Who is your customer?
What market are you operating in, and how do you define it?
What are the key elements of your business model?
These are critical questions as you build your startup and work toward seeking investment. This episode explores how to answer these questions.
Your ticket to success is finding a customer problem, and solving that problem so well that customers fall in love with and can’t live without your product.
The most important person in your business isn’t the inventor, the CEO, or the investor – it’s the customer. This episode makes the case that finding a real customer problem, and solving it so well that customers can’t live without your product, is the founder’s true ticket to success. Too many pre-revenue founders build what they assume the market wants without ever talking to it; this episode is about not being that founder.
We start with customer discovery – building personas, finding real people who match them, and interviewing them to uncover their pain points before you try to sell anything. From there we move out to your market: why trying to be all things to all people rarely works, how to choose a beachhead, and how to think about niche and geography (including where small-but-familiar New Zealand fits in). Finally, we look at business models – B2C, B2B and its enterprise and government variants, B2B2C, and platforms – and why settling on one and committing to it beats dabbling across several.
The episode ties together with the Lean Canvas as a way to capture your whole business model on a single page, and ends on the hardest discipline of all: surfacing the assumptions baked into your canvas, ranking them from most to least lethal, and systematically testing them on the road to product-market fit. That’s the science of building a startup which is where we pick up in the next episode.
Four-part homework:
- Define your customer personas and go out and talk to potential customers;
- Define your beachhead market and how you’ll expand;
- Fill in a Lean Canvas describing your business model; and
- List and rank the assumptions you’ll need to validate.
Resources:
- Hubspot’s guide to customer personas
- Downloadable Lean Canvas
- Isaac Jeffries on how to fill in a Lean Canvas
Transcript:
Kia ora koutou, hello and welcome to Episode 8 of nzangels.com – a guide to raising angel investment in Aotearoa New Zealand. I’m Dave Moskovitz, one of New Zealand’s most experienced angel investors.
This is Episode 8 – Customer, Market, and Business Model
Who is the most important person in your business? It’s not the inventor, the head of sales, the CEO, or the investor – it’s the customer. Your customers are going to dictate your fate more than any other people associated with your venture – they’re the people who are going to pay your bills. There are a surprising number of pre-revenue founders who have not talked to many, if any, potential customers. Instead, they’re focused on building a product that they believe the market wants. They rarely succeed. Don’t be that founder.
Your ticket to success is finding a customer problem, and solving that problem so well that customers fall in love with and can’t live without your product. They sing your praises to everyone they meet. But that starts with understanding, and validating, who your ideal customer is.
Most startups do this by identifying a number of made-up customer personas, finding real-world people who match those personas, and then interviewing them to discover where their pain points are – even before you try to sell your product to them. Hubspot have a great tool for enumerating your personas, and there are many others too. And you just need to do a bit of online research for how to conduct customer discovery interviews, and you’ll get a good idea of how to proceed. You may already have active customers that you’ve either sold to or who are interested in buying your product, and that’s great too. The more specific you can get about your customers and their attributes, the better.
Part 1 of your homework is to define your customer personas, find a few potential customers, and go out and talk to them about what you’re doing. Do you think you’ve achieved problem-solution fit?
Who is your market? It’s a whole big world out there. One common mistake early-stage founders make is to try to be all things to all people. In 2026, many of the most investable businesses are specialised for a single industry vertical, and are integrated into the workflow of people in that vertical. Even if you want to be all things to all people, it’s usually best to start with a narrow group, your beachhead, and work out from there. The alternative is being buffeted about by a diverse set of needs and trying to fulfil all of those at once.
There may be a particular niche in your chosen industry that you want to serve initially as well. This could be demographic (eg, young), psychographic (eg, adventurous), situational (eg, busy), or any one of a number of other dimensions, or focusing in on a subset of the problem you’re solving.
Geography is another component of your market. New Zealand is a very small market, with only 5m people, so maybe it’s your first test market. But every week you spend gaining hard-won knowledge about the New Zealand market is a week you’re not spending learning about a larger market. On the other hand, if you don’t have experience in other geographies, it probably makes sense to start here.
You want to find a good balance which lets you focus on establishing a beachhead that you’ll be able to serve well and expand, somewhere between “everyone globally” and “left-handed middle-aged busy vegan dentists in Invercargill”.
Part 2 of your homework is defining your initial beachhead market. How big is that market? Once you’re successful in that market, how will you expand? How will you know when you’ve achieved product-market fit?
Once you know who your customer is and what market they occupy, you can have a crack at your business model. They usually fall into one of the following classes: B2C, B2B, B2B2C, or Platform.
B2C: if your customers individuals, and are you’re selling directly to them, that’s B2C business model. Your main focus will be acquiring customers through advertising, social media, search engine optimisation (SEO), and so on, as well as product-led growth.
B2B: If your customers are small-to-medium (SMB) businesses, that’s a B2B business model. Your main focus will be acquiring customers through outbound lead generation and sales. Variations of B2B are B2B-Enterprise, and B2B-Government, which typically involve high-touch account management. The thing to remember is that the bigger the entity, the longer the sales cycle. Even though the prize may be large, it could take you years to get in the door.
B2B2C: If you’re selling your product indirectly through a channel, your main focus will be onboarding, motivating, and managing channel partners. The tricky bit here is that even though your product is solving a problem for the end customer, you’re only going to make money by solving a problem (which is often sales) for the intermediary.
Platform: If you’re providing a platform that connects buyers and sellers, you’re probably doing all three of the above!
And there are more too.
Each one of these models requires completely different sales, customer success, and support configurations. I’ve seen startups flip-flop between these business model classes with essentially the same product, which is usually painful, time-consuming, and expensive. It’s best to settle on one to start out with, and go hard on that, rather than try to dabble in more than one at a time.
Your business model has quite a few attributes, but they can be encapsulated in a tool like the Lean Canvas, which you can download from this episode page on nzangels.com
Part 3 of your homework is to fill in a Lean Canvas that describes your business.
Isaac Jeffries has a great guide to filling in a Lean Canvas – I suggest you have a look.
The Lean Canvas is a dynamic tool which should change as you learn more about your business and your customers.
Now here is the really hard part:
Part 4 of your homework is to list the assumptions inherent in each of the statements you’ve made on the canvas. Once you’ve made the list, reorder the assumptions from riskiest (ie, if proven wrong would kill the business the quickest) to least risky.
Your main job as a founder, on your way to product-market fit, is to validate or invalidate those assumptions. This list will change over time, and when you make a new assumption, you’d be well advised to construct an experiment to validate or invalidate it. This is the science of building a startup.
We’ll talk more about the science of building a startup in our next episode.
The pithy quote from today’s episode is: Your ticket to success is finding a customer problem, and solving that problem so well that customers fall in love with and can’t live without your product.
Until next time, ka kite!
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