Insights: Principal & Interest
Ideas on building a business that compounds in every direction — not just revenue. From Joe Koenig, who built, scaled, and sold a software company, and now helps other owners do the same.
Who Is Your Business Actually For?
"Anyone who needs what we do" is the most expensive answer an owner can give. Getting clear on who you serve best usually grows revenue — even though narrowing feels like the opposite.
Ask an owner who their best customer is, and you'll get one of two answers.
A few can tell you in a sentence. The specific kind of company or person they serve better than anyone else, and why those people choose them over the alternatives. They don't have to think about it.
Most give some version of "anyone who needs what we do."
That second answer feels safe. It's also expensive.
In the early years you take the work that comes, because you have to. Payroll is real and the pipeline is thin, so you say yes to the customer who's slightly outside your wheelhouse, and then to the one who's well outside it. That's not a failure of discipline. That's survival, and most of us did it.
The problem is leaving that posture in place long after the business has outgrown the need for it.
What vagueness costs you
Being unclear about who you're for doesn't stay contained in one part of the business. It leaks.
Your marketing goes generic, because copy written for everyone can't say anything sharp to anyone. Your sales conversations get longer, because you're educating people who were never going to buy. You end up competing on price against companies that aren't as good as you are, since price is the only comparison left when nothing else about you stands out. And delivery gets harder, because every project is a little different from the last one and nothing you learn carries forward.
None of that shows up as a line item. It shows up as a business that feels heavier than it should for the revenue it produces.
What clarity actually looks like
It's not a persona slide. It's a written description of your ideal customer that your whole team could roughly quote from memory — the kind of company or person, the situation they're in when they need you, what they value, and what makes them a good fit for how you work.
The part owners skip is the other half of that document: who you don't serve. That list is where the value is. It's what lets a salesperson walk away from a deal in week one instead of week nine, and what keeps you from taking on the customer everyone will regret by month three.
I personally learned this the hard way. We created a new product to meet the needs of an existing customer. However, it reached outside of the market our existing products hit. The result? Low sales, extra maintenance, and an overall headache. All because we put a little revenue over a long-term strategy.
Why narrowing usually grows revenue
This is the part owners resist, and understandably. Turning away revenue when you're not sure where next quarter's revenue is coming from feels reckless.
But in practice, narrowing tends to grow the business inside of a year. Conversion rates rise because you're talking to people who are actually a fit. Average deal size rises because you're solving a problem you're genuinely excellent at, and you can price accordingly. Referrals rise, because customers who fit well are the ones who tell other people about you. The work gets easier and the margin gets better at the same time.
Getting clear on the customer is what makes everything else in the demand engine work. Positioning becomes possible, because you know who you're positioning against and who you're positioning for. A repeatable sales process becomes possible, because the conversations start rhyming. Marketing channels become choosable, because you know where these people actually are.
Purpose still has to reach somebody
I care a great deal about why a business exists. It's the first thing I work on with an owner, and I think it's the foundation everything else sits on.
But the strongest mission in the world doesn't do much if nobody knows you exist or nobody's buying. Market is the part of the business that turns purpose into revenue — and revenue is what funds the jobs, the generosity, and everything else you're hoping this thing will produce.
So it's worth an honest hour on the question. Could you describe your best customer in one sentence right now? Could your team? If the answers don't match, that gap is probably costing you more than you realize.
Where does your business actually stand?
The free Compound Impact Diagnostic scores you across the six areas a healthy company runs on — about 8 minutes, and you get your results right away.
