Once there is product-market-fit, scaling SaaS companies’ number one mistake is blindly ramping up marketing and sales investments without building a scalable, repeatable, and predictive marketing and sales machine first.
In this chat, Oxx co-founding partner Mikael Johnsson talked to Rory Blundell, CEO of Gravitee. This fast-growing SaaS company is right now in the process of building its marketing & sales machine to take the step from product-market-fit to go-to-market-fit. The conversation focused on key learnings and the dos and don’ts of navigating this tricky but critical phase of your SaaS company’s growth.
The 3 phases of SaaS growth
Mikael started by stating that the growth journey of a SaaS company has three distinct phases. These phases are all critical and require different approaches.
- Product-market fit
- A product that works and is battle-tested
- Customers like it, use it, and renew their contracts
- Go-to-market fit
- Proven GTM on a smaller scale – backed by strong GTM metrics
- The core leadership team in place
- Growth and moat
- Growing fast at scale with strong and predictable metrics
- Category leader contender
The cardinal sin, according to Mikael, is to try to skip the middle phase. When there is product-market fit, many companies are understandably eager to grow. But to start throwing money at problems before proving your ways of working at a smaller scale is a recipe for failure. Doing so is a common pitfall, and a potentially very costly one.
So, how to develop go-to-market fit?
Rory shared a lot of learnings from this journey with Gravitee, that is right now in the middle of this process. We’ve condensed his insights and advice into the list below:
- You need to identify your ICP and understand and decide precisely where you want to win. Who is it that wants your solution? Which sales model will help you sell to that target group?
- Go-to-market fit is about deciding what to do and what not to do. Another word for that would be positioning, deciding where to place yourself in the market and how to compete.
- Speak to your teams and listen to your customers continuously.
- Stay updated on intelligence from analysts like Gartner and Forrester.
- Take the time to read, be intellectually honest, and be willing to be proven wrong.
- Be prepared to change and adapt quickly when needed.