Talking to Investors About Go-to-Market, Platform Products, and Marketplace Products
If you have a platform technology with various applications how do you select a market?
You just select one - don’t think too much about it. A really easy way to select one is to just put them all on a numbered list based on your personal belief on how likely they are to turn into sales and then just pick the one that has the highest ranking.
Your ability to make decisions is what dictates your future. Decisions are actually cutting out all of the bad futures - so as many decisions as you can make is better and then how many tests you can run is better. Select that market, get 30 calls with them - which should become 10 offers or 10 demos, which should become 3 sales. If you don’t get that, move onto the next one.
How do you approach talking to investors when you can go into multiple markets?
Pick one and tell them that’s what you’re focusing on rather than explaining how broad the opportunity is. Everybody explains how broad the opportunity is - if you want to differentiate yourself, you have to approach it like “this is what we’re tackling, this is the total market, but we’re focused people - we say what we’re going to do and we do it. This is what we’re going after, this is the percentage of that market we’re going to capture, and this is what we’ve done so far.” That’s the conversation that you want to have.
A good investor knows you’re going to go into different markets eventually - if it’s a good enough product and if it’s growing fast enough, they know. If they don’t know that and you have to educate them a little bit, just explain: “the total market is X we’re doing X right now because it’s cheaper to go after one market and then we’re going to go after other markets”
For Marketplace: where should investors put more effort at the beginning?
Honestly, you just want to solve one as soon as possible - so it’s really dependent on what kind of marketplace you have. For example, the reason AirBnB grew so fast is because they were able to fix their demand-side. They had this hack where they just posted everything on Craigslist and so all of their properties would just get booked off of Craigslist which already had a lot of traffic.
You want to find some way to solve one side of the problem so that you can just focus on investing money on the other side. You can do a partnership, or some kind of growth hack - there’s something that you can find to be able to solve that.