A look at the last thirty years will show you time and again how innovative products - built by smart and talented people have failed, or fallen far short of their potential. You may recall a favorite program, service or startup that seemed destined for successes before something went wrong along the way. Too often we see great products die shortly after they get to market.
We celebrate the brilliant technical minds of our engineering teams for good reasons; they find creative solutions to challenging problems. In truth, selling technology - bringing new programs and services to market – may be even more difficult than building the product in the first place.
My firm, Ramp Equity Partners, is hired to address the unique challenges early stage technology companies face when taking new services to market. The executives and board members for the firms that hire us, see Ramp as rainmakers. We built a track record of working with small teams to do great things, but we learned many of our lessons the hard way. Along with my colleagues, I have lead teams in product management, marketing, sales and business development - launching new products in each stage. I made my share of mistakes. As a startup, when those mistakes are hitting your credit card, the lessons sting.
When raising funds, seeking key account development or a strategic exit, startup executive teams will understandably focus on how quickly they can accelerate market adoption and revenue growth. To achieve transformative growth, technology startups need to execute an effective go-to-market (GTM) strategy.
What is the go-to-market strategy?
The GTM strategy details how the company plans to reach its targeted customers and gain a commanding market presence.
When we work with a new team to execute a GTM strategy, our first step is to audit and understand the work already done. If your product is solid, there are a number of key steps you can take to establish a foundation that will deliver transformative growth. I call these the five pillars of the successful go-to-market strategy.
Your team has doubtlessly given each careful consideration. The challenge for a startup is to recognize their interdependence and the need to cycle through your process as the market and product change. It can be a time-consuming and frustrating process, but the effort will pay off.
The five pillars are product analysis, product messaging, the sales proposition, marketing strategy and the sales strategy. As you will see, there are good reasons to address each in this order.
Product Analysis
Most startups have products in an evolutionary state. New ideas and responses to the market or key accounts can put the value proposition in flux. A critical first step is to understand the state of your current product. What is the market potential for it now as opposed to what the product team plans for in their roadmap? Plan for the time and capital expense required in taking the product to its intended state. This may limit your resources and marketing strategy. A sober assessment at this stage will bring your team expectations into alignment.
Look carefully at the targeted users and create valid personas to guide your GTM strategy. Have you clearly defined the value you provide the user? Is your market well defined? Recognize that as the product evolves the user value and market definition will shift. Everything in a successful GTM strategy will reference these core declarations, so you must ensure they remain valid.
Product Messaging
Product messaging starts with a basic product position statement. A typical positioning formula will look something like this: [Product name] is a [product class] for [target market] that [product purpose]. Unlike [competitor] [product name] has [unique features].The message makes certain you are communicating your product’s core objectives clearly. It may seem simple, but this can be a big challenge to a lot of startups.
You will next need a careful evaluation of the competition, being sure to consider the status quo. Recognize how your buyers and users may be different. Developing good personas will force you to consider how your buyers and users perceive the product and how they make decisions.
Another critical consideration at this stage is your product value. What is the business case your buyer will make to capture a budget commitment? What is your product objectively worth? How do you define and defend the worth of the product?
Sales Proposition
When engaging in direct sales, most startups need to consider how messaging is delivered in different stages of the sales cycle. The early stage needs to place an emphasis on the business case. Case studies and white papers are a good example of sales collateral helpful early in the sales cycle. Mid-stage messaging should focus on how your product compares to the competition. A classic example mid-stage messaging is the competitive product matrix. Late-stage messaging shifts the focus away from the product and to the business relationship. Testimonials about the value of your post-sales support are a good example of late-stage messaging.
When evaluating your current sales proposition, take time to audit your existing or targeted strategic accounts. Does the value proposition align to their needs? How are the account expectations being managed? What quarterly milestones did the team establish for the accounts and how are they tracking against those milestones?
Next, consider your pricing. How clearly do you define the delta between the price and the value? How does the pricing line up to the competition? Does it factor for the buyer’s decision-making process? If you chose a premium pricing structure you must be sure your sales proposition supports it.
Marketing Strategy
With good user and buyer personas, we can craft targeted audiences and a plan to reach them with the right ad campaigns. Look at age, geography, income, title, affiliations and online behavior to create campaign audiences to test. The power of digital marketing is the capacity to test targeting audiences with unique messaging, images and creatives that initiate the call to action across a number of advertising channels. Effective test results can be attained with a limited budget. We will often test a full set of messages on Facebook audiences with budgets of just $50 per day.
The best digital marketing teams follow an agile model with sprints that continually test channels, ad creatives and targeting. Starting with small budgets will help you dial into an optimized conversion rate.It also allows you to be sure your analytics capture attribution that allows you to measure the lifetime value of a customer credited to the campaign. Scoring your outcomes accurately will let you direct how and where to expand your digital budget. When you move to less nimble advertising channels you will benefit from the tested ad messaging and KPIs.
Sales Strategy
The last of the five pillars is the sales strategy. Begin your assessment with a candid evaluation of your current sales pipeline. Does it reflect your current sales potential? Can the pipeline reporting be counted on to accurately predict future revenue?
Define your partner strategy. What products complement yours? What products are likely to be purchased before or after yours? What advantages can be gained in marketing jointly with these providers?
A channel partner strategy is classic business development. Consider how and when others might add unique value when selling your products. In practice, business development is the art of getting others to sell on your behalf. This is why a single business development manager will often outperform an entire sales team.
With clear product messaging, key account plans, pricing strategy and quality lead generation, you can build a solid revenue roadmap. This is also the time to look candidly at your sales team. Do you have the right people in place? What skills do they need? How long will it take them to complete a sales cycle? What compensation plan is needed to incent the needed performance? And how will staffing impact your sales forecast?
Execution
It helps to have a great product, but that is not always enough. In the end, your success is dependent on your capacity to execute. Building a solid GTM plan will give you the framework you need for transformative growth. Having the right people working with you, collaborating, challenging your assumptions and providing encouragement will make all the difference.
The best minds of the best teams working on the greatest ideas will still make mistakes. Taking new technology to market can be a huge challenge. Crafting a solid GTM strategy, which carefully integrates product analysis, product messaging, your sales proposition, marketing strategy and sales strategy will help you avoid mistakes. It will keep your resources focused and help you execute a strategy with the greatest potential for success.
