Plan How to Take Your Product to Market, Not Just to Potential Investors.
Go-to-market plans seem nearly out of vogue in Silicon Valley.
After leading the most consistently profitable semiconductor company, and by doing so becoming the longest serving CEO in Silicon Valley, I decided to help a few startups with mentoring and early-round investments. Deals soon came flying over the transom and I was awash with opportunities.
Nearly all of them were rejected, mainly for lack of a solid go-to-market plan.
Plan your plan, then execute your plan.
Silicon Valley has no shortage of bright people with interesting ideas. But an idea is not a product, nor is it a connection to a buyer. The next Google could walk into my door tomorrow, but would be rejected if they lacked a solid understanding of who their customers are, how those customers could be engaged and how to monetize the process. In other words, their go-to-market strategy.
Silicon Valley startup culture has been perverted by the “grow fast and funded” mentality. Instead of a solid go-to-market plan, founders try (and most often fail) to grab funding on the fly and “growth hack” their way to success. For truly disruptive products, this can work, though the odds are long. You can find venture capitalists (VCs) who will fund an idea from a moldable team, providing you dance their dance -- surrender control of your company, endlessly seek more investors to dilute risk and mindlessly bump up top-line revenues without regard to bottom-line results.
Without VC money, you only succeed by planning your plan, and executing your plan. You are more likely to succeed this way than the VC way.
Cash, spend, repeat.
A well thought-out go-to-market plan tells you many things. It describes your target customers and markets with precision. It maps how you will reach and romance these customers. It details the money needed to execute the plan.
That last part is important to investors like myself who want to help build enduring companies. Cash is king, but it can be a crippling agent as well. You need cash to execute your plan, but excess cash can generate problems that are long-lasting:
- Spend it all: You will spend whatever cash you have. Companies are not too dissimilar to families when it comes to budgeting. Excess cash goes somewhere, and in startups it is often spent frivolously. Raise what you need and let your detailed planning define need.
- Blunted creativity: Kids are inventive at play. Take away their electronic games, Internet and movies and they will entertain themselves for nothing. Excess money can suppress creative solutions. Corporate frugality is about more than mere cash management -- it is about building a culture that says, “Let’s find a better way.”
- Dilution: Every bit of financing dilutes you, either from an equity or spiritual standpoint. If you compensate for a lack of a solid go-to-market plan by constantly raising funds to misspend, then your soul withers alongside your equity ratio.
Planning is fun.
Go-to-market planning is a creative and scientific process, according to my friends at Silicon Strategies Marketing. The entertainment value comes from exploring the unknowns about your market and customers, then designing a strategy to seduce them. The big secret is that no investor -- be they typical gambler VCs or mentors like myself -- will give you a dime without seeing that you know what you need to know and that you have planned how you will dominate your markets. Plan first to get our attention, then fund to the plan and nothing more.
Then just do it.