We talk a lot about how to achieve business success, but today let’s focus on everyone’s biggest fear. What happens if I fail?
The stats can be pretty daunting; on average 50% of businesses will fail in the first 5 years, and according to Inc 95% of new products will fail in their first year.
Established brands and enterprise level businesses aren’t safe either. There are plenty of big tech companies out there, including Microsoft and Samsung, who put themselves on the back foot with competitors as a result of badly thought out Go-to-Market strategies.
But it’s not all doom and gloom. We can learn from failure, and with a Go-to-Market strategy, you can mitigate the risk of it happening to you.
Read on to understand the cost of Go-to-Market failure, and what you should be looking out for in your own business strategies.
The financial cost of Go-to-Market failure
We can’t put an exact figure on this, because every company has a different budget and therefore has a different sum of money on the line if their Go-to-Market strategy fails. But essentially, if you put money in and a product fails, then you’re unlikely to get that investment back.
However, there’s more than one way to fail at Go-to-Market. According to McKinsey, new product launches drive 25% of total revenue and profits. So if your product launches are failing it’s not just the cost of your investment that you’re losing. You’ve also denied yourself the potential growth in revenue that a successful product launch would have brought you.
It’s a lose-lose situation.
Whether you're an enterprise business that can weather the storm of lost revenue and a drop in share prices or a new business with investors counting on you, no one wants to see their money go to waste.
That’s why, before you sink all your investments into a product, you need to pay attention to some of the most critical steps in Go-to-Market:
Before you go anywhere with your product, you need to make sure people actually want it. It’s a massive risk to assume there’ll be demand for your product just cause you to think it's a good idea.
Then you need to know who your ideal customer will be, how you’re going to market to them and how you’re going to make them choose you over competitors.
Once you’re absolutely certain that there’s a) a market for your product and b) you can win that market over, then you can take your next steps in the Go-to-Market process.
The long-term cost of Go-to-Market failure
When a product launch fails it’s not just your bank account that takes the hit, it’s your reputation. A high profile launch that completely flops can do lasting damage to a brand.
Let’s take a look at some examples:
Apple vs Microsoft
The disaster that was Microsoft Vista had a serious knock on effect on the company. Many users at the time downgraded back to their previous software, Windows XP, while others moved over to Apple.
The failure of this launch came in two parts. First off, Microsoft completely threw their product roadmap out of whack by pushing the release of the software back by two years. Secondly, when the product finally was released, it was slow, buggy and difficult to use, rendering it deeply unpopular with previously loyal customers.
But this all happened back in 2006. What does it matter today? Well, the failure of Microsoft Vista is largely credited as the reason Apple was able to catch up with Microsoft and become the more popular of the two brands.
With Microsoft wrapped up in Vista and pursuing the wrong priorities, Apple had a clear path to swoop in with the iPad, successfully meeting one of the most popular market demands of the time. Microsoft pretty much missed out on the smartphone market, while Apple’s phone and tablet sales brought them pretty much neck and neck with the titan.
Microsoft failed to recognize what their audience cared about, be this through a lack of market research or testing of their own internal assumptions. They also could have caught onto customer dissatisfaction with the products they were producing had they carried out thorough beta testing or a soft launch. As you can see, when you miss key go-to-market steps, the cost is high.
In 2022, Apple is now securely in the lead, clocking in at a net worth of nearly a trillion dollars more than Microsoft.
Samsung vs The World
Samsung similarly took a dent to their brand back in 2016 when their Galaxy Note 7’s had to be recalled after repeated incidents of the phones ‘exploding’. Samsung allegedly lost $14.3 billion in investments and that’s before you take into account the customers that will have gone elsewhere for their products after the recall put them off Samsung devices.
Phones catching fire on planes, tablets emitting smoke, burn injuries to customers. Not only is that financially costly, but who’s gonna trust a brand that’s all over the news for setting fire to customers?
In 2022, six years on, Samsung’s reputation is still suffering from the exploding phone scandal, with complaints still coming out from time to time about smoking batteries as recently as the summer of this year.
