The Bullseye: Knowing Your Target Audience

Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.

Knowing Your Target Audience

Knowing the audience for your business, your web presence, and your content can help you to achieve your goals
. Here’s a hint: your target audience isn’t everyone.

While most of us would love to run a business with such widespread appeal that everyone comprises the target audience, that’s generally not the case. Running your business as though it were can be dangerous.

Determining the true composition of your target audience is necessary to ensure that your offerings align with their needs. By focusing on those individuals most likely to desire your products or services, you can focus your energy on maximizing your marketing, honing your products and services, and seeking appropriate feedback.

What Does a Target Audience Look Like?

Let’s assume that we’re thinking of starting a printing business. Who might comprise our target audience?

If you’re planning on maintaining a brick-and-mortar location, then you might decide to target both consumers and businesses. However, narrowing it down to those two groups isn’t sufficient. A properly identified target audience should be more specific. Winnowing the field will enable you to focus your efforts on attracting (and retaining!) those potential customers and help increase your chances of success.

For a location-specific business, a target audience should be restricted to the specific geographic area of operation. So, our print shop’s customers will be from a specific city or county. For our example, let’s use Orlando.

How else can we pinpoint our target audience?

Before you can begin to focus on the intended market for your products and services (your unique value proposition), you need to have a clear understanding of the problem you’re trying to solve or the need you’re trying to fill for your prospective customers.

Our print shop is aiming to serve consumers and business clients in the Orlando area. What kind of services are we planning to offer them? Here’s where our market research will come into play.

Suppose we learned that many consumers prefer to make their own copies. We can offer a self-serve area, as well as the ability to send a document via a website form to create copies for later pickup. Additionally, university students in the area frequently use binding services for their theses and professors appreciate the ability to create course books for their classes. Since the location is within walking distance of a university, these offerings will capitalize on a nearby market.

While it’s useful to make offerings such as these available, they aren’t really sufficient to keep our business going because they represent infrequent activities. While students may desire printing and binding services for their theses and dissertations, they may only seek those services in the May or June timeframe. Likewise, professors will only want course books prior to the start of semester.

Business clients, on the other hand, are more frequent customers of print shops. Therefore, while having services available for consumers, a B2B model that focuses on local or small businesses as a target audience may be more successful.

Narrowing Target Market

Now that we’ve decided to primarily focus on other businesses, while still offering printing services to consumers, how can we further narrow our target market and create a buyer persona? There are plenty of small businesses in Orlando – which ones shall we target?

Firstly, consider which small businesses most require our services. Then, think about the values which those businesses may possess.

For our print shop, we may seek to identify businesses with frequent printing needs such as realtors and restaurants. If our aim is to serve local businesses, it may be that our target market is further reduced. However, many cities have networks in place to support small, local businesses. These networks may sponsor a monthly meeting of business owners or an online presence that helps to connect those individuals enriching their communities through business. Resources such as these are a great way to get acquainted with our target audience, learn more about their needs, and directly offer them services to aid in establishing and promoting their businesses and brands.

Just like that, we’ve found our target audience. More specifically, we’ve found one of our target audiences. Chances are, with a little more time and effort, we could identify several more markets that would benefit from our business (for example, local music promoters).

Analyzing Buyer Personas

One of our buyer personas might look like this:
A local restaurant owner in the Orlando area who values supporting other small businesses and is in need of vendor triplicate forms, seasonal menus, business cards, and promotional materials.

Another one might be:
A local Orlando real estate agency that values supporting small businesses and is in need of business cards, sell sheets, signs, brochures, and other marketing materials.

Now that we have our target audience and buyer personas, we can dedicate our efforts to converting those clients by differentiating ourselves from other print shops. Rather than just placing an open sign in our brick-and-mortar window, we can network, offer discounts, and actively market our business to our target audience.

As you’re thinking about your own target audience, keep in mind the following questions:

UVP and Needs: What is my unique value proposition (product or service) and what needs or desire will it fill?

Geography: Where does my target audience live? Are they local, statewide, national, or global?

Type of business: Are my products and services intended for consumers or other businesses?

Competition: Who is my competition? Who is my competition neglecting? How can I differentiate myself from the competition?

Demographics: Is my product or service only intended for a particular demographic? (For example, Spanx focuses on women who would like a leaner profile.) Consider age, sex, education level, income level, occupation, marital status, family status, etc.

