GTM Strategy (Not a Plan)
Whether you are starting a new company, starting a funding round, trying to enter a new market, or taking your company global, there is a point that you should always start from. That point is your go-to-market strategy.
As the name suggests, this strategy lays out exactly how you plan to go to market. If you’re building a startup, then it’s the market that you plan to sell your product in. If you’re expanding, then it’s a new market that you’ve never operated in or reached before. Whichever market it is, you need to know how to get to it, how to win in it, and how to stay in it, making sure no one else in that market eats your lunch.
Your potential investors will ask about it, your sales and BD teams will shape their approach around it, your marketing team needs to know how to target correctly, your product/development team will build what’s necessary for it, and most importantly, as a leader, you need it in every decision you make.
Now, before we go into what a GTM strategy is, let’s say what it isn’t. And we can do that through some things that people describe as their GTM strategy:
Our GTM is to outprice competitors in that market and be the best value-for-money option. That’s not a strategy, but a tactic.
Our GTM is to focus on targeting distributors, and they will help us access the market. That might be a plan and part of the overall strategy, but not a strategy on its own.
Our GTM is to target our ICPs with our positioning as the better product because of so & so. That could be part of your positioning or marketing strategy but again not a GTM strategy.
That’s not to say that the above examples are bad decisions, or that they don’t belong in a GTM strategy. But on their own, they are not a strategy.
A Strategy
We have previously covered what a strategy actually is, and you can read about it here: link
But to recap: a strategy is not simply a list of goals, a handful of tactics, or a plan of things to do. A good strategy needs a diagnosis of the challenge, a guiding policy for how you intend to address it, and a set of coherent actions that support that policy.
A GTM strategy is no different.
Start with a diagnosis of the challenge. This could be a diagnosis of what’s stopping us from expanding into a certain market. Or, if we are starting a company, then a diagnosis of what opportunities or challenges the market presents for us and what that market looks like for a product like ours, including potential customers, competitors, etc.
Then we move to a guiding policy for how to address that challenge based on the diagnosis we just made. It could be that our approach to a new market can’t rely on hiring a local sales team due to costs, so maybe our guiding policy will be to approach the market by building a channel or partner ecosystem there.
After that come the actions, the things we will actually do to support this policy. Attending important events, localizing our marketing for that specific market, creating the right pricing based on how we want to position ourselves against competitors and how price-sensitive the market is. We start with smaller channel partners that serve our target customer segments, moving to bigger channel partners after we have established some revenue in the market and collected enough references. We can then utilize those references in marketing to new customers, etc.
That is a GTM strategy. You know where you are, you understand the right approach, and you build coherent actions that serve that approach and lead to your success in the market.
Now, to build this strategy, there are things you should know or find out that will shape your GTM strategy.
What Shapes Your GTM
Any good strategy needs to be based on an understanding of the factors that shape your challenge. The better your understanding of these factors is, the better your strategy will be. And when we talk about GTM, these factors can include, but are not limited to, the following:
Customer: Obviously, the customer is the most important factor. They are the people we are going to market to. They make or break the business. When it’s a new company, we need to know who our customer actually is. If we already have a market but are planning to expand to a new market, then we need to start again with the customer in that market. Find out what they need. What they like and what they hate. Their aspirations. Why would they care about what we want to provide, etc.
Market: What’s the market size for our product category? Does it even exist, or are we starting a new market? Is it mature or new? Is that category well defined, and do customers understand it? Are there any barriers to entry? We sometimes mistake a customer, or ideal customer profile, for a market. But a market is a much more complex category that includes our target customers within it.
Competitors/Alternatives: What alternatives to our offer is the customer using now? Is our offering better than the alternatives? If there are other players in the market, then why are we better than them? Are they cheaper, more expensive, lower quality, or just as good? What are they doing in the market that’s working, and what’s something we can take advantage of? It’s a mistake to assume that just because our product is better, customers will go for it. Sometimes, a well-established competitor has already built a tight network of relationships with customers that is quite hard to break.
Positioning: What market/category does a product, company, or brand fit into, what does it compete against, why is it better, and how do customers perceive it? The answer to this is positioning. It is figuring out where we belong, what makes us stand out, what we should focus on, and what we should communicate to the customer so they choose us. More on positioning here: On Positioning.
Pricing: Pricing goes hand in hand with your positioning. How do we want to compete, and how do we want to be perceived? Are we a premium product with a premium price? Or are we a cost-friendly alternative to the market-dominating products? Also, what kind of discounts can we afford to offer channel partners? Pricing has to be built not around what we wish to be making and our target revenue, but around our positioning, how we want to compete, and how we wish to be perceived.
Channel: How does distribution look for our product? Should we go direct to customers? Or does our target customer prefer working through resellers? Are there existing channels we can utilize in the target market, or do we need to build one? A good channel is as important as everything else. We can ace our branding, messaging, and pricing and still not be able to achieve desirable results due to poor distribution channels.
The Better the Strategy, the Further We Can Go
The GTM strategy will depend heavily on the above-mentioned factors (and some other factors that could be added), and the better we can research and interpret each factor, the better the strategy we can build. And the better the strategy we build, the more prepared we will be, and the further we can go in the market.
Our job, however, does not end once the strategy is written. Markets change. A new competitor can appear, customer expectations can shift, or a channel we relied on might stop delivering. That means the assumptions behind our strategy need to be revisited continuously, not researched once and forgotten.
So before asking which events to attend, which partners to approach, what campaigns to run, or how much to charge, first understand the market, diagnose the challenge, decide how you intend to win, and then build the actions around that choice.
