Who is this field guide for?

Are you a SaaS founder who has zeroed in on your first set of Ideal Customer Profiles and lined up a promising group of 10-15 satisfied customers? It's a great start to your business but what now? Depending on your product and annual contract values, you might be on the exciting brink of reaching your first $1M in Annual Recurring Revenue, all while managing with less than $3-4M in the bank. If this sounds like you, you're likely grappling with a plethora of choices on how to shape your marketing plan. It's a thrilling yet complex stage, and this field guide, created in collaboration with Compass Captain Vikram Bhaskaran, is designed to guide you through it. Inside, you'll find principles to steer your early marketing strategy, helping you decide between inbound or outbound GTM approaches, paid or organic methods, when to invest in content and events, and other key considerations.

Steps for Initial marketing choices

This field guide covers the basic principles that will help you make early decisions in your marketing strategy in 4 steps. Founders at the 0-PMF stage are faced with a plethora of choices – what GTM motions to scale (inbound or outbound), where to focus and to what extent (paid or organic), when to invest in content and events, and so on.

We leverage Vikram’s vast experience in making and executing decisions like these and our insights from having seen many such journeys from the sidelines, to help founders make early decisions. By the end of the field guide, we aim for founders to have made meaningful progress on how to optimally deploy the limited capital they have to build their GTM motions effectively.

Step 1: Analyze The Shape Of Your Market

This is the first suggestion from our mentor Vikram. Founders should spend a lot of time analyzing the shape of the market across the dimensions of availability, demand, and network metric:

a) Availability: Do you perceive your market as a finite or infinite play? This is a key differentiator. Almost every product can be perceived as either - especially since products and markets are designed to evolve. Finite markets tend to be extremely focused (enterprise-focused vertical SaaS companies like Veeva would be the most extreme example) and will have different levers for efficient marketing. High-touch, highly evangelical, high ACV products can find a better footing as a finite market first.

Infinite markets will usually be horizontal (in terms of sectors) and applicable to a wide cross-section of users/companies. Classic examples here include companies like Salesforce and Slack. Infinite markets allow you to cast your net wide in terms of building awareness. An example that can bring this contrast out is Hipchat vs Slack – when Atlassian built Hipchat, their focus was primarily on developers, and this led them to marketing choices that were extremely different from Slack, which had taken a more horizontal approach to messaging.

b) Demand: Does the demand for your product already exist (extant)? If the answer is yes, then all your attempts should be focused on meeting customers where they are expressing this demand. Are the customers searching for this pain/product already? What are the keyword volumes here? Does a G2 or a Gartner or a Forrester category already exist, or do you need to create a new one? Markets with an extant demand base are easier to target and can be friendlier to inbound channels. However, the choice of inbound or outbound depends a lot on the category, persona, and ACVs. Categories with extant demand allow for faster experimentation and quicker initial scale-ups but need strong axes of product differentiation and marketing differentiation to scale.

Non-extant demand means that founders need to spend a lot of time educating the market and discovering the right persona. Their first port of call would probably be to tap networks where their target persona agglomerates (conferences, events, communities, etc) and to invest in educating them. The pace may be slower, but if it works out, the company and product become synonymous with the category, much like it has happened for companies like Veeva and Procore. The other examples here are products like Notion and Grammarly – pain points existed, but the number of people who were looking for a better/enhanced Google Docs or grammar-checking product was not very large. Notion, for example, invested in creating this awareness via communities on Reddit and eventually layered this with strong collaboration and network features (covered next). Lead times here may be longer, but founders who are able to innovate and pull this off economically create companies and products that are synonymous with such categories.

Expert Tip: Vikram likes to assess the demand factor by doing a simple “zero moment of truth (z-mot)” exercise — what happened in the customer's life that eventually led to them coming to you? If you can derive a single, repeatable, at-volume pain, you probably have extant demand already. Another indicator is competition: if you have one or more popular competitors (and especially if you notice some areas of dissatisfaction with existing solutions), you definitely have extant demand.

More on Z-Mot in a later article :)

c) Network Metric: Does your product unlock incremental value as it spreads in a network? What is the atomic unit of this network? Does this unit help in adoption or distribution? What is the strength of this unit?

This aspect of the market has implications for both distribution and the product. Also, unlike the first two dimensions, where founders have a large degree of control over what choice to make, this dimension is strongly influenced by the category one is building in. Products like Notion and Slack are the most amenable to this dimension. Both products amplify in value as more and more people adopt and can have GTM motions leveraging this dimension. Bill.com is another example, which via its payments and accounts payable product, has been able to amplify its distribution.