Psychographics (Attitudes): What opinions, values, or ideals do my potential customers hold? (For example, customers of Whole Foods may place a greater value on organic food than other customers. Customers of Walmart place a greater value on cost savings.)

This should help you achieve a better picture of your target audience, allow you to refine your services as necessary, and aid in pinpointing your marketing to more accurately hit the spot.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.

Is a Lean Startup For You?

Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.

Entrepreneurship and business are replete with associated jargon: value-add, competencies, SMART goals, etc. One term that has been floating around for the past few years is ‘lean startup’ – and it’s no wonder. The phrase is enticing and so are the ideas behind it.

At first glance, you may think that adapting your business idea to the lean startup model is the best path to take. After all, starting with minimal financing seems ideal and you go to market quickly, but is it in your best interest long-term? Also, can lean startup strategies be applied to bring services to market rather than products?

Defining the Pros and Cons of ‘lean startup’ business methodology.

In this post, my goal is not to take a position on your use of lean startup principles, but simply to provide you with information. Once armed with this information, you’ll be able to determine whether the lean method is appropriate for you.

 What is a Lean Startup?

In 2011, Eric Ries published The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. His goal was to illustrate that there was a quicker, data-driven way to get to market with a product and hopefully increase the chances of entrepreneurial success.

Now, countless companies have popped up to assist those looking to build a lean startup. By assisting with business model canvases, marketing, etc., they’re capitalizing on the popularity of the lean model with business services, conferences, and speaking engagements. However, few thoroughly explain the concepts behind the model and plenty of myths abound in that vacuum.

At its core, the lean startup focuses on data-driven results.

Many articles call it “scientific”, though a better term is probably “analytic”. Entrepreneurs are tasked with identifying a need or solving a problem. They then produce a minimally viable product to take to market for customer feedback. That feedback is analyzed to either hone and create future iterations or to completely scrap the project.

To some extent, the lean startup follows the “fail fast” method.

Get your product out as quickly as possible and determine whether people want it. If not, fix it or close up shop. All of this is accomplished while avoiding large expenses in the research and development phase. While this certainly saves money and time, it may also lead to missed opportunities and insights.

The lean startup proposes an iterative process.

The three general principles mentioned above work in a cycle and drive further development and innovation.

Source: http://theleanstartup.com/principles

Build: Minimum Viable Product

Normally, businesses spend a great deal of time designing, manufacturing, and testing their products before going to market. The lean startup model suggests that entrepreneurs should trim this lengthy process by focusing on the minimum that a product requires to function and sell – the minimum viable product or MVP. Once the MVP is on the shelf, customer feedback can work its magic to let you know how users feel about it.

Measure: Customer Feedback

Customer feedback is a necessity for the lean model to work effectively. Once you have your minimum viable product, it is necessary to take it to market. Customer feedback about features, usability, manufacturing – anything, really – proves to be an essential driver of future iterations. The more feedback, the better.

The basic concept at work here is that customer feedback will inform future product iterations, thereby making it more successful. This is at odds with the traditional product development paths of beta testing and focus groups. Rather than having a small pool of initial users, the lean model serves to broaden the market considerably.

Learn: Analyzing Data

With the customer feedback, as well as your sales numbers and manufacturing costs in hand, you can begin analyzing your data to determine the changes required to make your product more successful. Rather than working in a corporate vacuum with only a few people generating ideas, you’re working with ideas from real users who may be able to pinpoint certain value-adds you hadn’t yet considered.

Not all feedback will be useful or possible to integrate into future iterations, but the hope is that there will be some consensus reached or striking new ideas broached as a result of utilizing this method.

Benefits of the Lean Startup

The lean model has introduced ideas and terminology to the business conversation that have become part of the common lexicon and are now being used by many entrepreneurs, regardless of whether they follow the lean model.

The lean startup model is believed to save time and money. By going to market quickly with an MVP and harvesting the feedback, you’re learning whether people are actually willing to buy your product without spending months (or years) and tens of thousands of dollars on research and development to create an amazing product that you love and no one else wants.

A lean startup can usually be gotten underway with a smaller investment, though that isn’t always the case. While “lean” may imply “low budget” to some, plenty of lean startups require outside starting capital and cannot be bootstrapped. Thanks, however, to the basic concept of getting to market quickly, less capital is required to produce a product when compared with those companies following a more traditional path toward production.

Although the lean startup seems particularly well-suited for internet and software companies, Eric Ries argues that any company can use the methodology to learn more about what consumers actually want in a product. It appears as though the ideology behind the lean startup can even be used to offer services at a local business level, so long as you’re willing to solicit customer feedback and implement any necessary adjustments.

