Personas: Create a Fake Customer
A description of the customer with the job he or she wants done is called a persona. Popularized by Alan Cooper in 2004, personas are a description of pretend users and what they wish to accomplish. Wish to accomplish is another way of saying “job hired for.” Originally conceived of as a tool for designers to ensure products were being developed in ways that would resonate with users, we believe the concept is useful to help you understand your customer deeply and drive all customer engagements, including marketing and selling.
So instead of just looking at how people will use the product and then treating sales and marketing as problems of distribution and exploring what magazines they read, you treat them all as a desirability problem of creating something wonderful that people want to buy, and you do that by identifying who is going to use it, what drives them, and what goals and desires they have.
Cooper says that these need not be real users, but rather archetypes of actual users. In our opinion, there’s nothing inherently wrong with using a real user as long as the sketch is representative of others. The advantage of using stereotypical characteristics is that the sketch is readily accessible to others, but your primary goal is to be as accurate as possible. You want to be able to recognize them when you see them.
Vague descriptions tend to solicit broader feature lists and less understanding of your must-have use case. You are not going for an assemblage of different users to come up with a composite.
Rather, you’re writing a character who has a specific goal and acts in precise ways. In B2B environments, you create a persona for all user types and even those who influence the purchasing decision. Every market has multiple personas, and each persona might have multiple use cases. Ideally, you design your product around one persona with the most compelling use case. Think of compelling along a continuum. A product is considered a painkiller if it is a must-have product, in contrast to a vitamin product, which is nice to have. We think of a shot of adrenalin as like the painkiller, only addressing a passion rather than relieving a pain.
Alan Cooper talks about a higher level of compelling—that which evokes desire. “People’s desires always have a way of emerging after their needs are satisfied. When a person needs something, she will do what is needed to get it, but when she desires something, she is loyal to it.”6
If you find a use case that evokes desire, you are ahead of the game. Your business, however, depends on evoking desire somehow. In the end, you may discover that it takes a combination of business qualities that go beyond solving a problem: product plus support, customer service beyond the call of duty, addictive gamification, off-the-charts ease of use, massive return on investment, and so on.
As with the other phases of building your startup, the way you determine your ideal market segment is by interacting with your customer (customer development), testing (viability testing), and measuring (data).
Case Study: Salim’s Fish Inventory
Our client, Salim, CEO of a company we’ll call NewCo, is developing a mobile application for restaurants to automatically track ingredient-sourcing information in real time in order to maximize menu efficiencies in terms of dish availability, food prices, and recipe costing. If, for example, a restaurant offers fresh halibut on their menu, but the supply is low one day and prices double, the chef needs to change the menu or offer smaller portions in order to maintain dish margins.
Salim is a successful Southern California restaurateur who came up with the solution based on his own experiences. He’s passionate, he hustles, he is personable and well connected in the restaurant industry, but does he understand the market from the right perspective to design a must-have solution to the ingredient-sourcing problem? Rather than focusing first on all the features Salim wanted to build, we focused on the six daily problems of restaurateurs that Salim told us he faced:
1. Food and plate costs—Getting an accurate food and plate cost is too complicated, so I just follow my gut and hope I don’t lose money.
2. Master product list—I try to keeping a master list, but updating it is too time consuming.
3. Recipes—My profitability is a guessing game because I am not able to readily update plate costs and, therefore, menu prices.
4. Inventory—Because inventory takes so long, I only do it monthly when it would be ideal to do it weekly.
5. Reporting—The data I get from my bookkeeper/accountant are not detailed enough for me to determine the reasons for my food-cost variances.
6. Labor—I don’t have enough labor hours to allocate in order to properly manage my food cost.
This is a good set of problems to work from, and we can begin to imagine what jobs a product needs to do in order to solve them, but which are the most pressing? What are the easiest to fix? Who decides whether to buy a solution to fix them?
When we asked Salim, this successful owner of multiple restaurants, a man with a tremendous amount of market knowledge, “Who is going to want this?” he answered like a typical entrepreneur: “Everyone will want it and will pay $99/month.”
