A founder’s ability and willingness to execute the right Go-To-Market (GTM) strategy is perhaps the most important factor in determining a startup’s future success.
It is now much more difficult to find the optimal “go-to-market strategy” for an enterprise startup than it was a decade back. Founders need to understand that the best GTM strategy starts with product strategy. It requires that you, as a founder, act as an expert conductor for several important functions within the organization.
The Old “Go to Market Strategy”
Traditionally founders hired talented engineers and gave them 18-24 months to create a better mousetrap and once it was ready for buyers, they would hire marketing and sales staff. Startups quickly grew their sales teams if they were successful. Marketing was about creating and publishing professional-looking content that buyers could consume.
Sales were more about recruiting a “force”, a group of people who could charm, wine, and dine their way to the top of the list of potential buyers and eventually drive a sale. To win over senior executives in their target accounts, sales account executives used large entertainment and travel budgets to enjoy the many dinners, concerts, and golf they needed.
A whole ecosystem of Value Added Representatives (“VARS”) was created whose primary “value” was the relationships they commanded, which could be made available to sales-hungry startups looking to push their new products through the “channel”.
Then Self-Service through the freemium model became vogue as the preferred way to engage customers and this caused a huge change in how products were sold in the market, especially for those who were in B2B.
The New Go-To Market Strategy – What’s Changed?
The adoption and purchase of new solutions were decentralized, as opposed to a centralized process within businesses.
Enterprise buyers no longer had to be limited to those in the C-suite, who made all decisions and “passed” the purchases into their companies. The old model was flipped upside down when individuals became both the first buyers and users of enterprise products within their organizations as well as the decision-makers and executors for any additional purchases.
This was a great opportunity for founders to create companies that embrace this new paradigm.
As a result of a significant shift in buying behavior and fundamentals in how businesses and people sell to each other, the level of operational and strategic sophistication required to run a successful enterprise startup GTM strategy has increased in recent years.
People don’t like to be sold to. The current founders are innovators who, right from the beginning of their companies, innovated as much in technology as in their go-to-market motions. These companies chose to embrace a process that provided innovation instead of just building products, patenting them, and then building sales and marketing organizations to go to market.
Seven principles underlie the new GTM system
- Make sure your product or content about the product is easily found by people who Google the problem.
- Create a product for free that allows the user to quickly experience the benefits of the solution.
- Nurture and build a customer-first mindset to allow for quick response times and a group of like-minded Users that are supportive of the product.
- Understanding the needs and profiles of Buyers and Users in a prospective customer is key to creating material and processes that maximize engagement.
- Create a product experience that allows both the initial purchase as well as the expansion purchase to be SELF-SERVICE.
- Protect the new product with IP laws to ensure exclusivity rights to your discovery.
- Establish sales engagement models so that account representatives only interact with prospects after they have demonstrated product engagement. This greatly increases the productivity of a startup’s largest resource.
The modern GTM model requires that you create an organization with a wide range of skills and high levels of teamwork to build a startup. Enterprise startups that used the traditional enterprise GTM model for their business had product and engineering teams that worked in a more sequential, siloed manner.
Sales and marketing were responsible for finding ways to enter an organization and close sales. The modern Go-to-Market strategy has more interdependence between the different teams, which are –
- Product, which is usually an MVP,
- Legal, and
Educate Your Customers
Education is a full-time responsibility in the new GTM as quality educational content is the best way to draw potential users. It turns out that people love to learn, even more in times of pandemics. Marketing material is not the best way to attract potential users.
Quality educational content is better than marketing material. The pipeline of sales is ultimately managed by marketing. If you assign the product marketing team the task of producing educational content, you’ll get amazing stuff that will set off the “BS detector” in most users.
Educational content that addresses real tactical or technical problems users face in a convincing way is of high quality and has learning objectives.
Marketing is closely linked to Education but is responsible for two things:
- Helping to create messaging that clearly communicates the company’s value proposition for the BUYER and assisting with educational content narratives and messaging for the USER.
- Optimizing the content distribution plan and SEO plan that drives USERs and BUYERS to the startup’s site and satisfies BUYERS at the appropriate stage of the sales process.
How you can Obtain Permission from Users interested in your Educational Content
This is a basic element of permission marketing. For this, you need your product and marketing to be in tune with each other.
Modern Go-To-Market Product is closely integrated with all functions within the organization.
