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A few months ago, we did a great collaboration with Steve Barsh from Dreamit Ventures. The
idea behind that video was getting into one of the most common mistakes we see in Pitch
Decks, the Market Slide, and the Total Addressable Market calculation.
Steve insisted on another common problem with the pitch decks they receive at DreamIt: the
Go-to-Market Slide.
Steve is one of the managing partners at DreamIt, and an investor himself... so there's no one
better to tell you what investors expect to see on a deck.
Thanks Caya for having me.
Go-to-Market Strategy. A super important item investors really want to understand, yet most
startups don’t really know what the term means. They struggle to describe their go-to-market
strategy in a clear and focused manner.
Investors want to see a well thought through, efficient, go-to-market strategy and initial
so they know when they invest, the startup will be focused on early customer segments
that they can win most easily using the fewest resources.
Usually, when I ask a startup about their go-to-market strategy I’ll hear an answer
like “we’re doing direct sales” or “we’ll do online sales.” That’s not a go-to-market
strategy. Those are sales tactics.
Let’s dive in so you know how to tackle this and blow investors away.
I hope you like this video and if you do, please like and subscribe to the Slidebean
and Dreamit Ventures YouTube channels.
Startups need to focus. When it comes to their go-to-market strategy, you need to focus their
time, energy and resources on customer segments where you can get traction and revenue as
quickly and efficiently as possible.
For that, you need a well thought through GTM/S that includes great customer targeting
criteria. In order to determine your criteria, I want you to think about your go-to-market
strategy like you’re going fishing.
Why? Because I love to fish and more importantly... I love to CATCH fish. Oh, and fishing makes
a great analogy!
In fishing, you want to “fish where the fish are.” You want to get fish in your
boat. When you go out you should ask yourself this question... “What am I fishing for
and most importantly, WHY?”
For example, are you going big game fishing for tuna far off shore. “Why?” Is it that
you want to catch really big fish? You love the “fight.” It’s exciting. If so, you’ll
have to be ok with the fact that you may catch nothing.
There are few tuna out there in the ocean. They’re 100 miles offshore and often far
between one another. Your boat may run out of gas before you catch even a single tuna.
But if you do hook in, whoa, it’s going to be huge.
So your criteria as to “why?” is as follows -- you want big fish, you love a big fight,
it’s exciting, and you don’t care if you catch nothing. So that’s your targeting
criteria that you have to be comfortable with.
This is what’s called a trophy-focused strategy. We see that a lot. Startups try to put a “logo
wall” in their pitch deck filled with “trophy fish / logos”. But those trophy fish are
hard to find, hook, and catch. The “sales cycle” for these trophy fish is super long
and it’s really hit or miss. It’s the classic 12-18 months sales cycle which is
REALLY hard to pull off if you have only 18 months of runway. AKA your boat runs out of
gas before you catch your tuna!
What if you change your “going fishing” strategy?” and take a different approach?
How about going for a different type of fish that are “in the bay.” Close to shore.
Easy to catch. Easy to boat. They’re not as big, cool and sexy as tuna, but you know
what… you’re cathing fish and not spending as much time, fuel and resources. So now my
criteria may be: close to shore, easy to catch, smaller size, higher quantity, and less resource
intensive. Hey - and speaking of resources… that boat and gas… I may need no gas at
all -- I could just “bootstrap” my fishing trip and fish off of the dock. It’s not
cool. It’s not sexy. But you know what, I’m catching fish. Kind of like… closing
customers.
So my question for you is this:
If you think about customers like fish… What are YOU fishing for? Why those customers?
What characteristics do those customers have that are so appealing?
The easiest way to figure that out, build your initial customer segment litmus test.
When you “dip your litmus paper in,” this test has specific characteristics that help
you identify the early customer types you should be going after. This helps you form
the core of your initial go-to-market strategy.
So how do you create a litmus test? Start thinking…
I know I’m looking at a great customer if they exhibit... what characteristics?
So maybe it’s things like…
The problem you solve takes away a searing pain point and fits exceptionally well with
this target customer segment.
Or...These early customers will close more quickly
as the buyer is usually the decision maker.
Maybe there is a geographic component… All of our customers will be within driving
distance. That way we can get to them easily, have face-to-face interactions, get direct
feedback, build strong relationships, and “stay close.”
Maybe it’s that...Your price point aligns perfectly with their typical budgets and spending
patterns.
Overall, think about the markets, customers and segments where you can “push sand down
a hill, not up!” These are segments where your targeting criteria are ridiculously well
aligned and you can close customers and build revenue quickly through shorter sales cycles,
faster adoption, and stronger growth.
With this litmus test, you should be able to create a coherent go to market strategy
that makes it clear to investors that your startup will be focused on early customer
segments that you can win efficiently.
And this approach is not for just your initial go-to-market strategy -- sometimes called
a “beachhead strategy.” You can repeat this process to identify your follow-on markets
in priority order. This way, when you speak to investors you can describe how your customer
segments and market will evolve over time… while at the same time discussing the marketing
and sales tactics you’ll employ to execute your go-to-market strategy.
Remember, if your strategy is not finely tuned for all the right reasons, the tactics will
be a waste of time. You’ll burn up all your fuel trying to catch the wrong fish.
I hope you liked this video and if you did, please like and subscribe to the Slidebean
and Dreamit Ventures YouTube channels.
Thanks for watching!