Do you really know who your potential clients are?
Do you know who your target market is?
This seems to be a very simple question but is not.
Many companies think their products or services can be used by almost anyone.
To put this in context, I see many small web agencies or creative shops that offer things such as website design and development, web app development, mobile app development, social media services, digital marketing services, etc.
They want to offer everything to everyone.
Do you see the problem here?
First, their messages are very generic, so their value proposition is diluted.
There are tons of companies trying to do the same, so it looks each one of them is a me too type of company.
The more specialized you become the more clarity you can have on your value proposition message. This will translate into a clearer picture of what your ideal customers are, and you will be able to target them with clear benefits for the problem you are trying to solve.
This is important overall when you are starting the business. As you grow you can add additional products and/or services. However, then, you should have specialized teams for each main service/product line to keep that clarity.
In my own case, I have some useful examples.
Computer graphics integrator company
In 1987 I started a company specialized in integrating computer graphics systems. We started super focused on the nascent desktop publishing market. We had a lot of clarity of who the potential buyers could be and we targeted them perfectly.
As we grew up we started adding more products on the high-end side. We started offering complete prepress systems, nonlinear video editing solutions, large digital color printers, etc. By 1995, we were considered the 16th largest computer-related company in Colombia by PC Magazine en Español.
In that list, were also included companies such as IBM, Microsoft, and some other giant multinationals companies.
Our marketing was super focused. We ran shows at hotel conference rooms twice or thrice per year. Each time we used to get about 1,200 people from several hundred companies to listen to our presentations (for two or three days sometimes). We had also demo stations in the halls to showcase the different solutions. We made sure people were having fun besides learning about state of the art technologies.
Right before the shows, we used to do press conferences and we had typically between 30 and 50 journalists coming. So we used to get some decent free press. We gave them some nice care packages, so they were happy to attend.
A few years later, as the violence and the recession hit hard in Colombia, many of our smaller clients started to get out of business, unable to pay their bills to us and to others. Furthermore, big companies and governmental clients took advantage of the situation to delay payments from typical net 30 or net 60 to net 180 or worse.
The cost of capital in Colombia at that time was about 3% per month, roughly 42% per year. So the situation was unbearable.
Additionally, our solutions didn’t cover our customers’ primary needs in many cases. Hence, many decided to postpone buying a better computer graphic solution indefinitely. This meant low demand on top everything else.
Faced with that we decided to become a generalist. Thus, we started offering regular computers, software, and peripherals to the market. However, we didn’t know that market and we didn’t know how to differentiate ourselves from the other vendors.
To make things worse, we were used to healthy margins, but now we were competing in a business with low margins, less than half our typical margins.
And because anyone could be our customer, we didn’t know how to communicate effectively with them anymore.
And we became a me too company,…until I closed the shop.
Around the same time, I partnered with three friends to create a software company specialized in digital cartography solutions.
When I was working on the 1985 Colombian Housing and Population Census as the Logistic Division Director / Deputy General Director, many functional aspects of the census were under my direction. As such, I was in charge of deciding what technologies, processes, and methodologies to implement or deploy.
At that time, census cartography was done by hand. Cartographers collected data on the field and then drew the maps by hand and make copies with machines analogous to photocopying machines. Hence, every one of the people filling the census surveys used to have the same map data, from the data collectors to the supervisors and up.
At that time and age, I thought we should be able to do better and digitize the maps and then print (or plot) the maps with varying degree of detail and scale according to people’s roles on the field.
So, I looked for digital cartography solutions, but what I found was not promising. The specialized workstations and software were around $150,000 each and we needed, according to my estimations, at least 30, but ideally 50 units. This was out of reach for a census in a third world country.
The next logical thing to do was to develop the system ourselves.
Thus, with my team, we wrote the initial specs and I hired a super smart friend that I met in college, Julio Serje, to develop the software.
I assigned some other members of my team to work on the logistics requirement to launch the digital cartography operations. This included all processes to digitize and reproduce maps for all cities and towns and different scales and details for all personnel involved. Instead of specialized workstations, we used Apple computers.
We were the first country in the world to produce and use digital cartography for a national census.
At the same time, other friends from college were working on a digital cartography project for the city of Bogota.
Their approach was different to ours, so sometime later, the four of us got together and decided to create a software company to develop a digital cartography solution that we could offer to some verticals.
We had great clients and the business was growing, However, at some point, some customers started to ask us to develop software solutions for their business. For example software for insurance companies and so on.
So here we had short-term deals that would bring money while distracting us from our main mission around digital cartography.
At the end, we split. Two of us were not interested. Finally, neither party continued with the main digital cartography product and the endeavor was over.
What’s the moral of the story?
The company lost its identity and its unique advantage.
It moved from being a product company to a service company.
It became a me too company.
A startup product idea
A few years ago I developed an interactive multidimensional visualization engine. I did this for a project I was working related to healthcare, so it was specifically applied to a particular use case.
However, the engine was agnostic to the data. This means that you could change the data (and hence the domain) and the thing would produce a new multidimensional visualization.
Great isn’t it?
Well, I thought so, so I started working on a most robust engine.
Everyone was loving the demos. They looked cool.
I explained to people that the can use any data (organized in particular structure) and the multidimensional visualization would render on a browser.
Just like that!
However, people were having a hard time understanding that and they were always concerned about how my much effort it would take to “customize” the system for their particular data.
Selling agnostic solutions is very hard.
First, the potential users could be anyone.
Second, crafting the message or the story is hard, because the problem is ill-defined.
So what is the solution, you may ask?
Well. The solution is to select a niche and create use cases, examples, and messages that resonate with that particular market. In the case of the multidimensional visualization tool, it could be a product to track and understand sales in a restaurant, or an app to visualize people involved in projects, etc.
For each niche, then, you create a site with all collaterals related to that. Let’s say the first application is for restaurants. Now you have full clarity who your potential clients are, and where to find them.
After you have some penetration and success on that niche, you develop the next one. Again, you create a site for this new market. The technology behind the product is the same than for the other niche (because, at least in my case, the engine is agnostic to the data), but your message is that you have developed a solution for each of these niches.
You repeat the process with more niches, …over time.
Specialization always win.
So resist the temptation to become an opportunistic marketer.
An opportunistic marketer is someone that offers anything a client is looking for.
Do you relate to any of these cases?
So, do you really know who your target market is?
Found this post useful? Kindly share on social media:)