The Exchanges

Q Yeah. Okay. So to give people a little bit of a mon, framework of how to help them identify these narrow set of attributes, share some of the, like, a list of attributes to think about to help them narrow. And how many, how many, like, narrowing attributes would you recommend? Is it, like, roughly heuristically? Is it like three? Is it five? Is it seven?

A It's probably gets down to, yeah, it's more like seven. Rough, I mean, that's, you know, roughly, it depends. Um, what I, the way I think about it is kind of in these three groups. So there are inclusion criteria, there are exclusion criteria, and then there are, what we found is very important are triggers. So by inclusion criteria, this is usually pretty easy because the team is like, yeah, these are the people we want in the group, right? It's people who are taking specialty medications, um, you know, for these particular conditions. Like we can build that out. The exclusion criteria I find are Is a place to dwell and help a company really think that through a bit more to brainstorm that because as we talked about, it's harder for teams to set people aside. Right. And so it's thinking about like, what are reasons why somebody maybe is not the best customer here? Not yet. And that could be things that we talked about was maybe they have too much expert knowledge here. They're not really a typical person. That's not who I want to talk to. Maybe they're using a competitive product and they're already like locked into that. Like, I don't need to talk to them or they've had some other personal past experience. That's gonna just make them not a good candidate. Like I'm working on FinTech and this person is in bankruptcy or has had identity stolen. Like that's, I want to help them,…

AI assessment note: “It's probably gets down to, yeah, it's more like seven.”

Q most important thing you need to know. Here's how to do it based on all that time I've spent. Perfect. What are, what ROI we were providing here? Okay. So your book and your process is about finding a bullseye customer to help, help us understand what is a bullseye customer and in particular, how, is there any difference from how most people think of the ICP ideal customer profile?

A So a bullseye customer is the very specific subset of your target market who initially is most likely to adopt your product or service. And so compared to when we talk to founders about their ICP or the personas that they come with, this tends to be more specific even than they usually have gotten. Um, and the reason that this, this concept of bullseye customer has become so important to us is we've seen this as really key to accelerating teams. So everybody, every ambitious founder wants to build a product for everybody and we're, we're investors. So at GV, we want them to be successful and to have these huge markets. But it doesn't start there. So to build successfully, usually you have to be much more focused and much more specific. So you can look at lots of companies, right? Amazon started just selling books or Facebook was just profiles for college students, et cetera, et cetera. So helping founders be very specific about who are you going to start with? Who is the, that very distinct group that is most likely initially to adopt, um, helps streamline a huge number of things. So it helps you prioritize. What are you building? It helps you get really deep in understanding who are those people. And understanding what they need. It helps you prioritize the feedback you're getting. You're often getting just a ton of input from investors, from friends and family, if you're talk…

AI assessment note: “a bullseye customer is the very specific subset of your target market”

Q detail of each of these steps just so folks can basically, what I'm hoping to do is they listen, folks listening to this can do this tomorrow or next week. There's a little prep time. Before we get into each step, when do you recommend people do this? When in the stage of a journey? Can you do it like many times? Any just context there before we dive in?

A Um, you can do it many times. Um, the key times to do it is at a high level. It's before, hopefully, you've invested a lot of time into building something. A lot of energy and, um, the team's energy and money that goes into the building. So it's usually before you build something, maybe if you're expanding into a new group of customers, so you were killing it in the UK and now you're trying to get into the US market and that's different, or you worry it's different, or you're not sure it's a good time to check. Um, or maybe you were selling to enterprise. You're doing very like white glove, high touch sales to enterprise. And now you're, you're, You're gonna shift down to maybe a different tier of customers, and you're trying to set up some more of a self-serve kind of a, a sales motion. You need to understand that. Another common time is when you're selling, but it's like not, something's not going quite as well as maybe you hoped it was going. You've already launched and you want to, you want to just kind of troubleshoot, like what's going on? Like we clearly, this is, we have some traction maybe, but it's not what we wanted, or we're getting that kind of very polite, encouraging feedback, which is kind of a sounds good, but it's really no. Um, Let's go dive in and find out. So those are kind of the big key things of the times of when to do it.

