Startups: How to find your target market.

Matt Wilbanks
Nov 14, 2016 · 5 min read

What problem are you solving? Who gets the most value from solving that problem? Ultimately, the answer to that second question is your target market. Boom. Done. If it were only that simple….

Finding your target market is up there at the top with some of the most common challenges a startup faces. The reason is because you have to ask a lot more questions to truly have an understanding of your target customer and whether your product really does solve their problem. A better way to think about this is asking yourself - are you asking the right questions and are you asking the right questions the right way? That’s where we’re going to focus on this post.

When my company, HelpSocial, spun out of Rackspace back in 2014 we had more than 4 years of experience building a tool to solve the problems we faced while offering customer service in social media. Before we spun out on our own, I personally interviewed a ton of companies testing our assumptions for the tool we were bringing to market. Once we spun out on our own, very quickly, we realized I had been asking questions the wrong way and had only received part of the whole answer.

In those interviews, after explaining what we were solving with the product, I asked things like: Is this a problem you experience at your company? Would you say it’s a big problem or a small problem? Do your current tools solve the problem for you? After a demo of the tool we would follow with things like: Would this solve the problem we just talked about? Would you be willing to pay for a tool that solves this problem?

I was asking the right types of questions, but not asking them the right way. In many cases, their answers immediately validated what I wanted to hear so I stopped probing into the reasons they gave for their answers. Like many other startup entrepreneurs, I was excited about my product and had many assumptions. I let my assumptions (that were based on 4+ years of solid market experience) get in the way of realizing that there was a possibility I was wrong and my current version of the product might not be the solution to the problem.

Before every interview, ask yourself this question: Are you convincing yourself your product has a market or are your potential customers convincing you that your product is a match for them?

Ok, so what’s the right way to ask the questions? First, your questions should be open-ended, not simple yes or no. This is very standard and basic but it deserves a mention because most of us are terrible at crafting great questions. And, it’s easy to fall back on a simple yes/no question vs getting a little uncomfortable and probing for the sensitive truth. Second, for every question you ask, you need to understand what is at the root of the answer you receive. Probe. Probe again. Ask why continuously.

In the following examples, we want to understand the problem from the customer’s perspective (it may be completely different from our own), understand exactly how big of a deal the problem is to the customer and whether or not your product has what it needs to be the right solution for them.

Instead of asking, Is this a problem your company faces, say, Tell me about your experience with <this problem scenario>. Follow their answers with questions, even if the answer seems super obvious. Drill in. Why is the problem so difficult? What happens if the problem isn’t solved? What does that mean for your team? What are you doing right now to solve the problem? Tell me how that has worked out? Why is that… and so on.

Don’t ask, Is this a big problem or a small problem for you. Instead, ask, If you had to put a dollar value on this problem, how much would that be? Be prepared to guide them through this by asking questions and get to a dollar amount. Ask, in terms of resources (time/money/people) how much has your company dedicated to fixing this problem? Why that amount? Later on, this information can help you with pricing your product. Early on, it can tell you if you should continue spending time here or not.

Never ask, would you be willing to pay for a tool that solves this problem. Be specific. Ask, would you be willing to pay $X for my product, in it’s current form, right now. Give them permission to say No — tell them it’s ok to say your baby is ugly. Then ask, why? Tell me what’s missing. Tell me what you hate about it. Tell me the #1 reason that you wouldn’t start paying for this tool today. Probe, drill in and be laser specific. Don’t be ambiguous and don’t leave the meeting with assumptions. The key here, is trying to get them to say No and then learn exactly why they said it. Give them every opportunity to tell you why your product isn’t a fit for them.

After you’ve gone through the interview, come back to your basic questions: What problem are you solving? Who gets the most value from solving that problem? If you’ve been thorough, you should have very clear answers to those first two questions. After many interviews, you’ll have the data points showing which types of customers get the most value from your product.

At HelpSocial, when we started, we thought our initial target market would be any social media team that wants to help customers. Later, we learned that we’re usually a much better fit for larger enterprises than SMB companies and our initial traction has come from large brands that want to scale social media across teams and contact centers full of support agents. Our focus is now much more specific to those types of businesses, and because of that specificity, we’re much more effective at solving the problem for them.

Products evolve and businesses change over time, but if you’re focused on asking the right questions the right way and allowing the customer to convince you of your product market/fit, finding your target market shouldn’t need to stay at the top of your list of challenges.

Matt Wilbanks

Written by

CEO, Co-Founder @HelpSocial. I've been known to swim, bike and run. Sometimes all in the same day. Love #TexasBBQ.