gtmPRO

The CEO goes "Let's go up market"

December 08, 2023 Gary & Andy Season 1 Episode 2
gtmPRO
The CEO goes "Let's go up market"
Show Notes Transcript Chapter Markers

References:
Sam Jacobs Post
The Complete Guide to Moving Up-Market in SaaS
How to Use Positioning in Sales Qualification and Discovery

Ready to demystify the process of moving up market? We are here to challenge your preconceived notions and guide you through the complexities of this pivotal shift. We'll be debunking the myth that it's solely a go-to-market team's task and exploring how this strategic move affects every function within the organization - from product development to onboarding. Expect a candid conversation as we express our frustrations over the oversimplification of this process and the unrealistic expectations of instant revenue escalation.

Taking a deep dive into the murky waters of moving up market, we'll shed light on the potential roadblocks that can stifle a Lower Middle Market company's growth. Is it fair to assume that larger companies should pay more automatically? We challenge this notion as we stress the need to demonstrate value swiftly to bigger organizations. We'll also examine the crucial elements of moving up market, such as product positioning, pricing, packaging, and strategic market entry, underlining the need for these components to harmonize for a successful market transition.

In the final leg of our journey up market, we switch our focus to the pivotal role of the CEO in driving revenue growth. Join us as we caution against the perils of hastening this market transition without fully understanding its complexities. We underscore the importance of a clear strategic plan, gauging the company's current market status against its aspirations, and the concept of three horizon thinking. We wrap up with some practical strategies on selling up market, emphasizing the need to comprehend the economic buyer and crafting targeted messaging. Buckle up, it's time to aim higher!

Gary:

Welcome to the GTM Pro Podcast, your essential audio resource for mastering go-to-market discussions in the boardroom. Here we share insights for revenue leaders at B2B Software and Services companies, especially those with less than 50 million in revenue. Why? Because the challenges faced by companies of this size are unique. They are too big to be small and too small to be big. This dynamic pushes revenue leaders into executive leadership without a lot of help or support. We are here to provide that support. Your journey to boardroom excellence starts now. Hey, I think I have a good way to kick us off, Andy, because, like all things in most of what we work, the underpants gnomes apply here For those that are uninitiated. Can you provide a short synopsis of the underpants gnomes, their business brilliance, preferably without the cussing at the end?

Andy:

As a lifelong at least half my life fan of the TV show South Park, one particular episode that stands out as pertinent to business is the underpants gnomes. These are little gnomes that live underground that come out at night and steal, in this case, the boys from South Park's underpants For unknown reasons. Initially in the episode, and as the episode progresses, they catch them doing it. One of the boys catches the underpants gnomes stealing his underpants. He proceeds to find out more about them, follows them down to the underground cavern and underpants gnomes have a big business. Going on down there. They have a huge pile of underpants and basically saying that they're really good at business.

Andy:

Once, when inquired upon that, they put up a little board of their three-step process for business. Phase one is collect underpants. Phase two is a question mark. Phase three profit and they're like get it, everybody's like. So the reason that's relevant, obviously, is that happens in real business. Sometimes there are question marks all over the place. And John Shadeed I must give him full credit here because we've talked about the underpants gnomes, but John Shadeed actually hangs out with friends, yeah.

Gary:

John, give your story. I love this Talk about practical application.

John:

You know it's fun when you're working in go-to-market. It's sometimes hard to describe the things you work on because it is across the board. You know sales, marketing, data, analytics, process, architecture, strategy, the whole thing. But when people ask what I do for work, instead of going into the big spiel of the things that I could work on on any given day, I'll just refer to the underpants, gnomes, and it is quite simply yield group, or what I work on is the question mark. We have companies come to us with the underpants. They say there's profit on the other end, but they don't know how to do it and we try to help them understand that question mark and where to go from there.

Gary:

So we need to just update that on our homepage, just have that board up there and we just have an arrow to the question mark. We are here, so we definitely have to post that in the show notes because people that haven't seen the episode will. We give full props to South Park and their brilliance of business acumen in the underpants gnomes.

Tiana:

Yeah, we could steal it, we would and put it up there Like this is us.

Gary:

I'm sure there's a few royalties involved there. Anyway, all right, Tiana, kick us off.

