Crawl Walk Run
High-potential startups are ultimately successful as they transform innovative product and service offerings that address important unmet needs into profitable businesses. One of the significant value step changes occurs when the startup begins to connect the dots and advance commercially into its chosen target market.
Despite what we might wish, the commercialization of something new does not go from zero to maximum in one jump. Instead, bringing innovative products to market evolves through phases. A common metaphor is that a startup should crawl, walk, and then run.
In this post, I am going to focus on what these phases might look like as you pursue them from the earliest commercial stage forward; however, let me note that when presenting your commercial go-to-market strategy to potential investors, you will likely begin with the end in mind, highlighting the most extensive possible vision and then backing into the steps you plan to take to derisk each phase and build your way there.
Crawling
When launching a new product with a transformational value proposition into the market, your potential customers will most likely not understand your innovative offering out of the gate. Your innovation will probably break some of your prospects’ assumptions about what is currently possible and available. This means that in the first “crawling” stage of commercialization, you will be seeking to connect with early adopters for whom your solution addresses a powerful felt need in a uniquely well-suited way and educating them about what is newly possible.
For a B2B business to do this, the startup team will likely rely on their domain expertise, passionate founder-led initial sales, and hands-on engagement to ensure that early adopters have a great experience and are transformed into solid references. The startup team needs to keep their eyes open to learn as much as possible as their product first enters the marketplace so that they can jump quickly on any adjustments required to that initial product/service offering, as that is the value of the “crawling” phase as you seek to establish product/market fit. There needs to be some tolerance for the reality that, at the crawling stage, you will only be beginning to formulate and test your commercial messaging and figuring out how to sell your new product most effectively. It is unlikely to be a fully scalable commercial model yet as you use more senior resources to maximize learning and agility, adjusting on the fly.
Walking
The walking phase starts as clarity emerges from the fog about what the scalable commercial model will look like. Instead of white glove service for the earliest adopters, the team works to establish and standardize its commercial messaging, iterating to dial in marketing and sales materials. Pricing models solidify as you confirm what customers are willing to pay. In addition, management of the sales funnel starts to emerge with increasing insight into what the stages of the sales process for this opportunity look like and what conversion rates to expect. At this stage, dedicated sales and marketing leaders beyond the startup CEO and founding team begin to join. One of the hallmarks of this stage is that, as a startup leader, you move from being aware of every emerging sale to being unable to keep track of all the individual sales threads. Now, your startup commercial team is walking.
Running
The running phase emerges as you can begin to replicate and scale your commercial processes to support rapid growth by adding team members. At this stage, you should have a handle on what works to attract leads and sell your product and be able to build processes that allow you to execute on that at scale. As you begin jogging and then running, there will be increasing specialization and focus on process management by your commercial leaders instead of having them directly engage in marketing and sales efforts to specific customers. Now, a Chief Marketing Officer role coordinating various marketing team members devising and executing strategies becomes essential. A sales leader begins building a sales force with territories, sales incentive plans, and supportive materials.
When fundraising along the way, a startup founder-CEO will need to capture both an inspiring vision of what the grand potential of the business, in a full running sprint, might look like as well as demonstrate practical knowledge and insight into where to begin to get the flywheel started as the business first crawls and then walks forward. The flywheel effect happens when small wins for your business build on each other over time and eventually gain so much momentum that growth almost seems to happen by itself.
At each stage, as you progress through commercialization, you seek to derisk the next phase by learning and refining what works and what doesn’t. Sophisticated investors will be familiar with these stages and not ask for premature investment in, for example, building out a sales force as you are still learning what value propositions resonate and what hurdles must be overcome with your first few earliest adopter customers. Once you have established a repeatable process, you can and should pour on the gasoline of scaling up. Transitioning beyond that initial founder “white glove” time too soon can miss critical learnings and not take advantage of the founder(s)’ passion to get the flywheel started.
