So, I listen to a lot of pitches. One thing that I notice frequently is that there are pitches that are a business, and pitches that are 3 side hustles in a trench coat. This is a little hard to describe, but you know it when you see it. It’s the B2B company that nonetheless has a B2C social media application tacked on. Or the product that does everything.
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Lately I’ve been seeing this archetype a lot with software for the trades - I suppose in part because that demographic is underserved, and a number of AI juiced founders are trying to serve it now. The pitch goes like “We’re accounting software for X (let’s say plumbers)! Also, we do scheduling, and payroll, and marketing, and websites, and sales tracking, and we’re a CRM.”
Woah woah woah, that’s a lot! It sounds impressive right? But they you get into the details, and you find that Customer A uses just the marketing and website, while B uses scheduling and sales tracking, and C uses the accounting and payroll. That’s not one product, that’s 6, and we’ve just seen 3 non-overlapping ICPs! And in these cases, it’s usually a pretty lean team addressing all of this. AI or not, the team has to pick and choose their battles - who’s worth the most, A, B, or C?
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I see this most often with mobile apps, but it doesn’t stop there. Someone has a great B2B software idea, or a great B2C one. Or maybe they’re working on some interesting new IoT device. But added on to this is a mobile app, frequently a social media app.
An example might be, productivity tech. You’ve got great software for managing AI agents. But then you also throw in a mobile app where your customers can swap tips and tricks related to how they’re using the app.
I want to be clear, there’s nothing wrong with this as an idea. It’s very reasonable. Create a community, which creates lock in through human connection. Nothing shocking here. But first off, it’s a wholly different business, with different ICPs! In this case, you might actually be selling to business admins, but the app users are more likely to be the regular users of your software. And second, non-users of your software might have needs in the app too!
So what does this mean? Again, a proliferation of ICPs. Again, choices - do we service product and ICP A, or product and ICP B?
So what’s the conclusion here? Well, businesses have ICPs. No surprises there. That means if you have multiple businesses, you’ll have multiple ICPs. That also means that if you have multiple ICPs, you’re probably actually sneakily building multiple businesses within your business. And that might sound well and good, but you probably have a team right-sized to build 1 business, not 3. You don’t get extra credit or a higher valuation just because you’re marketing and selling to more people - you just have higher cost in marketing, sales, product, technology, support, and more, and higher risk.
Look, there’s nothing wrong with being ambitious. Articulate an ambitious vision. But go after that vision one step at a time - don’t try to build at scale with an unscaled team or unscaled finances. It’s risky, and it’s not profitable.