When and How to Move to a New Customer Segment

All it takes is a lot of push

Chatting with an early-stage founder recently, he posed a question that I'm sure rattles around in the heads of many: "We're selling our consumer software for $10/month. How do we get some of those big enterprise customers? Ads? Outbound?"

My response was straightforward: You can't force with some paid ads or clever outreach what you don't see already organically happening inbound.

Products don't just leap from one customer segment to another on a whim. There's always a little wiggle room; you can, of course, cater to those slightly below or above your core market. But go too far below, and your product feels like a behemoth. Aim just a touch too high, and suddenly you're the lightweight with frustrating shortcomings.

Still, if you've made a strategic decision to move upmarket, there's a path forward: cozy up to your most demanding customers. Understand their pain points, figure out what would make your product indispensable to their entire organization, and craft a roadmap around those needs. Balance this with nurturing the needs of your existing customers. And if all goes well, you'll find a new breed of clients beating a path to your door.

This isn't a sprint; it's a marathon. You can make some progress refining your current features, but sometimes it takes an executive decision to make some audacious bets.

Semaphore’s two big bets

Here's a case in point. Semaphore, initially tailored for small dev teams crafting web apps, underwent a full overhaul five years post-launch.

While it's almost taboo to even whisper about a product rewrite—most product gurus would advise against it—it was our ticket out of a cutthroat competition in our primary segment. Fast-forward to today, and we've doubled down on that strategy, building Semaphore On-Premise catered specifically for the enterprise giants.

So, if you're standing at that crossroad, deciding whether to make that leap to another segment, remember this: the journey isn't easy. But with customer understanding, bold moves, and commitment, the leap can redefine your product's destiny.