Danilo 0:00

Landon, what, what is an ideal customer? Why do we need to care about this?

Landon 0:05

I think ideal customers are important, not because they actually exist. Right. I think there can be this time where we spend a lot of time and effort crafting these like personas and like we tell stories and it's like, this is Jim and he's 35 years old and he owns a Porsche and his house is white and like. That's not what we're talking about here. We need to be able to say who is conceptually the person that we are building for, and what value are they going to find in the thing that we're building?

Danilo 0:36

When I've been consulting, there are obviously customers that I want, and customers I don't want, I don't want a customer with an eight month sales cycle if I'm trying to pay bills. Next quarter, right? I, I wanna work with a startup that can make, uh, a quick decision. But even that, right? That's not necessarily the tidiest tightest definition of ideal customer for me. 'cause lemme tell you something. A 21-year-old startup founder would rather set himself on fire, then hire me, right? 'cause

Landon 1:09

I mean, I've had that experience with you, so I

Danilo 1:11

year. A 21-year-old startup founder needs to be the guy, right? A 50-year-old startup founder, a 40-year-old startup founder, right? That is a person who has no need to be the guy and just needs things to get solved and is much more comfortable hiring me to go and do a particular thing as a consultant. That's a really simple example, but I think it shows up like that in lots of places. Some people want us, some people don't, right?

Landon 1:42

Yeah, and I think, again, you never want to narrow to the point. Your ideal customer is like one guy that lives in in Brooklyn, and that's the only person you can sell to, nor can your ideal customer be R, right? Uh, and he's probably not got enough money to keep your whole business going forever.

Danilo 2:01

right.

Landon 2:02

The other thing is, your ideal customer profile cannot be all of humanity unless you like sell water. And even then you probably have a more narrow, ideal customer. So I think there has to be some like. Middle ground between everybody and one dude, and finding out what that looks like is largely gonna be a factor of what you're selling, right?

Danilo 2:24

Before we get into how you define something like this, I just wanna drill in an underline part of what you just said, which is we have fi finite time in a given day, in a given year. We have finite resources, finite attention span, and so by definition, we cannot serve everybody if nothing else. We need to constrain our investigation, our marketing, our outreach. We have to constrain that to people who are probably going to be able to say yes and then pay us right.

Landon 3:02

Yeah, and I think I, I like how you framed it in terms of finite time, but I think sometimes that works against us because we go, oh, you know what? I'm really efficient. I can work really well, like I'm smarter and better than all those other Douses. Like I'm just gonna do the better thing. And I think for me, what has been really helpful is while understanding there's a constraint to time and there's a constraint to effort.

Danilo 3:25

Yeah.

Landon 3:26

I think the bigger constraint is the fact that your decisions are oftentimes mutually exclusive and to build the good thing for one person. Means building the thing that is not the right fit for the other person, and to the extent that you can make those right decisions, build the good thing for the person who is your ideal customer, not build the thing for the person who's not your customer, or build something that's so mediocre, doesn't really serve either of them. I feel like that for me is a key piece as well.

Danilo 3:55

And, and I really wanna emphasize the building piece of this because even if you're selling something extremely simple like consulting, you still have to build certain stuff you need to build. You need to build a good website, you need a lead magnet, you need a sales letter, right? All of this stuff is something that you have to invest in, and the less specific you are as you create your artifacts, the less likely you are to hook somebody's attention and get them to show up and have a conversation with you. So if our goal is to get somebody to talk to us to buy the thing that we've got. How do we define which somebody we want to talk to?

Landon 4:39

We've been using the word customer a lot and that may be obvious, right? Someone who wants to gimme their money, but I think customer can be, um. It. It can get tricky under certain business models, right? Under a really obvious B2C model. Your customer is probably the person who's paying you the money, right? You build a thing, you give them the thing, they give you their money. It's relatively straightforward and transactional, but under other models like advertising models or models that have a hybrid of subscription and advertising. Who is your customer there? And does serving one customer undermine serving the other one, right? If, if you're working with something that is a hybrid of ads and subscriptions, can you serve the ads customers really well while still serving the subscription customers really well? Probably not, right? And so this is where that ideal part comes in of at some point you may have a whole wide base of customers, but who is your ideal customer at the end of the day? I think it's that person that's driving the purpose of your, whatever you're building, your company, your thing, your foundation, whatever the, the thing is, it's that person that's driving the purpose. Maybe that's your end user. Maybe it's not.

