Every day, for over 10 years, I’ve helped founders develop and execute go-to-market strategies. Strategies that have helped them grow revenue and attract investors.
While every company and industry provides its unique challenges, most go-to-market strategies lack the most basic elements of any good plan: a tangible goal and deadline. This common mistake condemns your revenue efforts – wasting your valuable time (and your investors money).
At the end of the day, your go-to-market strategy is really your go-to-fundraising strategy. It’s not an endless effort to achieve total domination of your TAM through exponential growth.
Your go-to-market strategy enables you to present a clear and compelling traction narrative to potential investors before time and runway runs out.
So, where do you begin and how do you come up with a deadline and a goal?
Timing is Everything
The deadline to complete your go-to-market strategy is the easy part. Ask yourself one question: when will you need to start fundraising?
As the old saying goes, a goal without a deadline is just a dream. Without results from a successful go-to-market strategy you can assume that it will be harder and take longer to fundraise. So how long do you have?
In my experience, most founders have anywhere between 4-8 months before they need to start fundraising. So that means you need to develop and execute a go-to-market strategy that fits within that time frame.
While the pressure of having a shot clock might feel daunting, it should actually come as a relief! Knowing how much time you have is not only a great motivator, it provides clarity in focus which in turn, enables you to eliminate any and all strategies, customers, and channels that don’t fit your timeline.
Setting a deadline reduces the founder-tendency towards shiny object syndrome.
As a founder, your time is limited and it shouldn’t be wasted on anything that doesn’t help achieve your business goals.
What, then, does success look like and what is the goal of your go-to-market strategy?
Crafting Your Goal
When it comes to picking a goal, most founders make the mistake of identifying goals that are either taken off the shelf – the $1M ARR Series A SaaS revenue target – or those that are completely pie-in-the-sky and have no real substance or connection to reality.
The key to identifying the right goal is to craft a goal that is bespoke to you. Understand your starting point, what you’re working with and then work to reverse engineer the outcome using simple questions and back-of-the-napkin math.
Let’s do that math together to understand the equation behind your GTM goals.
You GTM Formula for Success
First, what’s the maximum capacity of your existing team to bring on new customers in any given month of quarter? We’ll call that X. Next, what’s the average contract value of your ideal customer? We’ll call that Y.
Keep in mind that your goal should not be to reach a revenue number by any means possible. The most convincing traction narrative to an investor would be one where you’ve demonstrated the ability to capture revenue from a consistent sales motion.
After that, how long is your typical sales cycle? We’ll call that B. Remember, as average contract value goes up so does your sales cycle.
Last but not least, we have your fundraising timeline from before, we’ll call that A.
So our first equation is X times Y = Z. Where Z is the most amount of revenue you can bring in on your best month at maximum capacity.
Now, take your fundraising timeline (A), subtract your average sales cycle (B), and you get C. C represents how many months of closing time you’ll have assuming you won’t acquire customers the moment you launch your GTM strategy.
Finally we arrive at the goal of your GTM. Z times C. What’s the maximum amount of revenue you can bring in per month with the number of closing months that you have left given your sales cycle?
Let’s consider an example with real numbers.
X: Total capacity to close is 2 customers per month.
Y: Average contract value is $25K ARR.
Z: Monthly maximum revenue capacity – $50K ARR
B: Sales Cycle is 3 months
A: Fundraising timeline is 8 months.
A-B = C → 8-3 = 5 months of closing time.
C*Z = 5 months * $50K ARR = $250K ARR = 10 customers at $25K ARR.
The Aha Moment
This exercise is one that I always love doing with founders because they always have the same reaction at the end, “That’s it? Oh I can definitely do that!” Once you know exactly what you are aiming for, it becomes much easier to manifest that goal into tangible tactics to achieve it.
Likewise, not only is that goal achievable but it also has plenty of wiggle room to be pushed higher if you can free up just a little bit of capacity to bring on new customers. Furthermore, if the customers from example 1 and 2 are the same, then there are additional upsell opportunities not even being captured in this equation.
At this point, it’s easy to craft a compelling investor narrative:
“Eight months ago, we had two customers but struggled for revenue consistency. So I had us focus all of our energy on acquiring customers from a specific market segment to not only prove that we had product market fit but to also generate consistent pipeline and revenue. Since we launched our new GTM strategy we’ve grown revenue 5x in 8 months and we are raising the capital to increase the capacity of our sales team to bring on more customers.”
Following my formula for GTM success and starting your customer and market development journey by setting a tangible goal and deadline enables you to execute with precision and then easily translate your wins into a clear and compelling traction narrative that’s sure to attract investors.