Summary

The conversation explores the complexities of go-to-market strategy and the critical importance of product market fit. It delves into the stages of product development, the role of a lighthouse customer, and the significance of a well-orchestrated go-to-market plan. The discussion also highlights the pitfalls of not having a solid go-to-market strategy and the impact on company growth and success. The conversation delves into the concept of go-to-market (GTM) strategy, exploring the transition from an artisanal mode to a repeatable model, the importance of the initial GTM process, market analysis, target market definition, value proposition, messaging, demand generation, pricing, distribution, sales model, controlled experiments, and scaling. The speakers emphasize the significance of listening to early adopters, building an MVP, and carefully scaling the company.

Takeaways

• The importance of product market fit in the success of a startup
• The role of a lighthouse customer in the development of a minimum viable product
• The impact of a well-orchestrated go-to-market plan on company growth and success Transition from artisanal mode to a repeatable model in GTM strategy
• Importance of listening to early adopters and building an MVP
• Critical components of GTM strategy: market analysis, target market definition, value proposition, messaging, demand generation, pricing, distribution, sales model, controlled experiments, and scaling

Sound Bites

"Product market fit is absolutely essential. It's a major milestone when you've proven it, you definitely should do some high fives."

"No startup who has not got a rock solid GTM is going to get a great exit or an IPO."

"Transition from artisanal mode to a repeatable model in GTM strategy"

"Importance of listening to early adopters and building an MVP"

"Critical components of GTM strategy: market analysis, target market definition, value proposition, messaging, demand generation, pricing, distribution, sales model, controlled experiments, and scaling"

Links

Please leave us a review: https://podchaser.com/DesigningSuccessfulStartups

The book Tech Startup Toolkit: https://www.manning.com/books/tech-startup-toolkit

Jothy’s site for speaking, podcasting, and ruminating: https://jothyrosenberg.com

Jothy’s non-profit foundation The Who Says I Can’t Foundation: https://whosaysicant.org

Jothy’s TEDx talk on why people with a disability over-achieve: https://www.youtube.com/watch?v=PNtOawXAx5A

Chapters

00:00 Understanding Go-to-Market Strategy

03:09 The Role of a Lighthouse Customer

08:24 The Pitfalls of Not Having a Solid Go-to-Market Strategy

30:02 Listening to Early Adopters and Building an MVP

57:39 Critical Components of GTM Strategy

And here's Peter. Hi, Peter.

Nice to see you again.

Nice to see you. It's interesting, our history, because we met a long time ago for a company called Service Integrity. You were helping various startups that you got connected to through VCs figure out what go to market meant. When I first met you, what I thought it meant was, well, you know, go to the market and start selling.

unbeknownst to me, it's way more important and way more complicated than that if you ever want to grow and scale your company. And that's what we're here to talk about today.

That's great. I think your perception is exactly right. I had the same perception when I first started working on these kinds of things. You know, it was just a matter of taking a great product. And as they say, if you build it, they will come. Sometimes they don't come. And so you have to you have to think about how that's all going to work. We used to have in many companies the analogy of the dogs eating the dog food. And overall,

Right.

You're kind of thinking about making sure that at least one dog likes the dog food and then after a while you want to make sure that there are enough dogs eating the dog food to sustain a business. So I had the same perception you did. It took a while for me to figure it out as well.

Well, we had so much fun doing it that time that we did it again for the company that I'm still a part of, which is called Dover Microsystems. And both of them were pretty harsh lessons in how hard it is to get a go -to -market strategy that's right, that works, and that really makes you successful. I think we got really close.

on Dover, there were some other mitigating factors that caused us to have to pivot. But almost everything we figured out that time was correct. And we had a minimum viable product. We had one customer who said, you've got product market fit. We didn't completely have it. But I'm jumping around a little bit. Let's.

Let's start kind of doing it sort of the step -by -step way that you always do.

Excuse me, I agree. So let's just start by talking about what it really means. I think it's pretty simple to think about it as, we just market. But let's be a little bit more specific in that. What you're really trying to do is develop a strategy and the tactics behind it to provide a product or a service. And that's why we're here.

and, and, and that basically acts as a solution to some sort of unfulfilled need. The important thing is it has to be an unfulfilled need in a defined market. So after you kind of figured out what the defined market was, and you have to think about what are the activities to engage that market. You actually, you know, talk to that market.

How do we get them to be interested in what we're doing? And then finally, as you're doing that, you're being very conscious about how well your product or solution fits that market. And we call this product market fit. It's a very common way to think about it. It's a lot more than just a sales plan, or a pricing strategy, or even a distribution strategy.

or a marketing communications plan. So the idea of testing product market fit inside a target market is really the genesis of all the GTM work that those companies do. Go ahead, Jathi, we're going to jump in.

