Ideal customer profile for B2B SaaS: go narrower

Most advice on an ideal customer profile for B2B SaaS tells you to list industries, company sizes and job titles. For a first-year product, that profile is too wide to act on. A useful first profile is narrow enough that you can name every company in it, find the person to write to, and talk to all of them within a quarter.

This post makes that case with three pieces of evidence: how a well-known startup grew from one small group, how one product team raised its fit score by changing who it served, and how few buyers are ready to buy at any one time. Then it turns the thesis into a short routine you can run this week.

The usual ideal customer profile is a filter, not a target

A typical profile reads like this: software companies, 10 to 500 employees, in North America, where the buyer is a head of operations or marketing. It sounds focused. In practice it describes tens of thousands of companies that want different things, buy in different ways and talk in different places.

A profile that wide does one job well: it tells you who to ignore. It does not tell you who to write to on Monday morning, which threads to read, or what words your buyers use for their problem. Those are the questions a founder with no customers has to answer, and only a narrow profile answers them.

The test is simple. If you cannot write down the names of the companies that fit, the profile is still a category, not a customer. Wide profiles also hide the most useful signal you have early on: which small group already cares a lot.

Evidence 1: small markets that feel made for them

Paul Graham, who co-founded Y Combinator, describes this move in his essay on doing things that do not scale. He says the most common unscalable trick is to focus on a deliberately narrow market, and he points to Facebook. At first it was only for Harvard students, a potential market of a few thousand people, and because they felt it was made for them, a critical mass signed up.

The same essay describes how the Stripe founders recruited early users by hand, inside the pool of other companies that Y Combinator had funded. That pool was a narrow, named list of companies with the same problem. The lesson for a B2B founder is that a small group which feels the product is built for it gives you something a wide market cannot: users who talk to each other and to you.

Evidence 2: one team raised its fit score by changing who it served

The second piece of evidence is about measurement. Sean Ellis asked users how they would feel if they could no longer use a product. After benchmarking nearly a hundred startups, he found that companies with strong traction had more than 40% of users answer very disappointed, and companies that struggled almost always had less.

Rahul Vohra, the founder of the email client Superhuman, wrote in First Round Review how his team used that survey. In the summer of 2017 only 22% of its users answered very disappointed. The team then assigned a persona to each respondent and narrowed the market to the personas that loved the product most.

That one change, made before any new feature, moved the score to 33%. Within three quarters of product work aimed at that group, the score nearly doubled to 58%. The first gain came from deciding who the product was for, not from building more.

Evidence 3: few buyers are ready to buy right now

The third piece of evidence is about timing. Writing in Marketing Week in 2021, Peter Weinberg and Jon Lombardo of the LinkedIn B2B Institute shared research with Professor John Dawes of the Ehrenberg-Bass Institute: only 5% of B2B buyers are in-market to buy right now, and the other 95% will not buy for months or even years.

Their example is business banking. Research they cite shows 80% of companies switch business banks once every five years, so only about 20% are likely to be in-market over a year. Your category will have its own cycle, but the shape holds. At any moment, most of the companies in your profile are not looking.

This seems to argue for a wide profile: if only a few are ready, cast a wide net. The opposite is true for a small team. A wide net means you cannot watch it. A narrow list is one you can watch closely, so you notice the moment a company on it starts to look.

A worked example: what a narrow profile gives you in one quarter

Take a hypothetical product: a scheduling tool for dental clinics. A wide profile is every clinic in the country. A narrow one is independent clinics with three to ten chairs in two states, where the office manager runs the calendar. Say that narrow list holds 200 named clinics.

The Ehrenberg-Bass Institute sums up the rule this way: only about 5% of your target customers are actively looking to buy at any given time. Apply that figure: 200 × 0.05 = 10 clinics likely to be ready to buy in a given quarter. Ten is a number one founder can serve well. You can read what those office managers write, reply to each one in person, and remember every conversation.

Now apply the Ellis threshold to your first users. If 25 clinics try the product, the 40% benchmark means you want at least 25 × 0.40 = 10 of them to answer very disappointed. If you get 5, the Superhuman story suggests you first look at who those 5 are and narrow toward them, before you build more.

None of this needs a big market on day one. It needs a short list, a way to notice who on it is looking now, and the patience to watch the other 190 until their turn comes.

How to build a narrow ideal customer profile for B2B SaaS

Run this routine once, then repeat it each quarter as you learn who loves the product.

• Write the profile as one sentence with a role, a company type and a trigger, for example office managers at independent clinics that just added a second location.
• Name at least 50 real companies that fit the sentence. If you cannot, the sentence is too vague or too narrow, so adjust it.
• For each company, find the one person who owns the problem and a checked way to reach them.
• Collect the words these people use for the problem in public threads, and use their words in your replies and emails.
• Ask each user the Ellis question after real use, and sort the very disappointed answers by role and company type.
• Each quarter, narrow toward the group with the most very disappointed answers, then widen one step at a time.

For the list itself, the guide on where to find your first customers for a SaaS covers the channels, and the post on how to find the decision maker at a company covers the person behind each name. To notice who is looking right now, social listening for B2B SaaS shows how to watch for the problem, not your brand name.

LitePal does two parts of this routine for you. It finds public conversations on Reddit, Hacker News, X and Threads where people ask for a product like yours, with a reply drafted for each. It also finds companies that fit, the decision-maker to write to with a checked email, and a drafted first line. You post and send from your own accounts.

Start narrow this week. Paste your site into LitePal and see which companies fit your product and who to write to at each one, with a first line drafted for every name.