Go-to-market Strategy

Sep 27, 2021

What is go-to-market (GTM) strategy? It's about how you as a company can deliver your value to your customers. Technical readers will most likely balk at this definition, but let me make it more concrete because a bad or mismatched GTM can completely ruin even the greatest products.

  1. Pricing. Will your product be free to use? Is it open source? Is there a free trial? What metric will users be charged by, seats, usage, or something else)?
  2. Sales. How will users actually purchase your product? Can they sign up and pay by themselves (self-service)? Do they need to talk to a sales rep?
  3. Distribution. How will you reach your target customers? Will you use paid channels like Google/Facebook ads?
  4. Positioning. How will you differentiate yourself from the competition? How will users (and hopefully buyers) ultimately understand the value you're bringing? Why can't your competition do these things?

DoorDash wasn't the first food delivery service. Postmates had started two years earlier, Eat32 a year earlier, and GrubHub a whole nine years earlier. How could they compete? Instead of going up against incumbents in high-density areas like cities, they attacked the suburban markets. From DoorDash's S-1 statement.

We believe that suburban markets and smaller metropolitan areas have experienced significantly higher growth compared to larger metropolitan markets because these smaller markets have been historically underserved by merchants and platforms that enable on-demand delivery. Accordingly, residents in these markets are more acutely impacted by the lack of alternatives and the inconvenience posed by distance and the need to drive to merchants, and therefore, consumers in these markets derive greater benefit from on-demand delivery. Additionally, suburban markets are attractive as consumers in these markets are more likely to be families who order more items per order. Lighter traffic and easier parking also mean that Dashers can serve these markets more efficiently.

For most infrastructure and DevOps companies, a useful GTM is open source. It's effective because it's meeting your first customers (developers) where they are (on GitHub). Developers increasingly want to try things before they buy them. They want to run software on their own machines (i.e. cloud) before trusting their data with someone else. And often, it's just easier to integrate it yourself first.

You can see that GTM depends on your target customer and the market you're in. B2C and B2B companies will have vastly different GTM strategies (product/GTM fit).

GTM changes over the course of a company's life, or at least it should. Many B2B companies that start with self-service eventually need to transition to a top-down sales model to support larger enterprise buyers with specific requirements (security and complexity, both of which lead to longer integration and sales cycles). They might need additional professional services to realize the full value of your product in their organization. And eventually, when you start to sell multiple products, sales reps will be needed to cross-sell those solutions to existing customers (see Net Dollar Retention).