Building an Effective Go-to-Market Strategy in a Highly Competitive Market – Part 1 of 4

In today’s fast-moving technology market it is not uncommon for new features and functions to quickly be copied by competitors. With the rapid spreading of knowledge and exponentially increasing speed and ease of use of new development platforms, developing new applications is cheaper than ever. These low barriers to entry inevitably result in increased competition and decreasing prices for software applications and technology in general. In some markets this can get so bad that the once unique and amazing technology becomes a commodity. Competing in such competitive environments demands not only a great product, but skillful execution from software company founders and management teams with in their target customer segments. One great example of this rampant increase in competition is in the cloud backup market.

For any readers that aren’t familiar with the cloud backup market, it is really one of the most competitive technology markets to be in today. The ubiquity of high-speed Internet and the decreasing cost of storage have made it very easy for “cloud backup” companies to pop up everywhere. Just about anybody can leverage a third party storage provider like and Amazon or Rackspace, along with some third party software and call the selves a cloud backup company. Some IT service providers will even setup some extra storage in their basement and call it cloud backup. Not to mention all of the consumer brand solutions out there advertising low cost storage to the masses, that doesn’t meet the feature and security requirements of most SMBs. In addition to competitive rivalry, and new companies constantly popping up there are many substitutes for backing up your data other than cloud backup. This combination of factors has also lead to pricing pressure driving down the cost of cloud backup, in many cases to an artificially low level.

While the cloud backup market is one great example of this phenomenon, it is far from the only one. Even seemingly untouchable companies like Facebook still face competition from competitors such as Google Plus. The challenge for today’s software company executive teams is to determine and execute on a go-to-market strategy that will make their companies grow rapidly and efficiently in highly competitive markets.

There were three strategies that I observed in 2011 that helped some of our portfolio companies compete in highly competitive markets:

1. Sell value
2. Build brand equity
3. Focus on the target customer segment

While these bullets might seem simple, executing on them is never as easy as it might seem, and it requires a lot of planning and discipline. In my next three posts I will dive into each of these points and explain how to implement such a strategy at your own company.