“Build it and they will come!”
… Is quite possibly the number one attitude that kills great ideas and early stage startups.
By virtue of you reading this, I have confidence that you have come up with a great idea, you’ve convinced a partner to jump in and build some form of product with you and…
… you don’t want to unintentionally build a product that no one gives a shit about.
In this guide I’m going to provide you with a way to validate and build your product while you acquire your first customers, giving you a far better chance of long term success.
The technical name for this is a go-to-market (GTM) strategy, and this will help you achieve the mission critical product-market-fit as quickly as possible.
Let’s get into it.
First up, what is a go-to-market strategy for startups?
Put simply, a GTM strategy is a tactical plan that outlines the steps necessary to succeed with a new customer persona or in a new market. An effective GTM strategy will help you find and sell to your ideal customer profile in the most efficient way possible.
This is different to a marketing strategy, which is used on an ongoing basis once you’ve achieved a level of product-market fit. The best way to think about your GTM strategy is to frame it as the plan you and your team will execute to launch your startup, launch new products, pivot and enter new markets. Whereas your marketing strategy is what you execute once you have proven some degree of success with the GTM strategy.
The GTM strategy is the “before”, and the marketing strategy is the “after”.
Broadly speaking, a great GTM strategy does the following:
Defines your initial ideal customer profile/persona (ICP)
Includes tactics to convert your initial ICP into customers
Allows you to build, measure and learn with your ICP to the point where the ICP becomes a raving fan!
If your goal is to build a venture-backable business, you do not have the benefit of time. You’re on a treadmill and building your startup is a race against the clock i.e. until your runway dries up). If you want to stay in the game, your GTM strategy is your ticket to hitting product-market-fit in the shortest amount of time.
Why do startups need a go-to-market strategy?
A GTM strategy is a time and capital efficient way to make sure that your product actually solves a real problem for your customer, and that they’re willing to pay for it.
In addition to this, your GTM strategy will help you achieve the following:
Detailed characteristics about your ideal customer profile
Up until this point you are likely working with a number of assumptions. Your GTM strategy will help provide hard data so you can narrow your focus. And, as you should already know, a clear focused customer type is critical to product-market-fit
Reduce the risk of your product launch
With qualitative user testing you will have ‘validated assumptions’ regarding what elements/features of your product are the most impactful. By executing a GTM strategy you will also quickly gather hard data on whether your assumptions are correct and/or if there are other features that are mission critical to turning customers into raving fans. Hey, you might even find that the product you’re building solves an even bigger problem than you initially thought!
How to market, sell & serve your customer
In order for you to bring on X number of early customers you are going to have to communicate, message and pitch what your product actually is. It will likely take a number of iterations and a bunch of people saying ‘I don’t get it’ before you start to notice a pattern that seems to work, which you will be able to apply to your future sales and marketing strategies. You will also need to serve these early customers, which will inform what type of customer success strategy you will need for your full launch.
Attract better funding terms
As a pre-seed company with no revenue and no users you have very little leverage (a requirement for a great investment deal). But, with a well thought out GTM strategy that encompasses something like a ‘beta customer waitlist’ who are itching to get their hands on your product, you’ll put your startup into a position where you can raise money quickly and on founder-friendly terms.
Let me be super clear. Point 4 is vital to your survival. I have personally been in a position with no leverage going into a funding round and guess what?
That startup failed. And it freaking hurt.
Just in case you still need convincing that a GTM strategy is worth your time, Harvard Business Review has an excellent example of what happens when a startup launches with a poorly calibrated GTM strategy:
Harvard case study
A five-year-old software company was breaking even operationally after a couple of rounds of funding. However, its salespeople were not able to expand deals with customers beyond a trial stage. The problem was that the company was pitching a product but hadn’t really considered the customer pain points that the software was meant to address. Things only started to turn around after consultants told the startup’s leadership to focus on three large enterprises and describe the business challenges that those organisations were facing. Then, armed with a renewed GTM strategy, the salespeople were able to start identifying some large opportunities and convert these opportunities into paying customers.
You may be thinking that this sounds like sales 101. That’s because it is! Yet thousands of startups get this wrong every single year. Don’t be one of them.
This example highlights exactly why the GTM strategy is so important for every startup: you could end up with an incredible product to sell, but if no one knows it exists or if it doesn't adequately solve their problem, the effort put into product development will have gone to waste.
A GTM strategy allows you to better align with your target audience, iterate on early feedback and ensure that real customers care about your product as quickly as possible.
What are the five elements to include in a go-to-market plan?
GTM strategies will differ from startup to startup. Regardless of what approach you’re taking, a strong GTM strategy will need to include following key components:
The Market Definition:
Start with this. What market are you going to target with your product? Who are your competitors? How does your customer currently solve this problem? In an earlier article, we looked at total addressable market, serviceable addressable market and serviceable obtainable market (TAM, SOM, SAM). That information can inform this market definition.
Key Takeaways
By now you should understand that a solid, thought out GTM strategy is essential for your startup. Some founders allow their GTM strategy to distract them. It becomes overly complicated with multiple buyers and they ultimately end up wasting a tonne of precious time.
Your GTM strategy when you’re pre product has one objective:
Acquire the right customers & validate your product as quickly as possible.
Keep it simple. Keep it flexible.
Build, measure, learn… and sell the socks off your product.