Fishing Where the Fish Are: The Art of Customer Targeting
Most founders suffer from a targeting blindspot. They build brilliant products but struggle when identifying who exactly should use them. Ask about their target market, and the answers reveal the problem: "We're for the enterprise." "Any team that needs collaboration." "Companies that want efficiency." These vague responses are dangerous. Markets don't work in abstractions. Waters vary in fish populations, fish have different appetites, and hungry fish seek specific bait.
Customer targeting appears deceptively simple. Everyone knows they need to find customers, yet the art of precisely identifying, understanding, and reaching the right ones remains elusive for many founders, particularly those at pre-seed and seed stages.
Confusing Interest with Intent
The conventional wisdom suggests founders should get close to customers; extraordinarily close. As one prominent investor frequently advises, "If you're not embarrassed by how much time you're spending with early customers, you're not spending enough time." Yet proximity alone doesn't guarantee insight.
Founders have spent months embedded with potential customers, meticulously documenting needs and pain points, only to build products that still missed the mark. The challenge lies in distinguishing between what customers say they want and what they'll actually pay for.
Consider the case of a founder who conducted over fifty customer interviews before building an AI-powered content creation platform. Despite overwhelming verbal enthusiasm during research, conversion rates languished below 2% at launch. What happened? The founder had confused interest with intent; a critical distinction in customer discovery.
As Harvard Business School professor Clayton Christensen observed, "The customer rarely buys what the company thinks it's selling." This insight reveals the limitation of proximity without proper interpretation. Customers don't always understand their own motivations, and their stated preferences often diverge from their actual behaviors.
The solution requires more thoughtful engagement. The most effective founders develop what anthropologists might call "participant-observer" skills; immersing themselves in customer environments while maintaining analytical distance. They validate learnings through small experiments that measure behavior over opinion.
The Niche Expansion Challenge
"Start with a niche and expand" has become conventional startup wisdom. Yet this approach contains its own contradiction. A product designed too specifically for an initial niche may become trapped there, unable to transcend its origins. Conversely, a product built for broad appeal risks failing to deeply satisfy any specific user group.
To illustrate this challenge, consider a hypothetical B2B payments startup following this trajectory: Their initial focus on restaurant suppliers creates such product-market fit that when they attempt to expand to other verticals, they discover their product is too specialized. Features crucial to restaurants prove irrelevant elsewhere, while capabilities needed by other industries are absent. This pattern, observed across numerous startups, reveals how early specialization can sometimes limit future options.
Meanwhile, Slack managed to navigate this challenge effectively. By targeting small, tech-savvy teams initially, they built a product specific enough to delight early adopters yet flexible enough to scale across industries. Their strategy involved identifying the right initial fish (collaborative teams already using fragmented tools) in the right pond (technology companies), with an awareness of how that pond connected to larger waters.
The key is understanding how to design a product architecture that can evolve. As Benchmark venture partner Sarah Tavel has noted, "The best startups start with a wedge—a single, focused use case—but build with a platform mentality."
When Customers Choose You
Perhaps the most persistent myth in customer targeting is the notion of the "ideal customer profile": a static, comprehensive description of the perfect buyer. This approach, while comforting in its certainty, often contradicts the messy reality of how products find their audiences.
Many successful products didn't initially target the customers who ultimately embraced them. When Twitter launched at SXSW in 2007, few could have predicted it would become essential for journalists and politicians. Facebook began exclusively for Harvard students before expanding to other universities and eventually becoming a global platform spanning generations.
There's a certain Heisenberg uncertainty to customer targeting; the act of pursuing a specific customer often changes what a product becomes, revealing opportunities that couldn't have been anticipated. This suggests a more dynamic approach to customer development, one that balances intentionality with adaptability.
Founders must resist becoming too locked into their initial product vision. The most successful companies often end up serving markets completely different from their original plans. Instagram started as Burbn, a location-based check-in app with photo-sharing features. When founders Kevin Systrom and Mike Krieger noticed users gravitating toward the photo aspect while ignoring location features, they made a bold decision. They stripped away everything except photo-sharing and filters, creating Instagram. The final product bore little resemblance to their original vision, but it matched what users actually wanted.
This adaptability requires founders to monitor user behavior constantly and remain willing to pivot when data contradicts assumptions. The product that succeeds may be very different from what you initially envisioned, and that's often exactly what needs to happen.
Following the Trail of Interest
One of the most counter-intuitive insights about customer targeting is that the best prospects often reveal themselves through organic discovery and adoption. Instead of exclusively pursuing predetermined customer segments, smart founders create mechanisms to detect and amplify emergent patterns of interest.
This approach inverts the traditional targeting paradigm. Instead of asking "who should we target?" it asks "who is already showing interest, and why?" This shift may feel passive to founders accustomed to aggressive outbound strategies, but it often yields more sustainable growth.
The early history of Shopify illustrates this principle. Initially built as an internal tool for a snowboard company, the founders noticed other small merchants expressing interest in their e-commerce solution. Instead of forcing their predetermined vision, they followed this organic signal, ultimately building a platform that serves millions of merchants across countless verticals.
This approach still requires intentionality. It means creating reliable methods to detect genuine interest through product usage data, content engagement metrics, or community participation, and then doubling down on segments showing real enthusiasm.
The Bottom Line
Effective customer targeting is about discerning who is ready to engage now, who might require education first, and who isn't worth pursuing at the current stage. It balances focus with flexibility, conviction with adaptability.
For pre-seed and seed founders, this means:
- Engaging deeply with potential customers, but validating insights through behavior over conversation
- Designing for a specific initial use case while maintaining architectural flexibility for expansion
- Creating mechanisms to detect organic interest instead of relying exclusively on predetermined targets
- Recognizing that the ideal customer profile will evolve as understanding deepens
Perhaps most importantly, customer targeting isn't a one-time exercise but an ongoing dialogue between vision and market reality. The most successful founders develop a dynamic understanding of the changing currents that influence where and when fish gather.
