In today’s episode of The Startup Chat, Steli and Hiten talk about how to switch your customer base.They highlight how to identify the right product for the right customer, and what to do if the customer you planned to target didn’t work out for our business.

Customers are the heart of any business, but not all customers are created equal. Because your customer base has such a huge impact on your business growth. It is important to ensure that they are of high quality, and that by providing them with the perfect solution to their problem. That they in turn help you to achieve the goals that you have for your business.

Tune into this week’s episode of The Startup Chat to learn what you can do if you have built your product, but find that the customer that you planned to market to are not responding to your solution. Steli and Hiten, also talk about the gift of flexibility, being open minded and honest with yourself about how things are going. They show how knowing that it isn’t working is a big step towards turning everything around and creating something that will work.

Time Stamped Show Notes:

02:39 The first step to identify the problem.

03:17 The importance of customer development.

04:03 What to do if you have your product and no customer to market to.

04:50 How to market a pre built product to a new market.

05:10 Why being flexible in your approach is important.

05:36 Mistakes not to make with your pre build product.

06:19 Tip on going after a new market.

06:45 Don’t operate from fear.

07:00 What can you do when it didn’t work.

07:32 The gift of realising it isn’t working.

3 Key Points:

  • Is your solution a good fit for that problem or is there another solution you can come up with.
  • Don’t think that you are forced to make that product work in a different market.
  • Keep your options open.


Steli Efti: Hey everybody. This is Steli Efti.



Hiten Shah: And this is Hiten Shah.



Steli Efti: Today on The Startup Chat, we want to talk about how do you switch your customer base? Or, how do you find a better customer if the customer you went after didn’t pan out? Right? The reason why I want to talk about this is that a listener sent us an email, I think, a day or so ago, asking us to talk about this and to give some advice. Whenever you listeners are sending us emails, A) we appreciate it, B) we try to get back to you and see whenever you bring up something we haven’t really discussed in too much detail, we’ll record an episode and dedicate it to you. The question that that founder had was, “Hey, we had a thought or an idea who our customer could be. We built a little solution for them. We went out there to try to acquire them, and what we learned was that it took or it takes way too much time and energy and money to acquire these types of customers for the return that we can make with them in terms of their willingness to pay for what we’ve built. So, now we’re thinking, ‘Shit, this is not the right type of customer. We won’t be able to build a successful business here. We have to go and find a different customer to sell our solution to.’ How do we do this?” What are your thoughts on this, Hiten?



Hiten Shah: Every time I talk to a founder about this problem, which is actually probably a pretty common problem, especially earlier stages of a business within like the first year of a startup, they usually have some intuition. Ideally, though, they have some data and information as to what experiments they can run to find the right customer. The reason I say that is oftentimes, they’re sitting there. They didn’t always deliberately target a certain customer set. In fact, they just sort of put their stuff out there and sort of targeted, but then there’s some pockets of customers that are super useful to learn from. These pockets of customers tend to be like people that are using the product a lot or really love it but are missing a feature. Or, you can’t tell because it’s in the noise of 100 or 200 customers or users, and the founder is unable to tell because they’re looking at the average, average customer and saying, “Oh, it’s not working.” What I like to do first is recommend that you dig in and look at what’s actually going on. Who’s using it? Is there anyone actually getting value from it, or enough value, and why are they getting the value? Oftentimes, it could be because there are certain thing about them, a certain need they have or a certain specific type of job or role or even type of company they are that really makes it a good thing for them. From there, I think that’s one common scenario, that you just need to dig in and figure out can I get more of them? Is that a big enough market? Things like that. Start with the customers you already have is my first piece of advice on this.



