At (capital) time Overwhelmingly, startups can overbuild their sales teams, hire the wrong sales leaders, and invest resources in sales strategies that don’t pay off.
Not a good idea, obviously, but excitement reigns and funding flows. But when belts are tightened in difficult times and words like “multiple burnouts” revisit boardroom conversations, it’s important to get the go-to-market (GTM) right.
People talk a lot about building the wrong GTM model, so we won’t cover the topic, even though it’s important. But we often see a different mistake: building the wrong GTM model for the current startup phase.
In a recession, getting the timing and evolution of the GTM model right in terms of business maturity can derail the business.
Here’s our look at what to do and when to do it.
Step 1: Product-market fit (seed level)
Before you can scale any sales model, you need a pipeline to support it.
Startups launching a product have two paths they can follow:
- Try selling your product to 100 people who you think might buy it. If you don’t get enough of them, repeat over and over until you hit the bull’s eye. This works best for an enterprise product, where there is a group of buyers that you already know or know easily. Most importantly, they send back a very clear message. The downside is that the message is that they are probably wrong.
- Alternatively, market your product widely, get as many people as possible to use your product, then find out where your favorites are. This is done for self service only. You can look at the many individuals using your product and find your best pockets of users: Who is active? Who shares your product? Who will change?
Step 2: Value and Profit (Seed to Series A)
You’ve got some customers who are willing to pay, but how much should they pay, and how long will it take to decide to buy? This is key: If your pricing and buying cycle are wrong, your entire GTM model will be wrong.