I was just going to say that I think that you hear most people talk about minimum viable product. You hear people talk about next step being product market fit. And that's where a lot of the discussion stops, product market fit, almost as if that's all you need. And for sure, product market fit is absolutely essential. It's a major milestone when you've

When you really have proven it, you definitely should do some high fives. But what that tells you is that there are a number, not a huge number, but there are a number of customers that have made it clear they will pay money for this thing that you're now calling product market fit. And I was going to say one other thing, and then I will let you go.

Mm -hmm, I agree.

I truly believe the people who have said, one is Andy Rakleff, who's at Stanford, who said, no startup has ever been successful without proving product market fit.

I agree.

Now, I think you'd go further and you could say, no startup who has not got a rock solid GTM is going to get a great exit or an IPO.

Yeah, and what you're really talking about is kind of a hand in glove relationship. The product market fit is a critical success factor. Without it, you're not going to have the ability to grow the product at all. But you won't really know if that's working unless you've orchestrated a go -to -market plan appropriately. Let me talk about a couple of things that might set the stage a little more structurally, and that might be useful. Everybody knows, well, I shouldn't say that.

A lot of people talk about the four P's of marketing. If we do the four P's of marketing, everything will fall into place. And what are they? Well, there's the product. We know about that one. What price is it? That's another P. How do we promote it? Promotion. In other words, how do we market this? And finally, place. Where do customers buy this? What's your distribution strategy? How do people actually buy your product?

Those are important and there's actually a fifth P that a lot of people forget about and that is if you do the four P's correctly, you create what amounts to a market position. Are you a competitor of some large entrenched company? Are you a disruptor of the market? Are you a fast follower as they like to say? You know, where you're suddenly coming into a market that may be not quite as new.

as others, but you just have a really outstanding product. And you see this a lot in various markets. In high tech in particular, this happens quite a bit. If you think about go to market, GTM for short, embraces and integrates all of these P's. So you kind of ask yourself, okay, well, that's good. If I do all that, right, everything just will fall into place.

So, you know, why does this really matter? And I think the way to think about it mattering is that if you hope that the market is going to accept your product, that's going to be a very difficult way to grow your company because you really won't have a plan to do so. And so what you're really trying to do with a well -orchestrated GTM is you're trying to map the product.

market need in a very conscious way. It gets you to better product market fit because you have mechanisms in place through your GTM to determine how well that fit is working. Also, as your product market fit gets done over time, it allows you to get your product adoption.

We've all been there where in fact we observed this in some of the companies you and I worked in Where you know you get the first customer and everybody seems very excited and then it takes a lot longer than you thought To get that second customer If you can speed that up A lot of good things happen. Not the least of which is you don't run out of funding so That's one of those things where you say boy product market fits important, but you know the speed of doing that is pretty important, too

Related to that is you and I both worked in early stage companies and so resource consumption is pretty important. If we spin our wheels for even a few months, you know, burning marketing dollars or R &D dollars or sales dollars, any kind of dollars there are, the resources become very scarce. And it's hard to be competitive in that mode.

You're basically in a very difficult situation where you can't bring a new innovation to the market because you don't have the funds to do it. So the reason that GTM matters on a positive level is all of the above, but there's some other interesting things that happen that you avoid. I should ask you this, you've been in the trenches as long as I have a longer probably.

Thank you.

How many times did you have somebody really excited about this great idea that you had? You really weren't sure exactly what the customer wanted. It happens all the time, right? We call that the shiny object problem, right? Gee, look at this great thing that I saw. We just created it and the R &D guys are excited about it. And I just read a thing about how this does on the cutting edge. But everybody will want this, right?

yeah.

Maybe, maybe. The other thing that happens is when you go down the shiny object approach, you take it out to a few more customer prospects and say, well, I like that, but I'd like this more. And so then you go back to R &D and you do some tweaking and you modify the product. And now all of a sudden you're kind of in this rework mode where every new customer wants something a little different. And

And then you really kind of wonder, what product are we selling here? So this is a pitfall that really comes to the table if your go -to -market isn't well thought through. The other thing that happens is it's the old analogy of the blind men describing the elephant. Depending on who you're talking to, if you haven't thought about your go -to -market.

