As a follow-up to our Venture Summit, we recently published our Preparing to go public: 5 IPO lessons learned article for companies getting ready for the public markets.
Here, we shift gears to earlier-stage companies and profile five lessons learned from our Venture Summit’s Go-To-Market strategy panel featuring Jeffrey Rayport, senior lecturer in entrepreneurship at Harvard Business School; Phil Coady, chief revenue officer at our portfolio company Dataiku; and Fred Groce, deal lead on our Wellington Access Ventures Team.
Lesson 1: Know your stage
Succeeding across progressive stages of a start-up’s life means understanding where you are in your evolution to ensure your go-to-market (GTM) efforts focus on the right goals. Early on, focus on setting and achieving your sales targets to build confidence with your investors and within your organization. As Phil noted in the panel, “It’s incredibly important that people see the ball going through the hoop a little bit.” Once you start consistently making and exceeding your targets, you can then look to define and layer in specific KPIs such as customer conversion and churn rates. When you are meeting both targets and KPIs, you’ve reached that “ideal” state that then enables you to hopefully scale up your process. Importantly, this is likely to be short-lived (more on this in Lesson 2 below).
Knowing your stage also enables you to communicate realistic expectations to leadership. This can help your team stay calm and focused through the maturation of your GTM strategy (because you aren’t setting unrealistic goals).
Lesson 2: Product-market fit is a process
Company leaders may think of product-market fit (PMF) as a single event to be achieved, but it is an iterative process that reemerges in successive growth stages.
In the early stages, companies search for PMF and develop a minimal viable product. As they advance to growth stage, they often look to diversify their product offering or expand into new geographies and customer segments. With these transitions, the search for PMF begins anew. Another way to think of this is continually moving from product-market fit to profit-market fit as your company scales in each stage.
There are many signs that your PMF is improving in a specific stage, but we’ll highlight three in particular:
- Moving from push to pull: As PMF materializes, your company starts to see “natural demand” in that market. This means you move from push to pull demand as customers know who you are and what you have to offer. This allows you to shift from outbound to inbound marketing.
- The Sean Ellis Test: This framework uses a series of questions to establish if 40% of your customers would be upset if you took your product away from the market. This helps identify embedded demand for your products.
- More systematization: With stronger PMF, your company is increasingly able to routinize your GTM strategy. As Jeffrey framed it in the panel, your company “moves from bushwhacking through a jungle onto a dirt road” that allows you to standardize your GTM approach.
Lesson 3: Sales is a science
Every company’s GTM strategy is unique, but there are best practices that allow companies to develop systematic and scalable GTM strategies and improve these motions through continuous feedback.
In practice, that means three things:
- Sales as a science: Best-in-class GTM strategies integrate established techniques, processes, and prepacked ideas (like the Three Whys — why change, why now, why this product) to create systematized playbooks and toolkits across sales practices. For example, by defining the profiles your sales team should contact, the modality to use, the question funnel by persona, and specific follow-ups for each, businesses can more quickly and consistently scale their sales efforts as the company grows.
- Continuous feedback: Sales teams (and product managers) constantly receive real-time information from the market that offers unbiased feedback to founders and product management on the GTM strategy (and even the product itself). Loss reviews are one method of quickly and systematically reviewing lessons learned (potentially via a third party) and integrating that feedback into your next at bats.
- Cadence is key: Consistent touchpoints with your sales teams to ensure they are aligned, effectively filling the sales funnel, and integrating feedback are critical. This can be everything from weekly pipeline calls to quarterly business reviews on sales highlights and lowlights.
Lesson 4: Focus on leading indicators
Companies often focus on lagging metrics like pipeline coverage ratio to measure success in their GTM strategy. In reality, we believe activity-based leading indicators can be far more beneficial progress measures.
For example, improvements in metrics like conversion rate and time-to-conversion that demonstrate more qualified leads in the pipeline are signs of increasing PMF. Tracking activity-based leading indicators can also provide both quantitative and qualitative feedback to help refine playbooks and support scalable processes.
Lesson 5: Foster a collaborative and aligned team culture
A successful GTM strategy is predicated on your product, sales, and customer success functions rowing in the same direction. That may be obvious — and is easy to say — but many companies fail to align compensation among these three groups around the same outcomes, which can hurt GTM success.
Notably, this is closely linked to Lesson 1 above (Know Your Stage). As highlighted above, just as each growth stage requires new GTM approaches, managing talent and culture likewise must evolve alongside your company’s changing priorities.
Bottom line on go-to-market strategy
These five lessons learned are just scratching the surface of a successful go-to-market strategy. Our Value Creation Team can tap into our public-market global industry experts, private market deal leads, and broader global network to help our portfolio companies hone their company-specific strategies.
Visit our Value Creation homepage for more information.