Tiana:

Okay, so hello everyone and welcome to the GTM Pro podcast. My name is Tiana, I'm a B2B marketer and I'm here with Andy, gary and John from Yield Group, as we just established the question mark of a tea consulting firm that gets to experience these GTM intricacies first hand every day. So today we will be talking about the moment when the CEO goes let's go up market. And the one that brought it up was Andy and I just wanted to ask Andy well, what triggered you into talking about it? What do you think is important about it and why? What do you think this happens and this becomes an issue to companies this size?

Andy:

Well, it's very real. I mean, we've now seen it a couple times, you know, not necessarily happening like we're going to just do this and this is everything the company is going to do. And actually that's kind of the problem, right. It's kind of brought up in passing Like we're just going to target bigger companies and there is very much oftentimes a lack of appreciation for how much goes into that. And so when we're talking about 2024 planning and the topic a potential topic of let's go up market came up, we realized those two things really matter to go together because if indeed somebody says a CEO, let's say let's go up market and it's not thought through, first of all, you're not, you're not going to touch revenue in 2024. There's like very little chance.

Andy:

Harry just found a great post from Sam Jacobs, the founder of Pavilion, who basically speaks to this very thing, which is, if you're scrambling around looking for 10 salespeople and a sales leader and so on to affect your 2024 plan, not specifically around let's go up market, but great use case, you're crazy, you're actually, if you take a step back and think about that, you have very little chance of actually impacting any revenue for the following year doing something that drastic and I would say going up market is the equivalent. So there is so much that goes into going up market. It's not just a go to market team and in fact I get upset when I hear that which is, hey, let's go up market GTM team or just marketing person figure out how we're gonna do that, how we're gonna target bigger companies and how we're gonna affect revenue in the next year, when in fact it's a often years long process to just figure out how to go up market because it affects the product, it affects support and onboarding and all kinds of functions within the company outside of just the go to market team. So I do I get upset about it.

Andy:

Like, just like you know you wanna shake people sometimes and say, like you can't just snap your finger, there's no easy button for that, there's no easy button, yep. So that, yeah, that really the 2024 planning really prompted it to say we should probably, you know, hopefully we can help some people nip this in the bud, which is like if your CEO has this in their mind that we're gonna go up market and we're gonna affect 2024 revenue, let's help those individuals affected by that would be decision to try to help them push back on just the notion. Not just to push back, but just to say like, here are all the implications and if we're not all on board, we're not gonna be able to make this happen. And oh, by the way, if we did everything right, we're probably not gonna affect 2024.

Gary:

Yeah, I think the posts that Sam posted. That's redundant. So the specific example he provided was a company that's doing $4 million in ARR and the CEO was convinced that they needed to be at $10 million the next year. So in some ways it's an indictment on the whole hyper scale thing. And you know, the VC model is shoot for the moon, right, and if you don't hit the moon then we'll throw you out and go on to the next one. So that's part of it. And what's interesting is it? Sometimes it is a lot of these posts obviously are empathetic with their revenue leaders, who are on the receiving end of this, whether it's the CEO or the board or whatever.

Gary:

Going up market isn't the issue necessarily. In fact, it may be the absolute right thing to do for the growth trajectory of the business. And I think, andy, you hit the nail on the head, which is the CEO and even the board have hired revenue leaders to help them think through that and in the absence of a framework on how to do that, that's how you end up with things like well, let's just hire 10 sellers and give them a million dollar quota and we'll be there by the end of the year without thinking through the pieces. So you know, I think it's incumbent. And the other side of this is, again, we are specifically focused on companies that aren't on the hyper scale playbook. Right, they are five, 10, $20 million in revenue. They built a successful, by all means a successful company, but in order to get to the next chapter, whatever that may be the next 10 million, the next 20 million, whatever there they need to think differently about. Go to market.

Gary:

Many times is we need to move up market and but how you do that, especially for companies that don't have the luxury of putting money against it to just try to plow through a brick wall in a short period of time. We don't have the luxury of hiring 10 people, seeing that it doesn't work and then firing them, because not only have we lost the money, what we've lost the time, which is even more of an issue than the money itself, I would argue. So that's, I think, the probably the most important thing we can do is say, okay, well, if you were a marketing or sales or CS or product leader, even and that was the design how would you actually break it down? What actually is required to do that?

