Lately I've been working with a group of investors who are bringing me in to hear pitches from entrepreneurs looking for seed round funding. These budding entrepreneurs are smart folks who have an idea and a partially built product and now they need help getting it to market. Help can come in the form of people or money or both.
From my marketing viewpoint, the biggest hurdle I see these startups face is that they fall for the trap of the big addressable market. They think that the best way to capture a large number of customers (and enjoy the dollars that come with that), is to be everything to as many people as possible.
For example, you are building a product for system administrators. Sound good at first, because there are tens of thousands of system administrators, so your market potential is huge, right?
But when you start thinking about how you are going to get your first 100 system administrators to buy your product, this huge market starts to make things difficult. Where do you start? What do you talk about? What pain points are you addressing? Most startups try a spray and pray approach, but they don't have much ammunition to spray because of limited time and money, so at best they end up with a few lucky hits.
Contrast that with a startup that does enough customer discovery to realize that the system admins that have decided to buy their product are folks who work in companies with less than 100 employees (i.e. small IT teams) that are using X product which is causing them lots of pain. Knowing this, your job as a marketer just got a lot easier. You now can drill deep into that segment, understanding where they gather (user groups, online discussion forums, particular industry events), how they are influenced (peers, particular blogs, their boss, etc...) and what criteria they use to decide what to buy.
The problem with doing this (and why most startups don't) is that it's scary to say no to potential business. By focusing on companies with less than 100 employees, you are taking your attention away from large companies. That is true, but you are not saying no to them forever, you are saying no to them right now.
This idea is not new (read Crossing the Chasm, for starters) but it's one that startups trip up over again and again. Dharmesh Shah, co-founder of HubSpot, describes this premise better than anyone I know. Hubspot started off doing one thing well for small and medium sized businesses. They built on this success to broaden their offering and target different customers but it was years in the making.
Go out and talk to people in your target market. Find out which ones are most likely to switch and why. Make sure that that market is big *enough* to generate the revenue you need, and then double down on your marketing efforts to get in front of more people like them.