Going to market with your product, service, or experience is the most important moment in your company’s development. Deciding HOW to get there is critical.Dirk Schart is the CMO and President of RE’FLEKT. A brand and growth leader and creator of the Tech Circle community, Dirk understands how to bring complex products to the right markets. While most companies only focus on a single lane of the go-to-market highway, Dirk advises startups to have the flexibility and vision to utilize multiple lanes, enabling them to reach the right audience in such a way that they are creating a 10x user experience. This includes:
- How to define the go-to lanes of marketing, product, and sales
- How to select the correct lane for your business
- Determining the right time to switch lanes
- And more
Whether you are a large or small company, taking your first or third product to market, this episode is worth a listen.
Mentioned in this episode:
Transcript
Voiceover: This is Performance Delivered. Insider secrets for digital marketing success with Steffen Horst and Dave Antil.Steffen Horst: Welcome to the Performance Delivered Insider Secrets for Digital Marketing Success podcast, where we talk with marketing and agency executives and learn how they build successful businesses and their personal brand. I'm your host Steffen Horst. The topic for today's episode is the three lanes of the go to market highway. Here to speak with me is Dirk Schart who is the Chief Marketing Officer and President at RE'FLEKT, a technology company that enables any business or industry to create their own in house augmented and mixed reality applications as well as provides state of the art remote support with intelligent routing. Dirk is a brand and growth leader helping tech companies to build desirable products and bring them to market. His credo is different is better than better, which defines his go to market strategies. He is the author of an augmented reality marketing book and creator of the tech circle community. He turned RE'FLEKT into the number one enterprise AR startup, paved the way for HyperloopTT's SaaS and marketplace products, launched Viond's VR platform globally and helped the mobility startup SkyWork to grow from 30 to over 200 people in less than 18 months. Dirk, welcome to the show.Dirk Schart: Thanks for having me. Really happy to be here in that episode with you.Steffen: Before we explore today's topics, I would like to find out more about you Dirk. Tell our listeners about how you got started in your career and how you ended up where you are at the moment.Dirk: Absolutely, Steffen. And so my background is in marketing and communication science and studied marketing. I did a Master's master's degree in communication science. And then interestingly enough, I I started my career in business development and sales enablement, before shifting to sales and spent a couple of years in sales, before I returned to marketing, which gives me a really good perspective and understanding for how sales teams work and what sales teams need. After that I joined an aviation startup called SkyWork, a rapidly growing company where I built the communications. That was very interesting, right. Where we grew from around 30 people to 200 in less than 18 months. So the learned really a lot about how to scale the teams there. And then I moved forward into the tech sector, where, since around 10 years, especially AR and VR. And then another big milestone for me, which then even even more kind of expanded my knowledge was when I joined Hyperloop. Elon Musk's Hyperloop project where we build products like the augmented windows and the marketplace. And my focus was more there on that on a product and a product marketing side and building the products from from scratch, where we've learned a lot about how to how to deal with product management. And then since 2019, I'm in the Bay Area, and really the global marketing for RE'FLEKT and helped to build the entire US business. So it when you combine all of that, then then I kind of have the background in marketing, sales and product, which helps me a lot as a CMO kind of to play the interface and understand the different different perspectives and the different needs there. And whenever I can I share my knowledge as a mentor for the German Silicon Valley Accelerator to startups who want to go to the US and how can they do their marketing and stuff like that in the United States. So for me, everything is about going to market. Going to market with tech products and especially emerging tech. So in complex products, that's something I really love. Kind of explain the complex and the new things in a very easy way and help people to understand that.Steffen: Interesting. Dirk obviously today want to talk about our main topic is the three lanes of the go to market highway. Now, what is the go to market highway?Dirk: So, go to market is a process to bring a product or an experience or service to market. Means it is available in the right market ready to be purchased. Now what I mean with the with the go to market highway is that there are three different lanes. And the three different lanes are kind of marketing, product and sales are not thinking in terms of department, but more thinking of how can we lead that and how can we build different systems. And what I realized in the last couple of years is that most of the companies they just think in in one way, sort of transferring that back to the highways just driving on one lane staying on that lane and they'd be more or less successful. But especially for startups, when you introduce new products, you have new