In our eleventh episode of category creators, Gil talks about category creation with two leaders who played a key role in the next-gen internet network performance management and cybersecurity intelligence categories.
Our panelists include:
- Kyle York, CEO of York IE and pioneer of the next-gen internet network performance management category
- Tom Wentworth, CMO of Recorded Future, and of the cybersecurity intelligence category
Key takeaways from this episode
If you’ve been following our B2B categories podcast for a while, you’ll know we frequently talk about using models to drive growth.
In our previous episode, we talked about how content can be used to drive your category maturity model. And before that, we covered hiring models.
We’re going back to the basics with this episode and talking about market models.
A market model is a powerful tool for better understanding your market opportunity. It provides insight into how and why other similar competitors have been successful, what customer segments are important, and where the opportunity lies in the market.
Think of it as an analytical framework to help make critical decisions about product development efforts. Without it, you increase the risk of building something people don’t want.
Your product might end up with lots of cool features but not really solve any of your customer’s needs.
Why technical founders struggle with market models
Many technical founders struggle with market models.
They are builders. They find a problem, and they build a solution.
This approach makes sense in development sprints where one-dimensional, deep-domain thinking is good. But as a founder, this type of thinking can lead to too much focus on the product and not enough on the market.
We’ve seen technical founders fall into this “shiny object syndrome” trap many times. They built a great product but couldn’t capture the market fast enough because they were feature-first and not market-first.
At the same time, companies with average products have won because they invested a lot more in marketing and brand positioning early on.
The importance of thinking ahead
By thinking about your growth in multi-year rather than yearly windows, you get greater context about your market model.
This is not the same as creating a 3-5 year plan for your pitch.
A multi-year market model is actionable. It highlights the operations that will need to take place over a 24-month+ period to execute your assumptions.
Some of the things that are typically included in a multi-year plan are:
- Sales teams and quota models
- Ramp times and the assumptions you’ve made historically
- Rep ratios to BDRs and SEs and managers
- Lead volume
- Inbound and outbound breakdowns
The compounding effect of branding
The same long-term thinking that’s needed to develop a multi-year model can also be used for branding.
Branding is often an afterthought for many growth-driven companies.
It’s easy to spend all your time on short-term demand generation tactics in the beginning and forget about branding. The problem with doing this is that you miss out on the long-term compounding effects of branding.
Long-term branding helps you:
- Stand out in your category
- Improve the customer perception of your brand
- Shorten your sales cycle
- Charge premium prices
- Increase customer retention and loyalty
- Attract and retain the best employee talent
If you take a look at the most successful exits in recent years, you’ll notice that the majority of those companies focused on branding in the early stages.
Through branding, long-term planning, and adopting a market-out approach, they won the market and were rewarded for it.
This podcast has many more interesting insights and examples of companies about market models, so be sure to tune in.
Tom Wentworth shares a story about how trying to be cool at South by Southwest led to one of the most obnoxious press releases that’s ever been written.