Go with me on this journey.
It’s 2003. I’ve just finished my PhD in linguistics. I decided six months ago that I didn’t want the academic job offers I was getting. I don’t know what I want to do instead, so I spend a year writing and running out of money.
A friend at Microsoft looks at my background in natural language processing and reaches out. “We’re hiring people just like you!” he says.
“No thanks, I hate all those people in tech,” I reply.
“Well, you said you needed a job,” he points out.
“That’s true,” I admit. My software career is born.
Looking back now, I couldn’t have expected to fall in love with software the way I did. I especially couldn’t have expected to fall in love with the business side of software, and least of all to found a tech startup where my favorite work was GTM. Yet two decades later, here we are.
This past fall, I ran three private workshops to share the lessons from my GTM journey with Operator Collective founders. I talked through several of the good decisions I made and most of the bad ones.
Every company that participated is a little bit different. Some are classic B2B SaaS while others are highly verticalized, some have product-market fit and others aren’t there yet, and some have gone through significant pivots. But for all the differences in product and stage, everyone is dealing with the same fundamental questions. For instance:
- Why is it so hard to get beyond founder selling?
- How do you build predictable lead generation when outbound is dead?
- How do you price and package your offering in a way that makes sense for both your customers and your economics?
Nothing kills you faster than scaling prematurely
There may be no question that undermines startups more than, “Does it scale?”
Don’t get me wrong. If you have product-market fit, a predictable sales motion with a predictable win rate, and low churn, then you are ready to scale. But most companies try to scale before they are ready. For instance, it’s common for early-stage companies to hire outside GTM leaders to run standard sales playbooks. However, I recently analyzed the growth signals from 180 different startups and found that founder-led sales far outperforms VP-Sales-led sales at least until companies pass their first $1M in ARR.
Another mistake companies frequently make is trying to ramp demand generation before they’ve proven their sale. At best, this becomes a distracting waste of time. At worst, it is a distracting waste of time and burns through valuable capital.
In our workshop, we broke early GTM into four different stages:
- Prove the product
- Prove the sale
- Prove the demand
- Prove the ongoing value
For each stage, we discussed the metrics and activities that are the right investments to give yourself the best chance of success.
Building demand is hard
Last year, I analyzed four years of cold mail received by my Textio email address. I’ve always disregarded the vast majority of these messages, but look what happened to my inbox in 2022 after ChatGPT was launched:
The number of cold messages jumps up dramatically. More than that, all the messages sound the same, and they’re nearly all selling AI:
We reviewed this data in the workshop, and then discussed: With the outbound sales landscape so oversaturated, how can you build demand when you have a new and unknown offering?
For each stage of revenue, we reviewed the lead gen investments and metrics that are essential to make and measure progress. At most stages, the goal is to make the kind of credible content that ultimately drives inbound.
We also talked through how to build the kind of content with a POV that can become an ongoing source of inbound demand. In my nine years as Textio’s CEO, we were able to build substantial demand by publishing the industry’s most compelling data stories about language at work. In our workshop, we reviewed some of my playbook for startups to develop and channel this kind of content.
Whatever type of content you build, if it doesn’t have a clear and distinct POV, it’s not going to drive demand. If your content could be published just as easily by anyone else, it’s not going to resonate with your customers and it’s not going to do much for your business.
Finally, it’s not a product if people aren’t paying you for it
When you’re building something new, no one knows how much it should cost. Is it too expensive? Too cheap? You don’t know the answer until you’ve locked in to a repeatable sale with a 20%+ win rate. Without that, you might have an amazing user experience with really impressive technology, but you don’t have product-market fit. And if you don’t have product-market fit, you’re not ready to scale.
