhead.
You can increase the likelihood of traction.
You can actually grow faster from there and expand.
If you starting to see the power in this,
can I just get a yes in the comments below.
Also, smash that like button for the YouTube algorithm.
It really likes it when you do that.
Also before I go to principle number three,
if you want help on building out
your ideal customer profile,
if you want help and actually building out
your full go-to-market strategy,
then I invite you to check out my SaaS
go-to-market coaching program.
I'll link to it below.
I'll tell you more about it at the end of this video,
but let's go to principle number three.
Alright, principle number three
is you should analyze the market you are considering.
It is not uncommon
for founders that I work with,
when they're going through my process,
to actually say, cool, here's potential ICPA,
potential ICPB, potential ICPC, potential ICPD.
They lay out,
they take the core profile
that we give you a template around,
then the research that you need to do.
And, then they, we lay it out,
and they just look at all four of them or five of them.
And, it's perfectly fine to do that.
And, then from there decide on which ideal customer profile
is the most probable to be successful
can be your next initial profile.
And, then you can expand from there.
And, in that process,
what I found is you can ask both qualitative
and quantitative questions
to vet your ideal customer profile.
Qualitative is the easiest.
You can ask yourself...
Well, none of them are easy.
You just have to do the work.
Depends on how much work you've already done,
how easy it'll be.
Qualitative is you need to ask yourself
who has the more urgent and important problem,
the more urgent and important the problem is
that you're solving for that segment of the market,
for that ICP,
the more likely they'll say yes,
the less marketing and sales you'll have to do.
The harder it is, the less urgent, the less important it is,
the more likely you'll fail.
And, so asking the qualitative question around your ICP,
is it urgent, is it important?
Can really make a big difference.
The other thing that you can do,
if you've already got revenues,
this is something that we did at the Marketo ICP exercise.
This is something we do with all the members in my program,
when they have revenues, and they're honing in on your ICP,
and they're iterating on it,
which we always do to drive scale,
we look at the quantitative aspects of it.
So, for a given ICP,
can you actually look at your revenue base
and start to understand what percentage of your revenue
is represented by this ICP.
Is over 50% of your current revenue
coming from a certain ICP category?
You can also see if certain segments of the market,
certain ICPs, have a higher win rate, a lower churn rate,
a greater LTV,
or they just make you happier.
One of the things that we did as an ICP exercise
back in the Taodab days, we started with email,
like we make you more productive in email.
And, then over time, we started to see that, hey,
salespeople love this a lot.
And, that's how sales engagement really started,
sales engagement, sales acceleration, all that.
And, what we realized was salespeople paid the most,
complained the least, churned the least,
and were the most fun to work with
versus anyone else that was using it.
We had HR using it. We had PR using it.
Sales people were awesome.
So, we were like,
let's just go double down on that.
We looked at our revenue data in a quantitative way
to really hone in and iterate on our ICP.
And, that led to tremendous growth for us
once we doubled down on that ICP.
And, so, as you're thinking about these different ICPs,
and you're thinking about building
an ideal customer profile,
think about it from a qualitative basis.
Is it urgent and important?
And, also from a quantitative basis, what's the win rate?
What's the churn rate?
What's the percentage of revenue does this represent?
And, that can help you figure out where the heat is.
This is a phrase that I use all the time
when I'm working with founders
and we're reviewing their ICP
and they're following our process.
I'm like, cool.
Let's figure out where the heat is.
And, almost always,
when you lay out the pieces like this,
you start to see where the heat is,
and you start to double down,
and you start to understand the patterns.
And, that always follows with growth, which is incredible.
So, to recap, for your ideal customer profile, number one,
principle number one, have one ideal customer profile,
not multiple.
Number two, you should think of it
as an initial customer profile,
and make sure your ICP
is not just a representation of your TAM,
'cause then you won't know how to focus
your go-to-market strategy.
No one has unlimited resources for marketing and sales.
So, the more focused you go,
the more successful you're gonna be.
And number three,
apply both a quantitative and qualitative lens
to figure out whether your ICP is any good
before you put resources towards it.
Those are my three principles.
And, if you got value from this,
please smash that like button.
Now, you know what the three most important principles are
for your ICP.
What you may not know
is how to actually follow all the steps
to properly build an ideal customer profile
for your go-to-market strategy.
You may not know how to mobilize that ideal customer profile
into your sales and marketing activities.
This is is why I created my SaaS go-to-market
coaching program.
Inside of this coaching program,
we focus on three things.
One, we help you build out your ICP the right way.
Two, we help you build out your manifesto.
That's your proper position and messaging for that ICP.
And, three, we help you run a Broadway show,
a proper set of sales and marketing activities
on the right channels that helps you bring your manifesto
to your ICP on a consistent basis,
so you can scale.
When you follow the steps in this program,
we help you build out your go-to market strategy
and execute on it.
It's an incredible program.
We've had over a hundred founders
just in this specific program alone.
It's for founders that have some revenues
and are looking to scale their go to market
and scale their go-to market strategy,
be more intentional about it.
If you're interested in working with me
to revamp your go to market strategy
and accelerate your grow,
just go to tkkader.com/gtm, tkkader.com/gtm.
And, on that page,
you'll get all the details about the go-to market program.
You'll be able to fill out a little form
to get on a call with us
so we can review where you are in the business,
and if we can help you.
If it sounds like a fit,
we'll be off to the races,
and we'll get you working
into the go-to market strategy pieces right away.
We'll help you build out the ICP, the manifesto,
and the Broadway show,
so you can have a go-to-market strategy and then scale,
and I'll support you through the whole process.
Just go to tkkader.com/gtm.
If you got value from this video,
please smash out like button for the YouTube algorithm.
I also drop a video like this every single Sunday
with actionable strategies from the trenches
on how to actually build and scale your SaaS business.
So, be sure to hit that subscribe button and that bell icon
that way you will get notified every single time
I drop an episode.
If you have a fellow founder,
a fellow team member that will get value from this,
please share this video with them.
My team and I put a lot of love into these videos,
a lot of research into these videos,
so means the world to us when you share it,
when you like it, when you subscribe,
and share it with others,
so we can serve as many SaaS founders and practitioners
as possible.
And remember, lastly,
everyone needs a strategy for their life and their business.
When you are with us, yours is gonna be unstoppable.
I'm TK and I'll see you in the next episode.
(instrumentals play)
On this episode,
I'm gonna walk you through the three episodes...