Possible Issues with the Lean Startup Model

By relying on a customer feedback cycle, more long-term ideas may be missed.

Consider the device on which you’re reading this article. Had potential customers been interviewed and asked decades ago about the product, what would they have most likely said? Many would’ve had difficulty imagining something like a smartphone, tablet, or laptop and just how integral to our lives those devices would eventually become.

The lean startup model may not be the most appropriate way for certain companies to go to market. Companies that revolutionize particular products or methods must also convince customers that they need those new products or methods and that they provide inherent value. For example, polling consumers decades ago as to whether they’d be interested in buying books online, they might have stated that they could simply go to the bookstore. If Jeff Bezos had listened, Amazon might not exist today.

The lean model seems to apply best to products or services where a market already exists, rather than for revolutionary new ideas.

It’s clear that the lean startup model isn’t for everyone. In fact, it seems more geared toward the tech sector. If the lean startup model seems like a fit for your company and product, great! Go for it! If the entire model isn’t for you, consider that there may be aspects of it which can help you propel your business idea forward. Use what you can and discard the rest.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, having one amazing wife and father of six wonderful children make him an incredibly blessed man.  He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.

What are the Biggest Fears Entrepreneurs Face

By Joe Johnson, PhD
Entrepreneur. Investor. Startup Expert.

There are many emotions connected with starting a business for the first time. I remember feeling excitement, anxiety and liberation when imparting on my first entrepreneurial venture. But fear is also a very common experience and it can be so stifling that it prevents a new venture from getting off the ground. Read on to find out if you are experiencing the fears most common to new entrepreneurs. Then learn why you shouldn’t let them stop you.

Entrepreneurship and the Fear of Failure

Fear is an inherent part of entrepreneurship. It is a phenomenon that is embedded into everyone’s subconscious self and has a great impact on decision making. Within the business world, the most common fear is the fear of failure (Bosma et al. 2008). This concept includes the instinctive assessment of threat in apprising situations where there is a chance of failure (Conroy 2001). This fear ultimately stops many promising entrepreneurs from launching startups.

A study conducted by the Global Entrepreneurship Monitor showed that nearly half of the UK population identify fear as a barrier to starting a business. It is clear that while many people have great business ideas and potential, there’s a psychological wall that is keeping some budding businesspeople from taking the plunge.

What about failing is so threatening to people?

Most Prominent Types of Fears

While the fear of failure is the most common for entrepreneurs, fear can be broken down and analyzed further. In the report of the FACE project Delphi Results, Dr. Jan Brinckmann broke down the fear into categories based on her study. Do any of these ring a bell for you?

Financial Related Fears

Financial loss is a primary fear in entrepreneurship because of the wider implications involved. Losing money can mean making material sacrifices, but can also impact the home and any other assets one owns.

Bankruptcy is feared by any entrepreneur because it not only has the ability to collapse the business, but affects credit and future opportunities. According to a survey by Gallop Business Journal, a massive 87% of Americans prefer the security of a steady income, something that is not guaranteed when working for oneself.

Career Related Fears

Building a career takes time, dedication and sacrifice. Fear of losing one’s long term efforts by attempting to start a business only to fail, is another category of fear common amongst entrepreneurs. It can be demoralising or even impossible to return to a previous job should the new venture not work out. Nobody wants their professional achievements and academic successes to be in vain.

Competence Related Fears

Incompetence is a third common fear. It’s important to have the right resources, information, knowledge and abilities to be able to start up and keep afloat a small business. A lack of any one of these would surely impact the success of the business negatively.

According to a survey, 49% of Americans feel they have a good business idea but don’t know where to begin. During the startup process, many entrepreneurs may feel isolated from the industry, with very few contacts or connections to turn to. Fear of this incompetence stops some entrepreneurs in their tracks. These are thoughts like “I don’t know what I am doing” or “I am not entrepreneur material”.

Loss of Freedom Related Fears

Starting a business takes time, money and energy. A person who is considering this venture often becomes fearful that financial freedoms and social engagements will suffer. For any social butterfly, this threat can be enough to distance the thought of becoming an entrepreneur in the first place. When surveyed, 47% of Americans felt that work-life balance would be a concern when beginning a business.