One of your folks in your company, maybe one of the sales guys, is very enamored with the elephant's trunk. And he says, well, our product is like a big snake. And then maybe someone in the customer service department says, our product is so stable and so wonderful, it's like the trunk of a tree, it's kind of like an elephant's leg. So you get into this business where the messaging out to the market,

It's very inconsistent. And that might be okay for large companies that have lots and lots of money to message, but for smaller companies, it can be deadly. You don't really don't know what you are. You also sometimes get into situations where you haven't thought through or haven't really researched enough, what makes your product competitive. And then I mentioned that, you know, that sort of drives a lot of early stage situations and

Mm -hmm.

and we've seen that, both of us have seen this before, is if you spin your wheels long enough, you will run out of money. And that's kind of the difficulty. That's why so many startups fail, is because they don't think through, go to market.

Well, I had this most recent with Dover. We never expected that this Lighthouse customer would take two years to think about it and to try to build it into their product, which is how ours had to sell. And not only did it burn too much cash for us, but as you well know, because you worked at some

bigger companies than I did, there's a real risk that there's a reorg at a big company before you're done if you take that long. And our champion got reorged right out of the company.

Mm -hmm. Yes.

Yes. Yeah. And at that point, you kind of have to push the reset button. And unfortunately, in a small situation, it's hard to do that because you may have not only burned capital, you've burned some credibility with your investors. And now they're saying, well, you know, is this really as much of a momentous thing as we thought? And then you get into a pretty dangerous spiral. I would like to describe a visual to you. And I know a lot of people...

on the podcast or just listening, but I'll bring the visual up for those that, you know, people can see it. If you think about at the highest level, we'll call it the 50 ,000 foot level, what GTM is doing for you. We've talked about some of the specifics of what goes into it. Let's talk about the very highest level, what it's doing for you. Think about a series of gears. You're trying to, you know, transfer energy from one thing to the next using gears.

One gear and let me bring this up on screen real quick if I can do that. And let me find it here and we'll bring it up on screen.

Okay, you should be able to see that now. And if you, this broadly.

many early stage companies is vision. And vision can't be understated as being important. What makes new companies tick, it's what makes new markets evolve. Vision is typically based on, at the very highest level, is an unfulfilled market need and some sort of innovative solution to that need. Well, a vision is good, provided it has a target market. And

And the target market naturally should have the unfulfilled need and be the solution. So what does GTM do? Well, it acts almost like a cog in a machine that's applying the unfulfilled need so that the target market is telling you what it really needs in very much detail, how the solution fulfills it, and then it engages with the target market. So if you think about this as,

as machinery and it's a little more complex than that, you're really saying, if I have a great vision and I've got a target market that is receptive to that vision, how do I make that target market actually want to buy that vision? And that's what GTM is all about at the very highest level. Does that make sense?

It does to me.

Okay, that's great. So let's go back to talking about maybe a different analogy. And I think you came up with one last time we spoke, which I thought was actually very compelling. Why don't you jump in on that one?

Okay, so I have here a series of five, worked out perfectly, the number five is gonna be important, of these nesting dolls. We used to call these Russian dolls, but they're just nesting dolls. And here's the baby. It's actually a penguin. And this is the idea. This is the...

the sort of initial product idea. It's not yet a minimum viable product. You haven't actually engaged with the market yet, but this is just, you think, because you came out of some industry and you know there's this problem and it's not been addressed by anybody. And you think you have an idea that can change the world. And,

And so you've already got an idea of what the product would need to look or service need to look like. And so it's going to look like this little baby penguin.

Okay, now step two, maybe through your connections or maybe you've just done some work on potential markets and you have been out working hard and you found a lighthouse customer. There's someone who wants this so badly, they're willing to work with you. And so,

What did we decide this is? This is a tiger. So the tiger, the penguins inside. And the.

And let's just take a minute, let's take a minute, Jocky, if I can interrupt, talk about what you mean by a lighthouse account. You know, everybody has different terminology, but take a minute and explain that. I think that's very important.

Yeah, yeah.

okay.

OK, so it is someone from this market who you got introduced to, you got lucky enough to find, that when they hear about the solution and maybe you showed them a prototype, they said, I would love to work with you to make that perfect. They're not saying it is perfect yet. There's probably some work to do. And they're.

going to provide some resources, some feedback to help you get that on its way to being a minimum viable product. And so that's what a Lighthouse customer is.

Great. OK, I think that's useful. Keep going. What happens next?

OK, so now you've got this Lighthouse customer, but is what you just built unique and only for them? Because that would not be good. Now, as you're building features to this customer's needs, you need to be checking with, you need to be finding other people in the market, in the same market, and finding out.

Am I building towards something that would solve their problems? Maybe those other people are not ready to be a lighthouse customer because they don't want to dedicate the resources and you've got this very excited one. But you need to make sure that what you're building is going to be, as you used earlier, another dog that will eat the dog food. And you want a handful of those. And so.

Now what we're trying to work towards, and this one is a bear. OK, so the bear, there's the, I'm now putting the Lighthouse customer inside the bear. And what the bear represents is minimum viable product. That's, it's really going to be something,

that multiple customers say, if you make that, I will actually pay you money for it.

And that's a key concept. If I can jump in for a second. Having a Lighthouse account is a really important thing. It gives you real world input. It might even provide a little bit of funding. Sometimes they do, sometimes they don't.

Of course.

But the problem with only building the product for one Lighthouse account is that, well, it's hard to build a company with one customer. The importance of the minimum viable product, and it's a marketing buzzword, MVP, is that it says, no way. We're not just building it for one Lighthouse account. We're building it for multiple classes of customers, people that are.

which have similar needs. They may not be identical, but they're similar. And the solution we're building has appeal beyond this one Lighthouse account. That's setting the stage for the actual creation of a company that has good product market fit. I'll turn it back over to you.

Well, and that's what happens with this. So this bear is initially, it's your minimum viable product. But at the same time, it's your first stab at product market fit. Because now you're going to go out and you're really looking for, can I get repeat business on this? Do I have the right feature set?

Am I aiming at a pain point that lots of people in this, lots of customers, prospects, customers have in this market? So the same little doll is going to represent our initial product market fit. But now is when we really have to engage the whole GTM process. We need, in order for the...

this to become something that you can build a company on. Let me say something that you, because you're a serious marketing guy, you might not even agree with. But right up until the point that you have, let's say, three customers that you're talking to, your lighthouse customer, maybe two more.

You don't need a big sales team. In fact, you may not need any sales because the executives of this small startup, maybe you've got sort of a person who can act like product management. You can actually close three deals without salespeople. What salespeople are phenomenal at is relationships and the process that they use. So I've never said that.

to you before, but you can tell me if you agree with me or not.

I do agree. I mean, in fact, this is what I've seen more often than not. The typical visionary or visionary team has a much better grasp of the market, is that they're trying to go after. They tend to hear things better than having to routinely sort of go into a pitch, if you will. So their pitches are part of the pitch.

you know, missionary work, getting people excited, preach the gospel, if you will, and partly, you know, market research, let's understand what's going on. The downside of that, and there is a downside, is that if you're only doing that, it's really hard to scale your company. You know, there have been a few examples, you know, in high tech in particular, where a missionary carries the day for quite a while, but...

At the end of the day, the things that make the company really successful are a better way of getting to market. They kick into GTM mode. A classic example of that might be Apple. Steve Jobs did a wonderful job of being the chief visionary. And yet, Apple scaled much more rapidly after the GTM started to kick in, after they started to think about

how they broaden their product portfolio and how they appeal to more than initially it was, we were appealing to people that use computers for artist work. Well, it's a lot more than that. And that kind of thing is the downside of just relying purely on the visionary. But to your point, kick into sales gear yet, unless you really think the product market fit is scalable.

Right, because a good friend of mine was, he went in to become CEO of a company that was doing whitelisting of all the applications that would run in your company. And if it wasn't in the whitelist, then it wasn't allowed to run. And it was meant to make the systems more secure. But he got there, and he discovered that,

Thank you.

Yeah, they had a few customers, but then each next customer was getting harder and harder to land. And he finally realized these guys actually had not successfully proven product market fit. What they really had was a very small handful of customers that liked it and had paid money for it. He had to let go all of sales and marketing, retrench.

Excuse me.

with the customers they did have and worked sort of again on what really is minimum viable product, what really is then product market fit. And then he could go back and do a GTM process and rehire sales and marketing. And that turned into Carbon Black and had a phenomenal IPO.

So let me elaborate just a bit as well. To your point, when you start thinking about GTM, you're kind of, and we've seen transitions in many industries this way, you kind of get out of the artisanal mode where everything is handmade and everything is custom created, and you get into more of a repeatable model. Not maybe ready for mass production yet, but you certainly,

are out of the, every single product is an adventure mode. Every single new customer is an adventure mode. That's a very difficult mode to grow in. So the GTM allows you to begin to exit artisanal mode and get into more repeatable mode. And I think that's what you see, you mentioned the Carbon Black, I'm familiar with exactly who you're talking about. And it's,

It's an interesting change from an artisanal approach to solving a need to a repeatable approach to solving a need because it means that, there are more people that might want to do this.

OK, so this is the artisanal mode. This is your initial idea of a product market fit. And what we have to do before we can go into the panda. Panda. Panda's OK. It's a bigger bear and a vegetarian bear. So.

