Building a startup company and making it successful takes a lot more than just creating a great product. The grim reality is that 90% of startups fail.
To give your startup the best chance of success, you’d also need to execute well in key areas such as acquiring funding and managing finance effectively, building a positive work environment, recruiting and retaining talented employees, and crafting a winning go-to-market strategy.
In this article, I will focus on helping you craft a winning go-to-market strategy.
Why Crafting a Strong Go-To-Market Strategy is Critical
I have worked at a couple of tech startups throughout my career, and I found it disappointing that a majority of those startups didn’t have a go-to-market strategy in place while I was working there.
In most cases, the companies would aggressively start hiring salespeople right after getting some funding, and expected these sales folks to start closing deals right away. Why? Because most founders (especially technical founders) have this belief that they have built a revolutionary product and that it should be easy to get buyers to buy their product right away.
The reality is that buyers’ today have many options to consider and they are skeptical. Buyers don’t have the time or inclination to evaluate your product unless you can convince them that your product can immediately solve a big pain they’ve been trying to solve or it can help them either drastically cut costs or improve productivity. Furthermore, they don’t trust you yet and are less inclined to make a change unless you can make a strong case to convince them.
Without a go-to-market strategy, your startup simply doesn’t have a strong foundation to build alignment among your product, sales, and marketing teams and acquire your first 100 customers.
So it’s important to create and hone a strong GTM strategy first before investing heavily on your sales and marketing efforts.
A GTM strategy serves as a blueprint that provides guidance on how you position your company, determine which market segment to capture first, reach your target audience, communicate your value proposition, and ultimately capture market share. In this comprehensive guide, I will share the essential components of creating a winning GTM strategy for b2b startups.
Understanding the Go-to-Market Strategy
A GTM strategy should be tailored to your startup’s unique characteristics, goals, and the market it operates in and should evolve over time to adapt to the changes in your company and in the market.
A well-crafted GTM strategy acts as a guiding framework, aligning all aspects of your startup’s operations (engineering, product, marketing, sales) to ensure a coordinated and effective market entry.
Crafting Your Unique Go-to-Market Strategy
Let’s craft your unique GTM strategy. Keep in mind that the specifics of your strategy will depend on your startup’s industry, product, and target market. Here’s a step-by-step guide to help you create a customized GTM strategy:
Step 1: Define Your Goals
Start by setting clear and specific goals for your GTM strategy. What do you want to achieve with your product or service launch? Goals could include revenue targets, customer acquisition numbers, market share, or product adoption rates.
Step 2: Conduct Market and Customer Research
A solid GTM strategy begins with understanding industry trends and your target market, including its size, and the needs and pain points of your buyers. This research should also encompass an analysis of competitors, their strengths and weaknesses, and the competitive landscape.
Action Steps:
- Conduct primary and secondary research to gather market data.
- Identify trends, opportunities, and potential threats.
- Interview existing customers and potential customers to deeply understand their needs, pains, buying triggers, research and buying process, and objections.
- Identify competitors and alternative solutions, and understand their strengths and weaknesses.
Note: Your research tools may include using G2 Report, Semrush Market explorer, Google Trends, Quora, Subreddits, US Census Business Data, Gartner, SurveyMonkey, AnswerthePublic, SimilarWeb, Statista, Qualtrics.
Step 3: Segment Your Target Customers and Create Ideal Customer Profile
Each segment of your market has different challenges, pains/needs, and buying process. If you are trying to sell to enterprise businesses, keep in mind that enterprise customers have a stronger need for security and scalability.
Doing the proper analysis will help you determine which segment is most promising for you to target first. Most startups make the mistake of wanting to go after every market segment, believing that their revolutionary product is ready to solve everyone’s problems. At this stage of your startup life, your startup simply doesn’t have the resources or the credibility to address too many market segments or use cases.
You should instead tailor your product, marketing, and sales efforts to a small and specific market segment that gives you the best chance of winning. A market segment is defined by the specific and urgent problem that a specific persona (i.e. IT leader, HR leader, developers) in a given company type (small business or enterprise) is facing.
Make sure that they have an urgent problem that your product can solve and that they have the budget and are willing to pay to use your product. Once you start owning that small market segment, it gives your company credibility and confidence to enter new markets.
Action Steps:
- Segment your market based on firmographics, size (SMBs, mid-market, or enterprise), or other relevant factors.
- Prioritize the segment with the highest potential for early adoption and revenue.
- Define your ICP (Ideal Customer Profile) – The ICP is the characteristics of the perfect customer for your product. This is the type of customer that can have a massive benefit from using your product, while being able to pay you. To develop your ICP, you need to know their job roles, job titles, the day-to-day challenges and pains they face.
Step 4: Develop Your Positioning and Value Proposition
Your positioning is about connecting your product to a specific problem or benefit for a specific market segment that your product solves in a unique way that differentiates you from the competitors. Your value proposition is the core message that communicates the unique capabilities and values/benefits of your product or service to your target audience. Positioning and value proposition are foundation of your product marketing.
Unfortunately, most startups underinvest in product marketing. Instead, they rush into doing tactical marketing and sales activities, and expect their sales team to start closing deals.
Your value proposition statement should clearly articulate what specific problems or pains you are solving, who is the ideal customer, the specific use cases of your product, how you address the pain points of your target customers, the values, benefits, or outcomes your product deliver, and how your solution is different than your competitors.
Action Steps:
- Define your unique selling points (USPs) and your positioning.
- Craft clear and compelling value proposition statement.
- Test your value proposition on beta customers or potential customers to ensure your value proposition resonates with your target audience.
