Rowan: Sangram, why do great companies fail?
Sangram: Per VentureBeat and many other resources, only 0.04% of companies cross the "Valley of Death" to earn $10M in revenue. Now, why is that? Is that because your vision became stale? Or because you can't hire great people? The answer, really, is that the product and the market evolved. Your GTM may not have matured, and that causes all kinds of issues. You need to first identify the stage of the business you are in before you figure out your GTM process and team.
Rowan: So, how do you know what stage of the business you’re in?
Sangram: The 3 P's. Companies MUST go through this to overcome (not avoid) "The Valley of Death." The stages are Problem-market fit, Product-market fit, and Platform-market fit.
Companies MUST go through this to overcome (not avoid) "The Valley of Death." The stages are Problem-market fit, Product-market fit, and Platform-market fit.
- Problem-market fit; We are testing our hypotheses of the problem that we believe can be solved by the solution we are still building for the customers we have and the customers we believe are out there (likely less than $20 million in revenue).
- Product-market fit; We have a product with a cohort of happy customers, and we are looking to capture market share and gain or maintain a leadership position in our category (likely between $10 and $150 million in revenue).
- Platform-market fit; Our potential to grow through existing customers far exceeds net new business, and we are developing new solutions and offerings to solve more of their problems and expand into new categories (likely around $100 million or higher in revenue).
Before you can predict your next MOVE, you need to know where you stand as a business with executive alignment.
Rowan: So are the metrics different based on these three stages of the business?
Sangram: Great question, yes they are. Actually, this is the reason why companies fail more often. We try to do and measure unnatural things in a business to become the next unicorn and try to leapfrog some basic steps.
So let's say you are in the Problem-market stage. You likely can measure metrics by Function:
- Outbound KPIs
- Meetings booked
- Opp creation
- Funnel conversion rates
- Closed won revenue
Let's say you are in the Product-market stage. Metrics by Segments become more important. ABM-centric metrics like:
- Engaged accounts
- Pipeline coverage
- Deal velocity
- Magic number
Oh! And if you get to Platform-market fit, then metrics by Customer cohorts becomes your ultimate true north:
- Gross margins
- Multi-product expansion
I include all the templates and scorecards in my new book and also on themovebook.com.
Thank you, Sangram!
And there you have it my fellow product marketing leaders, aka Marchitects! Products and markets evolve, which means revenue functions need to evolve. Modern selling is about being buyer-centric and outcome-driven. And MOVE is a blueprint for customer-centric companies that want to get aligned and add value at every step of the sales process.
Now, Marchitects, don’t get it twisted. You don’t own GTM. Your CEO does. Brian Halligan, CEO (now Chairman) of Hubspot said he owns it. The same message was echoed by Nick Mehta, CEO Gainsight, Tim Kopp, CEO Terminus, and even Geoffrey Moore who wrote Crossing the Chasm. Your CEO owns GTM.
I highly recommend reading MOVE to learn how to play a part alongside your CEO in turning your GTM silos into a high-performing revenue team.
Bonus: The proceeds for the book go to Sangram’s favourite charity NewStory, which tackles one of the world’s biggest problems, homelessness. This is why I'm proud to call him a friend.