One of the 6 points in the Pitch Practice method of developing your pitch is “who is the customer?” We put this piece of information in the elevator pitch because, right after articulating the problem that you are solving, knowing your customer is the next most important piece of information that you can convey to your audience.
After we’ve identified a problem somewhere in a marketplace, the next thing we do is get out of the building, talk to as many potential customers as we can, and validate the problem. The Lean Startup calls this process customer discovery. It’s not selling, because you don’t have a product to sell yet. Customer discovery is literally discovering who the customer is. It’s the entity that is experiencing the problem that you have identified, validated, and solved. That is the entity that will pay you money for your product at some point.
User vs. Customer
Just as important as being ridiculously specific about the problem you’re solving is being ridiculously specific about who your customer is, especially early on in the life of your business. It may well be that the entire world is your target audience, but when you’re a 1 or 2 or 3 person startup, you can’t market to, sell to, or support the whole world. Even Facebook started with a very specific user in mind: college students at Harvard. But let’s not get confused here. There are customers and there are users. Customers pay you money. Users don’t. Facebook has 1.5 billion users, but we don’t pay them money. Facebook’s advertisers pay them money.
At some point, someone has to pay your startup money, or you won’t survive. Very, very few startups can be like Instagram (2 years old, 10 employees, zero revenue, sold to Facebook for $1 Billion), and nobody in their right mind would recommend that as a strategy. So, in your pitch, it should be clear to your audience who your customer is and how you make money, even if it’s as simple as “it’s a SaaS product for inside sales managers.” That tells us exactly who the customer is and exactly how the imaginary startup will make money (subscription).
Who are you beholden to?
This particular lesson comes up a lot at Pitch Practice. The ensuing discussion usually works its way back to the Facebook example I mentioned earlier. Facebook has over a billion users, but they have thousands of customers (advertisers) who pay them money. Who is Facebook beholden to? Their customers. In other words, when Facebook changes something in its UI or app or algorithm, that is most likely for the benefit of their advertisers.
Make sure that you can identify who your customer segment is and that your audience is clear that you know everything about your customer.
It is precisely because of lessons like this one that we are creating the Pitch Practice Podcast, to share these lessons and pitches to new entrepreneurs everywhere. Will you help us launch the podcast? Just add your email at PitchPractice.co, and we’ll send you instructions around launch day (June 27th!) It will take no more than 3 minutes of your time, and you’ll get exactly 3 emails from us, no more, we promise. Thank you!