When a company has a product that works, it is tempting to sell it to anyone who will take a meeting. Early on that makes sense, because every deal teaches you something. By the time you are hiring sellers, though, selling to everyone starts to cost more than it returns. Messaging gets vague, case studies do not transfer, and each deal feels like starting from scratch.
The fix is to choose one segment and become the obvious choice for it before you expand. Geoffrey Moore made the same case in Crossing the Chasm, describing a good beachhead as “big enough to matter, small enough to lead” and a good fit with what you do best.
What a segment is
A segment is a group of companies that share the same problem, buy in roughly the same way and would recognise each other as peers. "Mid-market retail" is too broad. "Multi-brand retailers in North America running their own ecommerce stack" is closer. A good test is whether a case study from one customer would be persuasive to the others.
How to choose
Start with the customers you already have. Score each one on:
- How quickly they bought, from first meeting to signature.
- Deal size compared with your average.
- How easy they were to onboard.
- Whether they have renewed or expanded.
- Whether they would act as a reference.
Group the high scorers and look for what they share: industry, size, region, technology and the trigger that made them start looking. That shared pattern is usually your first segment. If nothing stands out, look at your losses too. Patterns in why deals were lost are often clearer than patterns in why they were won.
Check it is big enough
A focused segment still needs room to grow. Count the companies that match, estimate a typical deal size and multiply. If the result supports your revenue target for the next 18 to 24 months at a realistic win rate, it is big enough. If not, widen one criterion at a time, such as region or company size, until it is.
Make the focus real
Choosing a segment only matters if it changes what the team does. In practice that means:
- Rewriting the website and pitch for that buyer, in their language.
- Building case studies and references from customers in the segment.
- Pointing outbound and events at named accounts within it.
- Giving sellers clear guidance on which deals outside the segment to take.
The last point is the hardest. Turning down a reasonable deal feels wrong when targets are tight. A simple rule helps: take deals outside the segment only if they are inbound, close to your average size and need no custom work.
Measure it
Give the segment two or three quarters and compare it with the rest of your pipeline on win rate, sales cycle length, average deal size and time to first value after signing. If the choice is right, these numbers should improve. If they do not, revisit the decision with what you have learned.
Knowing when to expand
Expand when the segment produces predictable results and new sellers can ramp on it without the founder’s help. Good signs include a steady win rate, a library of references and inbound interest you did not have to generate. Then pick the neighbouring segment that shares the most with the first, usually the same buyer in a related industry or the same industry in a new region, and repeat the process.
Focus feels like a constraint at first. In practice it is what lets a small team compete with much larger ones.