E437 | Natasha Lytton & Micah Smurthwaite, Pipeline Ventures: The art and science behind effective GTM strategies for startups and scale-ups [Path to Market]

0:03Welcome to Path to Market, the podcast where we unravel the art and science of go to market strategies for startups and scale-ups. Brought to you by Natasha Litton from Seedcamp, the day one partner for Europe's most exceptional entrepreneurs, and Micah Smirthwaite, seasoned investor and sales leader. This series dives deep into the challenges, opportunities, and insights that define a company's journey to market success. Together, Natasha and Micah will share their own learnings, uncover practical advice from seasoned go-to-market leaders, and dispel the myths surrounding what it really takes to master go-to-market.

0:33So whether you're a founder, operator, or investor, this series will empower you with actionable insights to navigate your path to market success. Let's dive in. Hi, I'm Natasha. Hey, I'm Micah. And we are very excited to be bringing you a brand new podcast series, Path to Market, where we unravel the art and science of go-to-market strategies for startups and scale-ups. So who are we and why the two of us together? Micah, can you maybe give us a brief intro on who you are, what brought you to where you are today. Sure. I've been in investing roles at a venture capital firm for the last few years.

1:12And prior to this, all of my background was in sales at tech companies. Most recently, I was the first sales hire at a company, Cloudflare, where I was in the US. And in the first year, we hired across all roles on the customer facing team and figured out how to sell our product. The second year, I moved to London to open our international office. And the third year, I worked on partnerships and resellers rather than selling direct. And so it was through the lens of those experiences that I try to help founders as they're making their first sales hires, scaling internationally or working through partnerships.

1:49And I should add to Micah and I have come together through many different ways as co-investors and things. And then also Micah's an extremely highly valued member of our Seedcamp expert collective, hugely valuable insights that he always has to share with our portfolio. And we've been talking over the years and thinking about this whole area of go-to-market and really, and we're seeing it especially today with so much focus on, you know, driving customers, revenue, monetization and path to that much sooner than previously people were looking for. And we realized there's just a lack of a consolidated place for where this information can live, an inability for people to necessarily distinguish between the different go-to-market motions.

2:32So our goal is to really come at it with our two different lenses. Obviously, Micah shared his amazing background in all things sales and obviously some very well-known businesses. And from my side, coming more from the marketing side of things, really seeing how these two interplay really closely together and how these two parts of the organization, well, the whole organization, frankly, but these two parts in particular need to be really, really closely aligned as you think about building that go-to-market motion out. Yeah, so Mike, I guess I'd love just for you to share a bit more of your wisdom with our listeners.

3:07And can you share an example of a company that you've worked with that face go-to-market challenges and just how you've helped them overcome that? Sure. Well, I do think it's important to realize that sales is both art and science. And the science of it can be something like a framework like Medic, where you identify who's the economic buyer and who's the champion. But the art really depends on your product, the market you're selling to, the people you have inside of your company. And that art piece of it is tailored to everyone's situation. And we started doing these dinners together with a bunch of founders and a bunch of sales leaders.

3:47And the best part about those dinners was that a founder could ask the same question they were wrestling with to five different go-to-market leaders, and they would get five different points of view. And then the founder could choose for themselves what works for them. So I think feeling that there was a true market need for this, that founders got a lot of value of speaking with a variety of go-to-market leaders is really in their best interest rather than just listening to one all-powerful, wise go-to-market leader, because what worked for them may not work for that particular founder. That's such a good point, Right.

4:24And this idea and this tendency that we see a lot of the time, which is we just want the playbook and we want to rinse and repeat it in any company. Well, that frankly just doesn't work. And so what we're really aspiring to do with this podcast as well is bring a breadth of different experiences. And you can pick and choose based on the type of organization that you have and what's going to be most relevant for you. Because, yeah, to your point, crowdsourcing different pieces of information and then figuring out what's the best fit for you is really critical. Yeah. Well, let me share a couple of examples of companies that I've been working with in real time to help some of their go-to-market challenges.

5:01So one is a hot YC company called Endorsed.com, and they use AI to review resumes. And they have a lot of customer inbound interest, but the founders themselves are technical founders with little to no sales experience. And so for them, I act as a coach or advisor on how to run a sales process. Simple questions like, who's the economic buyer? Have you identified that they really have budget for this? What's their process for procurement like? and helping them think about this end-to-end process of just how do you complete a sale. For others that are, I'd say, earlier in their journey, just trying to get customer demand, there's a great company in France called Heal.dev, and their product is to use AI to heal your code.

5:53Well, who would need that? Seemingly everyone. But as we've gone along to figure out who the ICP is, we realized, hmm, large organizations have a whole quality QA team to figure out, oh, our code, here's where it's broken. We can fix it ourselves. So maybe the big org isn't the real target. So let's scale it down to small orgs. And what do small orgs really need? And so really getting more customer interviews to dial the product market fit, that's been the thing that Heal has needed. And now that they've dialed the product market fit, they're in France and they're going to make their first U.S.

6:32sales hire. So now I'm helping figure out who's the right profile to hire here for you. So working on whether it's individual transactions, finding product market fit or finding early hires are the best ways that I spend my time. And then what are some of the most common pitfalls you see founders falling into when it comes to all things go to market? and how are you helping them navigate around those obstacles? Well, I'd say there's conventional wisdom that a founder has to get the sales playbook ready, do all the founder selling, and then they can hire the first salesperson. And I would say that is kind of right.

