By, Josh Angus

At the centre of any go-to-market strategy is four crucial decisions. Which customers to target, what technologies to apply, what organisational identity to assume and how to position the business against competitors. To complicate matters further, the decisions are interdependent. The customers you choose to target greatly influence the technology you need to apply and the organisational identity to assume.

For established businesses, the four decisions involve analysis of data they are likely to already have. They have the financial capacity to engage in market research, the time to experiment, measure and refine. Crucially, they can draw on previous experiences and learnings.

A small business or start-up on a comparable shoestring budget, in contract, lacks history, experience and the knowledge that brings. That, however, can be an advantage.

Prior experience, historical data, commitments and existing processes that drive existing operations can create blind spots for established businesses – even causing them to overlook innovations and existential threats. Nevertheless, start-ups and small businesses ultimately face competition when established businesses notice innovations and they will certainly face pressure from other start-ups and small businesses trying to beat them to market.

Small business owners and entrepreneurs are likely to feel overwhelmed by the mass number of choices they are faced with, even though some options are clearly not suitable and easily dismissed.

The Four Crucial Decisions

The four crucial decisions are imperative for every venture. Any business will, of course, face a multitude of additional choices that are specifically relevant to that venture, however, a start-up that has not considered at least these four crucial decisions is unlikely to create value on a sustainable and ongoing basis. The story of Amazon is illustrative.

Customers

Often when we have a start-up idea, we focus on the product or service we intend to offer. Ensuring the product or service has viability means confirming we have a potential market of customers. Identifying customers and understanding their pains and gains is, I believe, the first step in a go-to-market strategy. The target or ideal customer is not necessarily the first customer and they certainly are not your only customer—and it is important that you understand the relationship between the two. You validate your product by getting the right early adopters.

Amazon’s decision to initially target book readers was a strategic choice. Its leadership recognised that books were just the beginning from which the company could expand into other retail categories. Their target customer wasn't readers, it was online shoppers. Readers were, however, the first customers - the low hanging fruit, the early adopters. It is vital that you consider both your ideal or target customer and also, your early adopters.  

Technology

Technology and customer choices are interdependent. Amazon could have built a simple online ordering system to service existing retail book stores. Instead, its goal was to let consumers buy the long tail of books. That is, Amazon consciously chose a strategy to sell low volumes of many hard-to-find books that could not be stocked physically at the local retailer, instead of selling popular, high volume titles. Because of this decision, the company had to invest significantly in building a database and a search engine capable of guiding customers through millions, rather than thousands of book titles. From a customer viewpoint, without the right technology, navigating the Amazon site and making purchases would have simply been too difficult. And that is why customers and technology are interdependent. The tech you use needs to be suitable for the customer and vice versa.

Organisational Identity, Culture and Capabilities 

Choices in this category should both create a story about what the company will stand for and communicate to all stakeholders what behaviour to expect and what capabilities it will develop.

Many start-ups and small business owners think values, mission statements and the like are only for ‘big’ companies. In truth, done well these acts as guidance, keeping you on track and adding to the organisational culture and behaviour.  

Capability planning is also something rarely considered by early start-ups or small businesses. Considering the goals for the organisation, business leaders should consider the ongoing needs for the business as it grows. At which point will the business require more staff? What will their duties be? At which point would be the next marker for further hires?

Of course, we now know readers loved Amazon’s offer, and investment firms quickly saw how much money the company could make. But they were focused on short term profits. Amazon’s founder, Jeff Bezos, wasn’t building just an online bookstore. He wanted to create the “everything store” we know it as today. Doing so would require that ordinary consumers trust they were getting a good deal, which meant that Amazon would focus relentlessly on lowering prices, despite pressure from investors for early returns. It meant staying true to the organisational goals, values, identity and building capabilities with the goal in mind.

You may not want to become the 'Amazon' of your industry, but whatever your vision and goal, setting organisational values, mission statements and considering future capability requirements will drive your strategy.

Competitors

Amazon defined its competition as other retailers and chose to compete aggressively by offering consumers more choice, greater reliability, and lower prices. In its early days, it could easily have chosen to work with existing retailers—perhaps even defining them as customers. Competitors would have been other search and logistics service providers, and the company could have established itself as a premium service provider by adding more value for booksellers.

The definition of your competitors plays a significant role in your direction and strategy. Amazon would be a very different organisation had it viewed logistics providers as the competition and retailers as the customers.

Start-ups and small businesses need to consider who their competition is and what they are doing. No matter the industry you want to start or grow in, you likely already have competition. Learn from them. What are they doing well? What are they doing poorly? Take a deep dive into analysing their strategy and see where the holes are, that you can potentially fill without them even noticing until you’re too big to stop.

Defining and answering these questions is not a completed strategy, rather a starting point. Doing so also does not eliminate or minimise the uncertainty inherent in launching a business. What it does do is provide you with a framework of questions to address to begin building an effective strategy. When a small business or start-up is competing with more established organisations, the winner is usually the organisation that best understands the environment in which they operate.  

If you need help answering these questions, finding direction or developing your business strategy, we're here to help.