- Ensure that everyone in your go-to-market team clearly understands and can articulate your value proposition
- Ensure that visitors to homepage can easily understand your value proposition within the first few seconds
Note: Your target audience must clearly understands what you do, the unique capabilities of your solution, the benefits and values it delivers, and who are the ideal customers (e.g. developers, enterprise finance teams, HR leaders, IT leaders). You can use tools like Wynter to get feedback about your website messaging from folks that fits your Ideal Customer Profile. Again, it’s important to craft your value proposition statement based on the small market segment and the ICP that gives you the best chance of winning deals at this moment. If your value proposition is too vague and too broad, you risk gaining any immediate traction.
Step 5: Create Your Pricing Strategy
The right pricing strategy should align with your value proposition, target market, and business model. Consider factors such as cost structure, perceived value, and competitors’ pricing strategies.
Action Steps:
- Calculate or estimate your cost of goods sold (COGS), operating expenses, and the value of your solution.
- Research competitor pricing.
- Test different pricing models and plans and gather feedback from early customers.
Step 6: Prepare Your Product or Service
Ensure that your product or service is fully developed, and all the bugs and usability issues have been addressed. It’s essential to have a product that meets or exceeds customer expectations and addresses their biggest pain points.
Action Steps:
- Conduct beta testing and gather user feedback. You can collect feedback from a small group of end-users on what they like and dislike about each feature and what bugs and usability issues that you need to be addressed.
- Address any identified issues, bugs, or shortcomings.
- Ensure your product is user-friendly and offers a seamless experience. If you want to sell to enterprise businesses, make sure that it meets their security and scalability requirements.
Note: You should also consider gathering feedback from prospects who decided not to purchase your product/service to gain insight into why they did not purchase your product or why they opted to go with a competitor’s product instead. However, you must resist trying to add too many features in order to please all your customers. You have limited resources so you’d need to prioritize and focus on the few crucial features and make them the best.
Step 7: Choose Distribution Channels
Determine how you will deliver your product or service to customers. Identify the most effective distribution channels for reaching your target customers. Consider whether you will sell directly to customers, list your product on market places, and/or work with partners and integrators.
Action Steps:
- Identify the most appropriate distribution channels for your product.
- Explore potential partnerships.
- Ensure efficient and reliable delivery mechanisms.
Step 8: Develop Your Marketing Plan
Develop a comprehensive marketing plan that includes building your ICP (Ideal Customer Profile), strategic narrative, messaging and value proposition, content strategy, and demand capture and demand creation strategies.
Action Steps:
- Define your ICP.
- Create a messaging document that includes your elevator pitch and your value proposition statement.
- Create a holistic marketing plan that includes the necessary messaging and content assets (blog articles, videos, case studies, FAQs, white papers, reports, demo videos, landing pages, web pages, etc) to support demand conversion, demand capture, and demand creation activities and campaigns.
Note: Only 5% of your potential buyers are in-market to buy today. The remaining 95% might not be ready until months or years later. Most of them certainly have never heard of you before. Yet, most businesses make the mistake of focusing solely on demand capture activities and pressuring their prospects to buy when most of them are not yet in-market to buy.
Demand creation activities and campaigns are absolutely necessary to drive awareness and educate your target audience about your solution, your unique approaches/technologies, the problems and pains your product solves, and the values your product delivers. Determine the best channels (Linkedin, emails/calls, Facebook, Google Search, review sites, market places, YouTube, podcasts, newsletters, webinars, events/tradeshows) to reach your target audience and distribute and share your content and messaging on those channels. The goal is to capture mindshare so that when they are in-market to buy, your company is on their list of vendors to evaluate.
Step 9: Define Your Sales Strategy
Define your sales approach, including the sales process, sales team structure, and training. Ensure that your sales strategy aligns with your target customer’s buying process.
Action Steps:
- Train your sales team on product features, capabilities, and benefits, customer’s buying process, and customer personas.
- Develop a sales playbook with key messaging and objection-handling techniques.
- Implement a customer relationship management (CRM) system and process to track and manage leads and customer interactions.
Step 10: Set Metrics and KPIs
Establish metrics and KPIs to measure the success of your GTM strategy. These should align with your startup’s goals and provide insights into the effectiveness of your efforts.
Action Steps:
- Set specific, measurable, and time-bound goals.
- Monitor and analyze metrics such as MQLs (Marketing Qualified Leads), Sales Qualified Opportunities (SQO), MQL to SQO conversion rate, cost per lead, customer acquisition cost (CAC), customer lifetime value (CLTV), website traffic, website conversion rates, and revenue growth.
Step 11: Create a Launch Plan
Develop a detailed launch plan that outlines the timeline, responsibilities, and resources needed for a successful market entry. Ensure all team members understand their roles and responsibilities.
Action Steps:
- Create a launch calendar with milestones and deadlines.
- Assign tasks and responsibilities to team members.
- Allocate resources for marketing and sales activities during the launch phase.
Step 12: Test and Iterate
Launch your product or service and closely monitor its performance. Collect feedback from early customers, track your metrics and KPIs, and be prepared to make adjustments and iterate on your GTM strategy as needed.
Conclusion
In the fiercely competitive business landscape, a well-crafted go-to-market strategy can be the difference between success and failure for a startup. Startups that invest time and effort into deeply understanding their market and customers, thoughtfully defining their positioning and value proposition, focusing on a market segment to go after initially, investing in demand creation activities, focusing on a few and crucial features, and creating immense value for their customers are better positioned to grow and thrive.
Creating a GTM strategy is not a one-time task; it’s an ongoing process that requires adaptation and refinement as market conditions change and your startup grows.
By following the steps outlined in this guide and avoiding common pitfalls, you can execute a thoughtfully crafted GTM strategy that maximizes your chances of success. Remember that flexibility, data-driven decision-making, and an on-going passion for understanding and serving your customer well will be your greatest assets on the path to survival and growth.