What exactly is an ICP, and why is it critical for early-stage startups to define it quickly?
In a rush to create something new, don’t overlook a critical step — understanding exactly who you’re building for.
👋 Heya! It’s Alicia. Welcome to Customer Focus - a newsletter to help you accelerate growth by putting your customers at the heart of your business.
James and I have re-branded our 5-star rated product marketing training course. Meet GTM Playbook! Check the bottom of this article for a special offer, available through October 21, 2024.
Last week, I had the privilege of delivering a talk to the 2024 Radia Accelerator cohort. Radia Accelerator, led by Albion VC and Speedinvest, focuses on a mission of helping to create more women-led unicorns in Europe. Speaking alongside Natasha Lytton from Seedcamp, we chatted for over an hour with some of Europe’s most interesting female SaaS founders. Watching these talented entrepreneurs stake a claim in shaping the future was personally inspiring, and I hope one day to be on their side of the table.
Our discussion focused on mission critical GTM work for early-stage startups:
Defining your Ideal Customer Profile (ICP)
Understanding your customer
Unfolding a go-to-market (GTM) strategy from there.
Launching a startup is an exhilarating process. With fresh ideas and the bravery needed to disrupt industries, founders are always eager to build their product and get it to market. But in the rush to create, many overlook a critical step—understanding who exactly they’re building for. Instead of developing a product for a real, urgent need, they gamble on finding an audience later. This misstep can lead to wasted time, resources, and, ultimately, failure.
So in the spirit of this energizing conversation, I wanted to get back to my sporadic newsletter musings and share my thoughts on one of the prompted questions with you all:
What exactly is an ICP, and why is it critical for early-stage startups to define it early on?
The problem: working backwards from product to audience
A common trap for tech founders is building a product first and then hunting for an audience.
This approach sets startups on shaky ground. April Dunford, positioning expert and author of Obviously Awesome, emphasizes that “Startups need to realize it’s not about creating a solution and finding a problem.” Instead, the customer’s pain should guide your product decisions from the start.
For example, if you're developing a SaaS product without understanding the specific pain points of your ideal users, you'll likely miss the mark. Founders should deeply understand the challenges their customers face, rather than working backwards to align an existing product with a market that might not need it. Most commonly, I see founders speaking about their ICP purely as a vertical (e.g. fintech/banking), or a segment size (enterprise). These might be important components that shape your ICP, but by themselves, they are incomplete, and dangerously unfocused on the total addressable market of human buyers with a common pain point that’s waiting to be solved. This is the important stuff that founders need to confidently shape their GTM strategy, and accelerate time to traction.
The implication: inviting risk from skipping customer validation
By not validating your customer base early, you risk building something no one wants. At the end of the day, if you’re solving a problem people don’t care about, you’re wasting time and money. Worse still, you may find out too late that your target market isn’t large enough or won’t pay for your solution.
Take the example of a B2B software tool that addresses a "nice-to-have" instead of a critical pain point. In this case, even if users like the product, they won't make it a budget priority, and your startup risks being sidelined. “Willingness to pay” is the single most important metric that separates competitive products capable of sustainable growth, from a pile of good startup ideas.
The solution: define and validate a real pain point
Before writing code or designing in Figma, founders must focus on understanding customer needs through real conversations. A product should address an urgent problem that users need solved. The solution must be so critical that the customer is willing to allocate a scarce budget towards it.
April Dunford adds, “You need to know your customers’ world inside and out before you can position a product in it.” Start with interviews, ask open-ended questions, and avoid assumptions. Talking to enough people will help you zero in on problems worth solving.
What exactly Is an ICP?
An Ideal Customer Profile (ICP) is a detailed description of your ideal buyer. It includes not just demographics or company size but also behaviors, motivations, and pain points. An ICP helps founders ensure they’re building for a customer base that has a real need and the willingness to pay for their solution.
As James Doman-Pipe and I teach in our product marketing course, GTM Playbook, the fundamental unit of an ICP is not firmographics or demographics, but the mindset of the buyer.