Samsung also lost their hold over the android world, with phones such as the Google Pixel and the OneNote eating into their market. While they probably haven’t been knocked off the top spot for android companies, their lead is nowhere near as solid as it used to or could have been.
What you may have noticed here though, is the companies we’ve mentioned are all big names not just in their fields, but around the world. Being an established brand has its perks, Microsoft and Samsung are by no means struggling despite their respective failures because they already had a stable enough user base to ride out the storm.
But, would their failures have made such a dramatic impact on brand reputation had they come from smaller businesses? There are perks to obscurity. In startups, you have more freedom to experiment and get things wrong, because the impact to your reputation if some messaging doesn’t hit right or your sales strategy isn’t perfect right out the gate will be less significant.
A product that explodes will be pretty hard to recover from, but when it comes to the strategic aspects of Go-to-Market you do have more room to play.
Of course, in an ideal world, we’d all get everything right all the time. But the reality is that’s not going to happen, and if you get it wrong the first time far fewer people will remember your mistakes than Samsung’s.
Minimizing the cost of Go-to-Market
Go-to-Market is a worthwhile investment, but it does come with a price tag, and you want to keep those numbers low without cutting corners.
A GTM failure doesn’t always mean a spectacular product flop. Sometimes, it just means that you didn’t hit your projected targets and the profits from a new product haven’t been worth the investment that went in.
A lot of the time, you can counteract this with tweaks throughout your Go-to-Market rather than completely jumping ship. It might be that you were 9 tenths of the way to success, but lost out based on a few aspects of your strategy missing the mark.
Go-to-Market is a process with a lot of moving parts, meaning it’s at high risk of being inefficient. If you’re working with tight margins, the last thing you want is to be hemorrhaging time and money, or not understanding where your resources are being wasted.
Think of it like energy transference. When energy transforms from one form to the next or is converted, a little bit of energy is lost each time. With a Go-to-Market strategy, you transfer from team to team, and it’s easy to lose some energy, time, money, knowledge, etc, at each stage. All of this has a cost to your business.
More than that, Go-to-Market is a process vulnerable to siloing. If your contributors aren’t enabled to do their jobs properly it’s inevitably going to end in a costly waste of resources and a product that doesn’t live up to its potential in the market.
To make sure your Go-to-Market strategy is optimizing resources and stretching the budget as far as it can go, you need to make the process efficient and cost effective.
The key to this is communication. Sounds simple, but it's something a lot of companies struggle with.
It’s important to get alignment from all your GTM teams early so everyone knows what their responsibilities are. If you don’t, you’ll be wasting time and resources as your teams work at cross-purposes, tasks get missed or duplicated deadlines continuously get pushed back.
A 2019 survey found that only 55% of new products actually launch on time, so if you’re in that other 45% you’re increasing the cost of your launch by a month's worth of resources and work, as well as wasting money on PR that has to be pushed back and missing out on sales as anticipation for your product dwindles, or customers look elsewhere.
As you can see, there are numerous ways you can waste money on a half-baked Go-to-Market strategy.
Having to start from scratch with each Go-to-Market cycle is also going to be costly, as an undefined strategy will leave stakeholders uncertain of their role, as well as requiring more time and resources throughout the process to figure out the directions the strategy is.
Put it this way, the route from A to B may always be complicated, but you’ll get there a lot quicker and easier with a map than if you just blindly set off without giving it much thought. Don’t be the guy that walks up and down the same road six times insisting he’s not lost. Take the map, and save time, money and energy.
If you put the effort into developing a sustainable, repeatable and scalable Go-to-Market strategy early on, you’ll save yourself time and money each GTM cycle and that initial work will quickly pay for itself.
And if you are losing money throughout the cost of your Go-to-Market process, a defined strategy will make it easier to identify where that loss is coming from and make the changes you need to make to get back on track.
And if you’re not sure how to go about defining a Go-to-Market process, you’re exactly where you need to be. Head over to the GTM Academy website and find all the resources you need to make this dream a reality for your business: