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Rocket GTM 🚀: How sharp is your knife? ⚔️
Stop applying pressure, sharpen your blade.
⚔️ How sharp is your knife?
A few months ago I saw this post on LinkedIn by Amit Bendov, the CEO at Gong.io
This post beautifully encapsulates the importance of strong product-market-fit, powerful brand, and an excellent process.
Let me explain
What a blunt knife does to your business
Using Amit's analogy, think of your company like a knife. Your product-market-fit and your brand are the blade itself. Your sales & marketing teams represent the pressure you apply to the knife.
Now imagine you are trying to slice through the middle of a piece of paper.
To cut paper (the market) with a blunt knife (low PMF / weak brand) normally results in companies applying more pressure.
Blunt knife = More pressure = Bad sh*t
🎯The sales team have zero margin for error in losing deals, even top performers yield mediocre results
🌵The top of funnel dries up, the CEO puts pressure on the CMO to deliver more MQLs
🤷♀️The CMO lets lower quality MQLs pass through to sales in order to hit her number
📉Sales team get lower quality leads causing them to lose more deals and conversion rates take a dive
😢Team morale in sales & marketing slumps
💔 Poor performance leads to more pressure being applied
♻️The cycle continues
A blunt knife damages the paper
Applying pressure, instead of sharpening your knife, will work up until a certain point. But there's only so much juice you can squeeze out a the lemon before there's nothing left. Continuing to apply pressure will eventually ruin the paper.
You earn a bad reputation among customers thanks to pushy sales reps trying to close deals that were never a good fit.
Customers that do close don't stay long, the customer success team then picks up the pieces.
The low performance causes the exec team to put more pressure on reps and the vicious cycle continues.
I call this a blunt knife death spiral ☠️
How does it happen?
Obviously each individual case is different but it's usually one of the following:
An Ideal Customer Segment has been fully capitalized on and the search for the mass market means crossing the chasm
New segments often have different pains and requirements that aren't catered for with the existing product
Product doesn't evolve quick enough to bridge this pain-solution gap
The sales team scales too quickly and there's not enough pipeline to fuel growth
There is an over reliance on one distribution channel as the team expands
The absence of a strong brand means your marketing efforts aren't leveraged. Marketing campaigns focus on finding demand instead of creating it
Slow down to sharpen your knife
Ironically, the outcome of a blunt knife is pretty painful.
This is the moment where you need to slow down and take time to sharpen your knife.
How do you sharpen your knife?
1) Build a product around your ideal customer 👉
When you expand into new segments don't optimize for revenue, optimize for learning.
There are typically three things you can pivot when going to market
Pitch or positioning
To understand if changing your pitch is sufficient, or whether you need to fundamentally build a better product, you first need to deeply understand your customer:
How is their process different
What is the current status quo your competing against
What transformation are they looking for
What's the competitive environment
How are their priorities different from existing customers
Your product may solve a pain, but what impact does solving that pain have
If you've established that the TAM (target addressable market) is large enough, you can take your new learnings and figure out whether changing your positioning or product will be best to sharpen your knife.
Finding a high-fit segment and focusing your efforts on it will yield stronger results over targeting a larger audience of mediocre fit customers.
2) Invest in brand 👉
Building a brand takes a long time, so start early. However, as I wrote in last weeks newsletter, scaling past $10M in ARR can be challenging for companies who haven't invested in brand because of the exponential requirements in pipeline generation to fuel growth.
A scaling sales team needs leads. Piling on more outbound SDRs will yield diminishing results as you have more people chasing fewer opportunities and you aren't "creating" demand, instead you're trying to find existing demand.
Building a brand and owning a category are two ways where you can actually create demand.
Invest in educating the market to illuminate the problem and more people will realize they need your product.
Demand generation cannot be switched on over night, however. Short term strategies can offer quick boosts in leads but will lose efficacy. You may make a splash on the surface, but you really need to change the underlying current of your market.
Investing in brand is the only way to get exponential results in brand awareness over the long run and ensure your audience grows large enough to fuel growth after $10M.
3) Focus on long term process over short term results 👉
It always baffles me how the world is ruined by the desire to achieve goals. It's not so much that goal attainment is bad to strive for, quite the contrary, but it's a fallacy to think that focusing on good results gets good results.
Good process gets good results.
Short term results are a consequence of executing the right process over a long time.
Most companies focus on tracking short term results. A mindset of 'results at all cost' lead to short term behaviors that, although get short term results, do nothing to change the long term current in the ocean.
The example I gave above exemplifies this: marketers who need to hit their quarter's MQL target may increase the number of leads that get passed to sales by reducing the score required to classify as a 'Marketing Qualified Lead'. Yes, it gets results. But at what cost? Lower conversion rates, angry customers, and unhappy sales who lose their bonus?
When we foster a culture of celebrating 'good process execution' over 'short term results at all cost' it keeps our knife sharp and focus on the things that count in the long run.
Putting it all together
If your top of funnel is slowing down and conversion rates are falling. Take a minute to step back and analyze how sharp your knife is. If it's dull then sharpen the blade by building a better product, brand, and process.
Trying to scale by putting pressure on a blunt knife is like putting your foot on the gas of a car with loose screws. It can only end badly.
Don't let your startup fall apart. Before you put your foot on the gas make sure your knife is sharp, fix your product, fix your brand, and fix your processes.
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