“If you build it, they will come.”
It’s a maxim that works for baseball diamonds in cornfields, not so much for building a bridge across the chasm between product-market fit and scalable growth.
In the canon of Silicon Valley mythology, no yarn is as durable as the garage myth: two brilliant Stanford dropout engineers have a “Eureka” moment in a rented garage and decide to start a company. Pretty soon they’ve developed a groundbreaking product and earned rave reviews from the first twenty customers, achieving the coveted “product-market fit.” And then, like magic, sales just go up-and-to-the-right because the product “sells itself.” A nice fantasy, to be sure.
For 99% of start-ups and every B2B company, the reality is different. Many B2B companies that build great products and achieve product-market fit struggle with sustained growth and fail to scale. After winning those first twenty customers, they hire a VP of sales and accelerate burn rate, only to go from twenty customers to… twenty-four. The gap between product-market fit and sustained growth is a chasm that swallows even the most dogged entrepreneurs.
Yet for such a universal gap, very little has been written about how to bridge it. Seeking to address this frustration, my friend and serial entrepreneur Bob Tinker, author of Survival to Thrival: Building the Enterprise Startup, coined a name for the solution: Go-To-Market (GTM) Fit. And if finding your GTM Fit was important before COVID-19, it’s essential now. Because many companies that have already bridged the GTM gap now need to go back and re-engineer a new bridge to cross it.
With this in mind, it was my pleasure to host a discussion with Bob, where we discussed best practices for finding GTM Fit and pitfalls we’ve experienced first-hand over decades of trial and error as technology leaders. Our key takeaways are summarized below.
- The gap between product-market fit and sustained growth is a chasm that swallows many B2B companies
- Go-To-Market (GTM) Fit is the missing link required to bridge the gap between product-market fit and sustained predictable growth.
- GTM Fit has 3 parts: GTM Model, GTM Playbook, and a wave of urgency.
- Refind your urgency by listening to prospects and customers for how their needs and priorities have changed.
- Adjust your value proposition if needed; there are no sacred cows.
- Measure success at each stage of your playbook to diagnose problems.
GTM Fit: Riding the Wave to Growth
To borrow Bob’s metaphor, finding your Go-To-Market Fit is much like learning to surf. It’s a three-step process: finding the wave, using the right board, and perfecting your technique.
First, find the right wave. This is your urgency: the reason why your customers need to buy your product now — not six months from now. If you can’t find this immediate need, you’ll never build momentum and crest that wave (more on that in the next section).
Next, choose the right surfboard. This is your Go-To-Market Model, the way you will approach and win customers. Selecting the right GTM model requires systems thinking across the company: different functions must complement and reinforce one another, in much the same way that various services of a technical architecture form a system that allows for reliable performance. Some companies will employ traditional “top-down” enterprise sales, with a large sales team and long sales cycles. In other companies, marketing will take the lead in identifying customers. Some tech companies will employ no salespeople at all, driving “bottom-up” sales through the product itself. Every company is different, so choose the surfboard that’s right for yours.
Board in hand, it’s time to catch that wave — again and again — by building your Go-To-Market Playbook, Your playbook is a 1–2 page flowchart that articulates the concrete steps of your sales journey, from identifying leads to closing deals. How do you find customers? How do you get them to the first meeting? What do you do and say at each step of the journey? What are the “wows” that excite customers to engage along the way? This playbook will allow you to grow in a repeatable, scalable way.
In the COVID-19 environment, codifying the “physics” of your customer journey into clear, simple steps is more important than ever. Your company probably already has an informal playbook for sales — a kind of “tribal knowledge” that everyone picked up around the office. But in a remote, distributed workplace, you can’t distribute this knowledge to new hires. Without a codified GTM playbook, new sales reps will have no idea what to do.
It takes grinding to distill your tribal knowledge down to 1–2 slides. But once you do it, everyone in your company will share the same version of reality. Getting everyone in sync reinforces the overall system and eases natural tension between technical (product and engineering) and commercial (sales and marketing) teams. Everyone — not just the sales team — should understand how they fit into the larger picture.
In our new COVID-19 reality, even companies who have found GTM Fit may need to go back to the drawing board. In order to reorient your GTM Playbook, you must refind urgency.
