Article · 12 min read

Defining Your Market: Choose the right peak before you start climbing the mountain

Accel India · SeedToScale Insights (Accel India) Free Intermediate India

Accel India's three tests for a segment (uniformity, enough size, reachability at a sane acquisition cost) are the cleanest way to judge whether a candidate second ICP is a real market or a distraction.

  • Treats 2 million dollars of ARR as the benchmark by which product-market fit has actually happened.
  • A TAM of 500 million to 1 billion dollars gives you a chance at 50 million dollars of revenue.
  • CAC should be recovered in 2 to 3 months of revenue if bootstrapped, under 12 months if VC backed.
  • Do not enter a new region unless you can see 5 to 10 million ARR there, and pick a second domain only past 3 to 5 million.
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It answers 2 questions

  1. We are winning in one segment. When is it right to add a second ICP, and how do I know we are not just bored?
  2. We are opening a new market, the US or Southeast Asia or the Gulf. Do we carry the same ICP across or start again?

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