Steli Efti: Beautiful. Well, first, a little bit of criticism from my side, which is that if you discover having built something and having tried to sell it to people … If it takes you a number of months to discover that, oh, shit, this market or this kind of customer is not a good market to go after or a good customer to go after, and now you turn around, you have a product in your hand, and you’re thinking, “Hmm, who else could I sell this to?” you probably didn’t do enough customer development. You didn’t spend enough time talking to these customers before building or while building your solution, right, trying to acquire some early alpha-access customers or some … You should have not built something, and then went out to try to sell, and then realize that it’s so hard to sell to this person. Because the one question that I have is that is the product that you have, and we’ve talked about this before … Is it such a universal value prop that you could easily look for somebody else to sell it to? Oftentimes, it isn’t. Right? If you decide that the product you built and the customer you’re going after … If you decide that that’s not working, you shouldn’t be thinking, “I’m in month six of my startup. Where do I find a new customer, or my ideal customer?” You should be thinking, “All right. We did startup version one six months ago. It didn’t work, and now I’m on day one again.” You should go out and do some customer development and maybe show the product or talk about the product or solution you’ve built and see what people tell you, but make sure, be aware to be open-minded enough that if you go to a different type of customer, a customer that you are now … Hopefully, you wisened up, and you figure out to go after somebody or talk to somebody that you think, “We could acquire this type of customer easier, faster, cheaper, and this kind of customer has a lot of money, who’s willing to pay to solve their problems.” If you find that kind of customer, you should be open-minded and be aware of being open-minded so that if they present to you a problem they have that doesn’t match the solution you’ve built, you just pay attention, learn, and build a new solution versus trying to force your solution on a different market that may work, but it may also not work. It might be a big trap, where you’re now walking around with your half-baked solution and trying to force it down the throat of a customer base. Then, when any type of new customer shows just even the slightest, most lukewarm interest, you go, “Well, we found a new customer base. Let’s focus all our energy on …” whatever. I think they try to sell to restaurants, and now you’re like, “Let’s force all our energies to doctors, doctors’ offices,” and then realize that no, you don’t have product market for them. These doctors, although they might have more money, or it’s easier to reach them, they will not end up paying a lot of money for your solution. Or, your solution, even if they pay you money, is not really solving their problem, so they’ll leave again. My biggest tip there is to … When you go after a new market, be very open-minded and try to understand what are their problems? What are potential opportunities going after that customer? Then, ask yourself, “Is our solution really a good fit for their problem? Is there another solution we could come up with?” Just be more open-minded and don’t force your solution down the throat of a new market, because that might just be another way to waste a ton of time.



Hiten Shah: Couldn’t agree more. I mean, seriously. It’s funny the amount of fear that comes up when something’s not working in a startup. I think if you want to dig underneath … Because, you know, we love digging underneath, right, Steli?



Steli Efti: Yep.



Hiten Shah: There’s fear, and you’re operating from fear. I know we’ve talked about that in the past, but I see so many founders operating from fear, like, it didn’t work. Well, it’s like, okay, it didn’t work. There’s two things you can do. One, figure out what you learned. Step back, figure out what you know, what you learned. State the facts. Be objective. Then, number two is exactly what you said, which is don’t be afraid to do whatever needs to be done. It’s that simple.



Steli Efti: It’s that simple.



Hiten Shah: I just see fear. I smell the fear when someone’s like, “It’s not working.” I’m like, “Okay, great. It’s not working. Be thankful. Now, figure it out.”



Steli Efti: Yeah, and you know, and when you … Realizing that is already something I give people props for. Because a lot of people, out of fear of accepting failure or defeat, even if it’s not working out, if this type of customer isn’t giving you enough money, or it takes way too long to acquire them, they just keep going, and they tell themselves a story



Hiten Shah: Now you know.



Steli Efti: Right?



Hiten Shah: It’s like now you know. Right?



Steli Efti: Now you know. You learned something.



Hiten Shah: It’s like now you know. It’s good. Yeah.



Steli Efti: Yeah.



Hiten Shah: I agree.



Steli Efti: All right.



Hiten Shah: I like that.



Steli Efti: Now, close that chapter. Take all that experience, and now ask yourself, “What’s next?” Right? And what’s next might be let’s take the product and try to sell it to somebody else, but what’s next might be let’s go and find a really good customer base and learn what their problems are and figure out can we build something new for them? What’s next could be a million different options. Right? Don’t think you-



Hiten Shah: You’ve got that right.



Steli Efti: Don’t think you’re forced to make that product work in a different market because that may work, but it may not. So, you should keep all your options open and don’t operate out of fear, just like Hiten said. All right? I think-



Hiten Shah: No fear.



Steli Efti: I think that is it for us for this episode. Go out there and get-



Hiten Shah: Later.



Steli Efti: By the way, before we wrap up, if you guys are struggling with customer development, customer acquisition, customers don’t want to … Prospects don’t want to pay you enough money, or you’re struggling in negotiation with them, or you’re … Whatever it is, send us an email., We’ll give you advice if we have any, and if you ask us … If you have a particular problem that’s so unique that we haven’t talked about it in almost 300 episodes, we’ll record an episode and dedicate it to you like we did today. All right. That’s it from us for today.



Hiten Shah: Absolutely. Bye.



Steli Efti: All right. Bye-bye.