It’s more than just a target segment. It’s the attributes and triggers that make real people take action. Defining an ICP helps teams prioritize the features that matter, align marketing and sales efforts, and avoid wasting resources on the wrong audience.
How does an ICP differ from a target customer or a buyer persona?
Though an ICP, target customer, and buyer persona may seem interchangeable, they are indeed very different.
Target Customer: Broad category that encompasses potential customers based on basic demographics and behaviors, providing a general sense of who might buy your product. For example, a mid-level Product Manager at a SaaS company might be roughly interested in the value of a new API product. However, will they have budget authority to actually buy?
Buyer Persona: A more specific, semi-fictional representation of different customer types within that target group, including detailed traits like pain points and motivations, often used for personalized marketing. For example: Someone lacking compensation expertise who is trying to survive rolling out their first pay review season in a fast-moving tech company.
Ideal Customer Profile (ICP): More focused than a persona, an ICP defines a single, ideal customer type with the highest potential to benefit from your product, allowing for concentrated marketing and sales efforts. For example: An in-house marketer or restaurant manager at a mid-market restaurant who wants to grow their sales, and is looking for new tools or technology to help them connect to new, loyal customers.
In short, while a target customer covers a broad range, an ICP narrows it down to one highly relevant segment for sharper focus and more effective targeting.
Why It’s critical to define your ICP early
Defining your ICP early brings focus and alignment to your startup. It ensures that you're solving the right problems for the right people.
According to Notion VC’s article Establishing an Ideal Customer Profile (ICP), starting with a strong ICP provides a foundation for all customer-facing functions: product development, marketing, and sales. Without it, you risk scattering your efforts, misaligning your team, and building a product nobody needs.
For example, many early-stage SaaS founders face the temptation to build feature-rich products. However, an ICP keeps you disciplined, ensuring you're building solutions that solve critical pain for a specific audience.
Practical tips: interview guide for deducing customer value
Here’s a framework I’ve developed to help founders identify their ICP by understanding customer pain points. Use these questions in your early conversations:
Who owns [problem] in your business?
When you’ve had an awful day and you want to close your laptop and rage quit, what has happened?*
When you have an amazing day and you’re buzzing with excitement about your job, what has happened*
How does this challenge impact your goals and daily work?
If you had a solution, how would it change things for you?
How are you currently solving this problem, and what frustrates you about it?
* Yes, I really ask these questions in these words. The goal of these interviews is to get people out of their heads, and to avoid them serving up canned responses of what they think I want to hear. The goal is to lift the lid on surface level chat, and uncover how they truly feel, what motivates them, what haunts them.
This is the secret sauce for understanding the full worldview of your buyers.
In essence, these conversations help refine your ICP by revealing the core challenges and desires of your potential customers. Emma Stratton reinforces this in her new (amazing!!) book, Make It Punchy, when she says: “Your customers' answers are the breadcrumbs that lead you to value.”
In conclusion: building without an ICP is risk that you don’t need to accept
Launching a startup without a clearly defined ICP is like navigating without a compass. You might move fast, but you’ll have no idea if you’re on the right path. By anchoring your efforts in solving real, urgent pain points for your ideal customer, you can avoid missteps and build a product that people genuinely need—and are willing to pay for.
Special offer: £200 off GTM Playbook
James and I are starting another live cohort of our 5-star rated course, GTM Playbook, formerly known as WTF Is Go-To-Market.
Same top-rated curriculum, same product marketing community, but with a new name and exclusive live cohort classes—and we’re giving you £200 off to celebrate.
Here’s what’s new:
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Save £200 with code WTF200—that’s just £499 for lifetime access
Like always, this is built by product marketers (that’s us) for product marketers (that’s you). Whether you’re looking to build GTM strategy foundations or fine-tune your positioning and messaging, this is the place to do it.
Sign up before October 21 and not only do you get lifetime access, but you’ll also join our upcoming live cohort sessions with no extra cost. It’s a unique chance to learn alongside a community of peers, ask your questions in real-time, and get tailored feedback.
Here’s what others have to say:
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The content was instantly applicable.”
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