It's a bigger bear.

What has to happen for this process to occur is actually the GTM process, the initial GTM. Because as you said at the beginning, just like with product market fit, you're going to try it and then you're going to tweak it. And then eventually, you're going to get it right. So this is the initial GTM. OK, so how is it different than just the product market fit?

Well, now we absolutely have to have all the functions of the company to exist. We have to have done a very careful analysis of exactly who is the competition and where do we stand with respect to them. We have to make sure that we understand where are the potential partners who could help us get this product out into the market. I'll just stop there because this is your chance to...

Talk about.

Yeah, we're going to get into that, but what I want to know, now you've got my attention here, what comes after the panda?

well, that is when you are really confident that things are scaling, that you can now start to see rapid growth. You can even contemplate the idea of an exit, and that's an elephant. And it's the elephant that with that, there, there, that's our big boy.

There you go. So what I'd like to do, again, this is with apologies to the folks who are just listening as opposed to watching, is I'd like to put this into context for you by sharing one additional slide, if I may. Bear with me one second here. And just grab this one more slide here.

and we'll look at...

that. So here, there you go. That looks kind of familiar. You almost think that we already knew about this. Think about your nesting doll's analogy. There's a natural progression that occurs. And you start with the penguin, if you will, the initial product idea, which as Jocky pointed out, is an important thing that you're trying to bring to a market.

yeah, looks familiar.

You know, we talked about an unfulfilled need that you're trying to take care of. And then you will find yourself an initial Lighthouse account or two, and you start to build your product to meet their requirements, recognizing that this is going to get you into a market, but it's a very small market of one or two accounts. And so after that, as we pointed out with the next doll, the polar bear,

This leads you to this nice buzzword MVP, Minimum Viable Product, which says, I think this is a pretty good product market fit, but I really don't have yet a really good feel for how large the market is and how many different facets the market has and who the key players are. We'll talk a little bit about that in a second. So what do I need to do? I need to create an initial go -to -market plan.

And this is where we'll spend a little time talking about what goes into an initial plan. And the reason for that is pretty straightforward. What I really want to get to is to be able to be an elephant and scale the company. Now, before we get into some of the piece parts of this nesting situation,

Like nesting dolls, it's important to point out that if at any point in time you are taking a shortcut or you really don't know whether one of the dolls is reasonably accurate, what will happen is the nesting dolls will fall over and you will never get to scaling. And so like nesting dolls,

starting with an initial product idea all the way up to scaling, you have to understand along the way how well these things are working and that's why we get into the different piece parts of the go -to -market plan itself. So let's talk about that. I'm going to stop sharing the screen for a second here and let's go back.

go back to the discussion of what goes into a go -to -market plan. So we talked about initial go -to -market plan. Gee, this is going to be the gear that's going to drive our vision. That was one analogy. We talked about it being the important prerequisite to getting to elephant status where we can scale our company. Any analogy we want to use, or it's the place where we determine that more than one dog will eat our dog food.

It doesn't matter what the analogy is, but this initial go -to -market plan is the thing that's going to give you the opportunity to scale, the opportunity to become an elephant. So what goes into it? I think that's an important thing to spend a couple of minutes on. There are some fairly high -level strategic components, and everybody loves to talk about strategy, but the reality is it sets the stage for execution. And you have to set your goals and imperative, what are we trying to accomplish here?

More importantly, where is the market opportunity? What is the need that the people are looking for? That naturally, market requirements. If they have a need, a particular problem isn't getting solved very well, they'll come up with a set of requirements. An ancient history analogy would be the introduction of spreadsheets.

into the accounting profession. There was a little product called VisiCalc many, many years ago, and then that led to Lotus 123, and then after that came Excel, and boy, after that, every accountant in the world is using a spreadsheet. People knew that there was a need to stop using ledger paper and large erasers, or relying on, in the old days, green bar coming off of some sort of large computer.

that you would get your report once a week. So here's a perfect example where the market requirements drove the evolution of a set of products which are now part and parcel of everything we do in the accounting and many other business professions.

the discussion of, okay, which dogs are we trying to get to eat the dog food? And there's a lot of little marketing terminology. And I think it's important not to get caught up in the terminology. People will talk about buying personas, for example. Well, there's lots of ways to think about that. But reality is a buying persona is a person that can influence the writing of a check or can actually write the check themselves.

It could be the person that has the problem. It could be the accounting department. It could be a purchasing person. But a buying persona is an important thing to understand. And then you'll hear another wonderful analogy or another terminology. It says, what is my ideal customer profile? ICP, another marketing buzzword. It's not that complicated when you think about it, because what you're really trying to do is to put down in a simple way,

something that would describe who really needs your solution and why. You make decisions along the way. Is my solution a horizontal solution or is it geared to a particular vertical market, for example? Am I selling to the pharmaceutical market or to the automotive market on the vertical side or am I selling a broader solution? That changes the way you address the market.

And then there's some nice adjacencies that you might consider. So for example, if I've decided I'm going to sell to the pharmaceutical market, there are related adjacencies where my solution to, you know, related parts of the healthcare market, like the hospital market, or even earlier on the biotech market. Another thing that people talk about, and we mentioned this earlier before, is this concept of

What market position do I want to have at the end of the day? At the end of the day is something that you don't really think about so much as a particular moment in time as the phase of the company. At the end of the first phase where you're just dealing with maybe the penguin and maybe the tiger, that's a pretty simple thing to talk about because your competition is fairly limited. You're not really

worried about being too broad in the market. But as you broaden your profile, as you broaden your footprint in the market, then you have to worry about how do I want people to perceive my company? Am I the most innovative company in the market? That's a viable position sometimes. Am I a company that just has built a better solution to a long -standing problem and mine is just particularly more efficient or easier to work with?

And then you get into the concept of, well, do I want to also consider undesired market positions? So for example, am I known as an innovator? But you know, I don't really bring products to market so much as I talk about ideas. And in high tech in particular, this is a problem because a lot of people have many ideas that are interesting on paper.

But then as they begin to try to productize them, they don't always work as well. Important to think about, you know, how far along the adoption curve do I want to be? Do I want to be the person that gets in the door first? I want to be the person that gets in the door maybe midway through a market, or do I want to harvest an existing market? So you have to kind of think about those things. And that relates to competition, of course. So these are the kinds of things you get into when you talk about...

that initial GTM plan. Jonathan, you want to jump in a little bit and talk about, you know, we had a very interesting process we went through at a couple of your companies where we talked about actually defining the target market in a detailed way.

Yeah, so that was actually really a great experience. What we did was we said, OK, so I'll use Dover as an example. So we felt like, OK, there were a lot of different markets that could use really good cybersecurity, we thought. And so we ended up having, I think, 13 that we looked at.

And we then came up with a, so think of them as being columns on a spreadsheet. We'll go back to the spreadsheet. And then the things that are gonna be the rows are gonna be criteria. And some are gonna be things that you want, that you really, the people in that market really want the product to do. It might have to do with,

It needs to be low cost or it needs to be very fast or it needs to be compatible with this and that and the other thing. And so when you create this beautiful chart with all your 13 columns and things that are good, you make the whole background of that spreadsheet cell green and things that are sort of medium, you make it yellow and then things that are bad,

you make the background bright red. And now you can help hold the chart really far away from you. And we called it a traffic light chart because you could even squint your eyes and not read any of the words and say, well, that third column, that has a lot of green. That one looks good. Which one is that? And I mean, it wasn't much more sophisticated than that that we said, all right, well, let's.

Let's get the 13 down to five markets. Let's do a little bit more analysis of those until we get it down to two or three. Now, you know, Jeffrey Moore would say, no, no, no, has to be one and only one. But a long time ago, you and I agreed that he has a point in theory about it's really efficient if you only focus on one and you're.

and you're not spinning your wheels, your marketing dollars on marketing to two. But if you only pick one and you're wrong, you've got a lot of time lost. So I've always thought it was really good idea to pick two.

Yeah, to your point, Jeffrey was a great advisor for one of my early companies and we had this discussion actually, but one versus two, it certainly wasn't one versus a hundred. You have to be more focused than that. And the point to be made is despite best efforts, you do get it wrong sometimes, not entirely wrong, but wrong enough to make it very difficult to grow a company. So,

I'm with you and Jeffrey, I actually saw what we were doing at the company I'm just describing and we hedged our bets because we had limited venture capital funding and we needed to make sure that we didn't miss our opportunity. And in another example, a company that was eventually bought by IBM, another great technical founder that Jathi also knows, actually,

Hedged our bet in a different way. We were doing very well in the main target market, but we felt that there was a sub market that we could actually benefit from that was much less competitive or fewer people in there and the price sensitivity was not as great. And that was the government market. And so we did, you know, you know, what we call the controlled experiment to being a particular value proposition. Another marketing buzzword we'll talk about in a second.

