So what does GTM Strategy has to do with all of this?
No matter how successful your pilots were or how incredible your technology, the lack of a solid go-to-market plan will dramatically increase your new product’s chance of failure.
History is littered with disastrous product launches. In fact, according to Professor Clayton Christensen of the Harvard Business School, 80% of new product launches end in failure. While he wasn’t addressing the hi-tech industry in particular, failure can be even more of a problem when it comes to technology startups.
Why do so many new products fail?
The intuitive answer could be that the products themselves just aren’t good enough. Or, maybe, that the market wasn’t ready for a particular product — the classic excuse of many failed innovative startups. The truth, however, may be different.
Hi-tech startups are surrounded (and often founded) by technologists that have very little knowledge of market needs, target audience, or selling methodologies. It’s only when they raise seed funding, and are under pressure to quickly commercialize their product, that they realize how little they know about what they should do next.
The reality is that failing product launches more often than not result from the lack of a smart, solid go-to-market strategy during those early stages after finishing the first funding rounds, or even before.
The most common mistakes startups make
To give a sense of just how easily this can happen to so many startups with great potential and innovative products, but without a solid go-to-market strategy, let’s go over a few painfully common mistakes:
- Failure to conduct a thorough, independent, unbiased market research.
- Failure to understand the product ecosystem and market, including the competition.
- Failure to pinpoint the right target audience and acknowledge their goals and needs.
- Failure to identify where to meet that target audience and what to say to them.
- Failure to orchestrate and combine the holy grail of product, sales, and marketing.
These mistakes are often the result of one fundamental flaw commonly found in startups — they are used to thinking solely in product and technology terms. But, when a startup is looking to storm the market with a new product, it is vital they start thinking outwardly and from the customer’s perspective.
The potential problem with successful pilots
So, you’ve had a few successful pilots. And now you think you’re good to go. But if you don’t have a proper go-to-market strategy in place, at some point, you’ll get stuck.
The first few pilots conducted by many startups often rely on existing contacts they have. This means they are therefore not forced to actually pitch. Thus, the pilot they conducted with a bank, for example, may have been made possible by a brother of one of the founders who holds a senior position there. The fact they are not going to market cold to pitch the benefits of their product means they are unlikely to fully understand if they are targeting the right audience or persona, or even the right market (a pilot conducted with an Israeli firm may be of little relevance if your market is actually firms operating in the UK). So, all of these pilots may have been a waste of effort and time.
When you have a go-to-market plan in place, you will know exactly the correct personas, audiences, companies and locations your pilots should target. You will know what they should achieve and how to get there. This allows you to focus your efforts.
So, what do you do now?
Stop, take a breath. Don’t start with any marketing campaigns just yet. Don’t hire your first sales team member. Don’t over-invest in product development.
It’s too early. Get a clear picture of the road before you drive it. It should not take long — a few weeks or a couple of months — to save you from becoming just another casualty among the 80% of failed product launches.
Redirecting your focus (from internal product development) to the marketplace will help you build a robust plan. This will help you combine and align product, marketing and sales efforts to support your startup’s growth.
And if you are still unsure and need to dive deeper into go-to-market strategy read our blog on Go-To-Market Strategy – The ‘DOs,’ The ‘DON’Ts,’ And The ‘HOWs.