audiences, thinking about things like crossing the chasm where your audience changes in different markets, you need to be flexible enough and understand which audience which market, which product needs what kind of go to market approach. And there are products where you're good to go with the marketing led approach. Which means you focus on inbound marketing, you have typical things like PR and and these kinds of things. Outbound, then is more a thing to do with a sales or sales led approach, especially for enterprise products, where you have your sales force bringing that thing to market. And then that the last one, the product led is something which came up the last two, three years. So it's quite new. On one side, it's not entirely new. But it's kind of a different perspective, where you use the product as your as your main vehicle, so to say, have an early access to the product and let customers test that very early without having any kind of salespeople involved, or any kind of marketing, other marketing activities involved. And so these are the three lanes. And it's very interesting how you can combine these, we can come and dive into some some examples there. But the best thing is really, how can you combine it and drive on all lanes, depending on the stage of your company, and the market and your product?Steffen: Now, a second ago, you said that marketing and sales are not really involved in a product led go to marketing strategy or approach. Now, can you talk a little bit more about that? Because how would people find out about your product if marketing and sales, you know, are not included in that approach?Dirk: Yeah. That's a great question, by the way. And yeah, if you if you ask the the people who are focusing entirely on a product led growth approach, then there is even the opinion that you can build products that sell themselves. I don't want to go that far, to be very honest. Because if you see if you see the approaches of a go to market, you will always have all of these disciplines involved. Now with with a product led approach, the difference is that you really focus on letting the product do the job so to say, right. So you have let's take an example. Let's take an example like Figma, right. And I take our example from our team. Our team came up with the with, with a request to say, well, we have found a new tool where we can collaborate better on on design assets and stuff like that, when here's the tool, Figma now manager going by it, right. And they just heard about that from other people in design departments in other companies. So they did not Google it, they did not look for something, they did not find it online, it's a typical word of mouth, and referral. So then that's a typical example, for a product led approach, right you use word of mouth, you use the product as the main vehicle to transfer, kind of transport your, your your product to the market. And when I see that, it was an easy decision, because we already kind of had the buy in from teams. There wasn't even a decision, a discussion anymore. Just because it's it's so easy, they already saw the value, which is super important for a product led approach, that the first user experience that aha moment is really good that an onboarding is well planned there, that you experience the value really, really fast. And that's exactly what happened. And our team then moved on and, and talked about about Figma with other people. And that's kind of the growth model of Figma until they reach a certain point, when it comes to different let me say account values per year. Once you get higher, and then go into the enterprise world then it's different. But the main vehicle is the product. And now to come back to your to your to your question also. Is there any kind of marketing or sales involved? Yes, there is, to a certain amount, of course. I mean, you cannot imagine to have a pure product led approach without having any kind of SEO involved, without maybe even paid ads involved. But even if you would reduce that, the SEO component is always there. Right? Because only word of mouth. It's with time of course one of the biggest growth models, the biggest levers to to grow that thing. But to start with, you need to have the marketing side as well. Steffen: Yeah. That makes that makes sense, right? I mean, what word of mouth is actually at the end of the day also a marketing form, right? Dirk: Absolutely.Steffen: Before someone can say hey, I love this product, you know, you've got to find at least one person to use your product and to hopefully like the product and then become an advocate and then basically tweet it out or write a post on LinkedIn or or tell it to a friend that works in a similar industry or they could use the program that then starts hopefully a viral effect. I think what I hear is basically at the end of the day, it's just what what is leading the go to market approach, which is, you know, the Figma example is the product itself. You know, how about HubSpot? How would you call? What approach would you see these guys have done to become what they are now?Dirk: So yeah, HubSpot is an interesting example as well. HubSpot did exactly the opposite of what tools like Figma or Miro or Slack are doing right. What was Slack and Figma and Miro they started with a typical product led approach with you know, typical, let me say pricing of maximum 2k per year. And then once they reached the threshold, they add enterprise sales teams. Now HubSpot, what HubSpot is famous for their thought leader approach around inbound marketing, right. That's how they came up with the whole CRM, about their