AI assessment note: “The key times to do it is at a high level. It's before, hopefully, you've invested”

Q too much, because there's always, like, why would we exclude this big market opportunity? Like, why would it have to be, like, so narrow? Can you just speak a little bit to just, like, why it's so important to get very, very narrow? Someone once described it, Andy Johns, on a newsletter post I just, I wrote once, he described it as, it should feel comically narrow. Does that resonate?

A I love that. Yeah. I hadn't heard that phrase, but I love that. Yeah. Um, comically narrow is exactly what it is. And there are times that teams will just be like, Oh, for God's sakes, Margolis, like, just like, this is too much. The reason that I do that is I'm pushing them to identify a person who they all would agree. This person, if, if we present this value prop that we think we're going to build and this problem that we think we're solving, we are all convinced or, or it's our best guess. Like it's fine if you're not sure, but we're pretty convinced that that's the person who will say, yeah, I mean, like I need this thing. And so it's a way I'm kind of running an experiment, right? So it's a way to reduce variables for me. Um, and then to get that specific, and then I recruit a bunch of the people who match that very particular characteristics, set of characteristics, and they're still gonna, they're people, so there's still some variation, but it's a way for us to, to test that. Right? And if there's too much variation, then what happens at the end of the day, you're like, that was kind of a mush. Like, I don't, I'm not really sure what we learned. Like, was it because It was just people had mixed feelings or was it because there was just not enough consistency? Like we had too many variables in there. Like I don't know what we learned here.

AI assessment note: “The reason that I do that is I'm pushing them to identify a person”

Q Any other tips on this step for folks that are like, okay, I'm gonna try this myself. I'm gonna stop, start interviewing folks. Any other tips, anything else important you think is worth mentioning?

A Yeah. Practice. It makes a difference. It's, it's a hard skill. It seems like, oh, everybody talks to everybody, but it, it's different. When I do these and I've done, I've interviewed thousands of people at this point. Um, I have a different character mode that I put my head in, and so I literally, before I start an interview, I stop, I take a deep breath, and I kind of put on that smile, and I put on my listener character, where I, I'm embodying these things, this extreme curiosity, this focus on the person, um, this engagement, which is quite different from my normal kind of more cynical, skeptical You know, personality to the point where if my kids like have overheard, like, who is that dude? Cause that does not sound like dad, whoever is talking to that person. Um, but it's a different mode in my head where I'm in interviewer mode. And so you might, maybe that's just me, but you, you might develop kind of that other character, especially if you're a founder used to pitching, you can have your, your listener character.

AI assessment note: “Practice. It makes a difference. It's, it's a hard skill.”

Q product market fit feels like. You just, you know it. If you don't feel, if it's not obvious, then you don't have it. Okay. Michael, we did a lot of good work here. We've gone through the entire process, solved everyone's problems. Uh, I'm gonna skip the lightning round just to keep this episode shorter. Is there anything else that you want to leave listeners with before we wrap up?

A One thing I've been thinking about and, and, and recently getting to experiment with, which I'm pretty excited about, is to how to apply these methods in biotech. So, um, A big piece of the GV portfolio is in biotech, developing new therapies, new treatments. That's a very different looking kind of business than a lot of digital enterprise consumer kind of products that I work with. What I think is really interesting is as I work more with those people, and so those are years, right? And they're doing science. So nobody's calling me when they're doing science, like they don't need that help. They get to a point where there is some productization of it. You need to figure out like, oh, actually, how is this going to fit into a physician's workflow? How will patients react to this relative to some other possible treatment or other things that are out there? How do we Encourage more people to accrue onto a clinical trial. How do we think about a clinical trial as a product and, and streamline that and make sure we're targeting the right people and increasing the number of people who are getting on there. So what's been interesting is as I work with teams, I mean, talk about expert teams. As I talk to people who come kind of from that tradition, I don't know what else to describe it is. They don't, they're doing similar work, but they don't seem to describe themselves as product ma…

AI assessment note: “One thing I've been thinking about... is to how to apply these methods in biotech”