And we were able to see that as a viable adjacency to our main market. But to Jathi's point, I don't want to make you think that if you get yourself a fancy spreadsheet, you can have this all fall into place. Yes, you'd like it to be as easy as looking at a traffic light chart. But what went into building that chart was a lot of

a lot of market research and a lot of talking to potential customers. Let us understand, what were the segments that we were going after? How big were those segments? What were their specific needs? These are typically early adopters, so sometimes their needs change. What particular applications were they looking at? Roles were, was there an economic buyer? Another buzzword.

We were talking to influencers or gatekeepers. And then of course, what were their pain points? What you get into with this traffic light spreadsheet is the ability to see more clearly where the likely ability to scale will be. What that leads you to, and I want to just sort of continue the process where we're trying to get from that initial,

initial go -to -market plan into the elephant where we can scale is, pardon me, we have to get into what do we say to these people? We use the term value proposition, and I think it's worth taking one second to talk about that. What is a value proposition? Well, it's basically the words you use to talk to your target market and say, this is why we're going to solve the problem that you're having.

There's a couple of ways you say it. You say it relative to what the customer needs are. You've taken the time through Lighthouse accounts to understand that. But you also think about it from a competitive perspective. Say, what are you hearing in the marketplace? Some of the things that you're hearing are the only solution to this problem may not be true. It may be steeped in an old product. It may be.

using an older technology. Maybe they are trying to protect and install base as we used to say. You kind of think about this value proposition from a couple of different perspectives. You also have to remember that people have attention spans that are short, especially when they're being bombarded by various smaller companies saying that, you know, I've got the best dog food in town. They have to think about, you know, hierarchy and

You kind of come up with a higher level value proposition and some very segment specific points. We used to call them proof points, if you will. And the idea there would be to engage with people and to get them to understand that, yes, from a higher level view, we can solve the problem you're trying to solve. But let's talk specifically about what parts of it we do better than others.

Jyothi, you want to talk a little bit about messaging? Let's just talk just for a second about how we get from market definition through value propositions into messaging.

Well, yeah, so it's really what I've always found very important when coming up with messaging is there's an analogy to the whole idea of minimum viable product, which is that you have what you think might be the right messaging for the market, but you don't actually define.

how the market wants to be messaged to. So you go out with your initial messaging. And if the customer says, you know, we don't call that blue. We call that turquoise. And so then you say, OK, well, from now on my messaging, when I thought I was going to be saying blue is going to say turquoise. And so that messaging.

there's this significant messaging exercise that you did a really wonderful job of sort of getting us to do. And we ourselves would really quickly get rid of some things that didn't work and we would agree on some things that seemed like the best. And then we would go test them with the real customers.

Yeah, and that's another part of sort of thinking about this go to market doll as having several facets to it. We've been talking about strategy. Now we're starting to talk about some of the tactics. And then you get into things like, OK, once we've got a pretty good handle on what our messages should be, what our higher order message is, and the different proof points we have to say, well, the reason we're better than X is because we do this.

more of the classic marketing area where you think about what's called demand generation. And that's not to be confused with advertising, it's demand generation where you're stimulating the market to want to engage with you. That can range all over the map. It could be podcasts like this one. It could be mail campaigns. It could be...

texting campaigns, you could go on social media, there's any number of different ways of doing that. And the idea there is to take your message to the market in an orchestrated way. Again, we've been talking about orchestration, making the dolls fit correctly. And then, you know, obviously you're going to talk about another key aspect of your tactics. Okay, so how much do people have to pay for this? What's your pricing model?

And we're getting back to the P's again, the marketing P's. And then how do people buy it? Do they buy it from me? Do I sell this solution through sales partners? Do I sell the solution through a co -marketing arrangement? And there are many ways to do that. And then at that point, you begin to say, okay, now I'm beginning to understand what I need to be in a front row. And to Jathi's earlier point, this is where...

you now have enough information to start crafting a sales plan. You actually start to say, OK, this is what we need in the way of salespeople. I'm going to go after the government market, for example, and I need the following people that have experience marketing to the or selling to the Department of Defense, for example. And that's a very different thing than saying that many months before saying, I'll just go get myself a sales guy and we'll start selling to the DOD.

I mentioned controlled experiments. I think that's worth taking a second on. And then I want to try to show you one more slide that shows how this all fits together because we're covering a lot of ground. Controlled experiments are nothing more than saying, I think that we have it right, but I'm not sure. And in early stage markets, that's very common. In fact, the...

