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Beyond Product-Market Fit: Why Go-To-Market Strategy is Just as Important as Product

January 18, 2023 Startup Ecosystem
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“Build it and they will come” is not a go-to-market strategy.  This seems like an obvious statement, but too many early-stage entrepreneurs minimize the importance of a go-to-market strategy. If you’re a brilliant engineer and you’ve developed the next game-changing product, you might assume that customers will find you, or flock to you!  But if nobody knows what you’re doing, and you don’t engage with potential customers in a systematic way, then your product, and emerging venture, will never get off the ground. 

The reality is that you should treat your go-to-market (GTM) strategy with the same care and attention as you do your product development. Like your product development, your GTM strategy requires great insight, expertise, and a kind of engineering to be successful. 

It might be helpful to view your product development and GTM as two startup companies in one that need to coordinate closely and become the best of friends. Let’s put this in the context of the lean startup framework to better explain.

In lean startup, you employ customer discovery to understand your ideal customers’ needs and use design thinking, build-measure-learn cycles, and agile product development to iterate on your product until you’ve reached product-market fit.  But that’s pretty much where the lean startup framework leaves off.  Get to product-market fit and it’s clear sailing from there, the framework might imply.

But that’s not where the story ends.  Many startups fail to appreciate the need to plan and execute their GTM strategy in the early stages, in parallel with their product development efforts. Like your product development, your GTM strategy will require time to learn from and iterate on before it can mature into a successful distribution engine for your product. In this sense, like product-market fit, you also need to find ‘go-to-market fit’.

The search for GTM fit, like product-market fit, starts with your target customer and their needs.  And in parallel to the customer discovery, design thinking, and agile development required for your product, you need to develop and refine the elements of your GTM strategy, which includes:

  1. Identify your buyer persona(s) — your customer discovery efforts may have pointed to your target market, but you must also identify the specific type of person(s) most likely to be the buyer within that market, which may include several personas that make up the buying process in the case of complex, big-ticket sales (read more).
  2. Understand your buyer’s journey — once you know your likely buyer, you need to understand the steps and obstacles in their buying process so you can meet them where they are and with the appropriate content (read more).
  3. Understand your differentiation from competitors — create a competitor matrix to know how you stack up against competitors and how to best position yourself with buyers (read more).
  4. Develop your pricing strategy — how you price your product now and in the future is another often overlooked element, but is critical to success (read more).
  5. Choose your distribution channels wisely — there are many possible marketing and sales channels to get to market – SEO, paid ads, social media, email, inside sales, field sales, partnerships, etc.  But there is likely an optimal channel set that offers the best growth potential for your product, so finding that is critical.  You want to get to ‘product channel fit’, as Brian Balfour recommends (read more). 
  6. Map out your sales funnel (or flywheel) — create a visual representation of your sales process through the buyer’s journey stages and list the channel(s) and metrics used at each stage (read more).
  7. Create a messaging matrix — which can be a helpful bridge between understanding your buyer personas and your sales and marketing content strategy (read more). 
  8. Create sales and marketing content — you’ll need to create content tailored to your buyer persona(s) for every stage of the buyer’s journey, which is aligned with your positioning, messaging, pricing, and channel strategies to compel your target customers (read more).
  9. Launch and execute on your GTM strategy — assuming you have an MVP ready, you may be ready to launch.  Make sure you’ve planned your product and GTM logistics prior to launch (read more).
  10. Measure results — use the appropriate metrics at each stage of the funnel (ie: ACV, LTV, Sales Cycle Length, Conversion Rate, Retention Rate, etc.) (read more).
  11. Learn, Learn, Learn — As with your product development, you’ll want to create a systematic process for incorporating your learnings about your GTM strategy and refine it over time until you reach GTM fit.  This will require using both your quantitative metrics as well as qualitative data, including feedback from customers. 

“Sit with the problem”Rich Rao.  Rao, a software developer by trade, who became a GTM guru early at Google and with other startups, talks about the need for refactoring the elements of your GTM regularly.  By that, he means carefully deconstructing and reengineering the GTM elements listed above as needed.  Given the number of variables in the GTM process, he recommends “deep understand work”, leveraging your qualitative and quantitative data, as well as insights from your team members and customers, to get to GTM fit.  And he often tells his team to sit with the problem and wait for insights to come. That includes thinking about the universe of possible data that you’re not currently measuring, and how to get it. 

GTM fit is all about optimizing the elements of your GTM for the success of your product in your target market. It’s about getting to a repeatable and scalable growth model to acquire and retain customers. 

Poor GTM strategy may be the number one cause of failure. Many entrepreneurs learn this the hard way. And many second- and third-time founders prioritize GTM as much or more than product development. Again, it may help to think about GTM as another startup within the startup that requires its own build-measure-learn cycles to get to GTM fit, in close coordination with the product-market fit effort.

The elements of a Go To Market model for startups

It’s worth noting that early-stage investors understand the importance of GTM as well, through their experience with portfolio companies. They will do as much due diligence on your go-to-market strategy as they will on your product, market, and team. So, if you plan to raise early-stage capital, you’ll want to have a solid, well-thought-out GTM strategy, and demonstrate a learning and iterative mindset aimed at GTM fit. 

It goes without saying that you may need to bring on an experienced GTM professional sooner than later to help craft and execute a plan if you don’t already have those skills in-house. But even if you can’t afford to bring someone on board yet, there’s a lot you can learn, implement, and experiment with on your own to get started. In fact, engineers may be uniquely qualified to think through and design an initial GTM strategy, if they’re inclined to learn the steps and variables, and perhaps go outside their comfort zone. 

At the end of the day, you need an effective and sustainable GTM strategy that actually works, and gets your product in the hands of your target customers to achieve growth for your startup.