Co-author of Survival to Thrival, Tae Hea Nahm, was featured on Nick Moran’s podcast, The Full Ratchet. The first Venture Capital podcast, The Full Ratchet, interviews Venture Capitalist and Angel Investors on all aspects of the startup growth and funding. Check out the podcast here!
We can’t believe Survival to Thrival Book 1 – The Company Journey is now available on Amazon. Writing the book was quite a journey in itself and we truly appreciate those who’ve been with us during every step of the process. Between anticipating for the arrival of Book 1 and finishing Book 2, we recently had the opportunity to host our contributors, beta-readers, fellow entrepreneurs, and influencers at Storm Ventures. Looking forward to seeing Survival to Thrival be apart of your enterprise startup journey.
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If you spend time in the incubators, accelerators, or coffee shops in innovation centers, you will hear entrepreneurs and investors alike talking about finding Product Market Fit (PMF). Finding PMF is the critical “A Ha!” moment that fills the origin stories of great entrepreneurs handed down from founder to founder. It is the essential and elusive allure of finding PMF that keeps founders up into the wee hours of the morning.
Winning those early customers and finding PMF is an essential milestone and profound moment worth celebrating for enterprise startups. Unfortunately, finding PMF is not sufficient to unlock growth for enterprise startups. There is a missing link between finding PMF and unlocking growth, and it is an equally important milestone and “A Ha!” moment. That missing link was previously unknown. We call it Go-To-Market Fit (GTM Fit).
After PMF is found, this missing link is the gap between the plan and the reality. Enterprise startups achieve PMF and rapidly invest in sales and marketing with a plan to unlock growth, only to see sales just bump along. New customers and new revenue grow sporadically, painfully disproportionate to the growth projections and rapid increase in sales and marketing expense. Cash burn accelerates. Investors and the leadership team get anxious. Why is this happening?
What is Go-To-Market Fit?
GTM Fit brings three things together: A clear sales model, a repeatable GTM playbook, and urgency.
1) A clear Go-To-Market model: Decide how you will sell your product. Will it be direct sales, inside sales, channel sales, online, freemium, or something else? Picking a sales model depends on type of product, customer decision-making, price point, gross margin, etc. While it is common for startups experiment with several models, focus on one model is required to ramp. For more detail on this, check out “Leslie’s Compass” by Mark Leslie.
2) A repeatable Go-To-Market Playbook to find and win customers: A repeatable method is the core of GTM Fit. The Go-To-Market Playbook (GTM Playbook) outlines step by step how the company finds, wins, engages, and ramps customers. It is much more than a simple slide deck or a sales tactics. It is a powerful tool that becomes the blueprint for the marketing and selling motion, ramping new sales reps, and aligning the entire company behind what it needs to do to win. Nailing the GTM Playbook is harder than it sounds. It requires distillation, sacrifice, and lots of iteration. If your GTM Playbook does not fit on a page or two, keep distilling.
3) Lined up on the right use cases to create urgency: The final part of GTM Fit is urgency. Align on a clear problem wave or use case that answers the question: “Why buy now? Instead of 6 months from now?”
Where did the inspiration for Go-To-Market Fit come from? Looking back at our personal experiences, our colleague’s experiences, and portfolio companies, we looked for the common threads between enterprise startups that unlocked growth and accelerated vs. those that did not. If they didn’t achieve Product-Market Fit, that was easy, they didn’t grow. The surprise was that there were lots of enterprise startups that achieved Product-Market Fit and their first 10 customers yet failed to unlock growth. Those that did unlock growth were remarkably consistent; they nailed the 3-parts of GTM Fit: 1) Clear sales model, 2) Repeatable playbook to find and win customers, and 3) Urgency.
The MobileIron GTM Fit Story
At MobileIron, we went through the search for GTM Fit in 2009 and 2010. MobileIron is a now-public mobile security company where Bob was founding CEO and Tae Hea was the original seed investor.
Picking the sales model: Some of the most stressful discussions in 2009 and 2010 were around “How do we sell?” Direct? Through channels? Via the Web? We did not know which one was best. All we knew was that we had to win our first customers through direct selling. But then what? Was that the right long-term model or not? What would scale? What would be practical? Because of our mid-level price point, we decided to go with the “sell 100% through channels,” but we would do some “direct touch” to help large customers because we were in a new technology market. We had our sales model.
Lining up on urgent wave: Over the course of 2009, we pushed our way to 20 paying customers. The reasons customers bought were clustered around several different use cases and problems: some were mobile security, some were mobile management, and some were mobile cost reduction. We engaged on all the fronts to win customers.
In early 2010, we finally began to have customers come to us. We started to feel pull. The problem was securing iPhones. In early 2010, everyone wanted an iPhone at work, but IT departments struggled to secure the phones. Users wanted to bring their own devices to work (BYOD). We decided to focus on iPhone security and BYOD. Two meta trends with pain and urgency were building to the leading edge of a mega wave.
Figuring out the GTM Playbook: The origin of our GTM Playbook was somewhat accidental. Through the mistakes that we made in the early days, we were pretty good at taking notes about what did and did not work.
“During our search for early customers, we had a whiteboard outside one of the cubes that had ‘What worked’ on the right and ‘What didn’t work’ on the left. We took notes on what kept a customer on the phone, what got to a second meeting, and what caused them to move forward.”
A funny thing started to happen. Everybody else started paying attention to that list. It began to influence our marketing slides. It became a starting point for sales discussions and a teaching tool for new sales people. We did not know it at the time, but this whiteboard was the seed corn of our GTM Playbook.
Then, we hired an experienced VP of Sales, John Donnelly, who first taught Bob about the magic of a GTM Playbook. Bob did not get it at first.
“I mistakenly thought the playbook this was a pitch and sales tactics thing. I was completely wrong.”
Our GTM Playbook pulled it all together: How we found customers, and how we engaged with them. What the objective of each engagement was, what the next step was, and what tools we had to make that step successful. Iterating and iterating on the playbook enabled us to find repeatability. Customers started to move from engaged to active, from first meeting through to wins. We hired new sales reps and taught them the playbook. We taught our channels the playbook. The company built tools to support each stage of the playbook. We had found our repeatable GTM Playbook.
By spring of 2010, we had GTM Fit. Momentum began to build. We started adding 30, then 80, then over 100 new customers per quarter by early 2011.
We had found GTM Fit. Growth unlocked, and we never looked back.
Finding GTM Fit: Nerve-wracking & Energizing
Finding GTM Fit is hard. The stakes are high. The search is stressful. Iteration and distillation is painful. The search for GTM Fit creates cultural and organizational changes as the company evolves. Cash burn goes up. It is nerve wracking.
At the same time, seeing a repeatable recipe to win customers is energizing. Customer wins accelerate. The business accelerates. Everyone in the startup realizes that they are not crazy. Hiring grade-A talent becomes easier. Investor interest grows. The startup picks up momentum. You see the path to building a real business. It is fun.
GTM Fit is the missing link. Find it and unlock growth for your enterprise startup. Best of luck!
A version of this post first appeared on The Mission