An ideal customer profile describes the kind of person or company that gets the most from your product and is most likely to pay for it.
A useful one is narrow and concrete: not "small businesses" but "freelance designers who invoice five to twenty clients a month". The narrower it is, the easier it is to know where those people are and what to say to them.
It is a guess at first. The customers who sign up, stay and tell others are the evidence that corrects it.
Why it matters for a launch
Your tagline, your category on a directory and the communities you post in all follow from who the product is for. Without an answer, every one of those is a coin toss.
Read more: How to write a product tagline