In order to refind urgency, you have to talk to customers. Their worlds have changed overnight. To quote Bob — if it was X, now it’s Y. Ask your customers about their most pressing priorities. With most CEOs keeping their budget spreadsheets open all day long, you’re likely to find urgency by finding a way to cut your customers’ costs.
Back in 2008, Bob’s startup MobileIron had just secured its first round of funding. Their value proposition: to provide security and support for offices using different kinds of smartphones. Customers were enthusiastic about the productivity gains they’d experience from the product. Then the financial crisis hit. Suddenly, those productivity problems weren’t so urgent.
By listening to recurring “hotspots” in their customers’ needs, Bob’s team found a way their product could indeed address an urgent problem: a feature that detected costly international roaming. MobileIron pivoted its value proposition and identified a new Ideal Customer Profile (ICP), the telecoms departments that were eager to prevent outrageous $10,000 surprise roaming charges. This feature — an “accidental byproduct” of the original technology — became a key selling point that helped MobileIron refind urgency, unlock growth, and go public in 2014.
Changing your value proposition can feel heretical, even like a betrayal of your founding vision. But for your customers, the most important features of your product are often not the ones your engineers spent the most time on, the ones that provoked a “Eureka!” in your garage. To quote Bob’s sage wisdom: there are no sacred cows. Listen to your customers and pivot to address their needs. Don’t let inertia make a decision for you.
Using Metrics to Diagnose Problems
With an explicit GTM Playbook up and running, interpreting metrics will become easier as you watch customers moving from stage to stage of your GTM motion. When you’ve caught your wave of urgency, you’ll start to see it in your leads, at the front end of your pipeline. Customers are more willing to talk. Volume and conversions go up. New salespeople will start winning deals. The pipeline will grow, and you’ll feel the momentum as your growth engine fires on all cylinders.
But sometimes one of the gears in your growth engine slows, or even stalls. Customers are getting stuck in the free trial stage, for example. Zoom in on the stall and diagnose the problem. Was their demand not in fact urgent? Are you not enabling the customer to experience value? Is there a sales follow-up problem? Focus on unsticking that stubborn gear.
Bob recently worked with a startup whose customers were stuck in the evaluation stage — the stage where customers research and weigh whether your product is the right fit for them. After zooming in on the problem, they found customers were not getting fully up and running with the product. So they split the stage into two stages to make sure the customer could get fully operational. And it worked — the startup was recently acquired for a healthy premium.
Pitfalls to Avoid on the Road to GTM Fit
Between the two of us, Bob and I have learned our fair share of lessons from mistakes made on the road to Go-To-Market Fit. Here are a few that come up time and again:
A good PowerPoint is only one bullet point in a GTM playbook — not the playbook itself. Impeccable slides and a slick font are part of a sales pitch; the GTM playbook is a repeatable process that codifies each step of the sales motion.
Finding GTM Fit is not a job for the founder. The best founders are great at reeling in the first 10 to 20 customers and finding product-market fit. With a religious commitment to their vision and inside-out knowledge of their product, they can walk into a room, sprinkle their magic founder pixie dust, and walk out with a sale. But this kind of sale is not repeatable. In order to scale, your playbook must be achievable by your sales team, and not dependant on the founder’s je ne sais quoi.
As you close in on your GTM Fit, don’t jump the gun by hiring a VP of Sales too early. In the early stages of your startup, you’re in “Davy Crockett mode” — experimenting and hacking your way blind through the backwoods to find your urgency and tune up your GTM Playbook. Hold off on hiring a high-powered VP until you are truly ready to increase burn and charge out of the forest.
The COVID-19 crisis has certainly thrown most of us back into the woods. But in this moment of disorientation, you have a great opportunity to get back to basics and reorient. By listening to your customers and re-finding your urgency, you can leverage your exploration into a clear, scalable process that will rally your company and build a bridge toward sustainable growth.
A huge thanks to CEO and author Bob Tinker (@BobTinker) for writing such a practical book on this topic, and for sharing his wisdom with me and contributing to this article.
We empower and invest in visionary financial entrepreneurs. Learn more about Portag3 Ventures at p3vc.com.