content strategy. And their content loop, which is still the core of their of their growth model. Now they started with a typical marketing led approach. Inbound marketing was their driver. And then when they when they grew, they added, of course, sales teams, and because they realized very quickly, okay, well, if you want to, if you want to grow that into larger companies, you need to have sales teams. Because your, your kind of your buying process changes, right. You don't have that singing guy who was swiping the credit card there, then you have a buying comedy, there's a couple of people, you have to approach there. So they added their sales people. Now what they would do what they started, like two, three years ago is to kind of also use the product led approach, they have a freemium model, you can still use the HubSpot CRM for free up to a certain amount of contacts in your system. So they started to use the product led approach with a freemium model in place, and kind of using that word of mouth to drive more users into the product. And, and let them have a great experience. So that's exactly the other way around. But you also see there, it's a mixture. Now you could think about, well, they started 70, 80% marketing and 20, 30% sales. And meanwhile, it's probably a mixture of 30, 30 and 40. Where the split between the 3d siblings, right? The interesting thing is always when you see a company starts to target an additional audience, right? Like the Figmas and the Slacks, they started either with small and medium business, or they approached mainly teams in larger companies, but really smaller tight teams, right. And on the other end of the of the spectrum, you have then the larger enterprise and both need to have different things. A good a good example, by the ways there is that article is I guess, five or six years old, from Christoph Janz's partner at at Nine Point Capital, one of the investors of a couple of companies. And he kind of categorized that there's five ways to build $100 million business. You start kind of the bottom with the really small ones, which he called flies, right? You can have 10 million flies with a really small amount of 10 bucks, or you go up and have a smaller amount of enterprise customers with 100k annual recurring revenue. And depending on who you have there, you need of course a different approach. Right? For the smaller ones, you have more product led involved. For the larger accounts, you have more sales led involved. So it depends a little bit on what kind of audience do you have there. Steffen: Now from your, from your experience, does it make sense to you know, to switch from one lane to another lane and have another approach take over while you're already starting to run? Or would you rather recommend a company focused on you know, like, like HubSpot. You said that they started off with marketing led and that they continue to focus on this one, instead of kind of later on maybe go more towards enterprise where maybe it becomes more a sales led approach?Dirk: Yeah, that's a good question. I mean, you know, especially in the startup world, the resources are limited, right? So you, you have a certain amount of resources for experimenting with different things, but you have to make sure that you don't use too much too much of resources. However, for me, the interesting thing is, is not just to implement such an approach, but having the perspective and seeing what can we challenge there. And I can share, share a couple of things about how we did that and why we did that. But let me let me before maybe focus on one thing. Especially from my point of view, marketing's is always struggling a little bit. It's about onboarding, right. In most of the startups, what I see is marketing's handing over the lead somewhere, you know, what's typical discussion and typical scenario, and then some someone does the onboarding. And onboarding is kind of a must have some someone needs to onboard that user or customer somehow. But this is kind of one of the most underrated channels or instruments in the whole marketing sales and customer success portfolio. And depending on your approach, you have different one, right? If you have the sales led approach. You have the sales people that are involved. They doing that may be supported by customer success. If you have the product led approach, and that's fully automated, there's nobody in one. Now the interesting thing is you can learn a lot from that. You can learn a lot of how they do that with a product led approach and how they make that whole onboarding, a really, really great experience. And with that typical thing, what we talked about all the time is out of the 10x experience, right. And that's what you have. And that's what kind of was our trigger to add another approach or two. They won't even say change. Because we did not entirely change it, we just added another component. And one of our products is a remote product. So you can compare that to something like Zoom or MS Teams, but for the manufacturing industry, where you can support in real time. And that was always a typical sales led approach supported by marketing, but led by typical sales teams and selling that to enterprise buyers. And then COVID came and even before we realized, wait, there's a lot of there are a lot of smaller companies, midsize companies starting to look for these kinds of solutions. They are faster, they don't have these long sales cycles, they don't have these complex buying processes. But what they want to have is they want to have really fast access to the product. You know, they're not the guys who