Education and Marketing collaborate with Product to create and define the material. Once the user visits the startup’s website, the product ensures the user experience. Marketing and Product collaborate closely on the website UX in order to give the user accurate positioning and consistent messaging.
Modern GTM offers a new role for startups in community management. It is important for founders to understand that potential USERs do not want to engage with salespeople. They do appreciate being supported and getting their questions answered by an active source.
Modern GTM has made community management an integral part of its operation. It supports daily engagement and provides valuable feedback for product management, education, and ensuring all the 7 functions of marketing are duly performed.
To ensure that the user’s journey is uninterrupted, we recommend that sales be kept away from the customer community that you are trying to build or else you might come off as pushy. Instead, try to incorporate an optional sales funnel that puts the ball in the customer’s court should they wish to interact with sales.
Founders should hire a sales executive with experience in the new GTM strategy. Some salespeople can apply ruthless objectivity in their early customer conversations to steer every function of a startup on the path toward product-market fit. This critical feedback helps the company prioritize the best product features, improve the marketing and educational content, hire engineering skills, and reach funding goals.
This is the same as in the past four decades. Old GTM or Modern GTM – it doesn’t matter. Quality Sales experience and judgment are essential to any early startup.
It is not an easy task for a founder to put together the right team to execute the Modern GTM. This requires self-awareness. It can make the difference between success and failure early on. The founder is responsible for ensuring that the company has the best possible people in each role. He/she also needs to learn at the pace the startup requires to reach its goals.
The most fundamental change in the Modern GTM vs. the old GTM model is the creation of specific steps and actions for two distinct persons – the user and the buyer.
As we have discussed, the buyer is the most powerful person in a sales decision in the GTM motion. Marketing and sales teams thus keep on targeting this person.
In the old days, the decision to buy was a central one, with power concentrated in the C-Level executive suite.
The buying of enterprise software is now largely decentralized. This means that individual USERs have the power and authority to search, select and buy solutions. The Modern GTM strategy for enterprise startups should first focus on the user’s needs. Only after they are satisfied, and have become solution champions, can the process of engaging the buyer start.
Till now, we have been focused on the user. The users have a hierarchy of needs and a behavior pattern founders need to understand. Users prefer a self-service approach when searching for and using new solutions.
Although not all user types will be able to follow the same steps, we see them frequently:
Step 1: The user searches for content that will help them to solve a high-priority pain.
Step 2: The user completes the educational content and is asked to click a link to go to the site of the content provider.
Step 3: The user finds the website that matches their needs and then discovers an easy and quick product trial experience.
Step 4: A trial experience provides quick value and an “Aha!” experience.
Step 5: The user demonstrates repeat engagement in the trial product.
Step 6a: The user is convinced that the solution works and becomes an internal champion or initial purchaser.
Modern GTM motions that are successful nurture a high number of USERs through each step. They also do so efficiently.
This requires a collaborative effort by the startup, its Marketing, Education and Product divisions, as well as the community functions. These efforts must be coordinated by the founder, who should set goals to ensure alignment between all teams.
The user becomes a champion for your solution at Step 6. Despite being the first purchasers of solutions and sometimes leading the charge for expansions, users are often not the best people to close more deals with. And this is where founders should make plans to hire salespeople.
For some startups, the buyer and the user may be the same person. But, sometimes, these two people can be very different. No matter what your situation may be, it is important to recognize that different motivations exist for your solution than for the purchasers.
This means that you will need to create marketing materials and engage in processes to maximize both. Sales is the main driver of each step. Sometimes, Product, Marketing and Education are also involved.
Product Led Growth (PLG) as Go-To-Market Strategy
Product Led Growth is an integral part of the Modern GTM strategy. One of the ways founders can get confused is when “PLG” is used in the same way as “bottom-up” to describe the strategy for GTM.
The Modern GTM is a strategy that uses a “pincer” approach to engaging with prospective customers. We also explain the realities of successful execution. The Modern GTM strategy is a combination of top-down execution and Product Led Growth.
Combining the two is what allows the startup to engage successfully with both the buyers and users.
That’s all. If you found the piece insightful, do give it a share and drop your thoughts down in the comments!
About the Author:
Adhip Ray is a startup consultant, the founder of a startup consultancy WinSavvy and an advisor at PatentPC. Although he hails from a finance and legal background with twin specializations on intellectual property rights and corporate law, he has been a marketing geek since 2015! He is also an author at HubSpot, Addicted2Success, StartupNation, and several other business publications.