Andy:

So, Well, you bring up time and times, the perfect segue to that, right? Because not only is it time to figure this all out as a company, not only the go to market motion, right, this is about your product. This is about how you sell into a business like that. It's a totally different animal. So it takes time just to figure that out. And the time aspect, of course, is your sales cycle is almost guaranteed to get longer, right?

Gary:

Just because it's a bigger company, and I think that's the really good point here is that the reality is your current motion can't stop and in many ways you need to be even more efficient so that you can allocate some resources to exploring this new motion. And the other challenge is that the exploration of that motion has to happen on so many different planes simultaneously. Right First is product. We have to actually understand can we actually deliver on what these buyers need? And the other thing that we see a lot of times related to that is pricing and packaging. And it's so interesting to me how Pricing and packaging is often divorced from both, more tied to go to market than it is from product. And to me it's almost like this it's the Trinity it's product, pricing and packaging and go to market, and you cannot separate the three.

Gary:

And that element of how we're actually going to go attack the enterprise market is really important. So let me give an example. Right, the traditional thought back to Sam's post about moving up market, hiring enterprise sales reps. We're going to go walk into enterprise and we're basically going to sell what was otherwise a $10,000 product for $100,000 or $500,000, just because the companies are bigger and they should be paying more, their problems are bigger. Well, that's obviously. That's a classic underpants noobs. There's the question mark in the middle, like we have a product and we have big customers on either side, so let's just go from A to B, but it's it's without using another topic for discussion will be product led.

Gary:

But if you were going to reverse engineer how to really move up market and you were building your company from scratch today, I don't think you would start your company with.

Gary:

We're going to sell a really expensive piece of software with two year sales cycles that has you know, $200 plus $1000 ARR, even multi-year contract, because the amount of capital it would take you to even get to prove you don't have the feedback loop fast enough for that. So how would you atomize the product to make it effective? The classic example is the slack and the others. But I think in a lot of ways those models actually pollute the thinking around. And this goes where product strategy meets, pricing and packaging meets go to market. Which is how could we begin to deploy pieces inside the organization that are easy to adopt, easy to get the time to value and start to plug together so that we can create more of an enterprise approach? It's that changes go to market completely from that approach versus we have a software, we're going to go through proof of concept, we're going to go through procurement, we're going to, you know, because it's a $300,000 product.

Andy:

Will you bring up another fallacy In addition to bigger companies should pay you more is to some extent. Well, if it's. If I'm working with smaller startups and you hear this a lot I'm like my constituents. My customers are smaller, so product led fits that better, and then as I go up market it can become saleslet. I actually think that could be inverted to your point. If you're going to get into larger companies and do it in a reasonable timeframe, you have to be good at things at least that resemble product led. You have to show them value. Because it's a large organization, the pain may exhibit itself in different ways across the organization. There's obviously more people involved, more levels of people and so on. So to be able to penetrate that, it's the land and expand thing to. You know to use a colloquialism, but you need to show value relatively quickly to people that don't need to let go through all layers of bureaucracy to get approval to use something Right.

Gary:

That's very difficult, yeah, having said that, there definitely are areas where that's harder to do than others. What comes to mind is an ERP solution If you're a mid-sized business or small-sized business, and that's where you've been able to have success. That's not an insignificant decision for an organization. So they're not just going to take a hey, let's just rip out our accounting, literally the nervous system of our company, and give this one a try because it's $9.99 or whatever.

Andy:

That's not going to happen, you're bringing up the other piece, which is as you go out, market inertia is going to be bigger. Especially in a situation like that, which is like it is an organization or company-wide decision, because it has to be by the nature of the product, inertia grows Right. It goes one to one on that.

Gary:

And I think that's probably the biggest difference between the kinds of companies that we serve, which typically have been in business for no less than five and in many cases 10 or more years and have had a very either bootstrapped or sipped capital along the way.

Gary:

Or, frankly, we're VC backed at one time and just fell off the growth trajectory, but they've got a customer base now that the problem that they solve is. There are lots of ways to solve that problem, and so, as you go out, market companies are already solving that problem. Your solution may be a more efficient way to do it, but you're not a new way to do things, like many startups can be. Where there is white space to move into, where you're not displacing necessarily something else, but you're actually additive to a process. And so to your point, andy. The inertia factor is not only are you trying to convince them that your solution is better in the sea of alternatives that they have available to them, but they also have this very real and expensive challenge of replacing the existing solution, and the more pervasive it is in the enterprise, the harder it is to do that.