have the spreadsheets with their requirements, they're more the folks who really want to get their hands on the product. And that triggered the process. And we said, well, we need to change our model from a sales model to something else. And we're kind of very motivated to do that until we realize, oh, wait, our product is not really ready for that. Because you cannot just roll it out or onboard people automatically. It takes like two days to do a to prepare everything to handle the accounts and make sure everything works. So that was the first thing. But the great thing is over over a time of like 12 to 18 months, we improved all of that. And we reduced that to kind of to down to 15 minutes today, and marketing and sales and product work together on that. And meanwhile we improved that we have really, you know, beside things like we have 300% of the trier request, which is nice. Or what I really like are things like we have 30% lower a number of service tickets, because the process is much better than it was before. We have much better feedback there from the customers, they get a faster access to the product. And that's for me key. Think about what does that approach help me to do, and then you kind of pick elements out of it, and add it to your existing approach and do it step by step. You don't need to turn that around from one day to the other because it's just not possible with the resources we have. But you can really do that step by step and learn from it. And and that's something you know, which takes your go to market, which brings you a lot of more flexibility to react faster, to learn more to get more data and more insights and to make better decisions.Steffen: That's interesting. Now, what if someone says out there and said, well, this is all great, but how do I select the right lane for me? So how do I decide whether I should go with a sales led, marketing led or product led approach?Dirk: Yeah. So that's the important question there, right? What is the criteria you can use there and I have three things I use, and you can add a lot more. But I think these three are for me important. The first one is target market. You need to understand who is your buyer there? How is the purchasing process? What are the preferred channels? Where do you really find these these these people? Do you have an enterprise customer? Do you have a small business? Where are your customers, there? And that defines, of course, what approach makes most sense. If you have a market full of enterprise buyers, and you have a complex product, it's probably not the right way to start with the product led approach. It can help you later on. Take HubSpot, you mentioned it. It's the best example HubSpot is not onboard and rolled out in one day. Just needs a lot of requirements before it needs to, you need to think about what what are you going to do with that whole thing. So there a marketing or sales, that approach is much better. But then when you go down to an to a smaller midsize business, or specific users, it's a completely different situation. So what kind of market do you have? What kind of audience do you have? That's the first thing. And the second thing is typically about the buying process? You know, when I, when I talk about, especially monetize monetization, right, monetization is not only about pricing, there is a lot of things involved. And that's exactly what you have to consider here. Sales cycles, of course, with a product led approach, you have different sales cycles, then with an enterprise approach, right? You can get, of course, higher account per revenue per account, but it takes longer. So how many people are there involved? How does that whole buying process look like? And if you know, you know, there's friction in that process that is maybe better to have a kind of a guide there, whether it is sales or customer success. While if you don't have friction there, well, then you go down to the marketing path, or you go to the product led approach. And then the third one, and that, of course, is super important. It's the product experience. I don't want to say only the product is really the product experience. But how much complexity do you have there in your product? Is it a super simple product? Something like Miro it's a whiteboard tool? Or do you have a product like, you know, Salesforce, or Workday? How much friction do you have in the onboarding? How easy is it is for the users to see the value there? You know, that first aha moment? How long does it take that? How much effort do you have to put into to get user adoption? And how much risk of churn do you have there? That's kind of everything around the product experience. So these are the three things for me. The target market, the buying process and a product experience. If you if you have a look at these new things, you will figure out quickly, what is the right mixture? I don't want to even say which is the right lane. I just say, you know, how much time do you spend on which lane? Where's the main lane so to say? But then how much can you use the others? So these are the three factors I use with our teams and also with the startups I mentor to make the decision about the right approach.Steffen: Yeah, just just to kind of to to emphasize. It's like never just a product approach. There's always marketing or sales a part of. The question is, how much of sales and marketing is required in your early stages, you know, and it's just kind of an add on to the product approach, basically. And that might change over time as you as you kind of progress in getting into the market. And you might, you might in