This runs in parallel to the preceding phase: nail the solution; nailing the solution and nailing the go-to-market strategy are done at the same time. In fact, this chapter is organized around the three key tests we discussed in the prior chapter (virtual prototype test, prototype test, and solution test).
Key points are:
- understanding the cusomter buying process
- discovering the mraket communication and distribution infrastructure
- pilot customer development
During the Virtual Prototype Test: Customer Buying Process and Sales Model Discovery
The customer buying process is the map of your customers' activities from the moment they find out about your product through the purchase and use to the ultimate disposal of your product.
The customer-buying process is defined by the job your customer is trying to get done and all the relevant activities that surround that job.
This is a typical break-down of the customer buying process (or consumption chain):
- Customer awareness
- Customer evaluation
- Customer purchasing
- Customer use
A simple way to start would be to ask your customers questions about each of these steps, such as how they solve the problem currently, how they decide which solution to purchase, and so forth. Simply take a stage and phrase a question around it.
For example, you might ask questions such as "How do you find out about new products?" If your customers respond that they read magazines, you'll want to drill deeper. "Which magazines?" "What part of the magazine do you find most informative?"
Last, as you do this exploratory work, you may want to take note of how the buying process may differ when customers are buying from a a big company versus from a startup. Also, begin to explore price points.
Discover a Sales Model Based on the Buying Process
The customer-buying process is defined by the job your customer is trying to get done and all the relevant activities that surround that job.
During the Prototype Test: Market Infrastructure Discovery
Map and understand the market communication and distribution infrastructure. Map flow of information from your company to your customer.
You should be very selective in picking the most targeted and relevant channels to your customer and then focusing all your resources to go big or go home. Keep your efforts focused and consistent. Measure the results. Targeted repetition increases your customers' comfort with your company and solution.
The Value Chain Wrapped Inside the Market Infrastructure
The value chain helps describe the distribution infrastructure of the industry, and while it may differ in some respects from the communication infrastructure, the two structures often overlap significantly. Be sure not to miss distributors - they may have unique requirements of which you need to be aware.
Whereas in the rest of the NISI process we generally focus on talking to customers (and being wary of non-customers), as you explore the market infrastructure, it may be helpful to think broadly in terms of who you talk to. Because the market infrastructure is bigger than your customers alone, conversations with others in the infrastructure may be helpful as long as you structure the conversation such that you son't damage the chance to make a good impression in the future.
When trying to discover the market infrastructure, talk to everyone!
Define a Market Infrastructure Strategy for your Startup
Your strategy, and the resulting tactical plan, should include both the activities you will undertake and the order in which you will tackle the stakeholders.
The Market Infrastructure Will Be Different for Startups Versus Established Firms
How your startup tackles the market infrastructure may be very different from how another company, particularly a big company, does so.
Plant Seeds for Early Customers and Pilot Deals
Your goals has been to learn, not sell, because when entrepreneurs go into selling mode, it becomes hard to listen deeply to customers. The only valid market survey is a signed purchase order. A signed purchase order was worth whole lot more than any ten market surveys you could name.
During the Solution Test: Pilot-Customer Development
As you prepare for the final test of your solution, on the marketing side you should be closing pilot-customer relationships to refine both your solution and go-to-market strategy in partnership with your lead customers. The objective at this stage is to validate your go-to-market strategy assumptions by closing paid (or other relevant proxy of commitment) pilot-customer relationships and then using these relationships to finish the solution with your customers.
During the third test, you should close and launch pilot-customer relationships, preferably paid pilot-customer relationships. Refine your go-to-market strategy. Get deep into your customers' workflow and optimize the solution to meet their pains. Get a deeper understanding of their buying process and how they interact with and gather information from the market infrastructure. Most important, pilot customers can become reference customers.
Reference customers don't just happen; they are chosen and nurtureed. To begin the process, you should actually select reference customers who would be good partners and strong references. It is crucial that your reference customers be credible, committed, and good to work with.