On the other hand, products like Freshdesk, while increasing in value as more agents within an organization adopt them (eg: collaborating on support tickets), cannot help them land new customers. But by making it super easy to access and leverage this feature, Freshworks can ensure that whatever customers deploy Freshdesk, the odds of them succeeding increase. Products like Grammarly and Calendly, which are low ACVs, and individual adoption, can build in small nudges that help them lower their CACs significantly. Products that land beyond ACVs of $10k, and have multiple decision-makers, will find it tough to leverage this dimension in distribution.

Step 2: Establish The Boundary Conditions For Your Product: Landing ACVs, Buyer Journey And Buyer Persona

Landing ACVs have very strong implications for product distribution and adoption. For example, a product like Veeva, if it were to be built today, which was focusing exclusively on pharmaceutical enterprises and targeting landing ACVs of at least a few tens of thousands of dollars, will find it extremely tough to get the initial few million $ of ARR relying on inbound. Similarly, if one is targeting landing ACVs of <$5K, justifying the cost of an outbound motion will be tough, and you would want to ‘inbound’-ize your market approach.

Buyer personas may or may not be users of your products but they are the ones championing and driving the buying journey within a customer. If your users have the ability to buy your products (individually or for the team), a self-serve (maybe freemium), inbound-led motion can be a great starting point. Collaboration products like Asana, Notion, Slack, Grammarly are classic examples of such products, which land with individuals or small units and then expand across organizations. Thinking deeply about the network and virality metric will be super important in these cases. Dedicated success teams in such cases may be tough, hence your product should be easy enough for customers to adopt by themselves. Coupled with virality, an inbound, freemium motion can be a great option. However, if there are multiple buyers involved or buyer/user persona are different, the options change quite a bit.

Complicating this is the notion of buyer journeys. If purchasing a product (to land) requires buy-ins across multiple functions and leaders, the sales cycles will be long and involved. Generally speaking, while one may be able to build an inbound lead generation channel here initially, the company will need to start thinking about an outbound marketing motion soon to engage with customers and buyer groups early on, rather only at the moment of purchase.

Expert Tip: Vikram feels that there needs to be more consideration while thinking about the buyer journeys and their implications on your sales motions. In categories with large extant demand but complex buyer journeys and hence high touch sales, companies have been able to scale to high double digit millions in ARR purely on inbound - primarily by complementing it with a strong inside sales motion.

Step 3: Decide where you want to be on the Commoditization-Uniqueness grid

Once you are clear about the shape of your market and have defined the boundary conditions for your product, you need to think about the positioning of your product. Uniqueness here refers to the product – are there dimensions where you are truly unique as far as the incumbents are concerned (basically, your USP. For eg: in a crowded category like Helpdesk, Freshdesk over-indexed on its uniqueness across the dimensions of ease of deployment, usage and pricing, which was super important for its customer base. Similarly, Slack was not a unique concept, their integrations made them unique.

The other axis is Commoditization (different from commodity in the truest sense of the word). This means identifying with a pain/position/category that is already present in the market. For eg: Freshdesk and Freshservice – both products will be very high on the commoditization axis, focusing on well-established categories of Helpdesk and ITSM respectively. If you choose (and yes you can choose) to take a low commodity positioning (very likely in a scenario of non-extant demand), then as a founder, you will need to invest in educating and creating this demand (like Notion).

Ideally, you want to be high on the uniqueness axis (else the product will be a tough sell anyway). The positioning on the commodity axis is a strategic call founders need to make, largely on the basis of long term how they want their product to be viewed as. Highly commoditized positions will clarify your ICPs, make it very easy for you get initial traction, do fast experiments on GTM and scale from $1 to $5M quickly – but they also mean that you have to do a great job of communicating your uniqueness at all points of your journey and ensure that your dimension of uniqueness addresses a hitherto unaddressed pain point (more on this in another post). You will encounter a lot of competition and must be ready to answer a lot of questions about more established alternatives. Low commodity positions that target deep pain points have longer gestation periods, need bottom up discovery of ICPs, require creativity on GTM and awareness building. Founders should keep this in mind as they build their marketing teams. If you want to create a new category or foray into a nascent one, this approach will make a lot of sense.

Step 4: Bringing it all together

Now that we have gone through the 3 steps of analyzing the market, defining the boundary conditions of the product and identifying ourselves on the commoditization/uniqueness axis, the next step is to bring those together to make choices about your marketing field guide. We will try to leverage a few examples (we have the benefit of hindsight here) to make these applications clearer.

1. Freshdesk:

Shape of the market:

Availability: Freshdesk (when launched in 2011/12) was a horizontal product focusing on SMBs across all sectors globally. So, very clearly going after an infinite market.

