By Bernard Lunn
I use “incredibly” deliberately. It is not credible that something as important as a go to market plan should be simple. This is so critical, so it has to be complex and difficult.
Or does it?
Making something simple makes it easier to get everybody aligned and focussed. Simplicity is key to execution and go to market plans are 1% inspiration and 99% perspiration. Constraints are good.
Organic vitality is the end goal. You can only get the right unit economics if one user leads to another user in an organic way. Without this your Customer Acquisition Costs (CAC) will be too high. Your customers/users must know each other. Seth Godin calls this Tribes. Or we can say “birds of a feather flock together”.
3 is a magic number. You need 3 customers. Sure, you need a lot more eventually, but 3 creates a tipping point. To see this in an entertaining way, watch this Ted talk about the “first follower”.
My mantra is:
How do you make that First Follower get up and dance? In the video, it looks like “dance and they will come”. But in an ADD world that is crowded with great propositions trying to get attention that is not enough. This is where you have to “do things that don’t scale”. You have to deliver crazy amounts of value to those first three and go the extra mile and then some. You do whatever it takes to win over those early customers. This is a phase – “this too shall pass”.
The net profitability of these early customers does not matter. The gross unit profitability does matter. Selling a dollar for 99 cents is easy; your revenue traction will be amazing! However if you want to sell to millions and have good unit economics, spending expensive founder time on winning the first few customers makes total sense.
Look at that first follower video again. You will see something happen after the third dancer joins. That is what could be called tipping point, or take off or traction or any number of words that basically says “its working”. Three times is a trend.
Of course that does not mean you only need three consumers. This is where you need to figure out your “bundles” of customer. That is a deliberately simplistic word to cover many types. For example a bundle could be a:
- vertical domain (Fintech or Cleantech for example).
- functional job type (e.g accountants or programmers)
- business customer type by size or stage of maturity
- tribe (types of consumers that think the same way and hang out together, which is much more actionable than traditional Lifestage targeting).
- geographic region with linguistic, regulatory and cultural similarities – marketing speak for a country
In each bundle, you have the same 1,2,3 challenge. For example, if your first enterprise customer is BMW, other car companies will be a relatively easy sell and once you have 3 car company references you are established (but a Bank or Retailer or Government customer still won’t see you as relevant).
If your first tribe is young single guys in Brooklyn who play Magic The Gathering, you will be credible when three who are influential start singing your praises (but a middle aged Mom/Dad in Brooklyn may still not view your product as relevant and will be useless as referrals).
Or think of Facebook growing through College networks. Once they were entrenched in three Colleges, all the others saw it as an inevitable trend (and only later did they break out of the college niche into the mainstream).
Once you have 3, start planning your organisational strategy in 10x increments – from 3 to 30 to 300 to 3,000 to 300k to 3m etc. That is how you scale using simple, repeatable processes. But you don’t get the opportunity to scale unless you get those first 3.
For example, if you have 3 car manufacturers, it is pretty simple to hire sales guys to go after the other car manufacturers.
Or, if you have 3 young single guys in Brooklyn who play Magic The Gathering, scaling that via community marketing is a process you can scale.
Choose the first three wisely, for they will typecast you. If you aim to eventually grow beyond a niche, they must be aspirational. For example:
– SAP got BMW as its first customer (a clearly world class manufacturer that other car companies wanted to emulate)
– Facebook started at Harvard and then Stanford, top tier colleges that are aspirational.
Car companies and colleges are all networks. Your job is to find the hubs in those networks and win them over. For example, if your first tribe is young single guys in Brooklyn who play Magic The Gathering, find somebody who is a community magnet, respected and liked by his peers. If he adopts your product, he is your first follower and others will follow you.
Once your scaling within one bundle, you can grow into adjacent bundles. This is where 3×3 is the magic number. For example if you want to be a leader in a product for manufacturing you can start with Automotive (# 1) and move into Electronics (# 2) and Pharma (# 3). Or, you can start with oung single guys in Brooklyn who play Magic The Gathering and expand to Berlin (# 2) and San Francisco (# 3). Or you can stay in Brooklyn but expand into other geeky games such as Go (# 2) and Battlestar Galactica (# 3).
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