GTM for Startups

Salonie Ganju
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Salonie: Hi and welcome to Matrix Moments. This is Salonie. And I am here with Avnish Bajaj, Founder and Managing Director at Matrix Partners India. In today’s episode, we talk about go-to-market strategy for startups also known as GTM and why we think this can shape the fate of a company.

Avnish, what does GTM mean to you? What is its interplay with PMF? And, would you say that PMF is the most important element in a startup success story?

Avnish: Yes. Great to be back, Salonie. I know the viewers won’t know it, but this is one is after some time that we had a break in between. So PMF is far more important than GTM. PMF determines the success or failure of a startup, but GTM is your insurance strategy. Maybe insurance strategy is a wrong word, but GTM is your risk management strategy towards PMF. So what does that means?

Businesses have started to get PMF. You are trying to attack a certain market. You believe there is a gap in that market. You are building a product. And you are hoping that product will fit with the market. That’s the PMF. But that’s far harder than it appears. First you have to develop the product. Then you have to aim it at the right place in the market, which is the GTM. And then hopefully the fit happens.

So we have been talking about - and in another episode we have spoken also about the fact that as Matrix we are investing behind lot of repeat entrepreneurs. And if you were to ask me the biggest difference I have seen between repeat entrepreneurs and first time entrepreneurs is that repeat – both are taking PMF risk, but the repeat entrepreneurs are typically saying failure is not an option and I don’t want to take PMF. And therefore, here’s my GTM. And the thought process is very different.

Whereas, the first stage entrepreneur will say Main kar dunga. I will make this happen. And then it’s a little bit more of a punt. Both work. Both work by the way. And I believe that the first time person may hit something very very large with that approach also. Essentially in a sports analogy PMF is your goal, GTM is that entire play that is happening to get to that goal. Who is passing the ball where, and offence, defense, where you are, how you are passing the ball between various phases of the businesses.

And I believe entrepreneurs don’t think through GTM enough. If you think through GTM enough, it can accelerate your PMF on the upside or it can also give you warning signals very early on the downside. Either which way, it is helping you with your goal of reaching a product market fit, because if I am delusional and I believe that I am able to - there is this term called or often smart VCs will ask entrepreneurs how will you drive a wedge in the market. There is a market. Most of the time, the market is getting catered to in some way or the other. And the question for you as an entrepreneur and the company is called how will you drive the wedge? What is going to be your differentiator?

Let’s say I have a thesis on it that I want to do x, y, z, and this is what I am catering to. And I go and try it and it doesn’t work. I have to rethink my business idea. So I think this is a very critical part that can change – I don’t know if it can change the destiny of a business. Sometimes it can and we will talk about it in the context of some success stories. But, it can definitely as an entrepreneur either accelerate your PMF. Or, it can give you very early warning signals that again accelerate your PMF because you can iterate faster.

What are the elements of a GTM? So it’s a more fancy term and we will talk about enterprise versus consumer. But net net, it’s about your marketing approach. And anybody who has done an MBA, in the early world of an MBA, there used to be four Ps. Your price, your placement, your promotion, and your product. GTM is a fancier way of defining it in the internet world. There is a lot of literature online which some of the links you should share on this on the transcript which talks about what elements people add to it. Sometimes people add people add to it. Promotion may be called by a different name, but net net that’s what it is. How are you positioning your product in the market.

You have to make pricing decisions. You have to figure out how exactly are you going to promote your product. By the way, what exactly is your product; you have to make that also. So, I think it’s a fancier term. It’s a similar thing as marketing, but a little bit more in the digital age. And we will talk about some of that because it gives you a lot more tools that didn’t use to exist before.

One of my pet points on this is what is called push versus pull products or often entrepreneurs probably get irritated when I say is it a vitamin or a painkiller. Vitamin is nice to have. Painkiller is a must have. So, that generally applies to the product. But it can also apply to a GTM. Can you make me aware of a pain that I have that I may not be aware that you are the solution for. This is another term we use internally about inside-out approach versus outside-in approach.

And my view is no matter what your GTM. No matter how you are approaching your business. This vitamin versus painkiller/push versus pull product, big big determinant of success. And outside-in versus-inside out, outside-in is a big determinant of success.

So if there are avoidable mistake, the avoidable mistakes are to be inside-out. I think the customer needs this - unless you are Steve Jobs and you can get away because you can execute by saying I am not going to ask the customer what they need because I will show them what they want. If you are Steve Jobs, you will get away with it. If you are not, then there is a much more scientific approach. Analyze your customers’ or consumers’ pain points and then think about how best to position. And therefore that is the outside-in approach.

Salonie: You mentioned enterprise versus consumer and how would say that GMT differs for these kinds of businesses? Should an entrepreneur think about his GTM or her GTM strategy differently for an enterprise and software company?

Avnish: Yes. So, look, strategically speaking the answer is no. Tactically speaking, the answer is yes. So why is it no strategically speaking? It is because ultimately the purpose is the same. I am trying to find a fit for my product in the market. Whether I am an enterprise company or a consumer company, I am trying to do the same. So strategically it’s the same thing. Tactically, it is apples and oranges, very different. And one of the articles that I think you are going to include it talks about sales versus marketing approach. Typically in enterprise, it’s more B2B. It’s more sales led. And in consumer, it is more marketing led. And that has been the historical axis around which they are very very different.

