Welcome to the first post in our #gxmxp Series! Our journey together begins with establishing a strong market foundation.
Going to market with a new product is like building a skyscraper — every subsequent step is riskier, less efficient and more difficult without a solid foundation.
Market Development, not Sales
Market development may be a new term for you. It’s not meant to confuse, but it’s important that we differentiate this process from pure sales.
Yes, you will be speaking with people in hopes of converting them into paying customers. However, unlike sales which is the pursuit of revenue for the purpose of profit, market development is the pursuit of revenue for the purpose of learning.
Learning precedes revenue! Why? Because not all revenue is created equally. Some revenue is going to be more profitable and more predictable than other revenue.
Efficiency at the early stages is critical; point your resources towards the opportunities that have the highest likelihood of producing the most relevant results for the least amount of effort.
The biggest risk to any new company is over-eating, not starvation.
Another difference between Market Development and Sales is the structure needed to gather insights and revenue. For sales, you want to build out your resources to grab as much market share in a specific market that has already been validated. Sales resources build in the flexibility to scale, but not to pivot markets.
As an early stage company, your markets are not validated yet. There are still several possible customer types and for each type there is potentially unique sales process learning.
With that in mind, Market Development resources should not be optimized for scale, but for flexibility (i.e. the ability to easily and quickly pivot all sales resources into a new direction, value proposition or market).
The word “scale” should be removed from your vocabulary until you have solidified your target market.
High volume, unfocused action is not a path to traction. We call it distraction by action.
High volume may feel productive, but without focus and intent, you can easily find yourself exhausted of resources without any progress towards revenue.
Shiny Object Syndrome
If you’re like most entrepreneurs, you suffer from what we call “Shiny Object Syndrome.” That is, you see endless possibilities when confronted with a challenge. You have the urge to capture as much of the opportunity as possible, including multiple paths to revenue.
The truth is, though, 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).
Market Foundation is the first step to finding the truth about how your product fits into the market, if at all.
Market Foundation: What to Expect
During this first phase of the #gxmxp Series, we’ll take a close look at how your people, processes and technology are aligned to support market versus product development.
Your Market Development Budget will define in specific terms the amount of time and resources you have to spend on learning and market development. This will enable you to counteract Shiny Object Syndrome as you will be forced to filter out any new ideas that you don’t have the resources to execute on.
By the end of Market Foundation, you can expect to have:
✓ Just collect data (for now) In the next three posts, the goal is to collect data about your current people, processes and technologies. We’re just putting everything on the table to identify where we’ve been so that we can accelerate where we are going.
✓ Take your time. You want to be thorough when creating your roadmaps in this section. This is your opportunity to stop and take an inventory of what is and isn’t working for your business right now so you can optimize your processes.
✓ Lack of options is not a problem We’re cutting out the noise and focusing on only what matters, what’s possible and what will succeed.
By understanding the resources you have today, you’ll gain a better grasp on the gaps that exist, what tools and resources you need to add or get rid of, and which events are going to compel you to have those needs.
Ready to dive into Market Foundation? Click here to get started!