Social Perception or Embarrassment Related Fears

‘Social perception fear’ can involve a preoccupation with what others think of the business itself. It can entertain an anxiety that the business idea might be perceived as crazy, out of touch or too far afield. Plus, if it fails or struggle, the fear of embarrassment can be overwhelming.

Friends and family may fuel this by casting doubt on the venture, or even mocking it. Another layer of this is the fear that the entrepreneur will be seen as a failure if the venture does fail. This fear is compounded if friends and family invest in the business.

These are the most common fears face by entrepreneurs and as you can see, they are all variations of different types of failures such as being ill equipped, losing things you care about, and being seen as a failure. Agreeably, these are undesirable outcomes that anyone would want to avoid.

I can personally relate to all these fears. My first major entrepreneurial failure came when I was 21 years old. I have experienced two other major startup failures in my entrepreneurial career. However, the key is to overcome these fears, even if they are real fears.

If you do, it could also result in the exact opposite of these fears, which could mean more freedom, more success, more competence, and taking your career to a level that you never may have reached otherwise. How do you get a hold on fears in order to overcome them?

Factors that increase and reduce entrepreneurial fears

Factors that Increase Fears

The study by FACE (Entrepreneurship Failure Aversion Change in Europe) has shown that there are some significant factors that lead to an increase in the aforementioned fears. These are good to know in order to help you identify if you are at a higher risk for fear so you can identify and overcome it.

A person with family responsibilities such as dependents, is far more likely to be fearful of starting a new business. A lack of personal finances to invest into the startup is also cited as a top fear, as well as a lack of support or encouragement by immediate family members. The end result that is most terrifying to new business owners is that they could end up without any money, which in turn leaves their family to suffer. These fears, while understandable, do not have to be debilitating.

Factors that Reduce Fears 

On the other hand, these factors contribute to the reduction of fears. The FACE study also showed that early wins can be the stepping stones to further success. This means creating simple short term goals which, once achieved, can be expanded into bigger ones.

Another top fear reduction factor is the importance of a supportive family. This assists in the development of confidence and a sense of safety. Lastly, it is important to understand that failure is in a startup venture is okay. It is not only okay, it is often instrumental to success.

For example, many of my biggest successes have come after major failures. It is through failures that I have been able to learn and improve my skills and ultimate results. This is one of the biggest lessons entrepreneurs have to accept. The entrepreneurial mindset should be a learning process, not a one-time shot.

In fact, Silicon Valley venture capitalists see failures as an asset, not a liability. It may be the only place on earth that sees prior failures as a good thing vs. a bad thing, but they have figured out that their capital gets a better ROI with entrepreneurs who have gone through the process of failure than people who haven’t. When I invest in a new startup, I want to see if the entrepreneurial leader has gone through major failures and what he or she has done to learn from them before I decide to invest in their new idea.

Understanding that failure is often part of the process and that it can lead to better things is important in reducing the fear of failing. Take it from Winston Churchill who said

“Success is the ability to go from failure to failure without losing your enthusiasm.”

Moving Past Your Fears

Fear is a normal and necessary emotion but it can also ruin a new business before it has even started. Or worse, once it has. But fear can be turned around and used to a person’s advantage. Small goals, family support, and an understanding of how failure can be a stepping stone, can slowly reduce fear and assist in developing a more stable and successful new startup.

In my next post, I will share strategies that you can apply based on my own experiences as well as research from others in the field. Learn how you can reclaim your goals from the fear holding them hostage.

References

Arnaut D, Ergun U. (2015) ANALYSIS OF FEAR AS BARRIER TO ENTREPRENEURSHIP. International Journal of Economics, Commerce and Management. United Kingdom

Bosma, N.S., Jones, K., Autio, E. and Levie, J. 2008.Global Entrepreneurship Monitor; 2007 Executive Report, Babson College, London Business School, and Global Entrepreneurship Research Association (GERA)

Brinckmann, J REPORT OF THE FACE PROJECT DELPHI RESULTS. FACE Entrepreneurship Failure Aversion Change in Europe.

Bharadwaj Bada, S and Ott, B. Many Potential Entrepreneurs Aren’t Taking the Plunge. (Online). Available at http://www.gallup.com/businessjournal/181592/potential-entrepreneurs-aren-taking-plunge.aspx (accessed 1 August 2016)

Conroy, D. E., Kaye, M. P.and Fifer, A. M. (2007). Cognitive links between fear of failure and perfectionism. Journal of Rational-Emotive & Cognitive-Behavior Therapy, 25, 237-253.