(2023-08-29) Rachitsky How To Identify Your Ideal Customer Profile B2b

Lenny Rachitsky: How to identify your ideal customer profile (B2B) (ICP). Welcome to part three of our series on how to kickstart and scale a B2B business:

A few of my biggest takeaways and surprises from this step

• Most founders initially got their ICP wrong.
• Everyone landed on at least three attributes to describe their ICP.
• Data from outbound sales is the best signal for what’s working, versus leads from investors and friends.

There are four common signs that you’re getting closer to your ICP, including

• A significant increase in your conversion rate
• A significant increase in enthusiasm

Summary

• Get super-specific and super-narrow with your ICP. Almost comically narrow.
• Start by paying attention to who gets most excited about what you’re building.
• Pay attention to which roles are most successfully implementing your product.
• Pay attention to the size of the company that’s the best fit for your solution.
• Look for patterns in the ways the company works.
• Be careful not to pattern-match too quickly.
• Pay the most attention to signals from outbound sales, instead of leads coming through your network.
• Keep at it—it often takes many months.
• If all else fails, focus on what you can sell this month.

To identify your own ICP, go through the list below and take your best guess at picking the three most unique and important characteristics of your potential ideal customer

many (perhaps most?) of the B2B companies I researched spent just as much time on picking the problem as they did on figuring out who to solve the problem for. When they didn’t do this, they often regretted it.

Initial ICPs for some of today’s biggest B2B companies

notice how most companies landed on exactly three attributes.

Try to get super-specific and super-narrow with your ICP. Almost comically narrow.

Don’t stress if you can’t figure out your ICP for a while.

Here’s Ali Ghodsi, co-founder and CEO of Databricks (which is now worth over $30B) on their complete lack of an ICP early on: "We didn’t have an ICP at all. In those years at Berkeley, we just wanted to change the world"... But the sooner you figure out your ICP, the faster things will fall into place.

Eventually, you’ll be forced to figure it out.

Start by paying attention to who gets most excited about what you’re building.

Be careful not to pattern-match too quickly.

(lots more detail/quotes in the post)