The goal of marketing is to make more money than you spend. That may seem like a simple statement, but it’s actually not so simple to achieve! There are many different models for how you can go about this.
In this article, I will go into detail about some of the most common GTM (go-to-market) models that startups use at each stage of their lifecycle and provide examples from my own experiences with startups and Fortune 500 companies alike.
Determining the market needs
The process of determining whether the needs of a target market can be addressed with a product and delivering that product to that group
In the early stage of a startup, you should be focused on finding product-market fit. This means that you need to find the right customers for your product, and those customers have to be willing to pay for it.
It’s not enough that people like your idea; they have to buy it from you at a price point where you can make a profit.
But don’t worry about pricing or profit now. This is called “scalable”. You need to be able to scale later for scaling today, not just put off profitability indefinitely (or worse yet, kill profitability altogether).
The startup journey of seed to series A
You may be wondering how to price your product. The simple answer is to ensure you’re covering your costs. But that doesn’t mean you need to price based solely on the cost of producing your product.
Pricing is also about positioning and differentiation in the market and ensuring that customers value your product enough to pay for it. And after all, if they don’t value what you’re selling them, then they won’t buy!
Your pricing strategy will depend on several factors, including:
- The number of customers who are willing to pay for what you offer (demand).
- Your cost structure (what it costs for each unit).
Focusing on building a great product
Don’t bother doing the things that will be a drag on your company when it grows. Focus instead on building a great product and finding people who love using it as much as you do!
In the early days of your startup, you should do things that don’t scale. This is because there’s no point in scaling something until it’s proven to work.
The focus is on customer acquisition and product market fit, not on sales and marketing or following best practices in those areas. You should still be able to acquire customers at a reasonable cost but maybe not as fast as later on when you’re at scale.
Also Read: Building a business isn’t Ximple. This is what my startup journey taught me
Customer success will also play an important role here since they will help train new hires who are coming in after each hiring cycle (new batch of employees). Customer retention is a high priority because most startups are acquired by larger companies when they get to that point where they need more funding than what their current cash flow can support
A company’s growth may be plotted on a pipeline graph
The pipeline model, which is designed to help you find a way to get customers, has several key components:
- A lead generation system
- A messaging system
- A sales process that your team can scale as it grows
The idea is that you have a steady stream of leads coming in from your marketing efforts and that you can convert those leads into paying customers. In this stage, your focus will be on closing deals more quickly and efficiently than ever before.
Suitable support services
After you’ve managed to get your series A, you have a lot of things on your mind. The business is still growing and evolving, so now’s the time to refine some aspects of your product or service.
You’re also building out key functions like customer support or training, which requires a lot of resources. As a result, it’s important that investors consider the team’s ability to deliver on these new responsibilities before they write another check.
There is no one go-to-market model, it changes at every stage of the startup process.
- You might have been taught that GTM models are set in stone, but they don’t have to be. As your company progresses through its lifecycle, the GTM model will change to match the needs of your business at that stage.
- This shift can be subtle or drastic depending on what phase of development you’re at. If you’re a startup with no audience, then getting people into your funnel is going to be more important than anything else. So we’d recommend using an acquisition-focused GTM model first before scaling up and investing more in things like Retention or Activation later on down the line.
- Once you’ve gotten some traction and customers are coming through your funnels (or just starting), using channels like ads and email marketing should become more effective as well: conversion rates increase when there’s already awareness about a product being available for purchase which means that getting people familiarised with what’s being offered before asking them for money becomes super important!
Final thoughts
It’s important to remember that when you do have a GTM strategy, it will need to evolve with your startup. You can’t expect the same tactic to work at different stages of your startup process, so keep an eye on changes in your business and make sure you stay ahead of them.
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This article was first published on September 2, 2022
The post A guide on the go-to-market models that startups use appeared first on e27.