Demand: Helpdesk software had been around a while and Zendesk had been scaling well. Hence, extant demand, people were looking for such products. Freshdesk needed to figure out the best way to get in front of these customers. As it turns out, these customers were on the internet, searching for such products.

Network Metric: This did not have strong implications on distribution.

Product boundary conditions:

ACVs: Low ACVs (~USD5k), given the SMB base. Difficult to justify an outbound motion for low intent/unqualified prospects.

Buyer Persona: Most likely the owner or the customer support head, with the full power of making the buying decision.

Buying journey: Quick decision making and deployment. Low involvement sales cycles.

Commoditization-Uniqueness Spectrum:

When Freshdesk was launched, SMBs did not have a lot of options for easy to use helpdesks. Moreover, these customers were searching for such products on the internet. Hence a commoditized positioning in the Helpdesk category, with a very high degree of uniqueness of ease of use and deployment (USP which addressed a prevalent pain point) allowed Freshdesk to access this high intent customer base.

Implication: Given the heavy extant demand, Freshdesk could leverage the commoditized helpdesk positioning. Setting up an inbound marketing channel made a lot of sense, as Freshdesk could now access high intent leads while meeting the boundary conditions of their product.

2. Procore:

Shape of the market:

Availability: Procore (when launched in 2002) was a vertical product focusing on the construction industry. Before the launch of Procore, some companies relied on accounting softwares, point solutions or in-house projects to manage a part of the value chain. But there did not exist an end-to-end tool and hence Procore is a category creator and had an finite market to go after

Demand: Procore had launched when the construction industry did not understand or adopt technology. Communication between architects, builders, contractors, subcontractors, and suppliers relied on paper plans, post-it notes, phones, faxes and walkie-talkies. Even though the pain point was real, the construction companies did not know what tool to use for end to end management and where to look for it. So the demand was non-extant

Network Metric: This did not have strong implications on distribution.

Product boundary conditions:

ACVs: Procore at the time of their IPO had ACVs of about 40K USD. Procore primarily sells subscriptions via their direct sales team (outbound motion). The field sales teams focussed on the large accounts while the inside sales teams focussed on the lower end of the market.

Buyer Persona: Owners, general contractors, and specialty contractors operating across the construction industry.

Buying journey: Long sales cycle as customers need to be educated about the product. In case of bigger companies, the process also becomes high touch with different departmental buy-ins needed

Commoditization-Uniqueness Spectrum:

Procore was unique in providing a platform where the entire construction industry could collaborate. Also, this came at a time when the industry was relying on broken and manual processes. But, they were playing in the low-commoditization axis and hence a lot of users had to be educated and trained. Hence Procore had to rely on creating their own demand, which is why they went with a strong outbound approach.

Implication: Given the non-extant demand and the lack of commoditization in the market, Procore started with an outbound engine primarily targeting the small and medium sized construction players. To gain more users, Procore did not go ahead with a user based pricing strategy. Instead they gave unlimited users for a project basing the pricing on modules used or project costs.

3. Veeva:

Shape of the market:

Availability: Finite Market. Veeva (when launched in 2007) was a vertical product focusing on the life-sciences industry (pharmaceuticals, biotechnology, and medical devices). While CRMs and CMSs existed at the time, Veeva was the first to focus exclusively on the life sciences industry with bespoke solutions.

Demand: While this was a deep pain point, customers were not actively searching for a product like this. They were relying on legacy and/or on-prem software that were not designed to handle the complex regulatory and compliance requirements of the life sciences industry. They did not know what a tailored solution would look like and where to find one. So we would classify the demand as non-extant.

Network Metric: This did not have strong implications on distribution.

Product boundary conditions:

ACVs: Its earliest reported ACV, which was at the time of its IPO in 2013, was $780K. At such a high price point, outbound motion becomes viable.

Buyer Persona: Most likely the owner or the CRO, with the full power of making the buying decision.

Buying journey: Complex and involved decision making and deployment with high touch, multi-stage buyer journeys requiring buy-ins from Commercial teams, IT, Legal, Compliance, Procurement etc.

Commoditization-Uniqueness Spectrum:

Veeva was highly unique with its life-science industry specific products in a time when life sciences companies were finding existing solutions insufficient for their esoteric requirements. However, the low commoditization (stemming from the lack of awareness/discovery/realization around industry specific CRM and CMS solutions) combined with non-extant demand necessitated education and demand creation.

Implication: Given the non-extant demand, long and complex buyer journeys, and high ACVs, Veeva set up an outbound marketing channel, bolstered by its highly unique positioning, going largely for Tradeshows and Events combined with thought leadership.