By Lilian Myers
Like many folks, I watch and participate in a bunch of groups on LinkedIn. Among them is one called Go-To-Market Strategy. Recently someone posted a topic looking for the fundamental cornerstones of a sound GTM. I couldn’t help but comment. This is what I’ve done for my entire career, in startups and new products/services for established companies.
For me it is an equation. It starts with one overarching question. Why?
The strategic items added together form the numerator and inform the necessity of tactical denominators. When all are in place a very clear image emerges.
In conversation on virtually any topic you’re likely to hear me either ask “Why?” I’ll also likely share anything I know about the topic – not the what of it, but the why. A friend labeled me an over-explainer for this but I’ll defend that the trait makes it possible to synthesize and relate lots of seemingly unrelated data for the benefit of others. So while it’s turned out to be valuable competency, some folks find it annoying. Sorry!
In my work, the answer to ‘why’ is ultimately the description of the market, the forces in it, the dynamics, participants, money flow, overall size, and a measure of spending to do the thing you are trying to solve for. But even after decades of working out the same equation, I came to have a whole new appreciation and approach through a recent GTM for a technology proposition in China.
Even in the progressive China of today, the practice of business, especially state-owned-enterprise, still bears the hallmark of Confucianism. In that context ‘Why’ is a confusing, or even a non-question. Asking directly yields a perfectly practical business answer in local practice, “Because it is expected.”
Ouch! What’s the right approach for a sample size of one where the ‘why’ is because it’s ‘expected’? By whom? To solve what problems? Is there more than one? Is this a market worth looking at? Is what they expect, what we think we can bring? If we wanted to do a one-off, here was the chance! But the roads in China are littered with carcasses of companies that tried to use a market of one as a proxy for a rosy GTM outlook.
Given that, finding a winning GTM was probably the biggest and most interesting challenge of my career. It meant subtly teasing out and unraveling the social, cultural, linguistic and, in this case, even political dynamics to get to the root of the answer. I had to learn how to interpret the landscape in a completely new way.
Today I take a much more culturally sensitive approach to the big WHY with each new proposition and can’t stress it enough for others.
The way I think about this may seem a little odd, but I tend to think about patterns in human behaviors. I used to have friends who thought I was some sort of psychic because I could often predict behaviors of individual people. The truth is I do nothing more than build an inventory of human behaviors by type of person and their motivations (or their ‘why’).
My grandmother used to say that we are all a product or sum of who and where we come from – our heritage. I believed her and spent years studying people and what makes us each uniquely who we are. But a discovery along the way was that even as individuals, we collect ourselves into groups. I deduced then that markets are nothing more than collections of humans who self-select into interests, jobs, purchasing styles, organizational structures, and decision-making clusters.
Decision-makers inside an enterprise have identifiable similarities just like consumer segments. Understand who buys, as well as their influences, influencers, and recommenders, and you have yourself a view of the customer and the market complete enough to even do personifications if your product managers like to use them.
Crystal Ball time. This is the one I see missed most often in a GTM. It’s a reasonably solid view of timing and trends. I can’t stress enough that unless you can afford to bump along for years with a handful of visionary customers, or conversely can get traction quickly in a blazing hot market, timing can be the make or break for a new entry. Market-makers really only make the market if the market is ready to go there and those who are first to market are often the first to go broke and fall away trying to make a market.
Just this week I gave a talk to the incoming class at the University of Central Florida’s Business Incubation program on lessons learned as an entrepreneur. Timing, or ‘When’, is top of my list of learnings. I’ve found that the two most important considerations are 1) an estimation of forces currently at work in a market and, 2) readiness of the infrastructure required to support an innovation.
I like to illustrate this timing through stories of a couple of products I’ve done at the wrong time. But the idea really comes to life when I pull out my Apple Newton and hold it up against my iPad. Essentially the same product (in some ways the Newton may have been better), but 15 years too early.
Wayne Gretzky would tell you to skate to where the puck is going. I’ll tell to you stay just a yard ahead with your eyes on both the puck and the field. Some force is bound to intercept and cause a change in direction while you are busy looking too far ahead. Being a visionary doesn’t mean being a futurist. It means having a pretty good idea of when that unmistakable ‘Thwack!’ sound is going to move the market in a new direction and being ready for it.
This is a basic but shouldn’t be underestimated. Slice and dice your ‘Who’ by where they are and how that effects geographic rollout, industry segmentation, and think about support, service, and price sensitivity variables by each. You can’t start everywhere. Find the optimal points of entry.
Now determine whether the best opportunity for early, then later, traction is in a geographic market: local, regional, national, or international. It might be possible to take on more than one at a time based on similarities, but be warned; international markets have to be thought of differently. Starting out thinking there are many similarities is usually a mistake. Cultural context varies radically in B2C unless you are dealing with a client-base you expect to be made up of many US-based multi-nationals. Consumers should always be evaluated in cultural context, domestically and internationally.
Horizontal or vertical. This is an interesting question too. There’s often a desire to go everywhere. At times there is evidence that might argue in favor of a horizontal approach – meaning all industry sectors. But consider that you can only expect to fully understand and address the dynamics in an industry or two in the early days. Get some successes under your belt and leverage them for later sector entry. Your GTM should also include acquisition of domain expertise for every segment you are after.
There will invariably be different requirements for each sector that could turn into huge distractions, so the ‘where’ becomes a strategic question that can alter the rate of adoption and ultimate position in the market.
With a Go decision it’s time to fill in the blanks on the tactical parts of the plan represented in the equation’s denominator.
This is where we get into the meat of the “it”. If you have no idea why, who, when, and where, there’s no way to determine the right thing to place in the market or even define the competitive threats.
Confidence around what you can get to market that is enough to get traction with a reasonable approximation of timing risk is the wizardry required here. It will lead your product team to the right set of priorities and end the product/engineering feature feuds. Coolness matters not at all if the dogs won’t eat it.
Direct, channel, retail, online, pricing, packaging, distribution, staffing models/costs, marketing, sales enablement, and operational overhead. A lot of territory to cover, for certain, but this is where the financial model gets completely filled out.
This is where the questions of what it costs to generate revenue over what period of time are answered. What are we investing and what’s the return? How long until we break even on run/burn? And what does the profit margin picture look like? Is it competitive?
To sum it up
As a long time start up gal. This is what the decision to do a new company or new product has been based on for me time and again. I’ve gotten it right, and I’ve gotten it too early (usually out of enthusiasm). Heck, I’ve even gotten it right and decided not to do it because I saw a trend issues I interpreted into timing problems. I turned out to be right on those and saved myself and prospective investors lots of energy and money.
I know lots of other folks who go at GTM determinations in similar ways. But the equation has always basically looked the same from my vantage point.
What about you? What’s your Go-To-Market Equation look like?
Oh, yeah…… Why?