Y Combinator Question 23: Who Are the Most Desperate Customers and How Do You Talk to Them First?

This Y Combinator question is designed to identify the customers who need your solution the most urgently and to understand how you plan to reach and communicate with them effectively.

Frederik Van Lierde

May 16, 2024

Y Combinator Question 23: Who Are the Most Desperate Customers and How Do You Talk to Them First?

Part of the series:
Y Combinator: 40 Questions and 40 Answers

1. Why Y Combinator Asks This Question

Y Combinator aims to see if you understand the segments within your market that are most acutely in need of your product and if you have a plan to reach these segments effectively.

This is crucial because customers who are most desperate for a solution are often willing to overlook early imperfections and can provide valuable feedback and early revenue. Identifying and engaging these customers can accelerate initial growth and product refinement.

2. How to Answer the Question

To respond effectively, identify the customer group that faces the most significant challenges that your product addresses.

Describe these challenges in detail to demonstrate your understanding of their pain points.

Then, outline your strategy for reaching out to these customers first, including specific communication channels and messaging that resonates with their urgent needs.

For example, if your startup develops a software tool for automating payroll, your most desperate customers might be small business owners who are overwhelmed by payroll management due to limited staff and resources.

3. How NOT to Answer the Question

Avoid vague or generic descriptions of customer segments. Be specific about who your customers are and why they are desperate.

Ensure that your communication strategy is tailored to the identified needs and behaviours of these customers; generic marketing strategies won’t be as effective in addressing or appealing to their specific desperation.

4. An Example, Based on a Tech Startup

Let’s consider a tech startup, StreamlineLogistics, that offers an AI-driven logistics management system designed for small to mid-sized e-commerce businesses that struggle with supply chain inefficiencies. Here’s how they might answer the question:

Most Desperate Customers: “Our most desperate customers are small to mid-sized e-commerce businesses experiencing rapid growth and who cannot keep up with the logistics demands this growth entails. These businesses often face significant delays, lost inventory, and customer service issues due to inadequate logistics solutions.”
Communication Strategy: “We reach these customers first by attending e-commerce industry conferences and engaging in online forums where e-commerce business owners discuss their operational challenges. Our communications focus on case studies and testimonials from similar businesses that have successfully streamlined their operations with our system, emphasizing the immediate relief and long-term benefits our solution offers.”

Y Combinator evaluates how startups identify and plan to reach the customers who most urgently need their solution, focusing on strategic engagement to accelerate growth and refine the product.