A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.
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What do you take into account in a go-to-market strategy?
When launching new products successfully there are a few elements to take into account:
ProductDevelopment
In today’s digital landscape, when it comes to digital products or physical products that have digital components, built-in growth features enable a successful go-to-market strategy.
For instance, frameworks like growth hacking; engineering, data analysis, and marketing come together to enable a successful product launch.
That’s because product features can switch on the viral growth engine, thus speeding up adoption. Companies like Dropbox, Slack, and Zoom know that pretty well.
Marketing, segmentation, and pricing
Other elements like market segmentation (where do we start? who do we target?), and pricing can be critical elements to build up momentum. For instance, Facebook started from specific niches, at selected campuses across the US, before opening up to anyone else.
Market context and distribution
A great product without proper distribution won’t go far, or too far. Distribution can be built in several ways. And based on the kind of product, you will structure your organization’s go-to-market strategy.
For instance, for the kind of product type and whether the market is ready or not for that, do you need a sales force able to deal with large enterprise customers? Or rather marketing power to push through a larger number of people?
For that, it will be extremely important to understand the market context:
A market type is a way a given group of consumers and producers interact, based on the context determined by the readiness of consumers to understand the product, the complexity of the product; how big is the existing market and how much it can potentially expand in the future.
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).
In most cases, the market entry strategy can vary based on how crowded is the market, whether customers are used to the kind of product you’re offering, and perhaps if you’re offering something wholly new, either because its a whole new product or it has never been done in that geographic market.
An entry strategy is a way an organization can access a market based on its structure. The entry strategy will highly depend on the definition of potential customers in that market and whether those are ready to get value from your potential offering. It alls starts by developing your smallest viable market.
Business model innovation, therefore, becomes a function of a much better product, or the ability to cut out fragmented intermediaries that extract value from the market. Or yet, by redesigning the whole customer value chain.
As new companies enter existing markets or create new ones, they tend to master a mixture of product, distribution and value innovation as a competitive advantage.
When entering the market, as a startup you can use different approaches. Some of them can be based on the product, distribution or value. A product approach, takes existing alternatives and it offers only the most valuable part of that product. A distribution approach, cuts out intermediaries from the market. A value approach offers only the most valuable part of the experience.
Zoom Multipronged go-to-market strategy
Zoom is a video communication platform, which mission is to “make video communications frictionless.” Leveraging on the viral growth from its freemium model, Zoom then uses its direct sales force to identify the opportunity and channel those in B2B and enterprise accounts.
Zoom defines its go-to-market as a “multipronged go-to-market strategy for optimal efficiency.” It starts with “viral enthusiasm” triggered by users as they join the platform for free.
The good experience is channeled by sales efforts to identify customers opportunities, such to transform a non-paying user into an enterprise customer.
For instance, as pointed out by Zoom in its 2019, 10K “back in 2019, 55% of the 344 customers that contributed more than $100,000 of revenue started with at least one free host prior to subscribing.”
Therefore, the sales model combines the viral demand generation from the free Zoom Meeting plan with direct sales looking for potential customer opportunities.
The Zoom direct sales force includes:
Inside sales
Field sales
Those are organized by customer employee count and vertical.
In short, Zoom the workflow looks like he following:
Free accounts are channeled through the right sales representative.
SMBs opportunities will be assigned to an inside sales team member for the acquisition of the paid account.
Larger SMBs accounts or potential enterprise accounts are assigned to field sales.
This sort of go-to-market is skewed toward product and distribution.
OYO octopus go-to-market strategy
OYO business model is a mixture of platform and brand, where the company started primarily as an aggregator of homes across India, and it quickly moved to other verticals, from leisure to co-working and corporate travel. In a sort of octopus business strategy of expansion to cover the whole spectrum of short-term real estate.
The process of standardization of the experience starts with what OYO claims to be a 150 point checklist that goes from the booking experience to the support center and the on-ground Cluster Managers, ready to solve any problem it might arise during the experience of guests.
Thus the go-to-market (expansion) strategy looks like the following:
Identification of the next opportunity/area/vertical to tackle.
