The Costly Trap of Appealing to Everyone: Why a Target Audience Wins
Learn why trying to please everyone will get you nowhere. Choose the right target audience and fight the urge to go after everyone.
Most startups begin with big dreams, high hopes, and an even bigger ambition—our product would be universal and appealing to everyone.
If there were ever a startup noob mistake 101, this is it.
And it sounds like...
"Our product is unlike anything else. It solves everyone's problems. So, we target everyone."
Sounds cute, doesn't it?
Six months later, you’re left scratching your head, wondering why you haven’t sold anything.
And so, a word to the wise: choose your target audience wisely, or you're doomed!
The first step towards that wisdom is not going after all.
Because if you cater to all, you cater to none.
If everyone is your audience, you're already a stat for businesses that didn't make it. You just don’t know it yet.
You can have the best product and a ton of resources at your disposal, but all that goes to the bin if you don’t focus and go after everyone.
If anything, it’s a mirage at best.
The ‘Everyone’ Trap
When starting out, it's pretty tempting to think, "Why not sell to everyone?"
The bigger the TAM (Total Addressable Market), the more dollars you can earn, right?
Money! Money! Money! 💰💰💰
Not so fast.
It might sound simple, but things don't work that way. This is what they like to call in Bizz, the ‘everyone’ trap.
When you try to appeal to everyone, you end up appealing to no one.
In addition, you position yourself to compete against everyone– a battle you can’t win.
Your message becomes so diluted that it's now more of a noise.
It’s so bad that some people even pay to phase out that noise. I did it with YouTube Premium.
Now, if by some miracle, even if you get users in, they won't do you any good.
You're looking at loops of bad feedback.
Your costs will increase. Your users will churn. Your motivation will drop. And eventually, your product will fail.
Disaster after disaster.
That’s my attempt to paint a grim picture of this ‘what if’ scenario…
But that’s just what happens on the outside.
This broad market fallacy also portrays a similar picture for your internal team.
Spoiler: your team will leave you faster than a cat at a dog convention.
Internal Effects of Choosing a Broad Audience
Here's what happens internally when you don't go after the right audience.
Product Marketers (PMM)
Forget about targeting everyone; even if you choose the wrong target audience, your customer liaisons will find your positioning and messaging not resonating with anyone. Low-quality random MQLs and SQLs will follow.
Growth Team
They'll find that customer acquisition costs (CAC) skyrocket and lifetime value (LTV) plummet. Users who do sign up won’t activate, and if they do, by any chance, it’ll be a churn-fest.
Product Managers (PM)
They’ll look at a mix of good and bad requests/suggestions, though mostly the latter. This will only lead to a poor product roadmap where you deprioritize the vital stuff. What follows is pivot after pivot to regain a sense of vision.
Engineers
Wrong inputs mean they'll create features that nobody will use. Soon enough, you're left with feature creep, leading to a bloated product.
Sales
Sales folks would find it hard to personalize paint points to sell because of user variety, each needing solutions to different problems with a different story. Conversions drop… if there are any.
Customer Support
They'll be looking at so many problems that they won't know which thread to follow.
Problems galore!
You don't have to guess what happens when so many things go wrong.
But it usually starts with people getting fired or abandoning the ship.
And that’s why less is more. But why?
Why Less is More ft. Target Audience
Call it the magic of specificity, but focusing on a narrower audience enables you to tailor everything to meet user needs.
Personalized marketing >>> Generic marketing.
When you talk directly to your target audience, you can speak their language, address their pain points, and offer better solutions.
Your resource allocation improves as there aren't too many fires to extinguish.
Oh, and in case you find something is not working, you can quickly pivot.
Here are some brands who've been there and done that.
Facebook (now Meta)
In its initial days (2004), Facebook was limited to only Harvard students. By 2012, they had 1 billion MAUs. Imagine if they went global on day 1, we'd still be using MySpace.
Uber
Uber launched in San Francisco, and city by city, they went global. And it took them just three years. Imagine if they launched globally on day. We’d still be standing on street corners, waving frantically for cabs that might never show up.
PayPal
Before finding a product-market fit with eBay sellers, PayPal only had around 10k random users. After they switched focus to only eBay sellers, their user base grew to more than 5 million within a year (1999-2000).
So, it's all about finding your niche and zeroing in on your best-performing segment.
Targeting all is the worst.
Targeting many is a close second (worst).
Generally, the narrower the target audience, the better.
Of course, there needs to be potential in the market with users willing to pay if you decide to go narrow.
So, how do you conquer the world when just starting out?
How to Capture Broad Audiences When Starting?
The answer to that question is simple.
Wedge!
Wedging means that to win the whole market, you must first capture a tiny part of it, enabling you to win it all.
This small part of the larger audience should have enough potential, with users willing to pay for your product or service.
So, what does a wedge look like?
This can be a product wedge, like PayPal becoming a consumer fin giant after initially focusing only on creating an online payments ecosystem for eBay sellers.
It could also be a market wedge, like Facebook, starting at Harvard before expanding globally. You can think of other examples, like Uber, Amazon, and Airbnb, that started locally before expanding.
Simple.
Though some might argue it’s no piece of cake.
Once you understand this, you’ll realize all your favorite brands initially catered to a small section (wedge) before expanding.
Here are some top brands and their wedges from Lenny’s article on picking a wedge.
So, to go to level 100, you'll need to grind the lower levels.
This grind finds its way through market and customer research, building feedback loops, and experimenting to the top.
Eventually, you’ll build something that a segment will appreciate and be willing to pay you enough to expand to a different segment as you grow.
And repeat.
Here’s a video of what wedge looks like in real life. It’s from the Sasquatch Music Festival 2009.
So, focus on one before going after many.
That’s why the great business sage Confucius once said,
The journey (of becoming a unicorn) of a thousand miles begins with that first Wedge.
Conclusion
The biggest disservice you can commit when starting is going after everyone.
By trying to appeal to a broad audience, you end up pleasing no one.
You must be meaningful to a few before you can serve many.
You do that by wedging!
Magic happens only after you identify and deeply understand a specific target audience.
That said, some folks still like to learn from their own experiences and still go after everyone. I believe there’s a meme that goes with it.
Get cooking!
PS: This is my first post on Substack. Phew! It just took me a couple of years. I’d try to do better than George R.R. Martin’s publishing strike rate.