Andy:

So you have to be that much better. The incremental pain to the existing solution has to be so much better to overcome that incredible inertia that you just described. So that's significant. Then, just to go to the GTM side, you're basically, as a CEO, throwing it across the fence to your marketing folks and saying solve all of that.

Gary:

Well, what we typically see, interestingly enough, is that which still floors me is that it doesn't actually go to marketing. It goes to sales. It becomes a sales problem. We need enterprise sellers, we need to provide them that, and to me that is absolutely the cart before the horse. We haven't even established that we know these customers, or how they think or what they buy, or what the process is, and that's where this triumvirate of so I think, bringing it down to okay, great, we talk about all the reasons why it's hard, but it's likely still necessary for an organization to move up market in order to do what it needs to do. So how do you do that? And the so, if we think of product positioning, pricing and packaging, then there's the sales motion, cs motion, all of those components, but really it's around the you know product. If you think again, the Trinity product, pricing and packaging, go-to-market, and in go-to-market are the motions of marketing, sales and CS in a large part, and the challenge is getting those three pieces to move down the board together, because those organizations are already lean. They're already trying to hit numbers with what they're already doing.

Gary:

We've established that moving up market is going to take time. You can't stop what you're already doing and devote all your resources to that. So at some point, the CEO's job as an allocator of resources is to determine this is a growth trajectory in which we need to invest, and this is how I'm going to move that forward. It's not just hiring salespeople, it's the, because I think this is one of those things that happens. You don't just wake up overnight and we did it. We're enterprise.

Gary:

Well done, it's frankly, and for the, the companies that we serve, you probably already have enterprise customers, very big companies, who are using your solution in some way, and because you had your classic good, better, best pricing, you're realizing that this company is getting enormous value from your product and they're only paying you $15,000 a year. And they other solutions. They're paying $150,000 a year, but we haven't thought about how we price and package that in order to create that land and expand motion. And so that's that, you know, really thinking through the moving the pieces down the road. So, starting with in your own backyard, with your existing customers exploring that, and how do you get started?

Tiana:

So a couple things there. Where does it even begin, like, when does the CEO actually goes? Let's go up market, like what triggers that situation? And how should the rest of the company take it as the? Because we have a status that it's well you like to say a lot of systems, thinking right, it's an integrated system that well affects every part and every department within the company. So how should every department of the company just move across it, how should they power through this situation? Because we also have said that it eventually has to happen. But when should it happen and when should it not? And what triggers the whole situation is my question.

Andy:

Well, a couple triggers right off the bat are our ACVs low and our retention is low, or, you know, churn rates high? You see those things and you say, well, out of this piece we have 5% of our base, that's above this certain ACV they retain. Really well, let's just do all that Right. So you see those piece or you read an article, a lot of ways to get those ideas. But oftentimes we're in the metrics, that's what you see, and so naturally you're like, well, let's just do all of that.

Gary:

Yeah, that reveals it's easier said than done. Right that another underpants, right. It's like oh look, these customers that are paying this this much retain better. You know, obviously have a higher ACV and look at if our whole portfolio looked like that, then we can do that. Let's go after that. And that's typically the trigger, and it's both from the board level and the CEO.

Andy:

But there's a, you know, just to go to the problem with that right, it seems that because you already have maybe a few customers that resemble that or directionally do it seems like, well, we're already doing it. So the ease at which you can pursue that seems less, you know, it seems easier to do than it really is right. And remember this is the hazard with well, we'll carve out resources to do this and still do what we're doing. Well is when you do something, you're not doing something else. It's just a lot of physics if you will, right.

Andy:

So yeah, if you carve out those resources, you know who's to say you've exhausted all your current opportunities. I mean, unless you're at some, you know, and a lot of schools have thought on the magic threshold for market penetration. But where you're at, you've probably not, especially in the lower middle market you've probably not exhausted all your opportunities. If you're doing that well and that's a relative gauge, right, because you turn and you say, well, I have higher ACVs here, I have better retention here, but I'm still doing this well, I'm very capital efficient at getting these customers and when you go upmarket, that dynamic changes a lot too, so it gets arguably a lot harder and less capital, efficient Like it's. That's a, you know, an equilibrium thing right.

