Early startups claim their go-to-market strategy is fully functional. In reality, GTM is a pure numbers game, and even with a solid plan, it can easily be thwarted by common problems like turf wars and poor communication.
Finding GTM fit is a milestone for any startup that encompasses everything from expanding the engineering team to starting your first media purchase. But how do you know when you reached that magical moment?
âThere are three metrics to consider: gross churn, magic number, and gross margin,â said Tae Hea Nahm, co-founder and chief executive of Storm Ventures.
High churn means that customers are not enthusiastic, low gross margins mean poor unit economy and this so-called magic number?
“You can calculate it by taking the new ARR divided by your marketing and sales expenses,” writes Nahm. “But remember that the magic number is a lagging indicator and it can take a few quarters before you see a positive result.”
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If you are methodical to build a larger customer base, it isn’t hard to drive steady growth.
Marketers who move in any direction the wind blows – or blindly follow others’ ideas about best practices – will be less successful.
“The not-so-secret secret here is that the key to great customer loyalty is really simple,” said growth expert Susan Su recently at TechCrunch Early Stage: Marketing and Fundraising. “It builds a product that solves a real and particularly persistent problem for people.”
Speaking to Managing Editor Eric Eldon, Su discussed a variety of topics, including tips on how founders should discuss growth with investors, and their methods for developing an exemplary qualitative growth model.
“I firmly believe that every founder should try their hand at growth,” said Su.
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Senior Editor, TechCrunch
How we built an AI unicorn in 6 years
Only a few startups launch exactly the product that their founders first imagined.
Today, Tractable is known for developing technology that allows drivers to upload photos of their vehicles after a collision so that the AI ââcan assess the damage. However, the first paying customer used Tractable to check the welds on plastic pipes.
And as fate would have it, this customer also fired them when the founders put up their first round.
“We struck gold with auto insurance,” says co-founder Alex Dalyac, as it is “a huge and inefficient market with an urgent need for modernization.”
In an Extra Crunch guest post, he shares several insights from the past six years of scaling a unicorn that are of value to founders of all stripes. Step one?
âLook for complementary co-founders who will become your best friends,â advises Dalyac.
The European VC market is so hot that it may skip its summer vacation
Alex Wilhelm and Anna Heim continued their exploration of the searing global VC market, this time with Europe in mind.
For perspective, they analyzed data from Dealroom and spoke to four VCs about the continent’s investment climate:
- Diana Koziarska, SMOK Ventures
- Vinoth Jayakumar, Draper Esprit
- Simon Schmincke, Creandum
- Javier Santiso, Mundi Ventures
âThere is little evidence that what we saw from Europe in 2021 will slow down in the third or fourth quarter,â write Alex and Anna.
“While Europe is known for long summer vacations, investors don’t expect much, if any, slowdown in Europe in this sun-drenched quarter.”
Startups and investors rely on micromobility subscriptions
“Amid the chaos of the COVID-19 pandemic and the grim road to profitability of shared electric micromobility, more and more companies have turned to subscriptions,” writes Rebecca Bellan in a summary on the future of micromobility.
âIt’s a business model that some founders and investors argue hits the sweet spot of the profit center – an approach that appeals to customers who are careful to share and prepay to buy a scooter or an e-bike to own while minimizing overheads and depreciation of assets. “
What Robinhood’s crypto trading warnings say about Coinbase’s near-term future
After realizing that Robinhood expects sales to decline in the third quarter due to slowing crypto trading, Alex Wilhelm began to worry about what that forecast means for Coinbase.
“The now public unicorn has experienced crypto-ups and crypto-downs,” he writes. “A drop in consumer interest over the next few months or quarters isn’t a big deal, provided you keep perspective long enough and the crypto-infused future your fans have come to expect.”
But will it?
Dear Sophie: Should we look to Canada to keep international talent?
As a consultant at various technology startups, I take care of people ops. Many have OPT or STEM OPT employees who were not selected in this year’s H-1B lottery.
Companies want to keep these people, but they are running out of options. Some companies will try the H-1B lottery again next year, despite facing high odds, especially if the H-1B lottery turns into a wage-based selection process next year.
Others are looking for O-1A visas but find that many employees do not yet have the experience to meet the qualifications. Should we look at Canada?
– Specialist in Silicon Valley
Silicon Valley communications expert Caryn Marooney explains how to get the narrative to the point
Caryn Marooney, a Silicon Valley communications pro turned venture capitalist, spoke in depth about storytelling at TechCrunch Early Stage: Marketing and Fundraising.
During her time in Silicon Valley, she helped companies like Salesforce, Amazon, Facebook and others bring products to market and sharpen their messages. In 2019 she left Facebook, where she was VP of Technology Communication, and joined Coatue Management as a general partner.
Marooney uses the acronym RIBS to describe their basic startup messaging strategy: relevance, inevitability, credibility, and keep simple.
Canada’s startup market is booming alongside hot global VC investments
For The Exchange, Alex Wilhelm and Anna Heim took a look at the Canadian VC market in the first half of 2021 and if you’ve read their paper you know what to expect.
Canada, like the rest of the world, was absolutely hot in the first half.
“Canada’s venture capital results now compete with those of the entire Latin American region, with exits and mega-deals roughly on par in the second quarter and a similar number of venture capital rounds over the period,” they write.
“That caught our attention.”
Greylock’s Mike Duboe explains how to define growth and build your team
With more venture funding pouring into the startup ecosystem than ever before, there has never been a better time to be a growth expert.
At TechCrunch Early Stage: Marketing and Fundraising earlier this month, Greylock Partners’ Mike Duboe analyzed a number of lessons and wisdom gathered from a number of high-growth startups, including StitchFix, as leading growth. His advice included recruitment, structure and analysis with numerous recommendations on what growth teams should focus their attention and resources on.
Delivery on the last mile in Latin America is ready to go
Thanks to extensive fulfillment centers, seamless logistics networks and ubiquitous Internet access, consumers in many regions can now order groceries and new cookware for breakfast and reasonably expect everything to arrive on time for dinner.
In Latin America, a lack of technological infrastructure makes delivery processes complex, and these supply chains are often managed with spreadsheets, paper and pen.
Algorithms that manage delivery routes or automatically dispatch drivers “are virtually unknown in the Latin American retail logistics sector,” says Bob Ma, investor at WIND Ventures.
But thanks to increasing consumer demand and increasing investment in startups for the last mile, Ma says, the region is at a turning point.
With Latin America’s middle class growing by 50% in the past decade and e-commerce accounting for only 6% of total retail, several unicorns have emerged over the past few years with even more waiting.
China’s anticipated edtech crackdown could scare off an important startup sector
China’s edtech industry is valued at $ 100 billion, but its leaders are reportedly considering a plan that would sign these companies as nonprofits.
“When it comes to control, the Chinese government doesn’t mind wiping out tens of billions of dollars in market capitalization here and there,” wrote Alex Wilhelm in the morning’s issue of The Exchange.
“It’s not a great system.”