Understanding Markets and Go-To-Market Strategy

- A workshop

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Subex - Zinnov

2

Understanding of the target market and effective go-to-market strategy is essential for a successful product business (1/2)

2

3

47

6 5

8

1Is the idea Is the idea scalable?scalable?

Is my team Is my team ready?ready?

Which Which technology?technology?

Who will Who will fund?fund?

Solves customer Solves customer problems?problems?

How to How to compete?compete?

Can I make $100 Can I make $100 million?million?

Which Market?Which Market?

Understanding the Target Market

3

Understanding of the target market and effective go-to-market strategy is essential for a successful product business (2/2)

Do we have a winning value proposition?

Go-To-Market

Strategy

Who will buy our product ? How do we sell ?

Do I have the right product or solution? What branding initiatives do

we need to take?

What mix of channels and partners will help me reach

and sell to the most customers at the lowest

possible cost?

1

2

34

5

4

Why do software product businesses fail ?

Does it meet the customer requirementsWrong distribution strategy ScalabilityNot able to articulate the ROIEasy to copyMarketing and BrandingHigh costStaying abreast with marketTimely deliveryTechnology decisionsQuality of the productOpen Source (Business model)No clear well thought strategyLack of focus

5

We will take you through a 6-step process to help you better understand the process involved in market understanding and in defining GTM1 strategy

Identify/validate market opportunity

1

Framework

Understand customer insights/segmentatio

n

2

Define business model and pricing models

3

Define messaging and branding strategy

4

Identify partnerships5

Define disciplined sales process

6

Monitor competitive landscape

Hire great people

Note:1Go-To-Market

6

What are the parameters we need to consider while assessing the opportunityHow big is the marketHow big is the opportunity (Market size)How is the need currently metEnvironmentWhat is the entry barrierBuying power of the customerCompetitorsWho are the customers (SMB, Enterprise)Future Trends (Vertical, Historical Market growthDelivery model Cost of saleNecessity or luxuryMacro economic factorsGeographyIT penetration

7

A structured opportunity assessment process and intuition based on deep domain expertise will help identify the market opportunities

Market Potential

Current market size 15%

Addressable Market Size 45%

Profitability 40%

Software Adoption

Total Cost of Ownership

Awareness

Ease of Availability

Physical Infrastructure

Entry Barriers

Cost of Sale

Pricing Pressure

High Level of Localization

Distribution Complexity

Market Dynamics

VC Investment Trends

IPO Trends

M&A Trends

CIO Investment Trends

Strategy

Start Local, Go Emerging

Start Local, Go Global

Go Global

Customer Segments 15 per cent

Enterprise

SMB

Consumer

Illustrative

Market Disruptions 25 per cent

Technology Innovations

Business Model Innovations

Revenue Model Innovations

1

8

Considering we have good understanding of the market and opportunities what should we do next ?Build a good teamFunctional business modelExecute on business modelBuild competencyBest reference FinancingPrototypeConstant learning (Fuzzy)Convince the team

9

Evaluate your team’s capability and expertise to solve a customer problem in interesting opportunity areas

Domain expertise/ Skill set capabilities

Ability to attract talent

Founding team composition

Sales and marketing capability

MentorsExisting industry

contacts

Team Capability

1

2

3

6

5

4

Illustrative

1

Current Capabilities

Future Capabilities

10

What is the next logical step ?

11

Plot the ideas based on market opportunity and your ability to execute to select the right opportunity

Opportunity

Domain expertise/ Skill set

capabilities

MentorsFounding team

compositionAbility to

attract talent

Sales and marketing capability

Existing industry contacts

Opportunity Area 1

Opportunity Area 2

Opportunity Area 3

Opportunity Area 4

Opportunity Area 5

LowHigh

Ability

Illustrative

1

12

How do we identify the niche/sweet spot ? How do we identify the unmet need of the customer ?Product managementMeeting with customersListening to customersStructured meetingsParticipating in industry forums (Subex E.g. Fraud Forum)Consulting partnersFocussed group discussion

13

It is critical to understand the key customer pain points to build solutions that can effectively solve the customer issues

In-depth qualitative interviews

Focused Group Discussions

Ethnography

• Validation of hypothesis and identification of potential customers

• Validation of hypothesis and identification of potential customers

• To understand the pain points and views of customers

• Understand the unsolved problem

• Gaps in existing solutions

• To understand the pain points and views of customers

• Understand the unsolved problem

• Gaps in existing solutions

• Customer observations• What extra a customer is

looking for from their existing solutions

• Feature usage• Ease of using the

automation solution

• Customer observations• What extra a customer is

looking for from their existing solutions

• Feature usage• Ease of using the

automation solution

Understanding Customer Pain Points

2

14

Customer value chain

Source: Zinnov Analysis

Customer Concerns

Criticality

Current Practice

Current Software Product Offerings

Solution Delivery

LowHigh

Criticality

2

15

Understanding Markets

ERP Product

SMB Local

Competitors

16

Coffee Break

17

Go To Market Strategy

GTM

Marketing Strategy

Channel Strategy

Partnerships

Sales Strategy

18

Product messaging should be structured so that individual customer segments are able to identify with the product

Messaging

• Quick 90 - 120 second

pitch of about the

company and product

• Pitch should answer

– What Product

– Typical customers

– Revenue model

– Board/Advisory team

– Competition and

competitive advantage

Elevator Pitch

A B C

• Ability to narrate a

seamless story, clearly

articulating the need,

product offerings, USP

and value proposition

• Market insights and facts

• Need for the customer to

solve the problem

• Benefits of solving the

problem

• How the product solves

the problem

• Demo/Prototype/screen

shots of the product

Pitch Without Presentation

Structured Pitch With Presentation

4

19

We are now clear about what message needs to be communicated to target customers ? What next ?

20

Branding to the targeted customer with limited budget is one of the biggest constraints faced by the start up companies

Customer Profiling

Identify Models to Reach Customer

Map the Channels to the Customer

Segment

PR Strategy

Branding Strategy

4

21

Customer Profile Vs. Target Modes

Online Email Marketing Cold Calls Conferences

CIO

Business Heads

22

What kind of partnerships will help us brand and sell our product ?

23

Key partnerships will help reduce the sales and marketing cost and increase the reach to the target customer base across the globe

Go To Market

• Create initial ‘hype’ leading to visibility and branding of product and management team in the market place

• Channel Partners have deep understanding of sales processes which can be leveraged to gain customer access

• Partners have in-depth knowledge, domain expertise and best practices which will help overcome implementation challenges

• Increase competitiveness of the product in global markets

• Assess market opportunity and formulate pricing strategies

• Analyze competitive landscape and help devise market entry strategies

Public Relation Networks

1

Channel Partnerships

2

Implementation Partnerships

3

• Provide access to latest technology platforms and decisions

• Provides access to channel and customer base

4Platform Partnerships

5Business Consulting

Firms

5

24

Relationships with IT services providers can help in expanding the global reach of Indian products

Note: E = Estimated

Source: Zinnov Analysis

9.5-12.0

3-4

0

5

10

15

India Based SoftwareProduct Business

(FY2015E)

SI Market from IndiaBased Software

Product Business(FY2015E)

Potential System Integration Market Generated by Indian Software Product

Businesses

US

D b

illio

n

Opportunity for Partnership

Provide access to global markets and customers

In-depth knowledge, domain expertise and best practices which will help overcome implementation challenges

Increase competitiveness of the product in global markets

IT services providers can enter emerging markets with low cost solutions

Service providers can also expand their portfolio of products/service offering

Provide support and other value added services to existing client base

India Product Businesses Large IT services companies

i-flex, Nucleus Software and Polaris partnering with IBM for implementation of their core

banking solutions

Facilitating Ecosystem Support 4

25

Large companies have created investment funds and programs to actively nurture new product ideas

Ma

rke

t D

ev

elo

pm

en

t F

un

ds

Google

Cisco

Intel

Motorola

Technology start-ups in the areas of Internet and mobile services 

Semiconductor, wireless & broadband technologies, security, IP telephony, storage and optical networking

Intel Capital is a fund created to boost Technology Innovation In India. Wireless connectivity, digital media content and consumer Internet. 

Technology start-ups in the areas of mobile services, wireless and broadband, gaming and internet. 

Program Description

Sun Microsystems

• The Sun Startup Essentials (SSE) program is designed specifically to help startups get off the ground rapidly and at lower cost

• Recently SSE conducted program to help entrepreneurs collaborate and learn. The program was conducted in association with TiE

Microsoft

• Microsoft Startup Accelerator Program selects start-ups through its Innovation Center.

• Aim of the program is to mentor and help entrepreneurs across the product business value chain

• Microsoft also helps entrepreneurs to gain access to their distribution channel

Source: Sun startup essentials (India) - http://in.sun.com/emrkt/startupessentials/index.jsp; Zinnov Analysis

Case Example, Non-Exhaustive

26

How do we structure internal sales process ?

