Sell What’s On The Truck

Summary: The first rule of software is that the quest for product-market fit never ends, and the second rule is customers will always demand more features and functionality than your product offers today.

This can cause inexperienced go-to-market teams to incorrectly attribute a lack of market traction to insufficient product-market fit and, in turn, lead to product teams getting bogged down with bogus or one-off feature requests in the hope of securing specific customer deals. Worse, this risks pushing out the attainment of strategic product-market fit.

While achieving product-market fit should always remain a top priority, together with capturing feedback from the market as you go, it’s vital, particularly during the market seeding stages, that GTM focus is targeted toward the cohorts most likely to purchase your promising yet incomplete value proposition, rather than burning precious time and resources attempting to satisfy the needs and concerns of later stage adopters.

Focusing on cohorts that will buy what’s on the truck today and ignoring everyone else is the often necessary commercial flipside of product-market fit; market-product fit.

First, an intro to B2B tech’s most famous playbook

The tech industry bible, Geoffrey A. Moore’s, Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers, was a banger when it first went to print in 1991 and arguably remains so thirty years on. However, even if you haven’t read it, you’ll likely be familiar with some of the concepts covered by the book, such as the Early Adopter, which passed it into mainstream awareness long ago.

Moore’s titular chasm is where early-stage B2B tech goes to die, having failed to cultivate and then convert sufficient quantities of support, advocacy or momentum (often, all three) from early-stage customers to guarantee progression into the later, more commercially lucrative stages of market penetration and ultimately commercial success.

Crossing The Chasm is a B2B-centric playbook, and some might argue that it’s somewhat outdated in an age of highly sophisticated digital acquisition theory. However, as market models go, it still offers a straightforward approach for thinking about how go-to-market strategy and early-stage product lifecycle management might be organised.

Note: Even if you’re not in B2B SaaS don’t overlook the point that while the original audience Moore had in mind was the 1990s tech company exec, these days, every business is more or less a technology business and therefore may benefit to some extent from the concepts and ideas outlined by Moore.

For Xero, Moore’s bell-curved landscape shaped our approach to taking a novel and unproven proposition – cloud accounting – to a conservative market; small business owners and their accountants, neither of whom had seen much innovation or fresh thinking for a long time. So, when Xero first appeared, although cloud software had slowly evolved through various guises for around a decade – Hotmail launched in 1996, then Salesforce in 1999 – the appetite for cloud-based accounting software was effectively non-existent in the UK.

Initially, many people assumed that Xero’s defining characteristic – the fact you accessed and used Xero from inside a web browser rather than as a native Windows desktop application – implied that cloud software was nothing more than an optional subsidiary branch of regular software, and so they quickly dismissed it. The new fad in software was ‘cloud’, and no doubt, next year, it would be something else.

Why on earth would anyone want to put all their sensitive financial information on the internet?!

Plus, old habits die hard. Therefore, it was understandable that trenchant desktop users, indoctrinated with best-practice maintenance rituals like taking regular data backups, would think it was absolutely preposterous that Xero possessed no data backup or restore capabilities. (Xero still doesn’t, by the way.)

But in their defence, just as all great pop songs need a hook, so does great software. Ideally, these software hooks should be a fresh new take or a novel capability, a unique characteristic that not only stood out but which sparked the imagination.

For cloud accounting software, there were a couple of compelling hooks; to finally make it easy for small business owners to know where they stood financially (accounting software had become too complex) and to transform the essential but arduous relationship many small businesses experienced working with their accountants. The good news was the latter hook was something accountants badly wanted, too, and this wasn’t a trivial hook; it was potentially hugely transformational and hadn’t been feasible before the arrival of cloud software.

So, occasionally, we’d find someone who saw the hook, saw the big picture and quickly got what Xero was all about. Fortunately, this usually meant that they couldn’t wait to jump in even if the product was effectively little more than a prototype compared with more established desktop products.

In Geoffrey Moore’s model, these visionary customer types were the earliest of early adopters; the Innovators. And while there weren’t many of them around (Moore suggests only about 5% of a market typically falls into the innovator cohort), they were pretty easy to spot.

And so, our GTM priority was to quickly filter out or dismiss prospects who weren’t look-alikes for innovators, gambling that we’d get the chance to pick them up later if we made it as far as their station on Moore’s bell curve.

As a small start-up team in a hurry, prioritising innovators was also smarter in a practical sense, too, because engaging the entire market as a whole, apart from being prohibitive from a cost point of view, would have meant dealing with later-stage adopters who, making up the vast majority of the market, would have quickly consumed all our time dealing with people who were just not ready to buy.

And even if they did, they might soon experience waves of buyer’s remorse when they uncovered all the holes in Xero they’d assumed weren’t there, which could soak up our equally small customer service teams' capacity and degrade our customer experience. They could also risk damaging our word-of-mouth reputation.

Note: Customer segmentation and profiling, which can vary a lot depending on your product and market, isn’t just important for the market seeding stages and should get a lot more sophisticated than just categorising adoption stage. As your product matures, you’ll develop comprehensive personas for the different kinds of customer segments and groups and build detailed maps of their specific motivations and preferences, which will shape your marketing and customer acquisition and growth in later years.

Alongside this, we prioritised finding the individual firms, industry groups and their annual conferences, and the other online communities where innovators would hang out, such as the online news website AccountingWeb — identifying as many target-rich environments as we could to address a large number of innovators in one go efficiently.

Working with online communities is a whole article in its own right. Still, early on, I created a host of Google Alerts triggers for several online communities and forums, which would instantly notify me the second someone asked a question about Xero, enabling me to quickly jump in and be the best concierge I could be, promptly and politely answering any questions people had about Xero, and tempting any curious innovators to sign up.

Note: I’m clearly biased, but I’d argue that for anyone who wants to engage the largest group of innovators in the accounting industry today, then this ‘find the innovators’ focus we started at Xero long ago has done a good job of curating a huge community of the country’s most innovative accountants; and in parallel with the Xero app ecosystem, the annual Xerocon conference is where the geographic density of innovative thinkers and operators in SMB accounting gathering in one place couldn’t be more concentrated.

Selling what’s on the truck

So, to close, unless you have a clear framework and understanding of where you are on your product-market fit journey, and you can reconcile that with the propensity of the market to adopt an early-stage product, you run the risk of wasting your GTM resources trying to sell the wrong product to the wrong people.

In the process, you’ll not only fail to realise your product’s true growth potential, but you’ll also spin up needless product development cycles and slow everything down.

Note: For mature companies who are introducing a new product line to replace an existing one, it’s important to qualify here that selling what’s on the truck doesn’t mean reverting to selling your old product line if the market is initially resistant to your new one — that’s classic Innovator’s Dilemma behaviour.

If you’re finding it hard to get traction — newsflash: it’s always hard! — don’t let your GTM team fall into the trap of thinking their lack of runs on the board is down to a lack of product capability.

There’s never enough product, even years after attaining product-market fit and maturity (I’ll cover this another time) – and so instead, think about where your GTM focus is going and make sure you’re selling to the right people.