Part 3: Practice
The first lesson we learned was the importance of localisation. Unlike product teams, which are often centralised in one place to facilitate an easier exchange of ideas, the New Product Go-To-Market (NPGTM) team needed to be globally distributed and focus on individual regions. Go-to-market strategy is, or rather should be, inextricably linked to the market to which it is applied, and simply claiming that a market is ‘global’ is not good enough. Uber’s failed attempt to displace the Chinese market’s incumbent Didi is a memorable example of a failure to accept the reality that local differences are enormously important. We can’t simply copy-paste the same approach we used in North America to the rest of the world. Thus, despite being a team of generalists, we shifted from a global to a regional view.
Scenario 0 - "early stage"
While the company places bets on more than just one new area, we learned that we as a team had to be more careful in choosing where to focus our efforts and which products to support. Two main factors play into that decision: the delta between a new products status quo and attaining both sales and technical readiness for it, as well as the product’s potential total addressable market.
The trajectory of moving from weak to strong sales and technical readiness respectively, exemplifies the pace at which a product attains product-market-sales fit, as described by Jyoti Bansal. Variables that inform the trajectory include market size, technical complexity and disparity to the rest of the product portfolio. Products we focus on tend to have a substantial future market size and the potential to be major revenue drivers, but are still in their infancy on almost all aspects. Once we’ve decided on a product, we guide its development until it reaches its potential, or until we are confident about the product’s trajectory.
Scenario 1 - "best case"
Friction can occur both with regards to “sales readiness”, as well as “technical readiness”. Ideally, the product’s journey will proceed linearly, making equal progress on both dimensions. In reality however, there is a lot of friction on both sides, and one of the areas typically ends up falling behind, meaning the other side has to work extra hard to help the product course-correct. Depending on the order in which friction is reduced in a specific area, the overall strategy might need to adapt. It follows that our team’s job is to manage the reduction of friction on both dimensions and to shift strategy accordingly.
Scenario 2 - "early GTM"
Scenario two is the most common scenario, partially because it tends to occur when following the “move fast and break things” approach that Facebook famously used to advocate for. In this scenario the product is straightforward for the Sales team, but lags behind in terms of technical readiness. Typically it will be a product out of the core product org, meaning that it is not a “moonshot project” and that it has a target market similar to that of an existing product category. While it’s possible that the engineering challenge was simply underestimated and now lags behind the roadmap by accident, the product was likely intentionally released before being ready. This allows the product team to get early customer feedback ‘outside of the lab’. However it also puts a higher burden on the sales teams.
The challenge from a go-to-market perspective lies in adjusting velocity accordingly, for example by intentionally stalling customers. That might feel uncomfortable and counterintuitive, but that discomfort is greatly outweighed by the struggle of dealing with a multitude of churning customers, who are rightly dissatisfied with an unfinished product. Not only does selling too aggressively at the start put the sales teams in an uncomfortable situation, but it also ends up putting the product teams under unnecessary pressure as triaging customer escalations delays the product roadmap. Despite the discomfort caused, this approach - when managed appropriately - allows the respective product teams to iterate and experiment much faster, as they can see what works and what does not.
Scenario 3 - "late GTM"
The third scenario is the inverse of scenario two, meaning that while progress is being made on the technical axis, the go-to-market strategy is a lot less clear, or outright neglected. As Ben Thompson remarked in reference to Alphabet’s aforementioned decision to not put all their chips on one of their moonshot factory ideas, and instead deciding to raise outside funding: “One of the big problems with being a science project for a monopoly is the absence of an incentive to get to market sooner-rather-than-later [leading to] an endless pursuit of the perfect instead of the good enough”.
Operating in a vacuum, and not engaging with customers, or failing to think about a go-to-market strategy from the very beginning, will slow things down in the long term. Instead of waiting for the ‘perfect product’ (which does not exist) it’s essential to work with Sales to engage early customers. Given our team’s unique position to synthesise input from those customers, it’s not uncommon for us to strongly advocate for changes in the roadmap based on our interactions. More importantly, the Sales motion associated with this type of new product, including the target buyer and messaging, is likely different from anything else in the product portfolio. Consequently both Sales and Marketing will be struggling to fit the product into known paradigms and rely on our team’s experience to bridge that gap. Overall, adding sales to the product-market-sales fit equation early on serves to add clearer targets, expectations, and a much clearer time frame, avoiding the type of detour outlined above.
Scenario 4 - "zigzag early GTM"
The fourth scenario occurs when technical readiness falls behind, as it did in scenario two, all the while failing to manage sales velocity properly by accelerating too much early on. A product falling behind on its technical roadmap is excusable, however failing to acknowledge it, and overstating technical readiness, typically leads to the product being ‘oversold’ early on, which eventually results in dissatisfied customers. This will affect internal confidence, particularly with the Sales team, for a prolonged period, even beyond the point at which the product has improved. Once that point of improvement is reached, most of the previous efforts into sales readiness will need to be repeated.
As was the case in scenario two, selling too aggressively early on ends up putting the Product teams under unnecessary pressure. Meanwhile Sales grow frustrated with a dysfunctional product that repeatedly falls short of customer expectations. As customer escalations eat up the resources of the Product teams, product improvements slow down, starting a vicious cycle that culminates in Sales teams dropping the new product in favour of the already proven, traditional alternatives, or another supposedly more attractive new product. By the time the product recovers from a technical standpoint, the progress with sales readiness has effectively been lost. At that point the sales strategy effectively needs to be redesigned and training needs to be repeated, with the goal of eventually restoring the confidence that was lost in the process. While generally easy to recover from, this zigzag pattern slows the go-to-market motion, which may profoundly impair its success in the long-term (i.e. by giving the competition time to catch up).
Scenario 5 - "zigzag late GTM"
Unlike the fourth scenario, which can largely be attributed to poor timing on the sales side, the fifth scenario is the result of unforeseen product iteration. At first similar to scenario three, the mistake that caused the initial trajectory to go off-course is a failure to engage prospects and customers early on. But in contrast to scenario three, a significant setback in technical readiness follows, before finally recovering.
In the absence of sufficient early sales efforts the realisation that certain product changes are necessary to achieve technical readiness will never come. By testing an innovation in the field, as opposed to in a vacuum, and trying to get a few early adopters, the zigzag pattern can be avoided and the time it takes to go-to-market is reduced significantly. Furthermore, once it’s obvious that a “zigzag trajectory” is inevitable, instead of falling for the sunk cost fallacy and investing in a “technical rebound”, sunsetting the product altogether may be the more prudent option. If sales readiness is increased while technical readiness declines and the technical team subsequently fails to deliver to revert that trend, it will inevitably erode both internal and external trust in the company.