Congratulations on completing the Market Foundation phase of our #gxmxp Series!
What You Learned in Market Foundation
In Market Foundation, you conducted a review of your current resources, marketing processes, and technology stack. You set the foundation to build a functional learning organization and now you have a firm grasp of your company’s market development “budget.”
As you move forward developing market development strategies, you’ll want to constantly refer back to your company’s market development budget so that you can quickly identify strategies with the highest likelihood of success given your current resources.
It’s time to move on to the next phase: Market Discovery.
What is Market Discovery?
Market Discovery is about effectively evaluating all potential customer profiles and go-to-market strategies that could fit into your market development budget. We’ll start by asking, “Who are the people out there with the biggest needs or problems that we can solve today?”
Most startups tend to focus on finding Mr. or Ms. Right. That’s too broad; especially when you have limited resources.
Market Discovery is the process of formulating hypotheses about your ideal customer profile(s) (ICP) and then ranking all possible profiles to identify which ICP has the highest likelihood of relevant feedback and revenue for the least amount of effort.
We call this profile your initial customer profile. Your go-to-market efforts should be focused exclusively on your first initial customer profile in order to make the most of your existing resources.
Contrary to what you might think, startups more often fail from overeating than starvation.
Maniacally focus on your initial customer profile if you want to win the long game.
The Importance of Market Discovery
With limited resources, you must focus your time, money and people on creating opportunities that are most likely to deliver feedback (and, ultimately, revenue) based on your current product (not your product roadmap).
It’s crucial to know what you’re looking for in a customer before you start marketing to avoid another common startup mistake: confusing being busy with making progress.
You can’t afford to waste resources by delivering the wrong value propositions to the wrong customers through the wrong channels.
Your founding team must be disciplined and focused on executing every market development strategy with intent.
The lack of intent in everyday market development activities today is one of the single biggest reasons why startups today fail to achieve product-market fit.
In order to execute with intent, founding teams must have the discipline to enter every customer interaction with a hypothesis and a way to validate or invalidate that hypothesis.
After a series of these interactions, you and your team will have enough data to complete Market Discovery and arrive at the truth: either a profitable and scalable market opportunity (aka, Mr. or Ms. Right Now) or the data to invalidate that ICP and begin testing the next ICP.
What You’ll Learn in Market Discovery
By the end of the Market Discovery portion of our #gxmxp Series, you’ll have:
✓ Do not overeat. Your goal is to maintain a disciplined focus on what creates the most honest and useful feedback from the market in the shortest period of time while using the least amount of resources.
✓ Think like a scientist. Before every experiment, scientists do research and determine a hypothesis before they begin conducting any experiments. That’s the mindset you need to adopt before interacting with any customers. You don’t want to be six months down the road with an ICP only to learn that you shouldn’t have gone down that road in the first place.
✓ No is an acceptable outcome. Throughout this milestone, you must be willing to eliminate the customer profiles that are not a “right now” fit for your company.
Having a small number of ideal customers to focus your efforts on might feel counterintuitive when there is so much pressure to scale. However, you must keep in mind that in order to scale, you first have to build a repeatable and profitable go-to-market foundation to scale on top of.
We know it might feel wrong to narrow your scope this much, but what you gain in focused learning and execution will enable you to significantly speed up your sales learning while simultaneously de-risking your go-to-market efforts.
All right, let’s go! Click here to get started on Market Discovery.