The implication is that everyone would want it because all restaurateurs look, feel, and smell like Salim, right? Wrong.
To get entrepreneurs to think about good segments, it’s sometimes helpful to think about people or organizations that, at first blush—that is, superficially—look, feel, and smell like a good segment, but would never buy the product. So we started talking this through, and Salim came up with the family-collective persona.
The family collective is a family restaurant as represented by a one-location restaurant, perhaps a family-owned Chinese or Indian restaurant. It’s a family affair: They want to make a profit, but it’s just as important that the family is working together and that everyone has a role, and the main thing is keeping the restaurant going and the bills paid. The way they source their ingredients is not the same way Salim does. Their networks are different. They go to the same sources from within their community. They tend to do things by routine, the way they’ve always done it.
Quickly, Salim launched into another persona, the old-school independent. This is a chef/owner, maybe a small Italian restaurant. Joe, the owner, is a bit older, has a few employees working for him, already sent his kids to college, and owns his house. He’s not really in it for the money at this point; he wants to pay the bills, stay in business, but he also enjoys hanging out with the regulars. He wants to be productive and happy in life. He likes talking to people—this is his life. The food is not bad, not complicated; the menu doesn’t change much. The restaurant is an extension of his personality. You’re not going to sell him an iPad application.
Thinking about these two antisegments—the people who look the part superficially, but won’t buy the product—broke the ice on how to think about segmentation.
From there, we established several positive segments, like Jack, the solo independent chef: Jack is single and is chef and owner of a Newport Beach seafood restaurant. He currently has one location, but hopes to have more. His restaurant is his lifeblood and he spends virtually all his waking hours there. He is a college graduate, is technology adept, and keeps up to date with emerging restaurant trends. He considers himself to be a fine-dining chef, and serving fresh fish is a key to his restaurant’s differentiation. It is important to him to be up to date on current inventory, and he is willing to update his menu daily to reflect current offerings. His biggest challenge is finding the time to call sources to keep up to date on available product.
The segmentation exercise includes not only the persona, but any other data that helps to describe the problem or relevant differences from other segments.
For example, the structure of the restaurant is important. Jack, the solo independent chef, doesn’t have a sous chef employed, meaning he is solely responsible for the ingredient-sourcing decision. A solution must save Jack time or it’s worthless.
Any details that affect how the business will be marketed and sold to are relevant, such as who influences the decision maker and what is the decision maker’s source of industry information. Salim was able to establish several additional segments, including those labeled “Team Independent,” “Small Corporate,” and “Corporate.”
Choosing a Market Segment
As we’ve discussed, the market segments you decide to pursue drive your business model. You can write a detailed plan on your product platform, how it will be distributed, what marketing channels will be the most efficient, and how the product will be sold, but all that depends on your market segment.
(Unless, of course, you choose your market segment based on one of those criteria. In other words, if you choose to disrupt the distribution model and only serve customers willing to buy computers off the Internet, then your distribution has chosen the segment that will behave that way.)
Notice, however, that we did say “choose.” Yes, you get to choose your market segments. Not only will this affect the potential size of your business, it may also affect how you feel about it. It’s important that your vision for the business align with your values and that the market segments align with your vision.
Case Study: Carla’s Dream Jobs
We were helping a social entrepreneur (we’ll call her Carla) whose vision is to help out-of-work women find their dream jobs. Carla is passionate about changing the lives of these women in fundamental and meaningful ways. She wanted to create a marketplace that would match their dream jobs with real-life business opportunities.
One business model hypothesis that she and her team were exploring had the job opportunity side of the product provided by large businesses that would require an enterprise, B2B sales model. She lamented the possibility of needing to build the product to satisfy that segment, thereby threatening her vision as well as her relationship with the segment she wanted to serve. She questioned whether she would have the same passion for her business if she had to work too long in that vertical (niche) market.
We reminded her of several things:
First, she owns her vision. Ultimately, she gets to do what she wants. The size of her business will be affected by the choices she made.
