Achieving product market fit is the initial target of every seed funded company. With that in place – and a successful Series A under their belt – their thoughts turn to go-to-market and proving the ability to replicate product market fit, through a repeatable sales strategy. And for many this is where it all goes wrong.
We are pleased to announce ChannelCreator as one our newest strategic partners and looking forward to working with them over the coming years. Matt Ball, Managing Director of ChannelCreator, shares his five steps on achieving ‘ Go-to-market fit ’ and being ready to raise Series B investment.” Stephen Millard
First and foremost, go-to-market is about focus. Many business make the mistake in the early stages of throwing the net too wide. This leads to multiple value propositions, a lack of repeatability in deal structure and project methodology, and higher support and internal training costs. It’s important to keep business development lean and accountable at all times, but in the initial go-to-market phase, it’s absolutely essential.
1. SELECTING YOUR TARGET MARKETS
Software entrepreneurs usually have good instincts – the right product, the right market, the right time, the right customers, the right partners, the right fiscal model, the right brand, the right marketing – if you planned all that meticulously before launch you’d never get off the ground. Believe in your own instincts – where you think there’s a market, there’s likely to be a market.
A pertinent example is Goldenfeeds, who’s solution enables companies to update product feeds with the highest refresh rates in the market, and with the highest possible levels of accuracy. This addresses a key pain point for e-tailers, but importantly addresses a major revenue killer for Affiliate Networks. Driving affiliate traffic to out of stock or discontinued items results in zero conversion, and a poor customer experience. Therefore, Affiliate Networks were the obvious first port of call – and five years later these companies now form an essential foundation to Goldenfeeds’ partner network.
2. VALIDATE YOUR INSTINCTS
Now you have decided where you think the business is, go and speak to the market. Ask the “suspects” what they’re up to, where their priorities lie, whether your product fits. Try and hit “friendlies” and use your (or other people’s) networks to get an honest answer. You don’t want flattery, you want fact. Is it interesting? What budget would you put aside to fix this problem? What do you need that we haven’t got? Where would you go to buy the stuff we haven’t got? And more importantly, where would you instinctively go to buy a product like ours?
3. BUILD A PIPELINE
Once you have validated, compile what you have learned and prioritise. Go after the segments that demonstrated immediate need and desire to buy. Focus on compelling events – who told you they had to do this due to compliance, revenue assurance, customer retention? They should be first on your call list. Extend your list of prospects in the hot market segments and build a pipeline. Clearly articulate your proposition in a proposal, and get offers on desks. The earlier people say no, the sooner you can ask why not and tweak your offer until the answer is yes. If you aren’t so good at commercial proposals this might be a stage to engage sales resources to support you.
Cognosec had been focusing on a few key areas of expansion with their portfolio of cybersecurity solutions, ecommerce system integrators, hosting companies, software providers and cyber security consultancies. It became clear that hosting companies and eCommerce system integrators were delivering better results. Whilst the eCommerce system integrators deliver a small number of projects per year with high average order value, Hosting companies are adding tens or hundreds of new clients to their platform, and typically have much greater scale and reach. Therefore, Cognosec developed a focus on a combination of these two verticals and has driven good lead flow from these channels to market over the course of 2015 and 2016.
4. WIN PILOTS. DELIVER THEM!
You’ve probably done 9 months of work by now to get the first customer to agree to pilot your product. Don’t mess it up! Better to deliver 1 or 2 world-class pilots than to win 5 and leave customers with poorly implemented projects. Try and do your pilots in collaboration with or via a partner. Engage them in the process and make it a joy to work with your business. Make it profitable as well and they will become your advocates, and your extended sales and marketing team. Hire resource to manage and incentivise a smaller number of successful partnerships based on expansion of this pilot model, and your channel to market will deliver sustainable revenues without massive investment. Experience is key here – find someone who knows channel and support them in driving these key strategic relationships.
SoftServe is a provider of Software Development services to ISVs and enterprises, delivering SaaS, Mobile, Big Data and Security frameworks and UI modernisation for software businesses. As part of their UK go to market they approached software and platform operators across the spectrum, from small, high growth startups to FTSE 100 organisations. By piloting initially with 1 or 2 individuals on a shorter projects, SoftServe has now built teams sizes of up to 13 full time resources working with UK customers, and these continue to grow. All down to complete dedication to the success of the initial pilot projects.
5. REPEAT AND EXPAND
Now your first market is on track, you can expand to a new territory. Consider challenges like translation, localisation, regulation and cost of sale and validate the new market that looks most feasible and most promising. Use a local resource and where pilots land, you can manage them more successfully. Remember, local resources don’t have to have offices or be employees. Own the contract, not the entire ecosystem!