The startup's true secret sauce?

Startups have been known for their ability to create innovative products. Yet in today s environment it is their ability to come up with optimal go-to-market strategies that will carry the day!

Much has been written about startups' unique advantages when it comes to creating innovative products for emerging markets. In fact, many established companies, eager to capture some of the advantages of their smaller brethrens, have created internal startups - sometimes called "Intrapreneuring" or "Spin-ins" - to send a few people "back to the garage" with the task of coming up with innovative products. But new businesses who focus on product innovation alone often miss out on what may be the most important aspect of successful startups: their ability to quickly understand their markets and deploy successful go-to-market strategies. Most startups spend vast amounts of time and money creating the best possible products. Yet, little analysis is performed to come up with the optimal "go-to-market" strategies – partly because the startup has very limited data on the emerging market. It is not unusual that the task of figuring out how to sell the new product is left to the sales team - "we will hire great salespeople who will figure it out". Yet this strategy is likely to be as successful as the proverbial "build it and they will come". Lessons from successful Startups There are a number of strategies that successful startups have used - or have been forced to use - that may seem anathema to some entrepreneurs. Yet the results from those strategies are undeniably rewarding. Here are six go-to-market strategies most new businesses can benefit from: 1. Sell the product while it is being built. Most companies use a structured, sequential approach to product introductions - typically starting with Product Definition, Engineering, Marketing and then Sales. On the other hand, some startups, typically starved for money, will try to sell their products while those are being developed. Those "premature" sales efforts - whether successful or not - enable the startup to obtain feedback from a critical constituency - real buyers (and not focus groups!) This can bring very beneficial results. Since the product is under development, the product definitions can be modified to ensure that the first release of the product can be successfully sold. Also, if the early sales are successful, the new business ends up with references that can significantly accelerate the adoption rate. 2. The entrepreneurial team - and not sales professionals - should lead the initial sales efforts. Many startups cannot afford to hire professional sales people and that works out just fine anyway. Entrepreneurs tend to be more successful selling to early adopters - Vision makes up for what a startup sorely lacks: references. Once the first few sales have been made, sales professionals can be hired to scale the business. 3. Everyone is in Sales - especially Marketing employees. In a new business, the Marketing department has the unique challenge of coming up with a marketing strategy before any sales have been made. Yet, the Marketing department is often unable to answer key questions that are critical for an effective marketing campaign. For example: What is the customer's buying process? On the other hand, in some startups, the Marketing team is often an integral part of the sales effort and therefore can gain, early on, a deep understanding of the customers buying process and the decision unit. 4. Align marketing and sales efforts to reach key decision makers. Most startups have scarce marketing budgets. Those are best spent helping the sales team getting in front of decision makers. Too often, marketing campaigns target audiences that are poor entry points for the sales team. This is a waste of precious resources since the sales team ends up engaging the customer at the wrong level. 5. Create a simple, yet compelling "elevator speech." Most startups need an elevator speech to introduce their business to investors, to early customers and to the founders' moms. Since this target audience is from outside the industry, the elevator speech has to be simple yet compelling. As the startup interacts with various prospects and partners, the elevator speech will be honed and toned. This elevator speech serves two purposes. It becomes the rallying flag behind which the entire company aligns as the company evolves and it becomes the cornerstone of the company's messaging that can be used to develop effective marketing and sales tools. 6. Follow the money. Most new businesses start with a loosely defined target market and product offering. As the business interacts with real prospects, it will typically change its focus and product direction. A startup will give particular attention to those customers who "vote with their purchase orders." Microsoft's original plan was to sell computer-programming languages. Their plan changed when they landed an IBM contract to develop an Operating System. It is not unusual for a business to go through several iterations before it narrows down to a sweet spot. The Best of Both Worlds Most entrepreneurs tend to be technical people and will bring a strong analytical discipline to their product development efforts. If those entrepreneurs can bring the same discipline to their go-to-market strategies, they are much more likely to deliver on the always optimistic forecasts for the new business.

Comments

[Mike McGee]

Antony,

Sent you an email, re: meeting. I think we have much in common which we could share, involving startups.

Mike McGee
408.246.7178 (H/O)
408.887.3546 (Cell)

[Steve Simmerman]

Good write up, but having been involved in several successful start ups I would take issue with the first two points:

1) yes, generally speaking, start ups sell the product while it is still in development but that is dangerous...start ups typically are led by people with some degree of experience and success and they should leverage that experience so that they have a plan/ a product road map. Stick to the roadmap as much as possible or they risk developing based on the 1st few customers who may have different needs, thus the start up ends up with a product that meets the needs of a few customers but is really 100% of something nobody really wants (paraphrasing Geoffrey Moore) - i.e. they lose focus of their intended target audience...use the bowling alley approach..satisfy the needs of one target before trying to knock down other pins (targets)

2) a solid start-up team should include not only technically skilled members but also an experienced/seasoned sales member as well...let the sales person position and sell and let the rest of the team support the sales effort as needed - everyone has a role