Spoiler Alert: To find product market fit, identify the person with the buying power for your solution and find out what matters to them.
- Response rates are dropping.
- Focus on prospect quality, not quantity.
- Don’t confuse “scale” with “spray and pray”
- Make your ideal customer profile (ICP) as tight as possible and align messaging with every ICP.
- Spend your precious sales hours differentiating not only your product but your effort. Research people and make it known that you have them in your sights.
- To scale your startup: Reach out over multiple channels (including phone), be persistent (try to get to 10 touches) and be genuinely personal.
A lot has changed since Aaron Ross penned Predictable Revenue (still an important read). Long gone are the days when a somewhat targeted, well-written, 3-4 step email campaign will yield 30-40% response rates with enterprise customers.
Templated, outbound emails campaigns designed to drive initial inbound interest and develop product market-fit have become standard operating procedure. Likewise, the number of SaaS startups has exploded, and email marketing automation tools help everyone from founders to enterprise sales teams 20x the number of daily emails they send.
As a result, email response rates – and, consequently, customer development – have dramatically eroded. This has forced everyone to turn to time consuming, multi-channel outreach campaigns in order to generate conversations.
Signal-to-Noise Problem & Scaling What Doesn’t Scale
Founders have three full-time jobs:
- Product Development;
- Market Development; and
Imagine finding the time to send 200 emails, 200 In-Mails and do 50-100 calls every day. Oh, and by the way, don’t expect more than a 10% positive reply rate. Sure, that’s pretty standard stuff for a professional sales rep. But for a founder, especially one with no formal sales background or training it’s not possible.
In a world fixated on scaling market development, to scale your startup early stage founders need to learn how to “scale back” activity and recognize that with limited bandwidth, they must build a market development strategy that takes into account their bandwidth.
The low signal-to-noise ratio means the table stakes for market development have changed.
Recognize and adjust, rather than blindly pursuing “scale” and pouring limited resources into a low-performing activity that will only shorten their runway. Ironically, to scale your startup, first get scale out of your vocabulary.
Quality Over Quantity
An elegant solution presents itself when you scale back on quantity: You are able to hyper focus on quality.
As one of my favorite sales trainers, John Barrows says, “get the phrase personalization at scale” out of your vocabulary. Just personalize.
It’s time to throw out your templates and hyper-focus on your ideal customer profile (ICP).
Target industry? Go further. Target company? Keep going.
To find product market fit, identify the person with the buying power for your solution and find out what matters to them.
Learn about these people. Identify triggers events and business priorities in their business. Understand how they are measured within the organization and how your product can move the needle for them. Find their content and figure out how you can genuinely relate to it.
Scale Down to Scale Up
When you hyper focus on your ICP, you’ll notice that the total available pool of pre-qualified prospects shrinks dramatically. This is a good thing.
Most founders only have enough time to focus on 10-20 opportunities at any given time. You need every ounce of time you can get to track these people down.
Adjust your value proposition (what you do for them) to that individual. Don’t discuss technical features with the head of sales. If you change your ICP, change the way you talk about your product for that ICP so that it’s relevant.
Reach out to them with truly personalized messages. Don’t stop reaching out until you hear back. Most importantly, don’t personalize their silence as a judgement on you.
Reach out over multiple channels.
Email-only is a surefire way to fail and it doesn’t matter if you send 100 a week or 1000.
Coordinate activity with email, InMail, social, video tools and yes…you need to call. The fastest way to get feedback is to call and most sales experts agree that the phone are more open than they have been in years.
Your goal is 10-25 highly targeted prospects. That translates into nearly 50 sales tasks a week (research, follow-ups, copywriting, calls, etc). That’s a lot of weekly activity for someone who only has one-third of their time to do market development.
Remember, no is the second-best answer in sales. Get there quickly (and then replace them with one more new ICP lead). And celebrate any yes (bang that gong!) and then replace them with one more new ICP lead.
Concluding Thoughts on Product Market Fit
Early stage founders need to shift their approach to finding product market fit, customer acquisition and especially scale.
Here is the reality: it takes more time and effort than ever before to acquire a new customer but founders are still just as time strapped as ever. We’ve reached the point where the problem can no longer be solved by simply sending more emails and crossing our fingers.
To scale your startup, the solution for early stage founders is simple: prioritize acquiring the right customers today by any and every means necessary over doing what feels “scalable.”
There is a time and a place for questions of scale. Knowing that time and place is critical to surviving through the learning curve. Focusing your initial market development efforts on quality over quantity will get you to scale (and predictable revenue).