Customer Development & Market Validation stage

How do I define my Ideal Customer Profile (ICP)?

Get step-by-step guidance on how to identify and define your Ideal Customer Profile (ICP).

Many times founders can become so focused on their idea and vision that they don’t determine their target market to validate their idea with.  

Not knowing your ideal customer profile (ICP) is a common mistake startups make.

If you try to sell your idea to the wrong person, you won’t be solving a problem they have and care to pay for. If you sell to the right person, they can give you feedback to make your solution even more valuable.

It’s perfectly ok to pivot and adjust who your ICP as you learn and evolve your startup.
Identifying your ICP is one of the key factors in the success of a startup.

In this article, we’ll explore what an ICP is, why it’s important for startups, and how you can effectively identify and utilize.

What is an Ideal Customer Profile (ICP)?

An Ideal Customer Profile (ICP) is a detailed description of a customer profile that: 

  • Has a problem your solution will solve 
  • Is willing and able to pay for you to solve it
  • Helps you make informed decisions about how to allocate resources to meet their needs
  • Enables you to identify potential risks and challenges 

ICP descriptions go beyond basic demographics like age, gender, and location, diving into deeper insights about your customer’s needs, pain points, behaviors, and preferences.  

These ICPs should be refined over time based upon data and market research.

Why is it important to identify an Ideal Customer Profile (ICP)?

  • Allocate your resources more efficiently to focus on the customers you can more likely acquire
  • Focus your marketing and sales efforts, tailoring your brand communication more effectively
  • Develop a solution that truly meets the needs and solves the problems your customers face
  • More quickly qualify prospects and close deals

How to identify an ICP for your startup 

Below are some best practices for helping define your ideal customer profile (ICP).

1. Define Your Product or Service

The first step in identifying your ICP is to have a clear understanding of what you’re offering

  • What problem does your product or service solve?
  • What are its unique features or benefits?

The better you understand the problem you’re trying to solve and how your solution solves it, the easier it will be to identify who may most benefit from your solution.

2. Conduct Market Research

Next, we recommend you conduct market research about your potential customer profile.

Listen to feedback and insights from your potential customers. Try to get authentic and unbiased data to kickstart your efforts.

Researching your target market to understand the various customer segments that exist. Look at existing data, surveys, and industry reports to gather insights.

Below are some initial questions to try to answer, to help you get started:

  • What is the total market size? 
  • What percentage of the market has already been acquired by competitors? 
  • What percentage of the market can I realistically acquire in the short-term and long-term? 
  • Who are my top potential customers? 
  • How much education will be required for those customers to understand what I will be offering and why they should purchase my solution? 
  • How satisfied are those potential customers with their existing solutions?

3. Perform Customer Segmentation and define the core characteristics of your ICP

Divide your potential customer base into segments, based on common characteristics, needs, and behaviors.

This segmentation can help you identify distinct ICPs within your market. Initially, the narrower the focus, the better.

An ICP typically includes information such as: 

  • Industry
  • Geography
  • Company size
  • Pain points
  • Goals
  • Budget Constraints
  • Customer Buying Process & Complexity


Let’s define an Ideal Customer Profile (ICP) for a startup in the software-as-a-service (SaaS) industry providing project management software to a niche in the Climate Tech industry.

This ICP will incorporate the parameters we mentioned:

1. Industry

The ideal customer for this startup is focused on the Climate Tech industry. 

2. Geography

The startup primarily targets customers in North America.

3. Company Size

The startup’s target market is primarily focused on small to medium-sized businesses (SMBs) with employee counts ranging from 10 to 500. These companies often require efficient project management tools but may not have the extensive budgets of larger enterprises.

4. Pain Points

The primary pain points of these ICPs include struggling to manage Climate Tech projects efficiently due to lack of software specific to their industry. Additionally, they are experiencing delays and bottlenecks, lacking collaboration among team members, and dealing with the challenges of remote work.

5. Goals

Ideal customers need a solution specific to their industry and need to improve project planning, streamline workflows, improve team collaboration and reduce project delivery times.

6. Budget Constraints

Customers in this market segment are willing to pay a monthly subscription fee ranging from $12 to $25 per user, depending on the features and plan offered.

7. Customer Buying Process & Complexity

The purchasing decision typically involves a mix of the CEO and a product manager. CEOs approve the budget and product managers evaluate the tool. 

4. Conduct Customer Interviews

Reach out to your potential and existing customers to conduct interviews or surveys to gather firsthand insights into their needs, pain points, and preferences. Don’t be scared to talk to potential customers so that you can understand their problems well. This qualitative data is invaluable in defining your ICP.

5. Test and Refine your ICP

As you engage with potential customers, continue to refine your ICP based upon what you learn from their feedback.


Defining your Ideal Customer Profile is an important step in your startup journey.

This step will help you save time, conserve resources, get to market more quickly and build a solution that is truly valuable for your customers.

By conducting thorough market research, customer segmentation and interviews, you can identify your ICP.

Being flexible and adjusting your ICP based upon data and market feedback is important to the success of your startup.

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