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Three questions that help you find the 12.5% of the market most likely to become your customer.

Three OR Questions

The goal is to identify your ‘Initial Client Profile’ (ICP) – that 12.5% of the marketplace that is more motivated and therefore likely to become your customer now instead of later.

Why “Initial,” not “Ideal”? Most frameworks call this the Ideal Client Profile. We use Initial deliberately. “Ideal” is aspirational — the customer you’d love someday. “Initial” is operational — who you can win right now. Start where you can win, validate, then expand. The ideal client emerges from the initial client’s success.

It is well known in the world of retail that the secret to success is location, location, location.

If you are a startup, the secret is focus, focus, focus!

Focus on:

  • One problem
  • For one customer type
  • In one industry or geography

The narrower your ICP, the fatter your wallet.

TAM  >  SAM  >  SOM  >  SIM

A funnel narrowing left to right through four stages: TAM the total available market at 100 percent, SAM the serviceable addressable market, SOM the serviceable obtainable market, and SIM the serviceable initial market at about 12.5 percent.TAMEveryoneSAMAddressableSOMReachableSIMMotivated100% of the market≈ 12.5%Narrow from everyone with the problem down to the slice motivated to buy now.
Identifying Your 'Motivated' Market

TAM — Everyone: if everyone in your market became your customer

SAM — Addressable: who has the problem you are addressing

SOM — Reachable: the portion of SAM that you can actually reach

SIM — Motivated: the portion of SOM that is motivated to change

The Bifurcation Funnel

A clean bifurcation moves from a wide market to one specific buyer in four cuts: TAM → 50% → 25% → 12.5% → validated ICP.

The first three steps narrow with OR questions. The last steps prove you got it right.

A decision tree. TAM splits with an OR question into a kept 50 percent and a discarded half. The 50 percent splits into a kept 25 percent, then a kept 12.5 percent, each time discarding the other half. The final 12.5 percent becomes the validated ICP.TAMeveryone with the problem50%kept after OR-cut 125%kept after OR-cut 212.5%kept after OR-cut 3ICP ✓validated client profilediscardedthe half you didn’t pickdiscardedthe half you didn’t pickdiscardedthe half you didn’t pick

The Bifurcation Funnel

A clean bifurcation moves from a wide market to one specific buyer in four cuts: TAM → 50% → 25% → 12.5% → validated ICP.

The first three steps narrow with OR questions. The last steps prove you got it right.

  1. TAM (Total Addressable Market) — Everyone in the world with the problem from Box 1.
  2. First OR Question — Splits TAM into two halves of roughly 50% each. Pick one side using the three-part framework above.
  3. Second OR Question — Splits the remaining half into quarters of roughly 25% each. Pick one side.
  4. Third OR Question — Splits the remaining quarter into eighths of roughly 12.5% each. You now have your ICP slice.
  5. ICP Sentence — Write the result as one sentence describing one specific person. Example: “Restaurant managers of non-chain restaurants, under 35, with fewer than 20 staff.”

Use this framework to guide which side you pick at each cut:

  1. Where is the biggest need?
  2. Where is the least competition?
  3. Where is the greatest risk of inaction?

PrepPilot example: Chains OR independents? → Independents (biggest need — chains already have corporate tools). Under 35 OR 35+? → Under 35 (least competition — younger managers adopt new software faster). Under 20 staff OR 20+? → Under 20 (greatest risk of inaction — one no-show can shut down a whole shift).

Validating Your ICP

Three tests to confirm your bifurcation landed on the right person.

Test 1: Can You Find This Person on LinkedIn in 10 Minutes?

If not, your ICP is still too vague — bifurcate again. A properly specific ICP should surface real matches within minutes. "Sarah, who manages scheduling at a mid-sized restaurant downtown" is better than "restaurant managers."

Test 2: Does This Person Have the Problem from Box 1?

If not, bifurcate again. Your ICP must be the person who experiences the specific negative outcome you defined — not a related person in the same company or industry.

Test 3: Does This Person Have Both the Authority and Urgency to Buy?

If they have the problem but no budget, bifurcate toward the person who does. The money, authority, and influence to act must all sit with the same person — or your ICP is incomplete.

Worked Example

Back to PrepPilot — the shift-prediction app for independent restaurants. Here is how PrepPilot bifurcates its market down to one ICP.

TAM — Everyone who runs a restaurant.

OR-cut 1 — Chains or independents? → Independents.

OR-cut 2 — Owner-run or manager-run? → Manager-run.

OR-cut 3 — 20+ staff or under 20? → Under 20.

ICP Sentence — “Managers of non-chain restaurants with fewer than 20 staff.”

LinkedIn Test — In ten minutes we found three real matches, including the manager of a 14-seat neighbourhood bistro. ✓

Authority Check — The manager owns the labour budget and signs off the schedule — money, authority, and influence confirmed. ✓

“Profile, not Persona. Client, not Company.”

3 Common Mistakes

  • Choosing the bigger half. Founders almost always pick the larger side of each bifurcation because “there’s more opportunity there.” The bigger half is more obvious, more crowded, and more comfortable — exactly why it’s harder to win. Instead, bifurcate three times — 50% → 25% → 12.5% — until you land on the slice of the market most motivated to buy now.
  • Defining ICP as an Ideal Company Profile or a Persona instead of a specific person. A company can’t sign a contract. A persona is a demographic sketch — not a specific person with money, authority, and influence to buy. Instead, name a specific person with the money, authority, and influence to pay — someone you can find on LinkedIn in 10 minutes.
  • Selecting multiple markets instead of picking one. “We target restaurants AND food trucks AND catering companies” is not bifurcation. Listen for “AND” and “OR” — they are the single biggest tell that you haven’t bifurcated. Instead, bifurcate until your ICP contains no ANDs and no ORs — then in Box 3 you’ll map the three forms of competition trying to win that one person’s attention today.

What’s Next

Download the fillable Traction Canvas template and write out your three OR questions.

Work on Box #3 — Competition. How to map the three forms of competition every startup has — and why your real competition is rarely who you think it is.

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