GTM Never Stops

If I told you that I can turn every $1 you give me into $10, would you believe me? Likely not without proof. 

Similarly, investors take on risk in exchange for high returns. But not blind risk. Institutional investing into early-stage startups will always be fraught with the risk that startups fail to generate high returns or, worse, fail altogether. VCs know that and accept it. Consequently, their decision to invest comes down to evaluating the degree to which the startup has validated its business model. That means the extent to which you’ve found high degrees of product-market fit (PMF) for your solution. GTM is the process by which you do that. 

If you missed these articles, check out:

  • How to Successfully Raise Institutional Funding
  • How to Build Your Initial GTM Plan

To summarize, these articles set PMF as the destination to your seed to series-A fundraising journey, GTM as the process to get to PMF, and the importance of structuring your initial GTM plan on 5 axes.  

Your initial GTM plan is your first set of educated assumptions on how to get to PMF. When launched, however, you’ll discover that some of them were wrong. That’s why GTM is ongoing and iterative – the process by which you successively weed out errors and eliminate uncertainties, while discovering paths that lead to success. It’s also the way to build proof for your maturing business model.

GTM Never Stops

I often see two mistakes with GTM. First, early-stage founders define it like the big players – a product launch plan. Second, they stick it in the pitch deck and let it collect dust, instead turning their attention to blasting the market with marketing noise, hoping to score. It’s in the deck because it’s expected to be there, but doesn’t serve a functional purpose. 

To set the record straight, GTM means action. Internally, it’s your play book for coordinating every team’s activities and a central data repository of what’s working, what isn’t, and what’s changing. Externally, it tells investors what you’re doing to get to product-market fit. They care a lot about what you’re doing, the lessons you learn and how you adapt your strategy based on your findings. 

That’s why it’s important to grasp why GTM never stops. And if you’re going to extend your burn rate long enough to get to PMF, your GTM activities need structure. 

The Process

I can’t overstate the importance of working with experts spanning multiple domains when defining your initial GTM plan. Why? To increase the odds that you head in the right direction from the start. But even if you do, it’s just a starting point; a working theory that you must test, because consumers and markets tend to be tricky.

At a high level, the process is to:

  1. Define an initial plan based on 5 essential axes
  2. Identify uncertainties or weaknesses in the plan
  3. Define & conduct structured experiments, within your means, to test those uncertainties
  4. Update the plan with your findings
  5. Keep repeating until you find the sweet spot: product-market fit.

Needless to say, you must structure your startup’s operations to support this fine-tuning process.

A Window into Your Leadership

While you might pitch to a few industry gurus from time to time, you know more about your business than VCs do. They’re here to learn about your startup and how you got to your current  business model. 

What role does your GTM journey play? A rather big one. GTM is the doing part of getting to product-market fit. You can’t talk about it unless you live it. From mistakes made, to dead ends and new directions, new ways of defining your solution and improvements in your revenue model, VCs want to know. More importantly, how you structure your GTM activities tells them a heck of a lot about whether they can trust you to creatively extend invested resources, or simply burn through them trying to find your way into PMF. It’s a window into how you think, and their decision to invest in your startup is their decision to build a longer-term relationship with you

By designing and conducting structured experiments with your early adopters, in order to get concrete answers and bust myths, you’re killing two birds with one stone: you’re eliminating uncertainty in your business model while also de-risking the investment for VCs. And by living it, you’ll begin to enjoy pitching to VCs. In turn, they’ll enjoy having conversations with you, and that’s a significant prerequisite for any investment to take place. 

Different Business Model Maturities for Different Rounds

The truth about institutional fundraising is that your final play book – and business model – will only be clear by the time you’re ready to launch your Series A round. Everything you do up to that point is an optimization problem: set the initial direction, define and conduct structured tests to confirm/eliminate, update the plan, repeat.

Stated differently, prior to Series A, you’re really selling VCs on your ability to drive meaningful traction while continuing to refine your GTM plan. When you understand that, you can see why GTM never stops.

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