Finding your goldilocks target market

As I'm working on narrowing down my target market, here are some notes that I've written down from the process.

Finding your "goldilocks" market:

• Not too large: You can't cater to everyone. You can never make everybody happy, and if you go too large, you're losing out on some valuable differentiation that would help with marketing and word of mouth.

• Not too small: it needs to be easy enough to find leads for your sales funnel.

The most common mistake in my opinion: targeting a market that's too broad. Narrow it down, and then when you think it's narrow enough, narrow it down further. You can always go broader later once you've secured a beach head piece of the market.

Example: suppose you're building a time tracking tool. Who are your customers? "Freelancers who need to track their time". Too broad. Narrow it down. "Graphics designers who need to track their hours." Better, but still too broad: there are tons of time trackers out there. And there are tons of graphics designers. How about "Graphics designers who are X" or "Graphics designers who do Y"? Now you can start to really connect with who your customers are, what their specific pain points are, and how you'll solve them.

The second most common mistake is targeting a market that isn't going to spend money. But, most of the time this is disguised as "we chose a market that's too small." In reality, your market probably isn't too small, but rather, you're solving a problem that isn't enough of a pain point for customers. They're not passionate enough about what you're doing. So actually it's the opposite: you chose a market that's too broad and/or a problem that's too bland.

Related ideas:

• It's much better to find the small group of customers who will passionately love your product than to put your product in front of a million people who won't care.
• Charge more. Prefer to have fewer customers, at a higher price point.
• Many businesses can succeed and be very profitable with the proverbial "1000 true fans" instead of trying to take over the entire world.