Danilo 5:57

Well, let's, let's dig into the kind of concrete example you offered there where you're selling a thing that can do ads and can also do subscriptions. You might be selling into a company that is already planning to build their own subscription product. In such a situation, the team that is really eager to be building subscriptions is going to do everything they can to undermine this sale, because what they don't want is somebody else showing up with a technology that's gonna compete. With their reason for being. And so what we're talking about here is politics, right? Organizations, and everybody's scared of politics, like, oh, that's a scary word. But every organization just has basic politics. It's the discussion of how resources are allocated and which decisions get made and who has the power to make them. And that's gonna show up in every organization. And so your ideal customer definition has to take into account how these social factors in a company. Are going to impact whether you get a yes or a no.

Landon 6:59

Yeah, and I think we've talked previously about how selling is more than just getting someone to buy the thing. It's about convincing people to kind of think about things. The way that you do what you just described is. Absolutely. One of those examples of selling and having a customer that may not be the person that's paying your bills, right? You are selling to a customer that, in this case, in your, in your example, is an internal business unit that you need to get across the, across the finish line.

Danilo 7:30

And so as you try to come to a definition of who you can sell to, you're, you're making a decision about the space. That you try to play in, right? And you have to make a call that describes a real space, right? There have to be real people who have decision making authority and purchasing authority inside of a space, while at the same time not having the complication that's going to screw up your deal. And so why don't we talk about like this definition piece. I love, for example, as a consultant working with startups. Anytime that I'm trying to sell my talents as a freelancer, I never want to deal with a big company because there's enough complication there that it's hard to find all the decision makers. It takes a long time. Versus a startup, there's like two decision makers and they can figure it out in a couple of days at longest. Right?

Landon 8:36

Yeah, there's a flexibility with startups. That allows them to engage you and make the sort of changes that are going to show real impact right away, right? So if you're selling something to another business, startups are a great way to get your foot in the door. And I think sometimes the miss. At least in my opinion, a misunderstanding that we have is, I, I think there's this desire of like, start with the small stuff and then once you get big enough and established enough, then your, your end goal is always enterprise. Your end goal is always to get to those big Fortune 500, fortune 100, like huge enterprise companies. And you know what? That may just not be the necessary ladder. You may not need to climb the ladder. It may be better to continue to serve those ideal customers that fit what you're already doing instead of trying to twist what you're doing into a space that doesn't really fit.

Danilo 9:31

Now a thing we've tried not to do in our conversations here is spend a lot of time about post hogs specifically because we're not trying to do a, a post hog infomercial. We we're not. We wanna give you. Information that's useful no matter what, but I do wanna take a moment to emphasize the chess game that I really liked that made me wanna come work at post Hog, which was the decision to make the software engineer the product focused engineer. The ideal customer because there is an interesting consequence of this. The product engineer doesn't need anybody's permission to integrate software, and so if you make the product engineer very happy, they can just start to do things and they don't need to ask. They don't need anyone sign off. They can just try it out and you can embed yourself very early in the life cycle. Of a company by making sure that that particular constituency is very happy.

Landon 10:33

Yeah, and again, this is the beauty of startups, and this is the beauty of engineering focused startups, right? This isn't playing to a large marketing crowd. This isn't trying to appeal to. 10 different potential ideal customers or personas or anything like that. You have one concept, the person who is both, uh, at the core of the value of the business as well as oftentimes the one that's doing the thing, right? And so when you, when we start to think about what's too broad and what's too narrow to bring us back to that kind of discussion, I think. Too broad is I wanna serve everyone in the org. Well, that's not usually feasible. Again, if you were doing, unless you're doing something that's very, very niche and very specific, that that could work that way, the vast majority of the time that that's not going to work. And again,

Danilo 11:29

many different kinds of documentation you would need for different, like. User types at that point, it's you would drown.