Acquisition via a growth representative expert in building up partnerships.
The expansion team will apply the 150 point checklist to make the property in line with the OYO standard.
Support and assistance provided by ad hoc OYO’s representatives.
The expansion process ends when the company is able to properly manage the end-to-end customer experience.
This sort of go-to-market is skewed toward distribution.
Partnerships as a go-to-market strategy
With partnership marketing, two or more companies team up to create marketing campaigns that help them grow organically with a mutual agreement, thus making it possible to reach shared business goals. Partnership marketing leverages time and resources of partners that help them expand their market.
In some other cases, a successful go-to-market strategy can be primarily about finding the platform or the partner that can help your product to gain the right amount of traction.
Tesla’s sports’ car go-to-market strategy
Tesla’s vision is to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional business model as its ecosystem grows.
From Tesla’s mission, it’s clear that the company wants to become in the long-run a mass-adopted car company. Yet, when it launched, it was all but a mass-market organization. An outside looker might have had the impression that Tesla was just a sports car company, coming up with a great electric alternative.
However, that was just a go-to-market strategy used by Tesla to enter an extremely competitive market, which required massive capital to survive in the first place. Tesla, instead of going for a model that would compete with all the other sedan car companies in the middle and lower segment of the market.
The company opted for a go-to-market strategy that was the only feasible at the time. It built a sport’s car, that was interesting only to a relatively small audience, and yet it was competitive.
Sport’s cars have much higher prices compared to other models (like sedan), and perhaps the person buying that type of car might be less sensitive to price itself. That is how Tesla slowly built up its strategy to cover larger spaces within the car industry.
And while Tesla is still a smaller player in terms of volume of car produced, as of 2020, compared to companies like Ford and GM, it is rolling out its strategy to become a mass-market electric car company. As this is a complete market change, it will still require a few years for this strategy to roll out successfully.
Netflix DVD-rental go-to-market strategy
When Netflix started its operations, it did that in the most feasible way at the time, as a DVD-rental company.
That was the most viable way to start a business that could compete with existing players like Blockbuster. Netflix could have tried to play it bigger. Netflix had known for years that being a competitive player in the DVD-rental space, was “just the beginning of something else.”
Yet the first time “streaming” was announced on Netflix plan was in the 2007 annual report, presented in 2008, and by 2009 annual report the term “streaming” would be mentioned 88 times (FourWeekMBA analysis). That is when things started to pick up and Netflix moved away from its go-to-market strategy.
It took over a decade from its foundation, for Netflix, to see its strategy to roll out fully!
Airbnb, OPN go-to-market strategy
As the story goes, in 2007, Brian Chesky and Joe Gebbia couldn’t afford the rent on their San Francisco apartment that is why they decided to transform their loft in a lodging space.
Yet instead of relying on Craiglist, they built their site, which they called Airbed & Breakfast and leveraged on Craigslist to drive users back to their website,
Therefore, Airbnb, to gain initial traction, used what is known in growth marketing as OPN (or other people’s network). It surfed a giant at the time (and still), Craigslist.
To be sure, Airbnb didn’t just gain visibility on Craigslist. Instead, it surfed the site to push its platform. A platform business model to take off run into the so-called chicken and egg problem.
In short, a platform differently from a linear business, to gain initial traction has to kick off its operations on often different sides. For instance, for Airbnb, it was critical to enhance the listings available on the platform to make it valuable for users, and vice versa.
The more users joined, the more it would attract listings. Where to start? Back in 2010, Airbnb figured a mechanism and automation that enabled listings on the platform to be reposted on Craigslist, thus generating substantial traffic.
In addition, those who searched for listings on Airbnb were users looking for alternatives to Hotels, so a great target. By using this initial strategy Airbnb managed to solve its initial growth phase.
Coca-Cola, franchained go-to-market strategy
In a FourWeekMBA analysis to dissect the Coca-Cola system, the company uses a template wherein the short term its new operations are controlled and the company keeps a controlling equity stake in the new venture.
