I recently spoke to a CEO of a company that we are talking to about a potential investment. I have been thinking about the conversation quite a bit because his basic approach aligns with how we think the best Go-To-Market (GTM) Strategies and models are created.
Essentially, the best GTM strategies and GTM operating models are forced evolution through rapid iteration.
Evolution is the key word, as you can have a going-in GTM strategy, but the best GTM strategies and models start with a combination of intuition and some level of trust that it might work and then they evolve with a number of ongoing adjustments to turn off what doesn’t work, expand what does work, and continuously experiment with new ideas and practices to evolve the GTM model.
In our conversation the CEO communicated this as his philosophy and told me where they stand in the process. The conversation got me excited, not because of where they stood in the evolution (although they seem to be at a good point), but because the CEO clearly has an approach that is evolving the GTM model and it is the evolution of the model that actually increases the odds of continuing to improve the model (of course, you might get really really lucky and find the best model on the first try, but that is a black swan event and I have yet to see a black swan).
Also, the results of the work show up in the sales and marketing economics (the cost of sales and marketing in relation to the gross profit created by the sale) and create more capital efficiency and better valuations (whether the company is looking for venture capital or executing a company exit strategy). Continuing to improve the GTM strategy and model continue to improve the economic performance of the company!
The best managed companies are continuously adjusting and evolving their GTM strategies and models, and this CEO in particular communicated his approach really well. But this CEO was onto something else that I completely agree with and that I have heard from strikingly few CEOs. I was probing him on GTM practices that I thought might work for his company and he told me that one in particular did not work for them. Then he said “but just because it didn’t work, doesn’t mean it doesn’t work.” This is a particularly powerful and rare statement coming from a CEO. He communicated that he is open to the idea that they may not have executed the practice well and that he is open to trying it again. This is really important, because a lot of experiments fail because they are not executed well and managers need to be mindful to this (while still being mindful that trying again means that you can try one less experiment of something else).
Finally, he told me that his management team is really open to outside ideas and that they seek outside advice and ideas regularly. This is really important because most of what any company does has been tried in the past and finding out the ideas, context, and results of ideas and practices can both help to increase your idea backlog and help you prioritize your backlog.
I was really impressed with this CEO’s transparency and open mindedness, two characteristics that I believe are very powerful contributors to company evolution and growth during the expansion stage. (Essentially, these characteristics help to increase the number of business growth strategies and business operating practices that a company considers and experiments with, which should raise the probability of finding the best practices for the company.)
What I heard from the CEO was:
- Rapidly evolve your GTM strategy and model
- Expand what is working
- Adjust what isn’t working and turn it off if you can’t make it work well
- Get as many new ideas and practices as possible onto the idea backlog, including ideas from outside the company
- Prioritize your GTM idea backlog
- Keep testing your best new ideas and practices
- Be open that just because it didn’t work doesn’t mean it doesn’t work
I believe that these are all really good points and align well with how we think about company building!
Note: I don’t mean to be getting into an “evolution vs. revolution” debate here, so consider my use of the term “evolution” to include “revolution” if it wasn’t clear.