Gary:

That's a great point, Andy. It's you're actually not really moving up marketing, market. Excuse me, you're adding upmarket. It's another motion that you're adding on top of your existing business, because you're not walking away from it.

Andy:

Well, hopefully, hopefully, you're not, like you know, playing roulette and taking all your chips and saying we're going doing this now and we're ignoring this other market, that's you know. Gotten us here, yeah, oh, one thing that.

Gary:

So we start, we start with. Really it starts with product. Right, you can go and try to market and sell and position all day long, but if your product fundamentally doesn't deliver the value that an organization of that size needs, then it's. You know, it's a house of cards. So One of the ways that we have approached that not again, we are by no means product experts, but we have been around quite a few product teams and developed products ourselves is really going in with this jobs to be done mentality, which is breaking down the entire chain and understanding where you sit and better understanding.

Gary:

A lot of times what we see with organizations in this phase where they want to move up market is that they've developed a good, better excuse me, good, better, best pricing strategy around usage and a handful of features.

Gary:

And that becomes very limiting when you're trying to get an organization to go from $15,000 to $100,000. It just people expect, with increased usage, diminishing marginal rates. So it's really hard to drive that purely from that perspective and you can't possibly throw in enough features. But if you start thinking about what challenges become unique, that are uniquely present for organizations of that size, and you start to build a set of, you know a package around that that starts to become a different animal and so it fundamentally starts thinking about product development from that perspective on the job, honestly. At the same time you're thinking about pricing and packaging and those two have to be formed and jointly developed which can actually be developed. As you're having success in this process's evolution of moving up market right, as you are having sales conversations, as you're developing a better positioning, you're learning as you go. But I think, andy, you put the nail, you put the point on it, which is that's not going to happen in the revenue that you want from that is not going to happen in the year that you start out.

Andy:

You just raised another great point, which is it's not the revenue you want. The revenue you want it's not about what you want, it's about what the customer wants. So, like I want to go up market, great. And so this opened up a completely new landscape of alternatives to that customer, that customer base as it pertains to your product. Like it's a totally different ballgame, right? So what you want, I want to get higher ACVs, I want great.

Andy:

But that customer's looking at it and they're like well, okay, you're just entering this world I don't even know you from Adam, from a brand. How are you like, again, you have this much higher bar to convince a larger organization that you are the right solution for them. That's great, I mean, it's great that you think that. But they have to think that it's a totally different animal. I mean you have different competitors now. Oftentimes they're bigger competitors and again you point to these three customers that are their enterprise. But I'll bet you you didn't go out and you didn't hunt them in the way that you're talking about doing that from going up market enterprise perspective. It happened somewhere else. It happened where a former customer went to a new company. It happened to be bigger. They liked you, so they brought you something like that, as opposed to just pure hunting and selling on your virtues. And again you need to put yourself in their shoes and they need to see you as the right solution for that big organization. It's just a different game.

Gary:

Yeah, that's such a great point. You've got two points the landscape of alternatives. As you move up market we established earlier, at least, with companies in the lower middle market that are a bit more mature, they are going to be in an environment where companies already have some form of a solution. Even if it's not a direct competitor, they're solving it in some way. And so, as you move up marketing, you think about those jobs. There are pieces of those jobs to be done that may very well be solved by something completely different than you even thought about before, but now you need to speak to it Like well, how does that? I've already have this tool over here, so how does this displace that? So you can't go in blind to that.

Gary:

The other is I would say it actually is a luxury which is, yes, you have customers that theoretically are already enterprise-ish customers.

Gary:

Yes, they very likely got there in a very different way, but you have them, they're in your portfolio. You have the ability to go reverse engineer and understand that, versus assuming that, oh, we had success doing that, so let's just target. Let's do the same thing we were doing, except point the cannon at a different target, like oh, it's a different tool. It's a different process, but you have the luxury of having them as customers. So talk to them, work with them, understand them, and I think that's the idea You've seen this more and more, but again, everybody says it but rarely done well is a customer advisory board, and so, as you think about it, if that's really a motion for you, then actually pulling these customers together to have them help you figure out how to do this would be invaluable. But a lot of times it's like let's create a customer advisory board and then back to the point of resource allocation. It becomes this side hustle on everybody's head, you got to talk to people.

