How to Start a Business

As a Startup, You Must Know Who Your Customers Are And Where They Are Now [Starting a business 2]

SaaS Catch
February 10, 2024
Previous Post|Starting a business 1: Common misconceptions about business ideas

1.Customers come first

In 2017, when I started my company, I developed a VR app. I thought people would be interested in it because VR technology was trending.

Even though I participated in many events such as trade fairs, Google Hack Fair, and G-Star, and promoted it to everyone around me, the number of users didn't increase. At the time, I wondered why. No matter how much I reasoned, I couldn't find the answer.

One day, as I was walking into the office, a thought popped into my head.

"Have I ever seen anyone using a VR machine?"

(Source : Unsplash)

We hadn't encountered any real users, except for companies developing VR around us and fellow entrepreneurs. We were just throwing ideas out there, and it didn't work.

After we decided to give up on VR, the team sat down together and asked ourselves questions about capabilities and resources: our majors, people we knew, hobbies, skills, and part-time job experiences.

One of our team members had a friend who was a high school teacher, and we realized that he was struggling with the new education policy.

So, we put everything we had into developing a product for him. We prototyped it, delivered it to over 50 schools, and got funding.

There are a lot of ideas in the world. Solutions are even more so, but what customers want is always veiled. Meet your customers. Meet them often, a lot, and find their hidden desires. Ideas become valuable when they fulfill customer wishes.

Apple, 최초의 공간 컴퓨터 Apple Vision Pro 발표 - Apple (KR)
(Of course, there are cases where technology leads the trend. Source : Apple)

2.Who are our customers?

Every customer is unique. No two people are the same, and no two minds are the same from morning to night, yesterday to today.

It's too time-consuming to organize an infinite number of customer types, so instead, it's better to decide what you want your customer to be like, be specific and relentless enough to attract them, and then go out and find people like them.

If you find someone who wants to solve a specific problem first, you might be able to come up with an idea that fits that bill.

The key is to figure out who you would love to have as a customer. You need to think about it.

What is this customer like? What's their name? What are their worries? What do they talk about with their friends, when and where are they going, what do they do, what do they look like, how do they spend their day?

It's all about figuring out, "Who do I want to continue my entrepreneurial journey with?"

Describe in great detail what you imagine your customers to look like, from their physical appearance to their information to their lifestyle. This is called a persona in marketing. Seek out people who closely resemble the persona you've created.

Don't match your persona to your product. Come up with ideas that fit your personas.

If you already have a product, build a very specific persona by finding the single biggest problem your customers have that you can solve with that product or service.

And if there's a way to solve that problem for less money, improve your product. If not, go find real customers who fit your persona. Choose "one person who is obsessed with acne" over "people who want to take care of their skin".

Free User Persona Template | FigJam
(Source : FigJam)

3.Where are my customers?

When I was in my early 20s, I acquired a pair of bamboo slippers from a factory in Busan. They were too stiff to wear for a long time, but they were well made for one-off use.

RYMD 래티스 대나무 슬리퍼 | 올리브영
(Source : Oliveyoung)

I thought a lot about who would wear them, and realized that hardness is not a disadvantage on sandy beaches, and there were a lot of people getting hurt going barefoot at the time.

I went straight to beach near Busan. I sold out a month's worth of inventory in three hours, due to the bottles buried in the sand and the hot asphalt. My ideal customers were all in the same place.

(Source : Visit Busan)

Online businesses should also find a place like this where my ideal customers are gathered. The internet space is also a good environment for similar people to meet because there are no physical restrictions.

Let's use our imagination to locate the places where customers gather. Here are some hints for spotting your ideal customers online.

- Website where the customers frequently visit

- Online communities

- Coupang, Amazon, and Naver shopping lists

- Google Trends, Naver Trends

- Newsletters, email subscriptions

- Favorite blogs

- YouTube subscription, watch history

- Instagram followers

- Search history, comments, reviews

- Online seminars

- Open chat

- Work tools

- Lectures

4.What if you found a customer?

Once you've found a customer or gotten them to come to you, you need to get them to buy something or do something - that's what makes it a business.

Our goal is to eventually get a customer to buy something from us, but even if you find them the hard way, would they pay for something from someone they don't even know? Most will run away, so you need to pique their interest with a fresh idea before they go away.