27

Sales process

1Target

identification

2Lead

Generation

3Prospecting

4

Proposal

5Engage

6Contract

negotiation

7Product

Deployment

6

28

Target owners (Internal champions) should be clearly defined so each one is aware of the responsibilities

Roles Target identification

Lead generation

Prospecting Proposal Engage Contract negotiation

Product Deployment

Domestic Market

Owner

Support

US East coast

Owner

Support

US West Coast

Owner

Support

Europe

Owner

Support

29

Target identification is a key process as better screening at this stage will reduce the effort of the entire sales process

1Targetidentification

2Lead generation

3Prospecting

4Proposal

5Engage

6Contract negotiation

7Product

Deployment

Mgmt 1

Emp 2

Emp 1Mgmt 2 Hoovers Salesforce

Ownership

Key metrics

Description

• The target companies should be identified by each of the target owners. In this case Emp 1 will help in creating the list and updating it in Salesforce.com for Mgmt 1 and Mgmt 2

• Hoovers, Google etc. could be used to get the company lists.

• Salesforce.com should be updated with all relevant information such as Company name, revenue, relevant contacts, their email ids, description, industry type, location etc

• High level research should be conducted regularly to find out about the broad problem areas of these companies

• Time taken between target identification to information capture in Sales force

• # of companies whose research information is uploaded into Sales force

Steps

Target identification

Search in Hoovers

Update in Sales force

30

Lead generation will require a lot of professionalism, attention to detail and understanding customer need

Ownership

Key metrics

Description

• The target companies needs to be researched

• A package containing the cold email, letter, study material that needs to be sent to the company should be created

• The package will be then printed and delivered to the target companies

• Email and Phone follow up will continue until we get a Yes or a No from the prospecting companies. The follow up for key accounts should be done frequently • Time taken to create a package

• Number of package delivered per week• Time taken per package delivery

Steps

Research companies

Create the package

Deliver the package

Follow up

1Targetidentification

2Lead generation

3Prospecting

4Proposal

5Engage

6Contract negotiation

7

Research the companies

Create the marketing collaterals

Deliver the package

Follow up

Product Deployment

31

Lead generation will require a lot of professionalism, attention to detail and understanding customer need

Ownership

Key metrics

Description

• The face to face meeting should be setup once the client shows interest in the product.

• Ensure that the F2F meeting is attended by the prospect stakeholders who key decision makers to buy the product.

• If possible, the prospect pain points should be identified via a short phone call with the prospect

• A confident and forceful sales pitch should be carefully planned and well rehearsed. Sell to the prospect with confidence. Assume that the prospect will buy the product

• Ensure that the meeting always ends with a discussion on relevant proposal and agree to send a proposal to the prospect

• Time taken to develop the presentation• Time taken to prepare for each presentation• # of follow ups

Steps

Setup F2F

Develop Presentation

Sell to prospect

Follow up

1Targetidentification

2Lead generation

3Prospecting

4Proposal

5Engage

6Contract negotiation

7

Setup F2F meeting

Develop presentation

Sell to prospect

Follow up

Product Deployment

32

Proposal…

Ownership

Key metrics

Description

• The member who was responsible for prospecting will explain the proposal requirement with the team

• The proposal should clearly address the following: – Customer’s pain points and the impact to the business– Value proposition of the product

• Always try and present the proposal to the customer instead of emailing them.

Steps

Internal brainstorming

Develop Proposal

Pricing and timeline

Proposal Delivery

1Targetidentification

2Lead generation

3Prospecting

4Proposal

5Engage

6Contract negotiation

7

Internal brainstorming

Proposal development

Pricing Delivery

Product Deployment

33

Engage…

Ownership

Key metrics

Description

• Engage with the customer by inviting them to dinner or other relevant events

• Send the customer any relevant industry information in the form of articles, whitepapers or any customer study

• Follow up with the prospect over phone calls

• Set up reference meetings to talk to existing customers who would talk highly about the product

• Number of touch points within the potential customer organization

1Targetidentification

2Lead generation

3Prospecting

4Proposal

5Engage

6Contract negotiation

7

Social meetings

New Information

Phone calls Reference calls

Product Deployment

34

Contract negotiation…

Ownership

Key metrics

Description

• The contract should be a detailed contract and address a number of clauses

• Pricing explanation

• Flexibility of pricing should be decided and provided as discount/steep discounts are not advisable

• Have the contract validated by a Legal personnel

1Targetidentification

2Lead generation

3Prospecting

4Proposal

5Engage

6Contract negotiation

7Product

Deployment

35

Product Deployment…

Ownership

Key metrics

Description

• The project will be transition by the sales team to the delivery team.

• Continuously engage customer to understand new product requirements and develop relationship

• Ensure that you are able to engage multiple stakeholders with in the client organization during and after the project Engage

• Continuously ask for references from the customers

• # of “Engage” meeting with customers.

1Targetidentification

2Lead generation

3Prospecting

4Proposal

5Engage

6Contract negotiation

7

Travel to customer site

Product Deployment

Engage customer

Product Deployment

36

Thank You !

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