Kozminski Techblog

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‘Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.’

Sun Tzu

While plenty Go-to-Market frameworks have emerged over time, they often fall short of capturing the intricate dynamics of the real-world market. These frameworks are much more complex than it’s needed. I believe reality is too complex so it’s better to simplify it as possible.

That’s why this article aims to distill the essence of crafting an effective GTM strategy for digital products, stripping away unnecessary complexities and focusing on the core elements that drive success.

Ideal Customer Profile (ICP) and to whom should you sell

First of all, a lot of startup gurus talk about the importance of having an Ideal Customer Profile, but not a lot of them talk about an Early Customer Profile [1].

This idea refers to a normal distribution, where only 13.5% of the population are early adopters – people who accept and untested your beta phase product (some of them even enjoy it)!. While creating GTM, you should have clear division between ICP and ECP.

Secondly, it’s important to know that your customer doesn’t always make a decision whether to buy or not of your product [2]. That’s why during the discovery process you should point out who is your persona (ICP) and who is decision-making unit (DMU);

In my opinion, a lot of companies struggle with this and don’t have a division between end-users and decision-makers. Unclear strategy affects execution so when you go on such companies’ website, you don’t know what they sell and for whom.

Racecar Growth Framework

Lenny Rachitsky in his article compared Growth and Go-To-Market to racecar [3]. According to this concept:

1. When you first start off, concentrate on kickstarts and perhaps a few turbo boosts until most of your growth is driven by your growth engine.
2. After your growth engine is operating, you should spend money on lubricants to make it function more smoothly and on the odd turbo boost to accelerate growth.
3. Once you reach a certain size, investigate one or two mid-stage stimulants.
4. As you continue to lubricate your current growth engine(s), experiment with and start a second growth engine before your primary engine asymptotes.
5. To continue growing, add a new business unit, go after new markets (like enterprise), and develop inside current accounts (such raising NRR) if you want to keep expanding.

Go-to-Market Growth Strategies

Luka Ivicevic posted on LinkedIn that “Paid channels is a terrible way to build and scale a business. Great businesses don’t depend on paid channels to acquire customers. Paid channels are great to kick-start growth, and get feedback. Especially if you’re venture-backed. Most non-venture-backed, bootstrapped companies don’t use paid ads because they can’t afford it. Instead, they find creative ways to acquire customers using free channels. This pays off in the long term” [4].

I definitely agree with Luka’s idea to use inbound only as a test and then use creativity and growth hacking in order to scale.

On top of that, famous LinkedIn growth influencer – Maja Voje – posted a post where she clearly described the most common GTM strategies [5].

Maja suggested that you should not consider growth to be “random acts of marketing” but rather movements. Each has unique unit economics, varying sales cycles, and varying degrees of demand generation and capture.

Furthermore, it’s crucial to consistently prioritize strategies that have proven success while simultaneously experimenting with new approaches. I advocate for applying the Pareto Principle, allocating 80% of resources to proven strategies and dedicating 20% to testing innovative concepts. This approach ensures that established strategies remain the foundation while allowing for exploration and adaptation to emerging trends

How is the winner’s approach?

There is no need to reinvent the wheel, so a good strategy is to follow what industry leaders do.

Contemporary trends suggest a divergence in go-to-market (GTM) strategies between B2B and B2C startups. B2B companies increasingly adopt a product-led GTM approach, focusing on showcasing the value proposition of their offerings to businesses. In contrast, B2C startups often rely on viral marketing, Search Engine Marketing , and paid advertising to drive user acquisition. This differentiation is rooted in the distinct nature of business and consumer decision-making processes. When selling to businesses, the emphasis lies on demonstrating the tangible benefits and ROI (return on investment) that the product can deliver. On the other hand, B2C marketing often emphasizes social influence and the creation of a buzz around the product to attract consumers.

Summary

In conclusion, navigating the ever-changing e-commerce landscape requires a strategic approach that balances simplicity with effectiveness.

1. Identify and divide ICP and ECP
2. Identify end-customers and create a decision-making unit
3. Then you can implement the Racecar Growth Framework
4. While scaling, focus only on one strategy that works the most (80/20 rule).

Resources

1. https://www.linkedin.com/posts/majavoje_reaching-pmf-is-nearly-impossible-if-you-activity-7136398644626214912-K9P5?utm_source=share&utm_medium=member_desktop
2. https://www.linkedin.com/posts/majavoje_b2b-hill-im-willing-to-die-on-personas-activity-7138799488550305792-4x1v?utm_source=share&utm_medium=member_desktop
3. https://www.lennysnewsletter.com/p/the-racecar-growth-frameworkexpanded
4. https://www.linkedin.com/posts/luka-ivicevic_paid-channels-is-a-terrible-way-to-build-activity-7137521892755660801-84nr?utm_source=share&utm_medium=member_desktop
5. https://www.linkedin.com/posts/majavoje_too-many-startups-jump-straight-into-tactics-activity-7138074712357662720-OwvU?utm_source=share&utm_medium=member_desktop
6. I used ChatGPT 4 to rewrite my text and improve vocabulary. Prompt: please rewrite text and improve vocab: (text).