So therefore, you will have inside sales or sales people driven GTM and you will have more of the consumer driven. So that’s the theory of it. The beauty of the last 5, 7 - 10 years is these things are converging. So there is something called the consumerization of the enterprise. And also this is largely led because everything is becoming digital. So in the digital world even an enterprise company can acquire all their consumers digitally.

In a digital world, I can have a consumer company for the first time the product company has a direct connect with the costumer. Earlier you should be reliant on digital channel – not digital physical channels. Just like a enterprise company can call their customers and say, are you happy or not and the NPS. Now a consumer company can call their customers live and say are you happy or not. So both the worlds are converging. And we will get into some of the case studies. But I think this is critical.

In today’s world, my GTM if I was becoming an entrepreneur again would include the best practices from the enterprise side of GTM. I just gave you an example inside sales, key account management, hunting versus farming. There is a bunch of stuff. There is a plethora of knowledge there. I would combine the best practices of that into a consumer company. And the best practices of consumer into a enterprise company where – by the way there is a concept called cohorts and retention of revenue, which is all actually come from enterprises in towards consumer when you started being able to track your consumers directly.

And I would bring the best practices of consumer, which is around brand. And sometimes you have seen that you subsidize your customers and then you capture them because you are going to make money with them over a long period of time. I would bring the best of both worlds together.

Salonie: Are there any examples of like super successful GMT strategies that you have seen where it has literally changed the fate or the destiny of a company?

Avnish: Yes, I think there are a bunch of them. I do think there is this CB Insights report which talks about great D2C companies which is direct to consumers companies If we can include a link or maybe reference then – because I think it has like 14 case studies which are generally on the consumer side. But, let’s talk about the ultimate one that I remember from the first dotcom days, PayPal.

So, PayPal you would not know. I don’t know - I think you were born then. The PayPal in 1999 was the first company that said you can pay each other. And the paying each other was that PayPal would give you $5 to send to another person if you were to send it to them. Now, guess what? I would get an email saying, Salonie has sent you $5, click on this link to receive it. Now all of that by the way is phishing and spamming, but this was real. Who wouldn’t do it? It was the ultimate viral product probably of the last two – three decades. Just caught fire.

Today, it’s become more normal for people to grease. Now it has become referral program and this and that. This is was just outstanding. So, everybody would click on the link. And then they would get another $5 to be able to invite somebody else. And this thing just caught fire.

Now that’s a go-to-market strategy. That is not the product market fit. The product market fit that PayPal had was to pay each other and pay on the internet, which was massive in those days – a massive value addition. So you had this outstanding go-to-market strategy sitting on top an outstanding product market fit. And that’s why that company became - in those days becoming a billion and billion and half worth within no time was just outstanding. By the way, they had another element of GTM which was they became the – because eBay was the first C2C kind of site, they became the payment option of choice for those C2C sellers. Again, consumer to consumer.

So they next thing you know they had these two viral things firing and it became a very valuable company very early. Then eBay bought, then eBay spun them out and they are worth $120 plus billion now. In the current world, speaking about consumerization of enterprise, I think Slack has done a great job. It’s a team collaboration product. Now it’s a public company. The core product – this whole freemium strategy is something enterprise which is free to start and then you have to pay. It’s everywhere. It’s on the apps. You will see this strategy is being followed. It’s a GTM strategy. The free gets you hooked.

Now guess what? Where does it come from? Way back in the days, the consumer product companies and the Cokes and Pepsis or even the shampoo companies, they used to give you trial packages. This is the internet view of the trial package. So, free to try and then you pay. And Slack has taken this consumerization to the next level because again it’s a collaboration tool. Now if I want to collaborate with you, you’ll also have to download Slack. But, it’s free. Zoom Video has done outstanding job. Forty minutes free, then you have to pay. So I think these are great examples of enterprise companies with great go-to-market strategies which are now being copied.

There is a whole genre in this report that I referred to. One of other great GTM strategies, one of which has been interestingly like Robinhood is a US based personal wealth management site which started by saying free trades, but also managed to create a lot of curiosity before they launched. I think they had a few hundred thousand people in the waiting list by saying these are the benefits you will get. Now imagine you are a direct to consumer site, what is your biggest worry? You won’t get the consumers. Before they launched, these guys have so many consumers. And this report covers a lot of these kind of case studies where you are offering something there is gamification. Now gamification is something where you are creating some kind of contest between people. So, people share stuff with each other and therefore they start.

So there are bunch of these things. And I think people should think much more deeply because digital GTM strategies have gone to the next level and are very core part of success.

In our portfolio we have company called Country Delight. And it’s a milk company on the face of it, mass premium. But they have done a great GTM strategy. So first of all they have replaced the milkman. Not replace, either they partner – but it’s a fancier milkman. And it’s ultimately a basket of fresh goods starting with milk. They are GTM first. They use the autowallas who are free between 5 and 7 am to replace the milkman. I thought that was brilliant. Second, they gave you five days free. Again, so combination of digital and then of course they have – but the product still has to be great.

Excellent GTM cannot solve for a bad PMF. And excellent GTM or a good GTM can explode an excellent PMF or a good PMF. So they have great product. But, I think there were lot of fancy things and thoughtful things done around the GTM that helped accelerate that business.

Salonie: Interesting. Thanks Avnish.

Avnish: Thank you.

Salonie: Thank you for tuning in. And you can find the transcribed version of this podcast on You can also follow us on TwitterandLinkedIn for more updates.

Reading material:

First Round

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