The Customer Profiles Framework (PCP>ICP>ECP)
An incredibly useful framework to leverage when trying to gauge the attractiveness of an opportunity or when attempting to strategize around early stage startup goals is the customer profiles framework, or more technically - PCP > ICP > ECP.
We are all familiar with the TAM > SAM > SOM methodology, which I've always felt was too intangible for teams to work with at the earliest stages. The reason being that these market size definitions are actually a derivative of customer profiles. In other words, if you have a shaky definition of your customer profiles (or no clear definition at all), these market sizes are really just theoretical fluff.
So naturally, the immediate takeaway is that it is far more useful to speak of target customer profiles and their evolution. Another key factor here is that there is usually a significant gap between your early adopters and your ICP (ideal customer profile). It’s important to have a term to describe and differentiate our initial customer profile, since it is not necessarily the ideal one (yet).
So let’s begin with the PCP. It stands for Penetration Customer Profile. “Penetration” is key here since we find it easier to think of the initial use case, initial customer profile, initial budget, initial buyer/user, the MVP and other important aspects as part of the same “penetration package”. This is what helps us get our first hold on the early adopters of our market.
As mentioned, the ICP is the famous Ideal Customer Profile. This profile represents a broader opportunity. The PCP is usually a subset of the ICP with a higher urgency and willingness to adopt our product. A key element behind the delta between the two profiles often revolves around an important parameter, which we call “time for pain increase”. This is the duration it will take for urgency to expand from the PCP to the ICP.
Needless to say, if both the PCP and the ICP don’t represent a large enough opportunity, then we have a problem (this is where market size definitions correlate with our framework - but as a secondary outcome - it is not the primary focus). Also, if the “time for pain increase” we theorize is too long, then we also need to rethink our strategy. Moreover, It is important to understand how our product offering evolves alongside the evolution of these profiles. Naturally, the MVP and several versions following it would be suitable for the PCP but could prove lacking for the ICP.
Finally, the ECP (aka the Extended Customer Profile) represents the ultimate opportunity, which correlates with the grand vision/platform version of our offering. These are the late adopters who will join the party after the majority of our market education has already been accomplished. Or these could be customers from other verticals, which only a broader platform could support.
This evolution of customer profiles is a much more tangible strategizing framework for early stage startups as it forces us to focus on data we encounter on a daily basis (customer characteristics) rather than top-down hypotheticals. It also better represents the gradual nature of how startups evolve and adapt their product and strategies according to the evolution of these customer profiles. I highly recommend it.