The more you're convinced that you have it right, the more likely it is that you probably overlooked something. I'm not saying that lightning ever strikes. It sometimes does. Occasionally, the market jumps all over your solution and you've just created the next fad. But that doesn't happen very often in more complex products. You look at the evolution of the, say, the...

the EV electric vehicle market here in the United States as compared to other places in Europe, for example. And there hasn't been a moment where people have said, aha, this is what I absolutely need. And so there's definitely some need to understand how your product might fit into various adjacencies, products that are

similar to what you do, or markets that have similar needs, maybe different ways of saying what your value proposition is. So in certain markets, you might stress the efficiency of your product, or in other markets, you might stress the innovative aspects of your product. And then, of course, when you get into things like verticals, there's a whole new language that you're learning.

When you're talking to a particular set of companies that are steeped in a particular vertical market, you have to talk the talk. And you can't sell a pharmaceutical company on a product using language that you might use to sell to an automotive company. That doesn't make any sense. So you do have to think about once your initial GTM is done,

recognizing that it's never going to be perfect and while it's not really trial and error because you've spent a lot of time gathering input, you do have to recognize that there is some value in running controlled experiments. It's similar to the idea of not picking one market to go after initially. Basically, even if I have two or three markets that I'm beginning to see traction in, I might also want to look at others because that's how I'm going to grow my company.

Kathy, there's one other slide I'd like to show that kind of puts this all together. It might be helpful. And again, my apologies to the folks that are just listening, but we can certainly make it easier to see this in one.

one slide. So here's a view of how this might fit together. If you think about go -to -market strategy and tactics along a couple of dimensions, there's obviously the strategy versus tactic dimension. And I'm describing kind of a big sort of a box diagram here. And then there's also planning versus execution.

If you think about the different piece parts, they actually fit together pretty well. So initially, for example, you're thinking about strategy and sort of planning. You want to talk about the things we talked about relative to the market opportunity and the need, what are the requirements? What's our target market definition? What market position do we want? What competitive position we want? These are the things that drive your higher order thinking about how you're going to bring the product to market.

That's not enough though. You have to also think about maybe, okay, from a strategy perspective, we still have to execute. So what are our value propositions? What is our messaging map or what's our messaging? How do we generate demand? What's our pricing and distribution model? So you do have to think about those things as well. If you really want to think tactically, you've got to get specific about your target market definition. We talked about a number of the points that make that up.

The most important one is the pain points. What is it that gives people pain that you're trying to solve? The old analogy that was sometimes used is, are we selling vitamins or pain relievers? In most cases, you want to sell a pain reliever because not everybody needs vitamins, but most everybody needs pain relievers. And then we talked about controlled experiments.

And last but not least, let's not forget, if we really want to get down and dirty about execution and tactics, we need to design, in light of all these other things, a sales model that fits, a marketing model that fits what our business development or partnership model is, how do we support our customers, and even what community are we trying to build.

So that's how this all fits together. And I think it's important to think about this as it's essentially you're putting piece parts together into a coherent whole. And that's allowing you to build the initial GTM that sets the stage for scaling for the elephant. There's the scaling. There's our elephant there.

Scaling, scaling.

Well, we're at a good point. You've covered a lot. We're coming up on almost an hour, which is about as long as we want to go. So I think this is, is there any last words you want to impart?

Yeah, I think the way to think about it, it comes down to getting, how do you get started? And there's a bunch of different pitfalls you could avoid and lots of critical success factors. I would emphasize integration is important and having sales and marketing and customer support and all those things talk to each other is pretty important. In fact, it's critical. But the way to think about it, it may sound, this is very daunting. There's too much to do here. The reality is that if you've got an innovative idea or

It boils down to a couple of simple steps. Now they're not trivial steps. They won't happen by themselves. Find yourself some early adopters, some penguins, if you will, right? And listen to what they have to say. Listen, listen, listen to what they have to say. And then build yourself an MVP, a minimum viable to see how it goes. Okay, after that, what do you do?

Let's find some more early adopters, right? And now you're starting to build a community, more dogs are eating the dog food, but wait, you have to listen, listen, listen again. And that means that now you're beginning to set the stage for scaling. And then finally, deliberately and very carefully after your GTM is starting to bear fruit, scale the company. That's when you start to build out your sales organization.

That's when you start to spend a little bit more money on marketing. That's when you have to worry about customer support. So my key, if you will, takeaway would be, don't be intimidated by this stuff. It's not as complex as a lot of people would have you believe. It's not formulaic, but it's not as complex as what a lot of people say to you. It's pretty commonsensical. And if you think about nesting dolls, that's a really good analogy.

If you think about gears, that's a good analogy as well. I think that would be about the best takeaway I could leave.

Well, I think that people who are thinking about startups or they're in the middle of a startup are going to relish your words of wisdom. I really appreciate your time.

No problem. I appreciate your interest. Thanks.

Always great to work with you. I am going to stop the recording there.

Likewise.