Andy:

I mean, when we go into an engagement, what's the first thing we do? We dissect a customer base just to really try and get to the pith of what are the dynamics, what are the unit economics and so on Really important. What's the next thing? Talking to customers? Just moment of value. When did that have? How'd you get there? How'd you find this? You mentioned pointing the can and just at a bigger audience. It's great because watering holes that these customers, a bigger customer frequency is going to probably look different. The buying group is going to look totally different. The roles, the job titles, where the rubber hits the road when you're trying to generate a lead list to target, is going to look different. Just the names and the names of the jobs, just that sort of thing materially is different.

Tiana:

Also, as Yav said before, there's no average customer. I believe the pattern that I'm identifying here is that a lot of the CEOs just think okay, we did well with this specific customer that brought us this amount of revenue. Just assume that everybody else will do the exact same thing and that they look, because even when two different companies could be doing the exact same thing but at the same time, the dynamics within those two companies could be very different. The problems that they have to face could be very different. At the same time, if you're just assuming that everybody is like that and you're just painting this ideal customer in this case to be your average customer, there is no such mythical customer. You can't assume that everybody else will have the same problem, that you will solve it the same way, especially in this environment and in this industry.

Gary:

One thing I want to. This struck me as well is it's common on LinkedIn and other places, to the evil CEO or the misintended or uninformed CEO who's coming down with this. I think that it's pervasive in our space. Not because of the CEO, because the reality is the CEO of a company is the allocator of resources and the builder of teams. Andy, you've said it's like yeah, there is an aspect of vision that's responsible there, but really, at the end of the day, it's about execution and they have hired people to help them execute.

Gary:

To think that and this is the point I think where we're going with this is that if you are a revenue leader at one of these companies and the CEO comes to you and says we're going to go up market and here's the plan to do that, and you don't have the foundation to be able to not push back but say I understand why we need to do that and that makes sense. Hopefully you understand why. Hopefully you have insights on the forward progress of the organization and its North Star and what its next strategic event is. Is it a capital raise? Is it a sale? Is it a merger? You should have an idea of what that plan is, because everything falls from that.

Gary:

Then, being able to help build that I think that's why this happens so frequently is people just follow orders. They get the mandate that we need to move up market and, in the absence of contributing to whoa, whoa, whoa, time out. Well, not only that's harder than it looks, but actually saying why it's harder than it looks, what pieces need to be in place and then actually stepping into that. Doing that is not a sales function. It is not a marketing function. As we established product. It's the Trinity, it's all of these working in concert together to develop a plan. And that's typically at organizations of this size where it falls apart because we end up separating it into the functional areas of expertise, but in reality, success is in the gray area between the functions.

Andy:

It's not about a CEO being misintended on all this. It's just that we're all impatient. We all think we can. I very much think I can get, on any given day, more things done than I typically can. It continues to happen. I just think there's a bigger version of that, which is the CEO sees this and says I think this can happen. There's an underappreciation for how many moving parts there are, how many pieces go into it, and so on.

Andy:

I think you bring up an awesome point about this higher goal for an exit, for a liquidity event, whatever it is that sometimes the goal shouldn't be. We're going to drive revenue from this in 2024, but we're going to prove that we can start to show that this can happen, that there is a path to making this happen. We can show a couple wins against it and maybe they're closed deals, maybe it's just showing that we're generating interest here and there's metrics around that. Getting to that trajectory to show the next buyer this can happen, that's a big win. I mean that can increase the value of the company for a prospective buyer. Those goals really do matter. Again, the reality of what can we accomplish and not lose sight of what we're doing today is vital.

Gary:

Let's take some time to make this practical. The visual that comes to me, the place that I believe makes the most sense to start with this team is really to come together with this jobs to be done mindset. We love the concept but at the same time we hate the concept because it can be so ambiguous and so overdone. But the way that we have made it practical is to really just think about the flow of work from beginning to end and every touch point that you have of work. Think of them as sub-assemblies. We may have a product that is carved out, a particular thing that we accomplished for an organization, but everything is a sub-assembly to a bigger process. Getting the team together to actually tear down that process and all the sub-assemblies and how it's solved basically your own version of the map.

Gary:

Guess what? It's really hard to do this. It takes everybody in the organization. It takes a lot of expertise. You're probably going to have to bring in some third-party help to do this.

