Review your strategy! Are you sales-driven or market-driven?
Be aware, dear software vendor/startup. Being sales-driven or market-driven is not the same. In fact, one of them will probably kill your company while the other might offer you a possible path through the chasm.
Are you not familiar with the Chasm? No problem, that’s why I’m here. The “Chasm” was coined by Geoffrey Moore in his book Crossing The Chasm, which I personally think is the most useful book for software startups that have already gained some traction and are looking to expand their business (Check this post to learn more).
My partners at Trackmob and I have recently spoken a lot about sales strategies and I quite often I think about the following:
Trying to cross the chasm without taking a niche market approach is like trying to light a fire without kindling. The bunched-up paper represents your promotional budget, and the log, a major market opportunity. No matter how much paper you put under that log, if you don’t have any target market segments to act as kindling, sooner or later, the paper will be all used up, and the log still won’t be burning.
It’s quite obvious, but It’s not as easy to manage as it seems to be — “This isn’t rocket science, but it does represent a kind of discipline”.
In my experience, the problem starts when you no longer have a clear picture of “the fire” - is it actually burning by itself? It will be able to spread and reach more customers?
Moreover, it’s quite easy to lose yourself in a sense that you are no longer addressing the same niche. You think you are approaching a group that requires the same product and service just to see yourself changing again your whole approach to strategy — you start being “Sales-Driven”:
We do not have, nor are we willing to adopt, any discipline that would ever require us to stop pursuing any sale at any time for any reason. We are, in other words, not a market-driven company; we are a sales-driven company.
Now, how bad can this really be? I mean, sales are good, right? Surely things can just work themselves out, and we will discover our market, albeit retroactively, led to it by our customers, yes? The true answers to the previous three questions are: (1) disastrous, (2) not always, and (3) never in a million years.
The consequences of being sales-driven during the chasm period are, to put it simply, fatal. Here’s why: The sole goal of the company during this stage of market development must be to secure a beachhead in a mainstream market — that is, to create a pragmatist customer base that is referenceable, people who can, in turn, provide us access to other mainstream prospects. To capture this reference base, we must ensure that our first set of customers completely satisfy their buying objectives. To do that, we must ensure that the customer gets not just the product but what we will describe in a later chapter as the whole product — the complete set of products and services needed to achieve the desired result. Whenever anything is left out from this set, the solution is incomplete, the selling promise unfulfilled, and the customer unavailable for referencing
That’s one of the most important things for your early-stage startup. Keep your eyes opened and be aware of the path your first sales are leading you to.