What goes in an ICP
For a product sold to businesses, an ICP describes the company: its industry, size, location, budget, the tools it already uses and the event that makes it look for something like yours. For a product sold to people, it describes the person: their role, situation, habits and what they have already tried. In both cases it names the problem in the customer's own words.
An ICP is different from a buyer persona. The ICP says which companies or customer types to go after. A persona describes the individual inside that customer who finds, chooses or uses the product.
Building it from data, not guesses
Before you have customers, an ICP is a hypothesis, built from interviews and the people who join your waitlist. Once you have 30 or more paying customers, rebuild it from facts. Sort your customers by how long they stay, how much they pay and how easily they bought. The group at the top, the ones with low churn and high revenue who needed little convincing, is your ICP.
Most founders find their best customers are a narrower group than they expected. That is useful: a narrow ICP makes your message sharper and your channels obvious.
How it shapes a launch
Your ICP decides where you launch, what your tagline says and which features you show first. A developer tool belongs on Show HN and developer directories. A tool for accountants belongs in the communities and newsletters accountants read. Write the tagline so the ICP recognises their problem in it straight away.
Example
A reporting tool has 80 paying customers. Thirty are marketing agencies with 5 to 20 staff. They pay $79 a month on average and churn at 2 percent a month. The other 50 pay $25 and churn at 7 percent. The founder rewrites the ICP as small marketing agencies, changes the homepage headline to speak to them and launches in two agency communities next.
Questions people ask
- How many ideal customer profiles should a startup have?
- One to start with. A second ICP splits your message, your product work and your marketing budget. Add another once the first one brings growth on its own.
- What is the difference between an ICP and a target market?
- A target market is everyone who could buy. An ICP is the narrower group inside it that buys most easily, pays most and stays longest.
Related terms
- Go-to-market strategyA go-to-market (GTM) strategy is the plan for how a product reaches its first customers: who you sell to, the problem you solve for them, how you price it, the channels you use to reach them and how you will measure it.
- Product-market fitProduct-market fit is the point at which a product satisfies a strong demand in a clear market: people use it, keep using it and tell others about it, so growth comes from demand rather than from pushing.
- Early adopterAn early adopter is someone who tries a new product soon after it appears, accepts rough edges in exchange for solving a problem first, and often gives the feedback that shapes it.
- Customer lifetime value (LTV)Customer lifetime value (LTV) is the gross profit a business expects from one customer over the whole time they stay. For a subscription it is usually average revenue per account × gross margin ÷ churn rate.
- TaglineA product tagline is the short line that says what a product is or does and who it is for, shown next to its name on launch platforms, app stores and directories.