SaaS idea definition, part 1: Your Customers

There are 5 essential parts to a well-formed SaaS idea. This post helps you define your target customers.

This is a free 5 part series, taken from the opening section of my SaaS idea evaluation workbook, where we go through the process of concretely defining your idea.

There are 5 important parts to a well-formed idea:

1. Target audience. Who is your customer? (This post)
2. Problem. The specific problem you’re trying to solve.
3. Solution. how you will solve the problem.
4. Market. How ‘big’ is your market?
5. Business model. Simple revenue projection.

Define your target audience

Who has the problem you want to solve?

The more specific the group, the more effective your solution will be, for a few reasons:

1. It will be easier to reach your market. Imagine trying to reach “extreme sports enthusiasts” vs trying to reach just “surfers”.
2. Your solution will be more useful. For example, a trip planner specific for surfers can offer information about accommodation that has space for storing surfboards.
3. It is easier to find an underserved niche of a larger market, which very popular brands are ignoring.

This doesn’t mean you have to serve a “small market”. Your niche should be a subset of a much larger market so that your business has room to grow.

Examples:

• Strava: started with serving road cyclists only (and it only worked with a Garmin 305 cycling computer).
• Facebook: started with serving Harvard students only.
• Buffer: started with serving Twitter users only.

“When you have an idea for a startup, ask yourself: who wants this right now? Who wants this so much that they’ll use it even when it’s a crappy version one made by a two-person startup they’ve never heard of?”
– Paul Graham, Y-Combinator

Successful founders recommend this too.

Pieter Levels recommends starting with a micro-niche (for example, booking software for African hairdressers).

Arvid Kahl, in his book “Zero to Sold”, recommends going after a new niche, where “the problems there will be unique, exciting, and can usually be solved quite well if they are in a well-defined niche.”

Don’t miss the next part: defining the problem your SaaS is solving. Out next week in my newsletter.

Or get the whole SaaS idea evaluation workbook now. Only $9.90 and includes Google sheet and PDF templates. Get the eBook.