As soon as it takes off, the operation goes back from chain to the franchise. Thus the company divests its controlling stakes and in the long-run that becomes a franchising agreement.
From there, the concept of “franchained.” This go-to-market strategy has worked pretty well for Coca-Cola since 2003, to enter new markets by leveraging on its scale, by controlling the new venture, and after that leaving it independent, by tied to Coca-Cola with a franchising agreement.
Coca-Cola follows a business strategy (implemented since 2006) where through its operating arm – the Bottling Investment Group – it invests initially in bottling partners operations. As they take off, Coca-Cola divests its equity stakes, and it establishes a franchising model, as long-term growth and distribution strategy.
DuckDuckGo, differentiating the value proposition to gain traction over the dominating giant
As I explained in privacy as business model, DuckDuckGo used a clearly differentiated value proposition compared to Google. Therefore, even if it entered the search industry quite late, over the years it kept growing.
Source: DuckDuckGo Traffic
I like to call it privacy as a business model, because privacy built into the company value proposition influences the whole business.
It affects product engineering, as a privacy based business model has to make sure that it collects the minimum amount of data necessary to make the service work well, while throwing it on the fly.
It changes the monetization strategy: as also the way the platform makes money, even if hidden, it has to be context-based, not behavioral-based.
It lowers switching costs as the sole fact that the product offers privacy as value proposition, it makes the user pass through the initial friction to switching up.
It is a different type of marketing, what we can call contrarian marketing, as it offers an alternative to the current, dominant players, by dismantling their core assumptions.
Go-To-Market Tactics
Direct Sales: Selling products or services directly to customers through sales teams or online platforms. This approach is common for high-touch or complex solutions.
Indirect Sales: Utilizing channel partners, such as distributors, resellers, or retailers, to reach a wider audience and leverage their existing customer relationships.
Online Sales: Leveraging e-commerce platforms to sell products directly to consumers. This strategy often includes digital marketing, SEO, and social media advertising.
Content Marketing: Creating valuable content (blogs, videos, ebooks) to educate and engage the target audience. Content can position the company as an industry thought leader.
Influencer Marketing: Collaborating with influencers in the industry to promote products or services. Influencers can have a significant impact on their followers’ purchasing decisions.
Product-Led Growth: Offering a free or freemium product or service with the expectation that users will upgrade to premium features or purchase related products.
Partnerships and Alliances: Forming strategic partnerships with complementary businesses to co-market or bundle products and services.
Event Marketing: Participating in trade shows, conferences, or hosting webinars and workshops to showcase products and connect with potential customers.
Social Media Marketing: Leveraging social media platforms to engage with customers, build brand awareness, and promote products or services.
Channel Expansion: Expanding into new geographic regions or target markets to reach untapped customer segments.
Customer Referral Programs: Encouraging existing customers to refer new customers in exchange for incentives, discounts, or rewards.
Inbound Marketing: Creating valuable and relevant content to attract and engage potential customers, leveraging SEO, blogs, and email marketing.
Outbound Marketing: Proactively reaching out to potential customers through methods like cold calling, email marketing, and direct mail.
Product Differentiation: Emphasizing unique features or benefits to distinguish the product from competitors in the market.
Pricing Strategies: Implementing competitive pricing, value-based pricing, or dynamic pricing based on market conditions.
Consumer Research: Conducting market research to understand customer needs, preferences, and pain points, and tailoring strategies accordingly.
Product Launch Campaigns: Creating buzz and anticipation around a new product or service through marketing campaigns and promotions.
Customer Success Programs: Focusing on post-sale customer support and success to drive retention and upselling opportunities.
Vertical Integration: Controlling various stages of the supply chain, from production to distribution, to optimize costs and quality.
Channel Marketing: Coordinating marketing efforts with channel partners to ensure consistent messaging and branding.
International Expansion: Expanding into international markets to tap into new customer bases and revenue streams.
Customer Feedback Loops: Establishing mechanisms to gather feedback and continuously improve products or services based on customer input.
