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Who is your customer

Ultimately every startup has to decide who is their customer. That priority needs to take precedent over all other decisions even if it means giving up “low hanging fruit”.

When I meet a startup that says we are building a consumer app and also a white label app, my first reaction is to cringe.

There is nothing wrong with a b2b or white label business. And certainly there is nothing wrong with building consumer apps. But to try to do both is beyond challenging.

When I provide this feedback, some folks agree with me and others disagree. Those that disagree sometimes tell me it would have been better if Twitter also built an enterprise version of Twitter and a carrier product as well.

And then we end up agreeing to disagree.

I feel pretty strongly about this. One of the reasons I think Apple is so successful is that they are focused entirely on the end user.

John Chambers, the Cisco CEO recently wrote a memo about their challenges. The consensus seems to be that they took their eye off the networking ball by straying into new markets.

Take a look at Cisco’s consumer products like a typical Linksys router and compare it with an Apple Airport Extreme and you can tell who is focused on telcos/service providers and who is focused on the consumer.

I’m not trying to disrespect Cisco. They are an amazing company with terrific people and will continue to have a successful business for years to come.

But Cisco is an example that even companies with huge balance sheets have a tough time focusing on two different customer types.

There are exceptions. Take Amazon. Amazon.com is one of my favorite ecommerce sites online. They are hyper focused on the user. But Amazon Web Services is all about developers and businesses. This is highly unusual but they have made it work beautifully.

Startups are constantly racing against the clock. THey don’t have the resources of a Cisco or Amazon to experiment with multiple customers. The majority of startups need to be hyperfocused.

So pick your customer ignore all the temptations.