The five steps of startup go-to-market

Nov30, 2015

I was recently invited to Cleveland’s TechPint Winter Summit on Dec 3 to speak about startup go-to-market (GTM). This got me thinking about how go-to-market fits with a startup’s search for product-market-fit (PMF). The connection comes in that PMF is achieved by finding the successful intersection of product iteration, competition/market and go-to-market strategy. Finding PMF, however, is really hard when these three factors confound testing and problem solving.

Fortunately, competition tends to be roughly constant over the period in which a startup is solving for PMF. Yes, this is a bold assumption, but often true except in the fastest moving new markets (ex: home automation) or most active established ones (ex: payments). To control between product iteration and GTM, go-to-market can be broken into five sub-steps in any of which product changes are small enough not to confound. This allows GTM strategy and tactics to be tested and proven or disproven.

The five steps are first sale, founder sales, sales people, sales leadership, scaling sales – each a distinct stage that can be tested and measured. There are metrics abound to measure sales performance, but many – including funnel conversion metrics, LTV and CAC – are fuzzy and imprecise in the early stages of a startup. What matters is whether a software business is adding adequate net new revenue per cash burned as measured by monthly increase in MRR per monthly net cash burned. Cash efficiency should go up at each of the five successive go-to-market steps.

Below is a detailed overview on how to test and measure the five steps of go-to-market development. Thanks to my friends at TechPint for hosting this presentation.

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