beginning start off with smaller companies. But as your your product, your service takes, you know, it's being adopted, you might then decide, hey, you know what, let's go after mid market and at some point, you might decide, let's go off to enterprise and those those shifts then, will kind of make your you will have to adjust your approach for that.Dirk: Absolutely. I mean, take take Slack as an example. Right, Slack used their focus on a product led approach to compete with Microsoft, right? They compete with Microsoft Teams as a communication tool, a collaboration tool. And why while Microsoft started with a typical sales led approach, what they usually always have and focused on targeting the buyers and the purchasing departments and the IT departments and then Slack came and said, well, okay, we will target teams. We will do have a buttoned up approach, and go there to the single users and grow out of that. And that worked. Of course, until until a certain stage, but then when you want to have convince global IT, that does not work with the with the product led approach, right, you need to have experienced account managers to handle that. And meanwhile, Slack, 50% of the Slack ARR comes from enterprise. And from accounts with more than 100k revenue per year. I guess that shows quite well, you can start like that. But then with a time you expand to the enterprise and I there's almost no company, which has a pure product led approach or just does not grow into the enterprise area, just because they realize there's a lot more money, and you know, then you get longer contracts and all of these things.Steffen: Now, before we come to and end, Dirk, how can someone keep the focus by leveraging the product experience?Dirk: Yeah, so you realize I talk a lot about the product experience rather than the than the product. And the reason for that is that, you know, for me, this is the alignment. It's the piece to align the different departments. Sales, marketing, product, and customer success, and I'm going to have all of these discussions we usually have they all we handed over the leads, and we did this and that, but the others did not do that, right. So everything is around the product experience. And and that's what you need for these for these different approaches, whether you have a sales led, or product led, especially for the product led. Now what I mean by product experiences, I split that in five different different stages, right? And it starts with kind of what I call see, it's the part where you kind of meet the product the first time you don't, you don't even use it, or you don't even test it, but you find it on a marketing channel somehow. But think about what kind of experience is that there? It's not just to have a channel there. The next step is think about what can you what kind of experience can you create when you try the product? And you know, it's easier with a simple product, of course, because you can download it, but what can you do in order to have the same experience for a company that has a more complex product? I had a situation last week with a startup and said, well, you know, we cannot just let that let just download because we kind of need to explain it. I said okay, but how can you how can we simulate that experience online that your users get a superfast experience. And know, uh, well, this is the differentiator, right? And then it goes goes like that to apply, where they really adopt the product, then how they rate about how the how happy they are with it. And finally, they share that experience, right. And that's where from marketers, of course, the the important part, why I talk about the product experience, don't leave that customer journey, once you hand over or once a user is on boarded. But really take then the last part of it, use all of that content and and share it and scale the entire journey. And that's what we do. For instance, we do user acceptance testing with all our customers. And we get the feedback out of there, we get the feedback from the users, which we then can share, right? And so for me, everything is about the product experience. And for me that helps startup teams, smaller teams, to really keep the focus in what do we have to focus on? Everything has to be connected to the product experience, and how can I make that better? It's not about what marketing can do better, or sales can do better. At the end of the day, it comes back to how can I create a 10x product experience?Steffen: Perfect. Well, Dirk, thank you so much for joining me on the Performance Delivered podcast and sharing your thoughts on you know how to approach a go to market strategy the right way. If people want to find out more about you and RE'FLEKT how can they get in touch?Dirk: Yeah, well they find me on LinkedIn Dirk Schart. They also can have a look at my website, dirkschart.com. We post articles just about the topics we we discussed. And if the audience wants to have a look at what RE'FLEKT, then it is re-flekt r e - f l e k t.com.Steffen: Perfect. Well, thanks everyone for listening. If you liked the Performance Delivered podcast, please subscribe to us and leave us a review on iTunes or your favorite podcast application. If you want to find out more about Symphonic Digital, you can visit us at symphonicdigital.com or follow us on Twitter at Symphonic HQ. Thanks again and see you next time.Voiceover: Performance Delivered is sponsored by Symphonic Digital. Discover audience focused and data driven digital marketing solutions for small and medium businesses at symphonicdigital.com
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