When you first meet a customer and make them an offer, there are four main reactions.

1.I like it, I'll buy it right away.

2.I'm interested, but I'll think twice.

3.I don't know what you're offering.

4.I'm not interested.

There's a clear distinction between 1 and 4. The more you can direct customers 2 and 3 to 1, the more successful your business will be. In marketing, this is called conversion. Most marketing techniques are also focused on how to convert customers to number 1.

(Source : Unsplash)

What if you were a customer? Try answering these questions

1) If a stranger tells you to buy something, you buy it. (O , X)

2) If a stranger comes up to you and offers to rub your shoulder, you pay for it. (O , X)

3) If a stranger offers you a drink, you drink it. (O , X)

For all three questions, you probably chose X. There's a sense of rejection.

So what about the next question?

1) I buy things recommended by channels I've watched from 10,000 to 100,000 subscribers. (O , X)

2) If an influencer you've been following offered to rub your shoulder, you'd pay for it. (O , X)

3) You try a drink that your family, friends, and coworkers all say is delicious. (O , X)

무료 반지 빛, 비디오 녹화, 비디오 블로거의 무료 스톡 사진
(Source : Pexels)

What about this time? Has your psychological barrier softened a bit?

The product hasn't changed, it's just that the wording of the offer has caught your eye once more, and it's been recommended by someone you like or know.

This is the classic marketing method that companies use when dealing with second and third type customers.

Marketing is all about getting customers' time.

Companies with a bunch of money can buy time with money until they have enough influence to get the customer's time. But startups have to save money. We can't afford to spend hundreds or thousands of dollars a month like any other company. Therefore, it's essential to get customers to spend the time to open their wallet first.

5.Value proposition

So, we've found our ideal customer, and we have an idea to solve their problem.

The first thing to do is to categorize the customers mentioned in 1, 2, 3, and 4 above, so we figure out the right option that our ideal customer would be interested in if they saw it and propose it first.

In marketing, this offer is called a hook, and it's how we can determine if the customer is someone who will listen to us.

*Customer triage

1.I like it, I'll buy it right away.

2.I'm interested, but I'll think about buying.

3.I don't know what you're offering.

4.Not interested.

1: They're open to offers.

2: Engages as far as getting the information they need.

3: They see the offer and move on to 2 or 4.

4: Not hooked.

Summary of Hooked — Nir Eyal. Hooked by Nir Eyal answers a very… | by  Rameen Mobin | Medium
(The Hook Model of Nir Eyal, Source : Rameen Mobin)

If you don't have a customer: It's likely that your hook is something that doesn't attract your ideal customer. Prepare another offer.

Once we've found customers 1, 2, and 3, we need to explain our idea. Tell a story that knocks on the door of their hearts, with a good grasp of the (-), (+), and (?) states. (mentioned in the previous post)

Our story must include something that our dream customer will definitely need. It's the value that will make them invest their time and decide to buy. Our goal is to get them to invest their time to listen to our story and convert them to customer 1.

※We'll talk more about converting customers 2 and 3 into 1 in 4th episode.

*Examples of hooks to get your customer's time

- Coupon for a free month

- Get a gift when you sign up

- Check out this offer to save $100

- 20% off the purchase price of a yarn

- 3 must-have resources to set you up for success

- Share your free stuff

- Refer a friend and get 1 month free

- 20,000 points for Instagram posts

- PDF for leaving a comment

- To learn more, join the cafe

- Start your hobby for 0

- 40% off your first visit

- See our press, patents, and awards

- 500 people already use it, so why not?

- Even that sassy celebrity uses it

- Attend an online seminar

- Get a free pot set just for talking to us

6.Customers are everywhere and nowhere

You may have already met your ideal customer. But if you didn't have an offer that was truly worthwhile to them, you wouldn't have been able to break through their guard.

Proposals aren't guaranteed to work, and they're not a one-and-done deal - in fact, of all the odds, they're the most likely to fail. But if your customer is out there, do everything you can think of to reach them.

Next Post|Starting a business 3: What to make and how to make it?

Written by SaaSCatch (Link)

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SaaS Catch
SaaS Catch
For anyone who wants to start a business, here are the tools and methods to make your idea a reality. Learn about setting up and growing a business, including business frameworks, product selection, how-to's, business operations, maker stories, user interviews, and more.