Gary:

It doesn't mean hiring a consultant or anything. It's just tapping the network of people who have multiple viewpoints on the space and how they're solving it, because it does so many things. One it helps you understand, from a product perspective, where you fit, who's involved, what it requires to build those pieces, and you're going to carve out okay, this is how we're going to. This is the next set of sub-assemblies that we're going to go after From a product perspective. Secondly, it helps you understand how you're going to price and package those things. Is it one thing? Is it individual pieces? Are we going out with a monolith? Are we going out with a collection of products, each of which can be purchased independently? There's pros and cons to all of that, and it also informs the GTM motions, which are again who's the buyer group? Where do they go? What are the watering holes? What are all those pieces?

Gary:

So starting with that exercise is so valuable and, I think, in a lot of ways, is functionally a gap analysis that says well, here's where we are, and if this is now, we know what our North Star is and where we desire to be as it relates to being a solution that is valued by the customer relative to all the other landscape of alternatives that they have. What is that gap? And then, what is the most logical next step? From where we are today? It's back to what we've said before, which is three horizon thinking right. We're out looking at the third horizon to determine where is the puck going to be, where do we want to be, where do we want to be in that relative to the puck? And then where are we today? And that's horizon one. And then that helps us understand horizon two. To me, that is a fantastic place to start. Much easier said than done.

Andy:

Yeah, I do. I think, looking at the bigger picture job to be done, what problem is being solved across that entire organization? How does that? What are the dynamics? How do the dynamics change between the organization we typically serve and the one we're looking to serve, like that whole problem, that whole job to be done? And then I would also say, as far as the buyer journey goes, how does that dynamic that's probably a quick follow to that is understanding. We talk about user buyers a lot, that actually there's an interesting dynamic, sometimes with larger organizations too, that their influence becomes a bigger factor and a bigger driver in the larger organizations. Ironically, it's kind of.

Andy:

It sounds counterintuitive there as well, but they're driving a lot of that and then the managers there kind of like the mini CEO I'm going to allocate resources the proper way for my organization and that's how that's being driven. So just as an example of another thing to think of as part of that dynamic shift, yeah, it was one thing you mentioned that Anthony's Pierre, he's with Fletch PMM.

Gary:

Shout out to Anthony, Having done some work with him. One of the things that I love about his approach is just reminding everybody that it's so easy, when we start thinking about selling up market, that we need to go to the economic buyer. And his whole point is again for companies of this size, the economic buyer doesn't wake up every day searching the internet and reading things on that particular solution. They've got much bigger challenges. This is a component of what they have to deal with. It is your user buyer, it is your champion, who is out looking for these solutions. So it's really easy to say, oh, we're going to go up market, so let's position, for we have to sell to the CFO now. Well, the CFO is not out looking for your potential solution likely.

Gary:

And so that actually complicates the process, though, because now we need layers of messaging. We have to be able to clearly articulate, especially in this environment, exactly what we do, for whom we do it and why we're better relative to the opportunities. Because we just want your mind share to start, and then we get you into the process. We get you actually raising your hand to desire to learn more, and then it is there where you can start to layer in those other pieces and not leaving at the chance. But to think that you have to throw that all out into the world and speak to that, especially when you're just starting out, is a giant mistake, because then you're just now, you're watering down your message, and most companies already have watered down messages, so they don't need to water it down further. I think so. And then there's building blocks of this too right, we think about it from a sales perspective, the ability for the company.

Gary:

Again, if this is something that you want to do, then you have to be very mindful about not making it a side project. If one of the biggest priorities of the organization is moving up market, then the way you make that a reality is you allocate resources. That means that you may very well be taking some of your best sellers and positioning them that way. I think one of the biggest challenges is well, we don't have anybody that can do this, so we need to bring somebody from the outside that is a proven enterprise seller. One of the biggest challenges with that is a lot of organizations, a lot of people that have had success in that area. Very rarely have built it, They've run inside of it. What quickly happens is they are fighting the last war and they are going to have your organization do what they think needs to be done based on that previous experience, which might be the right thing to do, but it might not.

Andy:

You're leaving it up to them. We see that a lot with sales. You're leaving up a lot of the foundational stuff to them to go figure out Again. Unless it's organizational and you're working from the foundation up, it's kind of a guess. It's often time to trial and error on that front. Where I have this message it's working in sales. It's like is that real? Is that almost like clickbait? That might be a little dramatic, but it wasn't built from the foundations of. This is what we're solving for these constituents. It's more reactive.

