By Andrew Goldner, cofounder of GrowthX and speaker at 36|86
Products and markets may be unique, but the path to finding product-market fit is not. It’s formulaic. At GrowthX, we help startups, corporations and countries commercialize innovation through capital, talent and know-how.
In the past, technology was expensive and complex. Product talent was sparse. So, the biggest risk for startups was in the product itself. Nowadays, the costs and complexity of technology are greatly reduced and product talent is plentiful. The risk now lies in market development, not product development.
The leading cause of death of seed-stage companies is founders who build products for problems that are interesting to solve rather than those that serve a market need.
We’ve built a proven framework to help our portfolio companies avoid making this fatal mistake. Here are the first ten steps to begin the path towards finding product-market fit.
- Review your current market development team and skill sets to determine skill gaps to maximize sales throughput and effectiveness.
- Review the current marketing and sales processes to identify any blockers, friction points or bottlenecks that can be eliminated through simple process change.
- Review the systems, tools and rules in place today to effectively manage your market outreach programs and identify where changes would be helpful.
- Create comprehensive account and pipeline lists by interviewing relevant team members, reviewing existing databases, spreadsheets, and email archives.
- Define ideal customer profiles (ICPs) and determine the first profiles to execute against by conducting a thorough review of all customer account data, identifying patterns, and analyzing revenue potential and the likelihood of winning business.
- Review the current opportunity pipeline based on your new ICP hypotheses. Then conduct a strategic account review of high priority opportunities.
- Review the lifecycle of current customer experience, including UX design and onboarding, by customer segments and product type.
- Review unit economics to develop rational hypothesis for LTV:CAC.
- Follow the sales complexity matrix to determine what customer acquisition models for your ICPs should be tested during initial market outreach (e.g. no-touch, light-touch inside, high-touch inside, channel, outside, outside team).
- Source prospect data and a data acquisition budget, and craft a process to keep your funnel full with your ICPs.
For deeper insights on these steps and to learn the rest of the formula, join us for a hands-on workshop at 36|86 on the foolproof formula for finding product-market fit.
36|86 is the Southeast’s premier gathering of founders, investors and ecosystem builders, offering 30+ growth-oriented panels, a new twist on founder:VC networking, the very best of Music City and so much more. Join us Aug. 29-30 in Nashville.