(2024-05-19) Posthog Creating An Ideal Customer Profile Transformed Our Company

PostHog: Creating an Ideal Customer Profile transformed our company. Defining our ICP is the most important thing we ever did

This week’s theme is: Everything you need to know about finding your ICP

1. ICP and personas aren’t the same thing

An ICP can include individual personas, but it should also include things like: Company type (startups, mid-market, etc.)...

Personas, on the other hand, describe the motivations and frustrations of specific users.

2. Your entire strategy (strategic context) is downstream of your ICP.

An accurate ICP will define not just which customers you target, but every aspect of your product and go-to-market strategy. It’s the sun around which product, marketing, and sales orbit.

Your ICP will influence every decision you make.

3. Start with your best guess and test it

our first ICP was broken down into three categories:
Things our customers need
Things our customers have
Things our customers don’t need

This lacks a few important details you need for a complete ICP, such as company size and revenue, but it was specific enough for us to test and refine later.

Lenny Rachitsky notes that most companies he spoke to had just three attributes in their initial ICP

4. Gather intel every way you can

It should go without saying that defining your ICP requires talking to users a lot. Write everything down

Other ways of gathering intel include: Asking questions at signup; Comparing retention between different types of companies and users. (list)

5. Learn to identify real enthusiasm

Look for people / companies who:
Show visible excitement when you demo the product.
Strongly agree when you describe the problem you’re solving.
Constantly give you feedback on things you can improve.
Spontaneously invite colleagues to your demo / to use your product

Signs your ICP is wrong include people who:
Describe your product as “interesting”, “cool”, or “clever”.
Use your product to do something unintended (investigate further).
Use the product but, when asked, state they wouldn’t pay for it.

Why is this important? Most people are polite, so they will let you down gently

6. Add more detail as you build confidence

As you talk to more users and gather more intel, you should add more detail until your ICP feels very narrow.

You can be confident your is correct when users in your ICP activate and retain better than those outside your ICP. If they’re still quite similar, you need to get more specific.

7. Remember these rules

A broad ICP is worse than none at all

Leaving it too late will cost you time

It will take you months to perfect your ICP

Don’t jump to conclusions

Don’t undervalue cold outbound

On the other hand, if you get a warm intro, people will take the call and maybe ask for a demo. It’s very non-committal and vague