How to Create a Go-To-Market Strategy for Startups (+Examples)

Why Does Your Startup Need a Go-To-Market Strategy?

A good GTM strategy for startups requires deep research and thorough planning. Is it really worth the time and effort?

Definitely! Here are the key reasons why you need a startup go-to-market strategy:                

# Reducing Time to Market

There is a widespread misconception that time to market is important only for pioneer products. The truth is that the longer it takes for your product to evolve from idea to market, the harder it is to sell it. A go-to-market strategy for startups allows focusing only on those steps that are vital to enter the market and define the stakeholder’s roles when it reaches the market.

# Resonating with Customer Needs

Customer requirements and opinions are vital in establishing a feedback loop. The main objective of every evolving business is to remain relevant. And a go-to-market for startups is a great tool to achieve this. Take Dunkin Donuts, for example. To remain relevant to customers in different markets, DD sells rice doughnuts in South Korea, mango doughnuts in Thailand, and fish flake doughnuts in China. And that’s just one of the examples.

# Limiting the Potential Risks

Your company gets protected from unpredicted economic conditions and can easily overcome the challenges of market entry. Investment at the beginning of creating a strategy pays off in the long run as you already have a detailed plan with well-thought-out steps.

# Achieving Successful Product Launch

Every year 95% of product launches fail, leading to losses of millions and billions of dollars. And the reasons are numerous: wrong product-market fit, poor marketing, absence of a well-planned GTM strategy, etc. The latter is responsible for creating brand awareness in the market and ensuring that the services meet audience needs so that a company can achieve its business goals.

# Revealing the Competition

Whichever product or service you offer, competition is always high and a go-to-market for startups will help you to know everything possible about your main competitors. Analyzing from seven to fifteen direct and indirect competitors, you will discover the features and strategies they use so you can attract their customers to buy from you.  

Examples of Successful Go-To-Market Strategies

Before diving into the process and tips on how to build a go-to-market plan for a startup, let’s get some inspiration from three very interesting examples of famous companies which didn’t spare time on GTM.

# Tesla

Tesla wasn’t the company to create the first functional battery or build the first electric car. Nevertheless, today it’s seen as an innovator in the industry at the top of the US car market. And largely Tesla owes its success to a robust GTM strategy, focused on 4 key aspects:

• Tesla decided to target the high-end market from the beginning. This way, they were able to produce their best cars just starting their career (their first car, Roadster cost $109k) and create the image of exclusivity;
• The company aimed at creating an extraordinary user experience that anyone else hasn’t offered before them. Starting from how buyers order the vehicles, and customizations to fully digital controls, Tesla has built a brand of a trailblazer;
• They adopted a DTC sales strategy, eliminating the cost for middlemen dealers and acquiring full control over buyer experience;
• Unlike competitors, who outsource most of their manufacturing, Tesla controls the production of their batteries, automation technology, and more.                 

# Huawei

Another go-to-market strategy for startups example is Huawei. At the beginning of plotting its entry into the Indian market, the company faced several challenges. First of all, marketing a Chinese product was rather difficult due to the frosty relationship between India and China. Secondly, Chinese products were considered low-quality. Therefore Huawei decided to build a GTM strategy that would not only help them to reach a wider audience but also diminish the negative associations with Chinese products. Their strategy consisted of such key steps:

• Building local R&D centers and hiring Indians to show commitment to the local community;
• Contributing to the “Make in India” initiative to enhance the industrial capabilities of the Indian economy;
• Sponsoring competition on a local TV channel where Huawei products were aspirational;
• Establishing marquee products to compete with Apple and Samsung in the mid and high-end markets.

These steps in Huawei’s GTM strategy helped to reimagine the perception of their products in the Indian market and made it the largest Huawei research base outside of China.

# Slack

Stewart Butterfield decided to share with the world a great internal communication platform he used with his team. There was no doubt that the platform was super beneficial, convenient and even revolutionary. The problem was to convince email-weary users that there is something better and faster than mailing each other.

The company built a strategy of positioning itself as a simple, integrated tool for team communication that eliminates all the confusing email threads. Slack has proven that the majority of companies even didn’t notice how big the internal communication problem in their teams was. 

In four years, Slack’s value rose from $0 to $4 billion.                    

What Are the Steps to Develop a Go-To-Market Strategy for a Startup?   

Step 1: Define your Product or Service

This may sound painfully obvious but you have to clearly define what is your product and what it does and what it does not before you dive into the next steps of your go-to-market strategy. Clarity brings scalability. You can start by answering these simple questions in writing:

1. Who are your target customers?
2. Who are your competitors or what are the alternatives to your product or service?
3. What pain points is your product solving?
4. What are your USPs?
5. How is your product better than competitors’?

Step 2: Define the Market

Defining the market stage consists of several important elements.

Target Market

A target market is a specific group of people with shared characteristics that have been identified as the most likely customers of a product or service. A new product should meet a need or solve a problem that is most probably not universal. Therefore businesses should define a subset of customers that will use the product. Consumers are usually divided into four major segments: demographic, geographic, psychographic, and behavioral.