Second, if she is to see the business through, she’ll be at it for a long time. Many entrepreneurs have a tendency to dramatically squash time lines. If she chose to pursue this particular strategy and it was successful, she would be at it for years, not months. Moving on to adjacent segments, perhaps those more closely aligned with her values, would be a long way out in the future. Deciding early whether she wishes to commit to that path is important not only to herself, but to customers, employees, and investors.
Third, you are not ready to be in a startup if you can’t do the things you don’t want to do. Again, it’s not about losing the vision, but about flexibility, listening, and doing things you don’t want to do in the realization of the vision.
Our discussion ultimately led Carla and her team to choose a different segment for the opportunity side of the market, one that was more in line with her vision.
One way to help you narrow down which segments you should pursue is to create an opportunity matrix. List segments (or personas) as row titles and criteria used to evaluate segments as column heads.
For the restaurant example, we list the different restaurant segments down the left-hand column and the criteria we use to evaluate the segments across the remaining columns. We chose the following criteria:
Depth of pain—how bad is the problem we’re trying to solve for this particular segment?
Budget—can the segment pay for a solution?
Ease of reach—are they marketable through relatively easy channels?
Ease of MVP (minimum viable product)—do we think the solution is relatively easy or complex?
Values—how do we feel about serving this constituency?
Opportunity Matrix
The criteria you use are up to you and your business. Be sure to choose characteristics that differentiate the segments. If all evaluations for a particular criterion are high, then that criterion is not serving a purpose for this exercise. Other criteria might be:
Length of sales cycle—how long does it take to acquire a new customer?
Cost of sales—does sales require people on the street or is it online conversion?
Tech savvy—does the segment look for technology solutions to problems?
To be sophisticated about the approach, you can weigh each criterion. For example, depth of pain is most important, so the weight is 4 out of 1–4, but “ease of MVP” only weighs a 2. Then, you can score the criteria for each segment 1–4, 4 being positive, 1 negative. Finally, you can use a mathematical formula to determine which segment scores the highest.
The score for each row would be:
(scoreA × weightA/(Sum of weight)) + (scoreB × weightB/(Sum of weight)) + (continue for all columns)
In our example, we took more of a back-of-the-napkin approach, whereby we simply ranked each criterion H for high, M for medium, or L for low, and eyeballed which segment(s) appeared to be the one most worth pursuing. This exercise helps you identify the segment characteristics you need to validate—in other words, the values you’ve put into the matrix. Are they right? Go out into the market and speak to customers to find out.
Does the solo chef really have the highest pain? Is the solution the easiest to provide?
As you prepare to validate the assumptions captured in your personas and market-segment characteristics, prepare a list of five people or organizations you can approach for each segment.
In our first book, The Entrepreneur’s Guide to Customer Development, we go into detail on how to find, approach, and hold conversations with members of your potential market, but we won’t repeat that here. In a world where the number of connections required to reach anyone on Earth has decreased from six degrees to just five in the last decade, avenues to your customers are all around you.
Access your network through Twitter, Facebook, and LinkedIn.
Use alumni organizations.
Cold call.
Use the friends and family of your friends and family.
Visit online communities.
Visit offline meetups.
Use Craigslist.
Send out surveys.
Although we eschew airport business books and motivational speaking, there is credence to the clarion call “Just do it.” To be an entrepreneur you have to be willing to do the things you don’t want to do, to do the things that you don’t feel you’re good at, and to take personal risks that make you feel vulnerable. You must.
The way to get started is by creating tasks that are of a doable size. Looking at the success of big businesses may be inspirational, but the tactics we see them undertaking right now don’t represent how they got big. All big businesses started out small—by definition. You must start small, too! You can find your thousandth customer only after your hundredth, which came after your tenth, which came after your first.
You don’t need to draw up big strategic plans to find the first 10 customers that care about your product; you just have to go out in the big, bad world and find them.
So, what do they look like? If you don’t know, take a stab at describing one. Close your eyes and imagine them. This is the process of creating assumptions—guesses, really—that give you something to measure against when you go out into the real world. Then, go out in the real world and find them, and talk to them.