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How to align your sales and go-to-market strategy

This article was an excrept from a Webinar at Stone and Chalk Melbourne, and published as a blog post here:


To commercialise Innovation usually means creating a New market, and new market development has its unique challenges. Due to limited VC funding, Customer-funded sales are becoming more important, however, customers' budgets might also be tightening. To succeed, it's important to scale faster and avoid unnecessary activities by staying focused and making the right decisions. Therefore, an aligned and leveraged go-to-market strategy reduces time to revenue, effort to sales and higher probability of sales closure.

When you introduce a new idea to the market, you're shifting market and people’s behaviour from status quo to a new paradigm. Startups usually target early adopters buyers who love new things, but mainstream buyers who want practical solutions. Therefore, many startups struggle to reach mainstream market success due to two key market challenges.

Key market challenges

Challenge 1: Shifting from Early Market to Early Majority

The early market and early majority have distinct buying needs and criteria, leading to a phenomenon known as the chasm, which many startups fail to cross over thus unable to achieve sustainable growth.

In the early market, people who love technology care a lot about the product itself, like its technology, features, and how easy it is to use. To sell to them, you have to show them why your product is better. On the other hand, the early majority are more practical and care about the market leaders, the standards, and the costs. They want a complete package and none of the inconvenience that early market tends to tolerate.

Competition is also different in these two markets. In the early market, especially in business-to-business sales, the competition is about getting a share of the money that companies have set aside. But in the early majority, the money comes from a different budget, and customers need to compare market leaders within a common category and choose the best option. If there's no clear competition or established market, it's hard to convince customers to buy. However, this also means there's a chance to create a new category and become a leader in it.

Challenge 2: The market consolidation

The second challenge occurs when a new market category consolidates. As that happens, one company will emerge as a clear leader, termed the “category king”, leaving the smaller competitors behind. Being a category king comes with significant benefits such as attracting the best talent, and earning higher profits due to having the largest customers and the ability to command higher prices. Therefore, becoming the category king should be your ultimate goal, rather than just focusing on increasing sales.

Alternatively, if becoming a category king is not yet possible, aim to become a beachhead queen in a smaller niche then sell it to the category leader and make a profitable exit. However, if there is still room for growth in the market, expanding beyond your niche and creating a new category can be worthwhile, giving you the opportunity to strive for the dominant position.

Steps to address the market challenges

Step 1: Find your starting point

To overcome the aforementioned market challenges, start by finding a beachhead where you can establish yourself as the queen—de facto vendor. Focus your sales, marketing, and partnerships on this niche. Remember, there will always be a dominant player in each market category, so be aware of potential competitors. Don't just consider the size of the market, but also the value of solving the problems faced by customers in that segment. The more painful the problem, the more willing they'll be to tolerate imperfections in your product.

Step 2: Build a complete solution

Once you've identified your starting point, build and deliver a product that meets the specific needs of your beachhead. This complete solution, tailored to the segment, is known as a whole product. The whole product model helps you understand how additional value can be added to your core product.

Assess your product from the customer's point of view, not from the product manager's perspective. It will guide your development efforts and investments to meet market demands. In the early stages, tech enthusiasts and visionaries may accept a minimum viable product (MVP), while the majority of customers require a complete solution with minimal inconvenience.

Bridge the gap between your product and market demands by identifying the minimum version of the whole product that satisfies the needs of your segment. Determine what's missing and prioritise filling those gaps to successfully cross the chasm. You can fill the gaps yourself or through strategic partnerships.

Step 3: Expand strategically

Once you've established a strong position as a beachhead queen, use it as a foundation to enter adjacent segments. Adapt and simplify your existing product to meet the needs of these new segments. By leveraging the investments you've already made in product development, you can offer a lighter and more affordable version to attract new customers.

How to align your sales, marketing, pricing and product development for your go-to-market strategy

In summary, your sales, marketing, pricing, product development and go-to-market strategy should be relevant to the stage you’re at. For example, in the product-market fit stage, your anchor point will be the MVP as well as any sale that you can convert into a customer in order to validate your product and hypotheses.

However, at the go-to-market fit stage, where you target early majority buyers, your anchor point needs to be your beachhead segment and your whole product model.

A segmented approach vs a disparate customer targeting approach is the difference between a strategy-driven one and a sales-driven one. The strategy-driven approach takes into account the "Product/offer" and the sales-driven approach only focuses on the next customer and sales at all cost, which is a short-sighted, tactical decision. "Any sales is good" is necessary at the product-market fit stage but one to avoid at the go-to-market fit stage.

Your ultimate goal is to create a strategy where customers fund your startup instead of relying heavily on venture capital. This approach will make for healthier and more sustainable growth in the long run.


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