For instance, Cle de Peau Beaute Synactif Soap is sold for $110 and is promoted as a product for rich and fashion-conscious customers who are willing to pay for a luxury product while a Dial soap costs around $5 on Amazon. Both products are on-demand but they cater to different target markets. 

Total Addressable Market

The total addressable market shows how much potential for growing your startup has. Investors want to make sure that your product solves the existing problem in the market and they will get profit from that. The total addressable market asks a question: “How many people could potentially use the product or service?” to define the overall revenue opportunity that is available for your solution if 100% of the market share is achieved.

Market Needs

Market needs refer to the functional needs, desires, and interests of the target audience. Here you need to discover the drivers of demand for your product or service. 

Market Test Results

The market test is an experiment held before the launch of a new product to find out if the product launch is going to be successful. The test is usually held in a small area with a small group of customers. If it succeeds, the product or service will be available to more customers or if not, the product will be dropped or improved and tested again.

Market testing brings the company two important benefits. First, the company gets a measure of its sales performance under typical market conditions. Second, managers can identify and solve any weaknesses. Despite these benefits, market testing isn’t a solution for each case as it’s a costly and laborious method. 

Step 3: Know Your Audience

What are the interests of your target audience and what are their pain points? Where do they spend their time and which social media channels do they use? These are just a few of the questions you should figure out to understand if the target audience you are trying to reach is ready and willing to buy your product or service. Because if not, you are just losing time, money, and effort. So, how to analyze your audience?

• Define Target Market Demographics

Begin by categorizing your audience based on their demographics such as age, gender, income, job type, education, marital status, etc. Although some of these characteristics may seem irrelevant to you, they all work together to paint a picture that is essential for building an effective communication strategy.

• Understand Target Market Psychographics

Psychographics include behavioral patterns, preferences, and the attitude of your customers which you can understand by analyzing their activities, hobbies, preferred music, food, movies, etc. This information is quite subjective compared to demographics though it gives you a window into your audience’s personality.

• Identify the Challenges and Pain Points

By identifying each of the challenges and pain points your audience faces (financial/productivity/process/support, etc.), you can choose the right approach to overcome them and build an effective marketing strategy. The examples can be various: addressing customer pain points through landing pages, social ads, paid search ads, etc.

Customer pain points are highly subjective and even if you analyze two customers who face the same problem, the routes of this problem most probably would greatly differ from each other. The primary resources you can use for identifying these problems are the customers themselves, the sales team, and support. 

Step 4: Map the Customer Journey

Customer journey mapping is a visual representation of a company's customer experience. Simply put, it shows all the stages that customers go through when interacting with your company from making a purchase online to leaving reviews on social media. Customer journey mapping provides an understanding of the path and channels customers take to get the products and forecasts the path of future customers as well.

There is no right or wrong way to create a customer journey map. Though it’s important to align your map with a chosen customer persona before you begin. Usually, the main stages of creating a customer journey map consist of such stages:

1. Creating a Customer Persona - a fictional character that represents your average customer. We recommend starting with three personas at most to help in narrowing your character. Think about age, job, personality, etc. to try on the customers’ shoes.
2. Deciding What to Measure - what goal you are trying to achieve with a current map? It’s also worth mentioning that the map is customizable and should evolve in correlation with your business needs.
3. Organizing with Touchpoints and Measures - First of all, you need to identify touchpoints. A touch point is each moment when a customer interacts with your brand, for example, in advertisements. Secondly, break down the whole journey into stages based on the customer’s needs. You can use an Excel document to organize your map.

Step 5: Decide on Pricing Strategy

Determining your sales process is more than just picking numbers out of thin air. Deciding on your pricing strategy is a long and complicated process that involves in-depth knowledge of the product and marketplace. You should thoroughly analyze the pricing model of your competitors, how much it costs for you to ship and store your product, and so on. The investors also will be interested in the ways you are planning to market and promote your service.

Step 6: Outline Marketing and Promotion Plans

A marketing plan outlines a specific marketing strategy and shows how an organization is planning to use them and outreach to target specific buyer personas. A marketing plan includes such core elements as:

• Marketing Objectives: the objectives should be measurable and achievable;
• Current Marketing Positioning: the current state of the company’s marketing positioning;
• Market Research: the aforementioned in-depth analysis of market trends, customers’ needs, etc.
• Marketing Activities: a list of marketing actions scheduled for the period and their timelines;
• KPIs: to be tracked;
• Competition: study competitors and their strategies;
• Marketing Budget: allocation of financial resources to marketing activities.                    

Step 7: Provide Feedback

Building a feedback loop among your product development, marketing, and sales teams ensures putting key performance indicators from your GTM strategy into action. 

Summary

Startups are very risky. If you have managed to avoid all the risks and get hit by the failure in marketing… Well, it will be a waste. Therefore your business must have a clear step-by-step game plan.