Industry leading tech companies have a relentless focus on their go-to-market strategy to transform their products into selling brands. It’s therefore surprising to see that so many seed stage startups which take these companies as role models don’t have a coherent sales strategy. In a recent discussion with a startup selling a mobile service to enterprises, all was smooth sailing for the first 15 minutes of our conversation. We established the significant improvement which the service represents over the current way of doing things, talked about the pricing strategy, and discussed the barriers to entry for potential competitors. We then started talking about the startup’s sales activities.
At this point it quickly became clear that the team consisted of five product people of which one allocated half his time to developing, pitching, and attempting to close sales leads. In addition to the unbalanced team composition, the startup’s target customers were in a different geography than the core team. This meant that the person in charge of sales had to travel several hours to meet with potential customers. Being in physical proximity to your customers is of crucial importance for seed stage startups which depend on rapid customer feedback to iterate and improve their product. This becomes even more important for companies performing enterprise sales since the customer has more specific needs and is often being courted by several companies at once.
Unfortunately, the example I demonstrated above is not the exception, but closer to the rule. When faced with a seed stage startup without a go-to-market strategy, the investor has two options. The first is to not move forward with the discussion. When the other pieces of the puzzle, like product-market fit, don’t fit together, this is the preferred approach. However, when a startup has clear product-market fit, there can be an opportunity to guide the startup in the right direction by recommending that they revisit their sales strategy and bring on new team members with the skills required to fill this gap. Since the startup in this example had a great product meeting a clear market need, I decided to take the second approach.
In addition to suggesting that the startup address the unbalanced team composition by bringing on two dedicated sales people operating in the company’s target geography, I offered to assist in the identification and recruitment of these individuals. Although some team members appeared to acknowledge the need to revisit their go-to-market strategy, they ultimately decided that this should not be their core focus. Not only had the startup not properly thought through how they were going to sell, it also wasn’t willing to make this investment in the future.
While a strong product focus is essential to build an industry leading tech company, it only becomes valuable when complemented with a coherent go-to-market strategy. Since the engineers who often launch tech startups naturally tend to focus on product, I encourage them to think about their sales strategy and build the skills around them to complement their product expertise before they begin to scale. Having a coherent sales strategy will make your business more attractive for investors, but this is just a side benefit. Whether you decide to take outside funding or not, a clear go-to-market strategy will make you more likely to build the next tech industry leader.