Landon 11:37

It's insane. On the flip side, you could go, okay, well my age. Ideal customer is product engineers, but it has to be broad enough that it's not product engineers working in startups below 10 people who only build on Ruby, um, and who are only doing B2C SaaS subscriptions in Brazil, right? Like that's the point where you have narrowed so far that your potential opportunity is pre pretty low.

Danilo 12:07

and this is a point where it would be useful to introduce the notion of a total addressable market. And so, uh, Tam is this thing you might hear the suits talking about. You might hear. The startup podcast people talking about, and Tam is really important. Tam describes the ceiling for what your offering can grow to. And so as you're thinking about your ideal customer, the thing that it exists in kind of, um, tension with is that you have to figure out. Is a total addressable market large enough to do the thing that you need to do. If you're an individual and you just need to pay some bills this year, you wanna buy a nice vacation to Greece, then you don't need to worry that much about the tam. If you can find a handful of customers that are ideal for you, but if you wanna build something bigger. Than that. Then you really gotta think about is my ideal customer such that enough of them exist on this planet that I can sell to them and be happy?

Landon 13:07

If you're selling dog food, are there enough dogs that want your food that you can make a business out of it?

Danilo 13:13

That's it.

Landon 13:15

I think, uh, a side product of Tam uh, of that total addressable market is then finding the right demographic of people who are interested in you and what you are trying to sell.

Danilo 13:29

Yes, because not everybody is interested in the same things and not everybody can be communicated to. In the same way, ag, again, selling to a younger founder for me as a freelancer, never worked out selling to someone a little older than myself. Always a jackpot and these kinds of demographic things turn up in all kinds of ways that might surprise you. They really do matter. As you think about this,

Landon 13:54

So why do you think that is? Why do you think you had so much more success with the older founder or the older kind of business owner versus the young founder?

Danilo 14:03

I think that the more experienced founder didn't have anything to prove and just needed to get problems to go away. And so I would roll up. I would be very confident in the particular problem that I was gonna solve for them. And they would say, oh, great. Finally somebody who knows what they're doing about this. I don't have to think about it anymore. Where do I sign? Um, whereas I think if you have more to prove, then you need to show everybody that you can figure out everything on your own.

Landon 14:32

Yeah, no, I, I think, uh, there's probably also an element of how do you do fellow kids sort of situation where the older founder looks at you and he is like. He's young, he's with it. He knows the, the youth, like he's gonna put me on the path to, to the ai. And I think there's, there's probably also a little bit of that too, right?

Danilo 14:56

Yeah, you show up with like enough freshness perhaps that you know something they don't, but at the same time, you're far enough along that like, all right, I can count on this person to, to actually get something done. And these are all like, just biases, right? But all of this stuff shows up. It's in the room as they're trying to convince people. To do anything, to buy things and to take it out of the kind of freelance experience that I often lean on. This shows up as you're trying to move software products as well, because you're gonna have teams who really want to invent it themselves, and so you are going to have to deal with the fact that some people think that they're better off rolling their own. And so your ideal customer is somebody with the wisdom to say, man, there is no upside to me holding the bag. For various uptime considerations and on-call shifts and everything else. For this product to work, that customer needs to be burned by enough downside to re recognize your upside.

Landon 15:58

I think that's right, and I think at the end of the day what you said is, is right. You get in the room and you feel it. You can tell when you have someone who is the right fit. And you can tell when you have someone where it's going to be like pulling teeth to try and get them to figure out what this is, what it does, why it's going to be useful for them.

Danilo 16:15

And that maybe is kind of the final point on the ideal customer is that you're going to have, if you have a customer and you close them, you're gonna have a lot of conversations with them. You're gonna do it directly. Your product is gonna talk to them. Perhaps your marketing materials are going to talk to them. And you want a customer who is not overly skeptical of what you have to say and what it is that you are coming from. And so the ICP. That you are looking for is somebody who wants to go in the similar direction to you and isn't going to fight you every step of the way.

Landon 16:51

Exactly like do they paint their face? Do they drink Faso? Are they potentially a gang? Like those are the things I'm looking for when I'm looking for an ICP versus, Hey, is this someone that wants to buy software?

Danilo 17:03

Everybody from Detroit is gonna come and shiv you for saying Faso instead of Faygo. And I'm just, I don't want any of that smoke.