Gary:

I think it's that you likely have the team today on the field who can do this initial work to understand the gap and where you need to start. Once you've done that, if you feel you need to bring somebody in who has more of an enterprise motion and you want to make that investment now they're doing it with organizational support. Everybody has already done the hard work to say these are our hypotheses, this is the evidence for it, this is how we think it is going to work. You get additional insight on that First is we want to do this. Let's bring in somebody to do it for us, because that is so often a recipe for disaster. They go out and they hire 10 sellers and give a million-dollar quota and say that's the number, that's what I need. Oh, and I need this in marketing and I need this. They become very demanding because that's what they had in their previous role.

Andy:

If we bring it back to 2024 planning, you've just introduced an unknown as far as a timeframe. I'm going to hire somebody I've never met before. There's somebody I haven't met before, so I don't know. Is it a perfect match? I haven't worked with them. Do we even have the same philosophy around this approach? You just introduced a whole bunch of unknowns in an even a decent case it really is akin to product-market fit.

Gary:

The whole idea is that you do what's not scalable when you're in a product-market fit stage until you find that you have it. Stage two, capital calls it the leading indicator of retention. When you have that with your product and you see, now that there is this component of retention, that people are getting companies are getting value from your product, that's when you start to really lean into okay, now we're going to stress test, go to market. It's the same kind of thing there. We don't—oh we got product-market fit, so let's go hire 15 salespeople. It's very methodical. Hire two, see if it's working. If that's working, then hire two more. Then hire two more largely, because the organization can't absorb that kind of growth anyway.

Gary:

Frankly, the organizations with whom we work don't have that luxury to go do that because they need to be capital efficient. They're relying on their own in many cases their own profitability or near profitability, to fund those growth investments. You can't afford to bet the farm on something. You have to see that it's a much more methodical approach but, done right, it's incredibly value-creating because it is going to compound on itself. You've built in place something that's very efficient. You've learned as you go and it really begins to compound on itself. Takes patience.

Tiana:

So we're running out of time, so final points on this.

Andy:

Well, you just talked about one thing that is near and dear to me, which is selling to the moment of value. Part of the methodical approach of not trying to hire 10 salespeople and only doing it in small pieces is to make sure that and this is the goal, no matter what, not selling up market, but overall you're selling a moment of value, that customer is getting value out of this. If that's not happening, everything falls apart.

Gary:

I would say related to that as well is the entire sales and marketing process is exactly that which is the prospect. The buyer actually wants to look through all of that stuff and get to. What will this look like on the other side? And many, many times, especially as we move up market, that is partly related to the product, but it's as much related to what is the implementation process and how do I make sure that we actually get the adoption that we hope that we would get, that we're able to get the value certainly product related, but also, what does your onboarding process look like and do you have a professional services? And can I do a proof of concept?

Gary:

All of which comes back to that pricing and packaging discussion. If you think about a proof of concept, the ultimate proof of concept is a land and expand, a very simple way to get in with a piece of your product that is attached to another piece, attached to another piece that they continue to consume because it meets more and more of their needs. Then the proof of concept is it's not just a trial run. They're a customer. They just happen to be a customer of a piece of your solution, versus testing out a piece of that, so all of those running together.

Tiana:

Great, thank you. Okay, so thank you guys so much for being here. Just a quick reminder to everybody that wants to know a little bit more about us or wants to read a little bit more about what we're talking about right now. We have a full set of blog posts posted on our website, which is gtmprococom. We're also going to be having next week a workshop where you can participate and ask any specific or particular question that you have within any of these subjects, being the main subject 2024 planning. So if you're talking about these things while trying to plan for 2024, that's the place to be, and I believe we're the persons to ask it to. So thank you everybody for being here, and this would be it.

Gary:

That's it, till next time, bye. Thank you for tuning in to GTM Pro, where you become the pro. We're here to foster your growth as revenue leader, offering insights you need to thrive. For further guidance, visit gtmproco and continue your path to becoming board ready with us. Share this journey, subscribe, engage and elevate your go to market skills. Until next time, go, be a pro.

Going Up Market
Overcoming Challenges of Moving Up Market
Considerations for Moving Upmarket
CEO's Role in Revenue Growth
Sales Strategies for Moving Up Market