As early-stage investors, we often talk our portfolio companies through how to boost their initial traction and grow their revenue (hit the first $100k in MRR) to be Series A ready. Although there are still many uncertainties about the product and countless other things to figure out at the seed level, we frequently help to create the initial go-to-market (GTM) strategy that either helps to sell the product to support early learnings or scales revenues in a predictable/repeatable way. While these sales strategies require different approaches and techniques, this article will focus on “scaling up” further on for a very simple reason: if the company hasn’t managed to prove its viability or achieve some initial signs of product-market-fit, staying too long in the ‘sorting things out’ phase can be pretty dire for the success of the company in general.
As for GTM strategies, there are a few to discuss - bottom-up, product-led innovation or top-down - but they all very much depend on the problem your product is trying to solve. Some may have advantages over others but only in certain situations, for example, a product-led approach can help with winning your first users, but it can fail or seem insufficient while acquiring clients like enterprises, which tend to have a centralised procurement process requiring executive approval. As top-down enterprise sales might at some point be inevitable for many, especially to unleash millions in MRR, I will focus on a typical top-down mid market approach with a direct cold outreach, where most InReach Ventures startups tend to begin.
The first step in building your sales machine (i.e. a predictable revenue model) is to craft your narrative: a story presenting your proposition to potential customers. It needs to be well articulated and crisp enough for your sales team and customers to understand:
1) Your customer’s main problem: Identify the problem you’re trying to solve and articulate it clearly. Try to keep it as narrow as possible, as your limited focus will help your potential customers understand quickly whether your product or service is relevant enough to them.
2) Who has the problem: Identifying the people with the problem you’re trying to solve is equally important. As your customers-to-be will probably appear in your value proposition statement, make sure you’re clear about the person or group of people you’re targeting. Generally speaking, if you have a clear sense of who the main stakeholders are, try to mention their roles - sales representatives, customer service etc. This helps your audience quickly figure out whether you’re potentially able to help with some of the challenges they face.
3) The cost of solving this problem: It’s essential to understand why a customer should expand their budget to acquire your product. If possible, try to estimate the return on investment (ROI) associated with implementing your solution. Opportunity costs or benefits are probably harder to estimate, but direct costs are easier and allow you to be more precise with the unit costs.
4) How the problem is currently being solved: Understanding the current solutions and why they fail will help your sales team to sound more credible. With insufficient knowledge about the sector, it might be pretty hard to drive an argument and convince your customers of your product or service. In other words, knowing the market will help you craft a better story. Also pay closer attention to what’s changing, what the trends are, and what they mean for your sales narrative - whether they support or undermine it.
5) How you solve the problem and why your product is better: Mentioning additional information about your product helps you to differentiate it from your competition, as well as enabling your audience to understand how you can solve their problems. The best way to do this is often to compare your product with existing products that your clients already know and understand. Supporting your analysis with some quantitative difference - such as metric-based comparisons against your competitors - will augment your narrative and help you to appear more credible. If possible, it’s also a good idea to create third-party validation. Any customer testimonials featuring your metrics, case studies, press or analyst coverage can help to explain why your solution is ultimately better.
After completing your narrative, the next step is to create all the materials your team will need when communicating your product or service to your audience. These include:
1) Slides: Though there are certainly many effective ways to communicate with your clients, a slide deck is still something of a standard means of providing them with a clearly structured presentation. The best way to do this is to create slides that correspond with your narrative: what the problem is, who has it, what the solutions are, what the market looks like, what’s changed, how your product works, why it’s better and how much it costs.
2) Emails: the centrepiece of your selling materials! The end goal of your emails is to drive recipients to your presentation, online demo and/or website. To start with, think about your audience, as you’ll be testing different stakeholders:
a) users for the solution
b) a person responsible for solving the problem (e.g. support)
c) a decision-maker with the budget authority.
Prepare various templates addressing each of their challenges. Always write in simple language, with a strong call-to-action at the end. Consider splitting your message into more than one email. Your first one can draw attention to your metrics, then later you can provide more information about your positioning, a comparison table, a case study, and finally, if you’re succeeding in engaging with your prospect, you can try to close it with an invitation to a demo call with your sales team. This is obviously just an example; the cold email approach can be designed in many different ways, and you’ll probably go through a few iterations before finding the right one.
3) Phone scripts: a well-targeted and customised email should hopefully help you set up an appointment with the right client (a qualified prospect), and though it’s probably hard to follow a script to the letter, having some bullet points should help you to drive the discussion. Try to prepare for different scenarios: when a client is interested (outcome: book a demo), not interested (gather information: why?), asking specific questions (is it a free product? how much does it cost?), comparing your solution to company x/your competitors’.
4) Product demo script: though you’ve probably already covered a lot about your product via emails or a qualification call, your demo will be visual, customised and provide way more context. Again, make sure your demo call is structured! Don’t leave the most compelling part to the end - try to present the strongest elements of your case at the beginning, and then continue by diving deeper into additional features.
Finding prospects and outreach (direct sales)
With a narrative and all the materials, the final step in your go-to-market strategy is to connect with the right potential customers. Instead of contacting just anyone, it’s important to be highly specific about who your customers are. As you’re building a product trying to solve a very specific problem, allocating your resources to the wrong companies or to individuals with different business pains will potentially influence either the product itself or your financials.
Spend as much time as necessary on identifying your ICP (ideal customer profile). We’ve previously talked about how to do this on our InReach Ventures blog, and I’d strongly recommend reading the article: Ideal Customer Profile made easy at this stage. Although it provides a practical framework to follow, finding your ICP is very much a question of going back to your narrative, which already describes your audience. All you have to do is to be very specific, define all the characteristics and create some hypotheses to test around geography, company size, stakeholders, revenue brackets, tech stack, stage, and so on. If you don’t get results, try different assumptions that allow you to nail down the most successful use case. If you do a good job of targeting the right people, your emails/direct messages will suggest a solution to a very specific problem - and that certainly won’t be perceived as noise. On the contrary, your prospects will be willing to engage with you and potentially purchase your product or service.
Set yourself up for success
Carrying out all the steps above may seem like a lot to do, and to be fair, it is! But after seeing many failing with the basics, the best advice I can give is to dedicate enough time to running through the list as diligently as possible. As the end goal is a well-thought-out go-to-market strategy, make sure you deliver a critical piece that will allow you to test your initial assumptions and quickly iterate if things don’t deliver. In other words, the more you prepare, the better the results you’ll achieve, and the more impactful your outreach will be, either with closed deals or learnings.