The hardest part of running a business is not deciding what you’re going to do. It’s deciding what you’re not going to do.
The market places a premium on CEOs who can focus on a singular vision. So do customers, who respond to brands with clear value propositions and offerings.
Still, keeping a tight focus can be challenging.
Most CEOs want to keep their fingers in many pies, hedging against the possibility that they’ve picked the wrong market or positioned their offering incorrectly – even if they know this lack of focus is slowing growth.
There’s an argument to be made for hedging risk. At the same time, CEOs will sometimes hedge against risks they’ve created for themselves by going to market without having done adequate research.
Taking The Right Kind of Risk
From an investment perspective, risk falls into two main categories: 1) Risks that can improve returns; and, 2) Risks that are just plain risky.
Companies sometimes launch based on the feedback of a handful of potential clients or the “gut feeling” of a founder. Unfortunately, this approach creates risks that fall into the second category.
Topline Strategy helps CEOs avoid the second type of risk by providing data-driven, in-depth analyses of the different value propositions and solutions for a company’s business.
These analyses, in turn, allow the CEO to go to market with a focused strategy, which helps them accelerate growth.
It starts with figuring out what to sell, who to sell to, what price to charge, and how to explain the solution to the marketplace.
Topline Strategy has helped hundreds of companies with their go-to-market. That experience has allowed us to develop a three-step process for successful launches:
- Concept Screening
Step 1. Ideation
Ideation is the earliest step, but certainly not the easiest.
It usually begins when a company has developed a new technology or application, but it can also start with an area of expertise. Sometimes, it begins with nothing more than an idea of how a process can be more effective.
Ideation relies heavily on brainstorming but begins with research, where we collect and analyze problems that the new offering can solve.
Once these are understood, the company challenges the market’s assumptions, to find ways to solve problems for potential clients that may not have even been considered.
Ideation involves working closely with a broad group of individuals from within the client company, incorporating various perspectives. Ideation will include sales and customer service personnel, in addition to the engineering and product teams.
For many companies, ideation precedes the company’s launch, so it’s not a typical engagement for many consulting firms like ours.
Still, we do have ideation work funneled to us from investment clients looking to have Topline flesh out an offering concept or established firms that have developed technology that might take them into new markets.
Step 2. Concept Screening
Having settled on a basic idea of the product, service, or solution, Topline begins the process of deciding which markets the company should pursue.
The deliverable is a red- / yellow- / green-light analysis of the potential applications, looking at each across several criteria, including:
- Market Sizing
- Value Proposition
Research starts with the interviews of potential clients across many industries that the client has identified as possible matches for this technology. (The number of interviews varies but can reach up to 200 interviews across three or five industries.)
Markets where the majority of these criteria come out as favorable – or green-lights – with no insurmountable obstacles – or red-lights – come out on top in the analysis.
Step 3. Go-to-market
Having vetted the major industries and applications, we dive deeper into the areas that show the most potential – our “green lights” from Concept Screening.
Within each of these, we track:
- Product Roadmap
- Buyer Journey
- Sales Model
- Lead Generation
- Revenue Modeling
Based on our interviews, we can identify the essential functionality required to enter the green-light markets and applications. We also examine what functionality those buyers will need to see over time, which helps our clients set their product roadmap.
By acquiring a deeper understanding of how these clients buy, we can also make recommendations about how sales should be structured and the messaging that will inform marketing based on target-client priorities.
Our understanding of what features target clients value, and the price they’re willing to pay for them, are fed into a sophisticated pricing analysis that allows the client to refine offering tiers or packages and set prices that will maximize revenues.
Finally, we also get the sales process moving, working with the client sales staff to ensure that the system runs smoothly.
Three… Two… One… Launch!
There’s a temptation when running a business to diversify across multiple markets and offerings as a hedge against risk.
Economists and academics have debated the efficacy of diversification for decades.
Wherever you stand on the subject of diversification versus focus, most would agree that you need to start by identifying the right offering for the right market and offer it at the right price.
Approaching those decisions with the three-step process described above will allow you to move away from a scattergun approach and focus on the best targets.