7:12The nuance though is they don't need a playbook. You just need a couple plays. And the truth is, is the playbook is never hard-coded. It's never finished. You are constant. All figuring out a go-to-market playbook is you run a bunch of experiments. You want divergent thinking, and then you figure out what works and you come to an answer and say, hey, these are the few plays that actually work. And once you make that first sales hire, they should be running their own plays too. So I'd say that is one of the biggest mistakes is a founder thinking, I've got to have the sales playbook dialed. Because in reality, it's never dialed.

7:49Even in large organizations with large sales teams, a salesperson might get mapped to 150 accounts and they say, hey, here's your 150 customers to try to sell to. And 100 of them will be, hey, we know this is our ICP. We know this is the vertical. We know the price point. But then another 50 might be experimental and say, hey, we think this vertical will sell. So run some experiments over there. Some people call it the majors and minors. And so I think that is one of the biggest mistakes, a founder waiting too long thinking they have to have the playbook dialed before they bring on salespeople.

8:25Really insightful. I guess hiring's probably one of the ones I see as on the flip of that also going wrong quite a lot of the time. Not hiring the right person, either hiring way too senior too early on and being unrealistic in the expectations or hiring very junior and not equipping them with the tools that they need in order to succeed. Do you have any experiences is seeing similar. Yeah, I agree. I think the rate of a miss hire, especially in the first go to market hire is incredibly high. It is easy for founders to be seduced by the logos on someone's resume and say, wow, they worked at Google, or they worked at this great company, they're going to teach us how to do it.

9:08But if that person, if that candidate has only worked at Google, when it's a large organization, they may be very good at systems and process and things that are established versus building the process and building the machine rather than being a cog in the machine is a much different skill set. It is a jack of all trades, an athlete where there's more work to do than there is people to do it. So your work goes beyond a job description of first sales or marketing hire, you're really doing five different jobs. And so I think finding that profile of someone who's comfortable in a small company, in an ambiguous environment, they can thrive.

9:50And so it can be a trap to be fooled by just how bright someone's halo is without knowing, did they build a machine or were they just really good at turning the crank on the machine. I couldn't agree more. It feels very different. When I started out in startups, there was really this, you know, you didn't really expect a job spec because you knew even if there was one, it would be out of the window in terms of what you'd actually have to deliver on. And it was the attitude to, I'm going to figure this out because that's what you need, the people with the smarts and the right attitude to figure out what's going to happen because it's an unknown, right?

10:26It doesn't exist yet. And that's part of the fun and the roller coaster of startup land, I guess. Yeah, I agree. And I think that that's part of the inspiration of this podcast is that there are other people who have had to figure it out at other places and hearing about their experiences hopefully can have a kernel of wisdom or inspiration for a founder as they're trying to figure it out in their own journey. Speaking of kernels of wisdom, if you could give a single piece of advice to a founder thinking about their go-to-market strategy, what would it be? Well, I am a big fan of crossing the chasm.

11:04And it's this old now, but a framework that the early adopters are of a certain profile for a product. And then there's a big chasm before you get to the majority of the market. and the early adopters just have different motivations and different ways of buying. And then once you get across the chasm to this larger majority, they are more of the profile of, hey, nobody gets fired for buying IBM. They want something that's tried and true and reference customers, et cetera. And so the key piece of advice that I've had for founders is it's okay to start with a very small market and be really good in that market.

11:50Because if you're trying to get to a big market and you just own 1 % of that market, it doesn't matter. Whereas if you do something really well for a small market and you can capture 25, 50 % of that market, well, now you can build into other markets and that's how you eventually cross the chasm and get the trust that customers need to be able to tap into the large majority of customers who have a different buying profile and want to buy the tried and true. So just focus on doing one thing really, really well, even if it's a small market, that's okay. That's where you start and you expand from there.

12:26Trusting the Chasm is a great resource by Jeffrey Moore. If you're not familiar with it, highly recommend that you check it out. Yeah, I fully agree. And it's this really hard tension between, you know, especially as a founder, look, when you're pitching to investors in particular, you're going after that big total addressable market number and you want to show like how sizable this opportunity is. But arguably when you're trying to be everything to everyone too early on, you end up being nothing to nobody because you can't really attack and penetrate that disproportionately influential early customer and show that you've got product market fit.

13:03And is willing you're doing that job that is so integral to them and figuring that piece out yeah is so so key so I agree it's the not trying to be everything to everyone too early is really key and we're going to talk about all of that Micah what kind of topics and themes can listeners expect to hear in our upcoming episodes well I would say wherever a founder is in their journey hopefully they'll be able to find something that applies to them where whether they're early or later. Something as early as trying to figure out what your ICP is, something as early as, do we hire an SDR to do outbounding?

13:42And how do you do that? To later on, if we have an enterprise sales team, how do we run it? Or do we try PLG motion? I think these are all questions that founders wrestle with in the early days, but then later on, there are still questions to figure out. on that note we are gonna leave it there and say we are very excited to bring path to market to you we really hope you enjoy it we'd love your feedback on the episodes we're always looking for great guests and experiences to bring you so stay tuned for more looking forward to it