The document discusses choosing target customers for products by categorizing them as elephants, deer, or rabbits. Elephants are large customers that demand a lot of resources but could feed you for a long time if caught. Rabbits are many small customers that are hard to catch but need to catch many to succeed. Deer are generally a good size for startups as they provide enough value without being too demanding. The document advises product managers to understand their ideal customer size, help their organization stay focused on core features for that segment, and periodically analyze features serving the right customers.

1. ELEPHANTS, DEER & RABBITS
CHOOSING THE RIGHT CUSTOMER FOR YOUR
PRODUCTS
AUG 14TH, 2016
Presented By: Andy Wadhwa

2. About Me
2
• Product Leader w/ 10+ years experience
• Mix of consumer & enterprise software at startups and mid-size companies
• BA in Computer Science & MBA

3. Overview
3
• Why choose a target set of customers for your product?
• How to think about your customers in animal sizes?
• How to apply this concept in your role as a Product Manager?

4. My friend Paul at his startup
4
Me: How are things coming along with your new app?
Paul: Great! We are getting ready to launch it next week. My team and I am really excited!
Me: Awesome! So tell me more about who this app is for?
Paul: Any company that wants to boost the productivity of their employees. Our app
provides a set of really slick features that improve communication in general.
Me: So is it for startups, mid-size or large companies?
Paul: Ummm… I’d really love to sign a deal with a 10,000+ employee company but I’ll take
any deal that comes my way initially. We’ve got a killer product and I can’t wait to sell it.

5. 3 months later…
5
Me: How did the app launch go?
Paul: It went well! We also signed up a large customer right after we launched.
Me: That’s great news!
Paul: Yes, though its been quite a lot of work. We are serving a department with 2500
employees and there are just 6 of us. We received a number of feature requests & SLA
requirements that my team is working to address in the product.
Me: Seems like they are pretty demanding.
Paul: I know. But once we make this customer happy, they will be a great reference to bring
in more large deals.

6. Hunting the right customers
6
• Trying to satisfy the needs of all customers is ineffective
• Pick a target market to hunt down without overdoing the research
• Elephants – large customers who will push you around
• Rabbits – small customers who are price conscious
• Deer – in the middle between elephants & rabbits

7. Elephants
7
• Kill one & they feed you a long time
• Very tempting to hunt down.
• Hard to catch
• Hunting uses up a lot of resources
• You can starve if you don’t end up hunting
one.
• Conversely, if you catch one it could be
even worse
• Examples – IBM, SAP, Oracle

8. Rabbits
8
• Lots of them & they seem to be
everywhere
• Scatter and run away when you try to
catch them
• Need to hunt down a many of them to
feed you
• Examples – GoDaddy, Intuit, Zoho

9. Deer
9
• Plenty of them to catch
• Enough meat to make hunting them down
worthwhile
• Not as demanding to hunt down as an
elephant
• If you catch several of them, then you are
not beholden to any individual one
• Generally, good size for a startup
• Examples – Zendesk, Marketo, Gooddata

10. Building a $10M business
10
ARPC
(Annual
revenue/cust
omer)
# of customers
$100
$10,000
$1,000,000
10 1,000 100,000

11. What can Product Managers do?
11
Regardless of whether you work at a startup or larger organization, as PMs, we are in a
strategic position to influence what customers to go after.
Here are 3 steps towards building products for the right set of customers:
1. Understand what size customer is ideal for your target market
2. Help your organization stay focused
3. Analyze the features in your product periodically

12. Step #1 - Understand what size customer is
ideal12
• Deeply understand the problems of each customer segment
• Dig deeper than the size of the animal if it makes
sense
• Determine what features will resonate
• Develop go to market strategy
• Each segment requires different sales, market and product
development skills to be successful
• If you are an early stage startup, force yourself to pick one
segment to go after

13. Step #2- Help your organization stay focused
13
• A common mistake is building a product that
meets 80% of the needs of different segments
• Focus requires saying “no” to some highly
attractive customer opportunities
• Stick to building the 2-3 core features that
customers “really” need
• Painkillers vs Vitamins

14. Step #3 – Analyze features in your product
periodically14
Beware of these
customers
Source - https://blog.intercom.io/prioritising-features-wholl-use-it-how-often/

15. Bene
15
Benefits of hunting the right
customers
• We can better articulate the specific needs and pain points of our target
market
• Product roadmap planning is more effective
• Faster time to value on new products & features
• We can be more proactive in anticipating how the customer’s needs are
going to evolve with time
• We can better position the messaging of the product to the target audience
Saves Time + Effort + Money

16. Bene
16
Thank you
References
• Both Sides of the Table Blog by Mark Suster – https://bothsidesofthetable.com
• Intercom Blog - https://blog.intercom.io/