1.5.1 PRODUCT/MARKET FIT AND THE IMPACT OF SALES HACKING
One of the most recent trends is the use of “growth hacking”. Growth hacking is a process of rapid…
Figure 7 Early stages of growth
Stage 1 Find Product Market Fit and test out Go To Market plans
This is the moment that a mature product is in a market with plenty of growth potential. This is one of the hardest to do in a market where innovative solutions are launching constantly and markets are never constant. However, founders are often passionate and well equipped in dealing with this situation.
Stage 2 Identify the Launch Window
One of the most common mistakes following product/market fit is when the fit is achieved and the company waits too long to scale to meet the market potential and misses the launch window. You often recognize these companies as #4, #5 of the list of alternatives with only a sliver of market share. Due to the increasing pace of innovation the launch window is shrinking from 18-36 months to 9-18 months.
Stage 3 Execute a proven GTM plan
The third and final hurdle to hit rapid growth is to execute the right Go To Market plan, often attributed to growing sales. It is the least understood topic, due to lack of education. Success of Executing the GTM is not measured in growth rate [%] or revenue [ARR] but rather against the growth potential.
Experimentation across marketing/sales channels, to identify Product/Market Fit, is the most effective and efficient way to grow a business. The challenge is that these organizations are primarily looking at the result, not using metrics to measure effectiveness and efficiency needed to scale the business. This growth of monthly recurring revenue (MRR) or annual recurring revenue (ARR) help in the short term, but do not provide insights on how to actually… This results in a simple plan to get to $10M. Do 10 x the plan that got us to $1M.
Keys to growth you have to identify during Product/Market Fit
- WHAT is the value proposition that prioritizes the solution offered
- WHO is the audience that has a real problem and is willing to take action
- HOW to get to the audience with the real problem in an efficient and effective way
Figure 8 Impact of sales hacking visualized
Due to the lack of measuring effectiveness and efficiency, the failures are also amplified by 10x. This means there is no real growth which results in a lower valuation of the company, and the firing of the sales leadership. The replacement sales leader lacks the context of the growth hacking results and blames this on poor sales execution of the sales people. The sales leader starts hiring new people… and with it the downward spiral continues.