You do absolutely everything you can to make those reference customers happy.
At this point, you should understand what you customers are willing to pay, or at least a range of what they might be willing to pay. You should also answer the crucial breakthrough questions that are relevant to your business. For example, will customers replace their existing database with your database? will they sign up for an account today? Will they pay for the account? The ultimate measure of nailing the solution and go-to-market strategy is whether customers will pay you.
*All taken straight from Nail it Then Scale it, by Nathan Furr and Paul Ahlstrom.
Discover a Sales Model Based on the Buying Process
The customer-buying process is defined by the job your customer is trying to get done and all the relevant activities that surround that job.
During the Prototype Test: Market Infrastructure Discovery
Map and understand the market communication and distribution infrastructure. Map flow of information from your company to your customer.
- Company
- Partners
- Influencers
- Advertising / Marketing / Social Media
- Target Customer
You should be very selective in picking the most targeted and relevant channels to your customer and then focusing all your resources to go big or go home. Keep your efforts focused and consistent. Measure the results. Targeted repetition increases your customers' comfort with your company and solution.
The Value Chain Wrapped Inside the Market Infrastructure
The value chain helps describe the distribution infrastructure of the industry, and while it may differ in some respects from the communication infrastructure, the two structures often overlap significantly. Be sure not to miss distributors - they may have unique requirements of which you need to be aware.
Whereas in the rest of the NISI process we generally focus on talking to customers (and being wary of non-customers), as you explore the market infrastructure, it may be helpful to think broadly in terms of who you talk to. Because the market infrastructure is bigger than your customers alone, conversations with others in the infrastructure may be helpful as long as you structure the conversation such that you son't damage the chance to make a good impression in the future.
When trying to discover the market infrastructure, talk to everyone!
Define a Market Infrastructure Strategy for your Startup
Your strategy, and the resulting tactical plan, should include both the activities you will undertake and the order in which you will tackle the stakeholders.
- Map the key categories of the market infrastructure
- Identify the top three partnerships in each category
- Understand the motivations and needs of each player
- Create measurable and time-bound objectives for each potential partner and a strategy to leverage the infrastructure based on your interactions with customers
- Assign an owner to each partner
The Market Infrastructure Will Be Different for Startups Versus Established Firms
How your startup tackles the market infrastructure may be very different from how another company, particularly a big company, does so.
Plant Seeds for Early Customers and Pilot Deals
Your goals has been to learn, not sell, because when entrepreneurs go into selling mode, it becomes hard to listen deeply to customers. The only valid market survey is a signed purchase order. A signed purchase order was worth whole lot more than any ten market surveys you could name.
During the Solution Test: Pilot-Customer Development
As you prepare for the final test of your solution, on the marketing side you should be closing pilot-customer relationships to refine both your solution and go-to-market strategy in partnership with your lead customers. The objective at this stage is to validate your go-to-market strategy assumptions by closing paid (or other relevant proxy of commitment) pilot-customer relationships and then using these relationships to finish the solution with your customers.
During the third test, you should close and launch pilot-customer relationships, preferably paid pilot-customer relationships. Refine your go-to-market strategy. Get deep into your customers' workflow and optimize the solution to meet their pains. Get a deeper understanding of their buying process and how they interact with and gather information from the market infrastructure. Most important, pilot customers can become reference customers.
Reference customers don't just happen; they are chosen and nurtureed. To begin the process, you should actually select reference customers who would be good partners and strong references. It is crucial that your reference customers be credible, committed, and good to work with.
You do absolutely everything you can to make those reference customers happy.
At this point, you should understand what you customers are willing to pay, or at least a range of what they might be willing to pay. You should also answer the crucial breakthrough questions that are relevant to your business. For example, will customers replace their existing database with your database? will they sign up for an account today? Will they pay for the account? The ultimate measure of nailing the solution and go-to-market strategy is whether customers will pay you.
*All taken straight from Nail it Then Scale it, by Nathan Furr and Paul Ahlstrom.
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