The cost of scaling non Ideal Customer Profiles
By all that is holy, please focus
Investors are not interested in where your company is today, they invest in the promise of where your company will be in the future. If you accept this assumption then you also have to consider whether everything you are today, a smaller version of the promise in the future... can scale.
Some stuff you can pay for easily as a small company but not as a big one. One of those is trying to retain customers that don't fit your Ideal Customer Profile and how much this might cost you.
Maintaining a long-term vision of your revenue can mean that you have to stop doing stuff that seemingly "works" now, even if it means you might pressure your short-term revenue.
Stop supporting customers that your product isn't built for. Focus on the ones that matter, the ones with the high LTV. Interview them, not the adjacents.
If you are a SaaS business that has almost no cost to serve think of your cost in terms of the opportunity cost - of building the wrong features with your product teams.
This is why you should show in your slides what you do for those that retain well, they have promise. I don't care that you had a nice growth hack that brought you 500 customers last year.
You won't be able to scale that. Retention you can. And if you can't measure your long-term retention yet define a proxy that is "proof" that they will retain:
Slack would say:"If 70% of the customers send 2'000 messages in the first 30 days we have product market fit (= retention)" It's a marathon. Put adjacents on life support.
#retention #scale