Notes on Software Distribution from software podcast in Nepal.
Go to market pipeline strategy
“A go-to-market strategy (GTM strategy) is an action plan that specifies how a company will reach target customers and achieve competitive advantage.” – techtarget
Normally, a startup has no go to market distribution pipeline with 100, 500 or 1000 personnels in varied departments. It has only few specializations combined in fewer roles. An individual would have to focus on many tasks.
Hiring software engineers with top technical talents in large economy is hard.
When building a product, focusing on sales at inception is risky. In a very logical way, if any non-member of organization can sell the product, then the product is actually solving a pain point in real world scenarios. And your early adopters of your product is your most important users who also happen to have not bought your complete product yet.
Your software product is not going to be the same between your 1st year of release to its 3rd year of updates. You are going to pivot. You are going to change it. And it inevitably ends up happening in the process of adjusting the product.
The only true proof that a software product has a product-market fit comes from a very simple thing: Is somebody willing to pay you money for your product over and over again? and are there people enough like them out there.
With a software product that lives on ARR (annual recurring revenue)/ MRR (monthly recurring revenue), it is not the revenue that matters but the recurring. Here the most important R is the recurring and not the revenue. The customer’s renewal is important. And without any recurring revenue model the product is not going to have Life Time Value.
If you sell a software product to users for $100k this year but the users don’t renew it next year, then the value of that software ends right there. But if you sell for $100k this year and the users renew it for 10years, then its a million dollar in lifetime value. You just increased the value of the software for at least a million dollars right there.
A new trend of Product Led Growth is now overtaking software industry. Here the plan is not sell huge $500 prices of software products in market but instead sell little $10 monthly prices of purchases in various forms like in-app purchases, coins and attractions. People sign up with their credit card details and subscribe to your software. Some existing examples of this Product Led model is Slack and Zoom and many more with recurring pricing. Trying people to get hooked to the value proposition in the product and allowing them to spend anywhere from $5 to $100 on their credit cards, but then create that continuous revenue flow. This is the drastic changes to the go to market strategy of software industry in silicon valley now.