How Defining Your ICP Drives Profitable Growth in SaaS Startups (￡5M to ￡25M ARR)

Most founding teams and investors naturally think that growth comes from winning more customers.

But here's the truth = more customers don’t mean more revenue, UNLESS they’re the right customers.

If you’re trying to scale from ￡5M to ￡25M ARR, understanding and refining your Ideal Customer Profile (ICP) is non-negotiable.

In a recent conversation on our Masterclass Podcast "Making Revenue Tick", I sat down with Paul Wingfield - Global Sales Director and seasoned expert in scaling businesses.

He shared why pinpointing your ICP isn’t just about better conversion rates - it’s about survival.

The Myth: “More Sales Reps, More Revenue”

A common mistake many CEOs make is thinking the solution to stagnant growth is hiring more AEs.

They assume, “If I’ve closed ￡1M with beta customers, I’ll easily hit ￡3M with three salespeople.”

But as Paul pointed out, this often leads to failure. Why? Because while early customers often come from a founder’s network or “Rolodex,” this doesn’t scale.

Here’s the problem = without a defined ICP, new AEs are left with no clear blueprint on who to sell to or how to articulate the right value proposition.

The result? Messy pipelines and disappointing sales figures.

“They think scaling means expanding into more verticals or geographies, but the real challenge is translating that founder-led sales motion into something repeatable and predictable”

What Happens When You Get ICP Wrong?

Skipping over the critical step of defining your ICP is like running full-speed into a brick wall. Founders excited by early traction often cast their nets too wide - trying to sell to everyone.

But when you try to reach everyone, you reach no one effectively.

Without a clear ICP, marketing gets spread too thin, sales conversations become generic, and you miss out on those critical opportunities that actually move the needle.

We discussed three key issues businesses face without a structured ICP approach:

1. Too Narrow: The market isn’t big enough to sustain long-term growth.
2. Too Broad: You can sell to anyone, but without focus, conversion rates tank.
3. Misaligned Focus: Moving to enterprise from SMB without a clear strategy causes more problems than growth.

Paul said number 2 is the major problem in the market today. Because the Grow At All Costs period taught so many that there is time and resource to spend. But today, that's not the same.

We spoke about how this often happens on Dragon's Den / Shark Tank - where people say "the toothbrush market in the US is worth ￡1 Trillion, and if we only get 0.1%... you know how those pitches end...!

What Makes a Strong ICP?

Getting it right starts with precision. An ICP isn’t just about the job title or industry. It’s about understanding the subtleties - like company size, geographical region, and specific pain points.

As Paul says, “Your ICP should guide every marketing campaign, every sales call, and every piece of content your team produces.”

Here’s how a well-defined ICP benefits your business:

• Improved Conversion Rates: Sales teams can target specific customers with laser-focused messaging, leading to shorter sales cycles.
• Increased Profitability: You spend less on marketing and outreach, and your team’s efforts become more efficient.
• Sustainable Growth: Rather than chasing every customer, you focus on the right ones - those who bring long-term value.

How to Nail Your ICP and Scale Profitably

During our discussion, Paul shared his playbook for navigating this tricky phase of growth - from ￡5M to ￡25M ARR. Here are his top tips:

• Step Back to Move Forward: Sometimes, you need to narrow your focus to unlock new opportunities. Start by honing in on a single industry, vertical, or region before broadening your approach.
• Specialise, Then Expand: Start with a specialized ICP and work to dominate that segment. Once you’ve achieved significant market penetration, only then look to adjacent markets.
• Avoid Spreading Too Thin: Many startups make the mistake of trying to cover every possible customer type. This leads to diluted value propositions and weaker pipelines. Stay focused on your core ICP and expand only when necessary.

"You have to step back to become more successful. The byproduct is, you’ll also become more profitable”

A Huge Upside? Getting This Right Will Make You a Magnet!

All in All,

Growing your business from ￡5M to ￡25M ARR is a tough challenge, but it becomes infinitely more manageable when you’re crystal clear on who your product is for.

Having a well-defined ICP allows your sales and marketing efforts to align, creating a predictable and repeatable sales process.

So, before you hire more salespeople or expand into new markets, ask yourself - have you nailed your ICP?

Let me know your thoughts in the comments - do you have a clearly defined ICP that you're targeting?

Like this? Watch the Full Masterclass!

What You’ll Learn in the Podcast Episode ???:

• How to avoid spreading your business too thin
• Why narrowing your ICP leads to better conversions
• How profitability beats growth-at-all-costs, every time!

Listen on Spotify

Listen on Apple

Or Watch on Youtube

P.s Are you Looking for a New Career Challenge?

(this will help!)

Waiting for a job to be advertised is like waiting for an RFP in sales. (it’s too late ??).

As GTM execs, we know that the best deals are rarely won by responding to RFPs. The same goes for your career.

By the time a job is posted, you’re already competing with hundreds of others.

That’s why I created the Dream 20 ICP Playbook, designed specifically for GTM execs who want to take control of their job search.

And play to their strengths (not by the standard rules)

It covers how to:

?? Define your personal value proposition (you’re the product!)

?? Identify your "Dream 20" companies and Ideal Challenge Profile

?? Flip the psychology (you’re interviewing them).

?? Offer value first and build real lasting relationships

?? Engage in human conversations and get meetings.

?? Be seen as the "go-to" trusted advisor for your true strength.

?? The response so far has been incredible.46 GTM leaders already have the playbook, and it’s about to be shared with 900 more in a major GTM exec community.

?? If you’re tired of waiting for the right role to be advertised, this is for you.I’d be happy to share the playbook with you - just drop me a message if you want to get your hands on a complimentary copy.

Thanks for reading & Stay magnetic

I'm Richard Washington, Founder of Tick Talent and it's my pleasure to share some of my best insights with you.

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