Yesterday, I had a cup of coffee with an entrepreneur whom I knew but hadn't previously spent a bunch of time with—our paths just never crossed until a couple weeks ago.
He's a technical entrepreneur, sharp as hell, but has spent his career hitting self-funded singles. Of course there's nothing wrong with that—he's doing well for himself. I'm just saying you probably don't know him.
His latest idea is legit. It's serious tech that he has architected and built himself. It plays off of technology that's already been adopted, but he's taking it in a unique direction. He's early with the idea, but current enough that what would've sounded crazy a year ago makes perfect sense today.
And, you know, good for him. I love that moment.
He just recently brought aboard somebody to handle business development and marketing. The time is right, because while his website does a fantastic job of explaining the how of his tech, it has precious little on the why. Classic tech entrepreneur go-to move.
As we talked and dove deeper into his grand plans, I realized that he's pulling all the right levers. Except one.
He told me he's starting his approach by creating a first use case—for entrepreneurs.
This makes a lot of sense in a lot of ways for him. I saw that immediately. Here's a founder who has spent his entire career trying to overcome hurdles and issues and problems faced by most entrepreneurs. I don't want to delve too far into what specific issues he's tackling because I'd be giving away his solution—you'd know the problem, and he has a solution.
But I backed him off of the entrepreneur use case. Because I've been there. Often. And I'll tell you what I told him.
Don't sell to entrepreneurs, man. They're terrible customers.
Selling into bad markets is a hard-to-overcome mistake. I've actually started more than a couple companies that targeted the wrong market for the right reasons. But here are two of the highlights:
Intrepid Media was the first social network for writers. And by first, I mean 1999. It was Facebook meets Medium meets Google Analytics before any of those things existed.
While Intrepid was wildly successful in a lot of ways, I'd call it just a double. It made a bunch of money. It took me across the country. It helped make people famous (well, writer famous, which is just above plumber famous but way below YouTube famous).
The problem with Intrepid was my target market. Writers are terrible customers in the same way that entrepreneurs are terrible customers. There are a number of reasons I say that, but the primary reasons are:
But I also call writers and entrepreneurs terrible customers with my tongue in my cheek a bit, because I'd learn later that you can still focus on a terrible customer if you shift your target.
- Writers don't have money.
- Writing doesn't scale.
- Writers spend way more time generating over buying.
When Intrepid flatlined around 2010, I took the tech that I had created for it and re-dedicated it to serve entrepreneurs. Within six months, ExitEvent started riding the same growth curve that Intrepid saw in the early 2000s, only this time I learned from my mistakes.
For one, I decided pretty quickly that the problem I needed to solve wasn't an entrenched problem like it was for writers, but a new problem. But more importantly, while my focus was entrepreneurs, a small market with low disposable income and poor buying habits, my target was everyone else.
We're doing the same kind of thing with Automated Insights now—where we create automated content from data. Our target—the customers we believe need automated content the most—aren't people who write as their profession and need to write a lot. They are people who don't write as their profession and need to write a lot.
It's everyone else.
This is why I sound so confident when I say things like "Automated content is not about replacing writers." Because it's not. It's about replacing the writing that you don't use writers for.
That market is huge. It has huge problems, and it has and is willing to spend a lot of money to solve those problems.
This is what I told my friend. Don't go with the market you know. Focus your product to solve those problems you face daily as an entrepreneur, but target everyone else, because they'll have the same problems. And what's more is they're much more willing to spend money to solve those problems.
And if you still want to solve entrepreneurs' problems with your tech? Great. Once you stand up a solid business selling to everyone else, give it to the entrepreneurs for free.