Segmentation and Targeting: Dividing the market into specific segments and tailoring marketing strategies to address the unique needs of each segment.
Customer Education: Providing resources, training, or certification programs to educate customers on how to use products effectively.
Sustainable and Ethical Practices: Emphasizing sustainability, ethical sourcing, or social responsibility as a key selling point.
Key Takeaways
Definition: A go-to-market strategy outlines how a company markets its new products or services to reach target customers in a scalable and repeatable way. It covers various aspects from product development to marketing, segmentation, pricing, and distribution.
Product Development: Digital products or physical products with digital components can benefit from growth features that enable a successful go-to-market strategy. Frameworks like growth hacking, data analysis, and marketing come together for a successful product launch.
Marketing, Segmentation, and Pricing: Market segmentation and pricing are critical elements to build momentum. Starting with specific niches and gradually expanding can be an effective approach, as seen with Facebook’s strategy.
Market Context and Distribution: Proper distribution is essential for a successful product launch. Understanding the market context, including existing market size and potential for growth, helps to formulate an effective growth/launch strategy.
Examples of Go-to-Market Strategies:
Zoom: Utilizes a multipronged go-to-market strategy with viral enthusiasm from free accounts channeled through direct sales to identify enterprise customers.
OYO: Implements an expansion strategy by identifying new opportunities, acquiring partnerships, and applying a checklist to standardize experiences.
Partnerships: Collaboration between companies for mutual marketing campaigns to reach shared business goals.
Tesla: Adopted a sports car go-to-market strategy initially, targeting a smaller audience, and gradually expanded to become a mass-market electric car company.
Airbnb: Leveraged other people’s networks (OPN) to gain initial traction and used Craigslist to push its platform.
Coca-Cola: Followed a franchained go-to-market strategy, initially controlling new ventures and then transitioning to franchising agreements.
DuckDuckGo: Differentiated its value proposition based on privacy, offering an alternative to dominant search engines.
A total addressable market or TAM is the available market for a product or service. That is a metric usually leveraged by startups to understand the business potential of an industry. Typically, a large addressable market is appealing to venture capitalists willing to back startups with extensive growth potential.
A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
In simple terms, market validation is the process of showing a concept to a prospective buyer and collecting feedback to determine whether it is worth persisting with. To that end, market validation requires the business to conduct multiple customer interviews before it has made a significant investment of time or money. A transitional business model is an example of market validation that helps the company secure the needed capital while having a market reality check. It helps shape the long-term vision and a scalable business model.
Market orientation is an approach to business where the company focuses more on the behaviors, wants, and needs of customers in its market. A company will first target a niche market to prove a commercial use case. And from there, it will create options to scale.
In a tech-driven business world, companies can move toward market expansion by creating options to scale via niches. Thus leveraging transitional business models to scale further and take advantage of non-linear competition, where today’s niches become tomorrow’s legacy players.
Digital and tech business models can be classified according to four levels of transformation into digitally-enabled, digitally-enhanced, tech or platform business models, and business platforms/ecosystems.
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.
Developing a successful business strategy is about finding the proper niche, where to launch an initial version of your product to create a feedback loop and improve fast while making sure not to run out of money. And from there create options to scale to adjacent niches.
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces.
A SWOT Analysis is a framework used for evaluating the business‘s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful businessproduct portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.
First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is valueinnovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.
A gap analysis helps an organization assess its alignment with strategic objectives to determine whether the current execution is in line with the company’s mission and long-term vision. Gap analyses then help reach a target performance by assisting organizations to use their resources better. A good gap analysis is a powerful tool to improve execution.
Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts at better strategic decision making by avoiding two pitfalls: underprediction, and overprediction.
You can use the Ansoff Matrix as a strategic framework to understand what growthstrategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growthstrategy can be derived by whether the market is new or existing, and the product is new or existing.
The Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.
A digitalchannel is a marketingchannel, part of a distributionstrategy, helping an organization to reach its potential customers via electronic means. There are several digitalmarketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.
A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.
The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.
The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).
In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.
Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.
A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
