Most Startups Should be Deer Hunters

Interesting points and useful analogies. But, I think it would be better framed within a specific subset of businesses rather than all startups. Also some subset of strategies.

Classical disruption for example, suggests a completely different strategy. Start with rats (ie an animal no one else even considers game). That is usually applied in a context where a rapidly improving disruptive technology is at the core of the business and it is getting ready to eat everything else. But it works in some other cases too. Adwords started as a service for fringe advertisers (rats to most ad sellers). Bullshit infoproducts, affiliate marketers & micro-businesses spending $5 on 100 clicks. They quickly moved into rabbits (ISPs, online businesses) and giant rats (that happens when your service is so useful, it actually makes customers). Deer came easily. Local dentists, ISPs, virtually every SME had an online marketing consultant at the door. Adwords is ideal for deer. Before that all they had was expensive and unreliable local media ads and trade rags. These days adwords gets a nice amount of elephant meat in its diet and they still do it with rat guns.

Its great to hear entrepreneurs argue about things in such definite terms. They are basically making the case for their way.

I think the main thing to take away though is to be extremely aware of what you are hunting. Make a conscious decision. Pick a strategy that works for your game and be aware of the risk profiles and gotchas of the strategy. They all have them.

I'm not an avid hunter but I was hoping the metaphor would involve something about waiting in a tree stand or in the bushes -- for f--king hours on end, without the promise of even seeing a deer if you failed to apply deer urine and/or judge the wind properly...but it still being an enjoyable test of patience and whatnot. Deer aren't easy to kill if you're abiding by normal hunting regulations.

Wow, that really resonates with me. As an enterprise play, we are definitely at risk of picking the wrong segment here. Although, our options are a little bit more limited due to the nature of our products. We're doing what you might call "Enterprise 2.0" stuff, operating at the intersection of social-networking (see: Enterprise Social Network), social-network-analysis, information retrieval and business process management... The stuff we're building really only starts to have utility in the larger companies. So we're still interviewing people, and researching and exploring to try and find the right target segment.

There's a train of thought in my mind, fueled by our first big round of Customer Discovery interviews, that we are looking at (using employee count as a rough approximation for overall company size) companies with 1000 employees or more. Maybe it really starts at 500 employees, but we're still working on that. Depending on where you draw the line between deer and elephant, we could wind up in either segment (or both).

Rabbits are definitely out for us though, at least given our current model. If things don't work going this route, we could pivot to a SaaS app that does less, and go down-market to the smaller companies. We did interview a few smaller companies earlier and saw some interest in that model, so it could be an option.

Our next step is to do a very focused Customer Discovery effort, focusing on manufacturing companies in the Southeast (mainly NC to start with, since that's where we are) with 1000 employees and up. But we'll mix in a few of the ones that are between 500 and 1000 as well, as we try to isolate the right focus.

The idea of landing an elephant or two does seem tempting, but msuster makes some good points there. We definitely don't want to get too caught up special-casing stuff for one big customer, to the point that they become our only customer, because we can't serve anybody else!

Excellent article. This is relevant advice not just to startups, but to every company - you need to decide what kind of customers you're going after.

I see it a lot in our Software Consultancy. We're constantly focusing on what our goal is: small startups, medium sized companies, or large businesses. And whether the're technical companies, or non-technical. Those are the two biggest issues we have, and they affect everything we do - from marketing (market technical skills? Market "solving problems without bothering you about it"?) to pricing (value-based? time based? Fixed-price Project based?) to how to grow technically (should we learn more languages and platforms to sell our skills to technical customers? Or should we lean towards learning a more specific niche if we're targeting a specific type of company).

The part about avoiding rabbits really hits home. You see so many SaaS companies going for ~$19-$99/mo business models. Think about the thousands of customers you need to gather & retain to turn a few million revenue with that. Feasible if you can automate and scale the customer acquisition process but any direct sales effort is likely to be a non-starter.

And since it's Friday, here's some folks who are really nailing the recommended approach: http://goo.gl/ue7uo :-)

>This is especially problematic in the Web 2.0 / Freemium world where too many company build their business models around trying to build massive scale of free customers and then convert a small share to low monthly payments. I guess it has worked for some companies? (Basecamp? Who else?)

Dropbox? Skype? I feel like there's a lot of freemium companies that make it.

I like this message though. Good advice for not just startups.

Awesome metaphor! At my company we are going after all three, and I can see how narrowing down our focus with laser like precision (on deer of course) could really help define our priorities.

Sound advice wrapped up in a very understandable analogy.

I have a little side-project going on which could easily cater to all three of those categories and, to be honest, in the back of my mind I have always thought about the Elephants when the realistic part of me knows I should only cater to the Deer.

Nice to be reminded to focus properly, I guess that elephant-related feature I was thinking about can be deleted

Any thoughts on what decides the point at which a business is no longer an early stage startup? When does it make sense to level up from deer hunter to elephant hunter?

Another aspect: just have fun and shoot everything that moves.

Also, in the old version, you can only carry 100 pounds of food back to the cart. The hunting subgame was fun for its time, but you're really better off putting your money into oxen and, if needed, buying food along the way.

Finally, don't ford the rivers. Pay passage if you can. Above all, start in May. You won't regret it.