The Art Start-Up Success

Approximately 565,000 startups are launched in the U.S. each month and ONLY 10% of Succeed. Statistics show that 9 out of 10 startups go out of business and less than 1% manage to make it to Unicorn status—60% fail between pre-seed and Series A funding stages—and sadly 75% of venture-backed companies never return cash to investors.

What Are the Common Mistakes?

The #1 reason that technology start-ups fail is not having a product-to-market or Service-to-market fit.

The typical scenario is that of a technical CEO and founding team, who have a Product or Service idea based on a problem they solved or didn’t solve at a previous job. This is "not" enough validation to base founding a company on. To a lesser degree, some start-up ideas are based solely on anticipating a trend in the market.  In many cases, the technical founding team is more excited about the “innovative technology” they are creating than the business problem customers need to solve; they haven’t done their homework.

In working with more than twenty startups, the trend I have seen is the that founding team will usually bring in Sales, Marketing, or Product Management resources when they think they are ready to sell.

Huge mistake!

They failed to recognize that they needed to define the GTM Strategy & Selling Plans "before" going too far down the path of developing an MVP or Service Offering and certainly before declaring their product ready for the market!

Because they are 'not' sellers, they don't get it. Why would you waste time and resources developing something to "sell", if you can't answer with any certainty the following key questions:

• What exactly do we have?
• What is the exact problem we solve (deep understanding)?
• Who has that problem?
• What are they doing about it today?
• What other vendors are trying to solve the problem?
• Why will customers buy from us?
• What is the best way to engage with these target customers?
• How do we get the first 3 customers/ design partners?
• What is the feedback loop back into our sprints so that we are developing something the “market” needs and will buy?

The Minimum Viable Product (MVP) is a foundational element in the go-to-market journey. It is the leanest version of how you see solving your customer’s problem. In the context of a GTM strategy, the MVP plays a critical role in fine-tuning your approach to market entry. As you gather feedback from early adopters, you can refine your messaging, marketing channels, and target audience. This iterative process helps optimize your marketing efforts, ensuring that you are reaching the right customers with a compelling and unique value proposition.

Another challenge is messaging. The startup may have something of real use and be one of the few teams that nailed the product-to-market fit, but they struggle to create a message that resonates. They are not "sellers", so they don’t understand how to craft messaging that resonates with buyers.

Frequently their unique value proposition is lost in the weeds of technology speak. A Web site visitor must perform "research" to figure out what they “really” offer, clicking on multiple tabs (Solutions, Products, Industries, etc.) and reading data sheets or whitepapers vs. a frictionless approach like watching 2-minute explainer videos.

The founding team doesn’t have the expertise and skill set to create a modern Web presence that makes it “easy” for prospective customers to engage. They probably didn't truly consider the visitor experience when creating their initial Online Presence.

Another very common theme is that there will usually be a miss-fire on sales hiring. Selling isn’t their wheelhouse; they don’t have a lot of prior experience launching the sales function in multiple startups and are not equipped to develop a GTM and Selling Plan, much less, know what position to hire for?

It’s a real headache for a CEO to navigate:

• Is my strategy more focused on SI’s and MSPs as the primary distribution channel or is it a direct sales play?  And if it’s channels, for which one is my product a great fit?
• Do I hire two or three junior sales development reps or a sales leader first?

To control burn rate the inclination is to hire junior people. This is a huge challenge because the company doesn’t have the right messaging and doesn’t have an influx of inbound requests.

• Do I subscribe to Salesforce.com, Hubspot or Zoho?
• Do I use a third-party lead generation service?

All of this is time-consuming; energy draining and is usually just winged.

Entrepreneurs spend around 40% of their time on tasks that don’t generate income!

They needed start-up sales and marketing expertise to assess & plan upfront. This doesn’t necessarily mean that they need to bring on the permanent founding sales leader, it can be a quick exercise done by a consultant but bypassing this sets the company up for a painfully slow launch of sales, false starts, wasted burn rate, and loss of competitive edge -- it sets the company up for failure.

The Art of a Startup

If it is not the right time to hire a seasoned start-up Sales Leader, consider working with a startup consultant who understands the art form of sourcing and closing the early customers, while building out the GTM Strategy, Sales Plan, Process, Messaging, and Tools.

FOCUS ON:

1. The problem your target buyers “have” and solving it, not on the coolness of your technology.
2. And being able to translate tech innovation into clearly articulated business value.
3. Define your GTM strategy and selling plan upfront so that you have a roadmap for success vs. flying blind.
4. Engaging with early customers who will help drive the product to "market ready".

A GTM strategy is key to startup success. It acts as the guide, ensuring all efforts align with customer needs and market demands. Embrace this and watch your startup take off.

About the author

Start-up Advisor | GTM & Sales Leadership | Cyber Security & Risk Management | Cloud | DevSecOps | Gen AI, LLMs | Data Governance & Analytics

Over the last three decades working in the Enterprise software world, I have been the first sales hire in several start-ups; been a part of eight companies that had successful exits and five of them being in Cyber Security. For the last twelve years I have consulted with more than twenty early start-ups on GTM strategy, messaging, differentiation, and launching the product and the sales function.