As founders start out on their journey, there’s a lot of balls to juggle for sure. Customers, product, competitive differentiator, access to capital, and the list continues. An important one that doesn’t get talked about enough is the Path to Market – how will you reach the customers. Founders sometimes skim over this by saying they’ll sell online or they will sell direct, suggesting this is just a logistical detail someone needs to put in place.
But it’s a whole lot more than a ‘logistical’ detail … the path to market is the ultimate test to how well they understand how the game is played.
Rather than recount stories of founders being burned by their inexperience, let’s focus on how to educate our founders to find the best path forward to market. Here at WKI, we start with a design framework we call the Ecosystem Ladder. The task is to map the Layers and Players in the value chain/ecosystem, identifying each layer in the value chain and beside each, listing the names of companies that “play the game” on that rung of the ladder. To illustrate, below is an example I created of the ecosystem ladder for the cloud computing space. The act of mapping the ecosystem is straightforward, but believe me, it requires the founder to do their homework to understand their market. The value is not in the mapping, but rather, in the analysis and conversations that follow. Let me show you a little bit of what I mean:
1. Who is playing the game? This is a great starting point — who’s on the ladder? Big industry giants (i.e., Amazon, Google, etc.), startups, etc. Are certain players occupying several rungs? (i.e., are they trying to dominate the space)? What are the dynamics in this ecosystem – i.e., major developments impacting all players? For investors, this map provides visibility to potential acquirers and other possible exits.
2. Where does the founder play? Make sure this is highlighted on the ladder. Are there potential partnerships (typically one layer above or below) that could be formed to carry their product to market? Are there some that would make the best “early access partners” to launch with? ? It’s often the case that bundling several products together into one solution creates a stronger customer value proposition. Plus, you share the marketing and sales expenses while lifting each other up. Think. beyond the obvious, big names that have cache, to firms just a little bigger than you.
3. How is the game played? What’s the business rhythm like? How is business done in this ecosystem? What are the various ways products move down the path to market? And what business models are in play? Whether it’s fintech, biotech, cloud services, medical devices, automotive, etc., every ecosystem has its own rhythm and way it provisions products and services. Our founders can leverage this to their advantage if they know how the game is played. It also builds credibility with investors that they know how to compete.
4. What about the playing field for suppliers? The recent chip shortage for the automotive manufacturers is a strong reminder that without a steady flow on the supply side, everything falls apart. I saw this firsthand during my startup days when we struggled to get supply because the major players had tied up relationships with the component suppliers. Let’s have this conversation early and often with our founders – can they get enough supply to launch and scale. Remember, supply issues can happen in any sector.
There’s a lot more we could discuss, but I’ll leave you with one final thought — All business builders can benefit from a periodic review of their ecosystem. After all, change is constant in an ecosystem and the players, dynamics, and developments lie at the core of a successful go-to-market strategy. Building out this conversation with the Ecosystem Ladder design framework can lead to some very productive insights and outcomes.
Try it out — I think you’ll be pleasantly surprised at the richness of the conversations and insights.