The piece of advice I give that is most often ignored by students, and which they always come to regret is simply this: Not everyone is your customer.
Which simply means you have to choose who is your customer, and equally who is not your customer and take a stand for that.
What typically happens in an entrepreneurship course is that very early on when people are hunting around for their next big idea, they tend to look at the largest market possible, with an eye to penetrate this and take 10% of the market. The issue with this is it will never happen. I have never seen anyone go from being a start up to capturing 10% of a broad market. Some people are more humble, and talk about capturing 1% of the market – I still have never seen it happen.
I have even been guilty of it myself when being an entrepreneur, and pitching my idea I have mentioned the 1% idea. I am embarrassed to think of it now. I think intuitively I always knew it was bullshit though. You can’t out compete others in the market by copying what they are doing. It just doesn’t work.
A crucial question in this regard is why would I buy from you instead of your competitors? Most entrepreneurs have a weak answer at best to this question. Until you strengthen your answer to this question you’re gonna have a bad time mmmmkay.
So the first step to coming up with a half way decent answer to the question of why people would buy from you is to realise the completely obvious reality that not everyone is the same. If people are different, then this means they will want different things (or at least on the surface they will want different things). If you want proof of this, just look at the art that people hang in their homes. Art is such a personal thing that most of dislike the art that others hang in their homes, and wouldn’t be caught dead having it in our house. Yet for that particular person the art is an absolute thing of beauty.
If you want another example, visit an American supermarket and just admire the peanut butter selection. There is probably 30 different types – and that’s just for people who like peanut butter. You have to realise there is a whole other category of people who hate peanut butter. The point being we could never create a single product that would satisfy all the peanut butter lovers – attempting to do so is a recipe for failure. The most likely outcome for those who are foolish enough to try is a totally bland unexciting peanut butter that is inoffensive to everyone, but attractive to no one.
Mark Mansen has an interesting book on dating called Models. Not its not about dating models, and it might be an offensive book to some, but I suspect that might have been his intention. The book has a key point in it, which the idea of polarisation. He recommends men stop being so bland, and just be themselves. In doing so he suggests that many women will dislike them, maybe even intensely, but the goal isn’t to date all women. The goal is to find those few women who actually like you for who you are and date them.
The same is true for entrepreneurship. We need to start polarising our customers so that they either love us or hate us, but the one thing we don’t want to have as a response is indifference. We want people to love our products, and that they can’t get enough of them or to hate them, and complain viciously about our existence in the world. If you want a recent example of a polarising product that has clearly been successful, then look no further than Jordan Petterson. Those who know his work tend to have a strong opinion to him one way or the other. He has polarised a large enough crowd that those who love him cannot get enough of him, and consequently he has created himself as a very profitable product.
Now at a personal level you still have to live with yourself, so in polarising your target audience, you need to make sure that you are still being congruent with your own morals and behaving in a way you think is ethical. At the same time you need to stop people pleasing, and release yourself of the duty to keep everyone happy. You might even need to fire some customers along the way.
The idea that not everyone can be our customer is far from new. The long tail by Chris Anderson, makes an entire book out of the idea that we can continually slice the salami by finding ever thinner niches who are underserved thanks to the power of the internet. Seth Godin has written multiple books on the subject from different angles -this is marketing, purple cow are two examples. Bill Aulet discusses the need for segmenting and beach head markets in Disciplined Entrepreneurship. SO why do I need to write it down once mo0re? Partly because most people don’t have the time to read these and I can therefore reduce all of the key points down into a single article. The other being that people still ignore the advice despite it being written in so many places, so maybe it needs to be said one more time for it to sink in. I also still believe entrepreneurship is a way for people to make a contribution to the world, so anything that can be done to support those efforts toward being successful feels like a positive thing to me.
Story time. My clearest example of a student ignoring this advice was a student who wanted to sell white sports socks. He was convinced that I was an idiot and had no idea what I was talking about. His plan was to buy white sport socks at $4 a pack from china, import them to Norway, and them sell them for $5 a pack, and that customers would pay the packing. As a point of reference, you could buy white sports socks in Norway from any big box store for around $6. So if we simplify it, he main thesis was that people were out there willing to google around, find his web shop, trust his webshop, purchase from him, wait the 5 days for postage, pay the postage, all to save around $1. To me this sounded ridiculous, but the student was passionate, certain he was right, and decided to go for it regardless of my advice. I managed as a compromise to convince him to sell niche socks on his website that included artwork from another student. He reluctantly agreed to the side hustle. I think he agreed mostly out of fear that I would somehow punish him for ignoring my advice - which I would never do. I am convinced that one day my students will present the next billion dollar idea and that I will be too ignorant to see its potential. I therefore only ever suggest what my student should do, but always allow them the freedom of choice. As I don’t want to be that teacher that crushed the next billion dollar idea (I mean honestly who thought Instagram/youtube/facebook was ever going to be successful in their first incarnations).
The story has a mildly happy ending though. The student sold a whole bunch of custom socks, and not a single pair of white socks. Not a single one. He came back to me at the end of the semester and very graciously admitted that he wished he had listened to me at the beginning. While the story is a boost for my ego (wow, look at me, so talented), the main point I think is that the theory works. Many people would have thought the custom socks were ugly, maybe even hated them. But with a wide enough audience you are likely to find those few people who love what you do. The key then is to create what’s called the product- customer fit. Where your product matches o perfectly to what your customer wants that they will be begging to pay you – and the only way to get to this point is to stop creating generic bland products and services.
So if we know what we need to do (create niche offerings) then why aren’t we doing it? The main answer in my head is the generic one – fear. We fear being disliked. We fear creating controversy. We fear failing, and assume people won’t love what we do – so therefore we try to m maximise our chances by being loveable to the broadest range of people possible. The counter intuitive truth though is the more we try to please the widest range of people the more likely we are to disappoint. This will likely trigger the fear even more, creating a blander response from us and sending us into a death spiral of irrelevance. So we need to overcome the fear, and be willing to take stand for what we believe in.
The final argument for those whoa re still arguing in favour of blandness is to draw on another example. The counter argument I almost always hear from my students who disagree with me is this: There are some companies out there who have everyone as their customer. This is true. I always ask my students to name an example of a company who has everyone as a customer. Generally they will answer something like ‘Colgate’ because everyone needs to brush their teeth. My student’s would are 100% correct in this observation. My next question is therefore, is Colgate a stratup? No. They are an intensely large company with more resources than many small countries – which is why they are capable of having an international marketing and distribution network. No start up has these resources. When I ask my students to name a successful startup that has everyone as a customer they are normally silent. There is sometime a student who tries to argue that facebook or some other tech company is a start up, but this doesn’t fly for me. FB started niche, and while it reached a global audience quickly, was still very niche for a number of years. FB is now an 17 year old company at the time of writing this – I think it is well out of the start up category.
While I love a good discussion where we can argue our way towards a better understanding, I feel like this particular argument has been settled long ago. In order to be successful you need to take a stand for what you believe in, this means serving a particular set of customers, and ignoring the large majority of others out there. If you attempt to please too many people (in the beginning) then you are increasing your chance of failing. Once you are established, successful, and making huge amounts of cashflow, then branching out to larger markets makes sense once you have saturated your original niche – but that’s a topic for another day. For now, start small, and stop ignoring the advice to pick a niche and serve it well.
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