45: Chris Tottman & Richard Blundell - focussing your business to success while dreaming big
Dec 10, 2023
01:08:58
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Chris Tottman and Richard Blundell discuss their operator's perspective on investing in successful businesses. They highlight the importance of being customer-focused in a narrow market and the dangers of going too broad. They also explore the metrics to evaluate businesses and the significance of where customers communicate and recommend.
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Quick takeaways
Understanding target market and balancing niche focus with market expansion is crucial for business success.
Recognizing the value of businesses that may not fit traditional investment criteria but offer growth opportunities.
Empathy in sales and effective storytelling play important roles in securing funding and building strong relationships.
Deep dives
The importance of understanding the target market
One of the key insights from the podcast episode is the importance of understanding your target market. The speaker emphasizes that a well-defined Ideal Customer Profile (ICP) and deep knowledge of the target audience are crucial for efficient marketing and sales. By addressing the ICP in a specific way, businesses can maximize their marketing and sales efforts, leading to higher customer acquisition and revenue generation. The speaker also highlights the challenge of balancing a niche market focus with the need to communicate the ability to expand into a larger market when pitching to investors. This discussion underscores the significance of finding the right balance between niche targeting and potential market expansion for business success.
The value of super niche investing
The podcast episode explores the concept of super niche investing and its potential benefits. The speakers emphasize that there are numerous exceptional businesses that don't receive venture capital funding but are highly efficient and successful. These businesses excel in areas such as marketing, sales, and customer satisfaction, generating a word-of-mouth effect that leads to increased customer loyalty and organic growth. The discussion highlights the importance of recognizing the value and potential of such businesses that may not fit traditional investment criteria but still offer significant growth opportunities.
The importance of empathy in sales
The podcast episode emphasizes the significance of empathy in sales, emphasizing that successful salespeople often exhibit empathetic qualities. The speakers highlight the importance of understanding and addressing customer pain points effectively. By actively listening, asking questions, and empathizing with customers, businesses can build stronger relationships and deliver personalized solutions that resonate with their target audience. The discussion emphasizes the role of empathy in sales success and encourages founders to focus on developing empathetic sales skills.
The role of vision and storytelling in fundraising
The podcast episode discusses the role of vision and storytelling in fundraising. The speakers highlight the importance of founders effectively conveying their vision to investors and potential customers. They emphasize the need to tap into emotions and create a sense of excitement and belief in the founder's vision for the business. The discussion highlights that investors are not just buying into the product or numbers but also investing in the founders as individuals and their ability to navigate the challenges ahead. The episode encourages founders to communicate their vision and passion to create a compelling narrative that resonates with investors and helps secure funding.
The Importance of Ideal Customer Profiles (ICPs)
Ideal Customer Profiles (ICPs) play a crucial role in creating focus for businesses. Whether it's using ICPs or personas, the main goal is to narrow down the target market and address specific customer needs. Focusing on a smaller market allows businesses to perfectly address customer requirements and increase efficiency, leading to higher chances of success. Broad approaches can often lead to inefficiencies and business failures. By strategically defining and targeting ICPs, businesses can enhance customer satisfaction, generate more word-of-mouth referrals, and ultimately expand their market.
The Power of Word-of-Mouth and Understanding the Market
Word-of-mouth is a powerful tool for business growth. Understanding your market and its unique dynamics is crucial to harnessing the potential of word-of-mouth referrals. Knowing which channels your customers use and how they communicate within their industry is key. For example, being present on WhatsApp might be essential for success in certain markets or sectors. Building products that solve real pain points and generate positive customer experiences significantly increases the likelihood of high word-of-mouth recommendations. Instead of aiming to make everyone happy, businesses should prioritize delighting a smaller set of customers and creating value along the way. This can lead to exponential growth opportunities, especially when customers share their positive experiences within their industry networks.
Chris Tottman and Richard Blundell joined me for a fantastic conversation about how they think from their own operators’ perspective when it comes to investing in successful businesses and their people.
Why you should not talk to investors who never went through the personal pain of failing and why it most of the time comes down to the basics of running a successful business:
Being obsessed with customers in a narrow market
Product Market Fit is not just having a great product in a great market but also communicating it where your customers are
Timestamps:
11:00 The origin story of Notion VC, a founder/operator-led fund. An aggregator of fuckups and occasional successes
17:10 Why do we keep making the same mistakes in business?
27:00 Why anyone invests in a business. Metrics to evaluate the present, personality to see the future
33:30 Why should anyone listen to your pitch? When chaos is not avoidable with success
45:20 Are you failing because your market is too big or too small? Dangers of going too broad with your ICPs
53:50 Markets are not just what people want but where they communicate and recommend
