There’s no single silver bullet for successfully launching a go-to-market strategy, particularly when it involves expanding into a market like the US. It’s equally as exciting as it is dizzying: the US is 13 times larger than the Australian market. For founders, it can feel like they’re flying by the seat of their pants.
You can remove the guesswork by tapping into the hard-won insights from someone who’s done it all before. That’s where Stephanie Carullo comes in. As an Aussie expat with a career spanning many US success stories from IBM to Cisco, Apple and now Box, Stephanie has seen first-hand what best-in-class go-to-market looks like, and has developed an instinct for how startups can finetune theirs.
Stephanie sat down with us as part of our Stacking the Odds series, to share her lessons from running the go-to-market motions at some of Silicon Valley’s tech giants, and her advice for Aussie and Kiwi founders on how to approach entering the US market.
Here are the highlights and key points from the session.
Building your go-to-market strategy
As an advisor to a handful of startups alongside her role at Box, Stephanie has witnessed first-hand the hurdles in front of founders as they start planning their go-to-market motion. To save your time and energy, Stephanie shares the 4 foundational elements to get you started.
1. Start with segmentation
If you get your market segmentation right from the start, this acts as a north star guide to find the best strategies for targeting your customers. Once you’ve identified your key market segments, you can probe into which segments to target first and what approach you could take.
Box’s approach to market segmentation has evolved with time:
When Box launched, they wanted to go big as they knew there was a vast market opportunity. It was a horizontal cross-industry, cross-segment play. It went all the way from a free single user to enterprise.
Over the years, we’ve fine tuned the segmentation. We’ve thought about where the sweet-spot is for our SMBs, mid-market and enterprise customers and also our product-market fit–we work extremely well in a regulated industry, like the public sector, financial services, life sciences and biotech. Then we identified the obvious, low-hanging fruit use cases. From there, you can start market mapping.
This methodical approach serves as a plan for how to identify the right market. “If you’ve got bandwidth, I’m a big fan of trying different things in parallel and pivoting quickly,” says Stephanie. “We run a lot of incubated experiments to test what’s working and shift as needed for the market and the customer.”
2. Have a position on your pricing strategy
The challenge for startups is the balance between giving something away for free to build momentum and draining your resources with low ROI.
Pricing decisions are hard to walk back on, so Stephanie spends a lot of time upfront on helping founders figure this out. Founders often flip between pricing really low, or really high to begin with, but if they don’t have a good rationale for why, Stephanie is quick to call time-out: “You need to have a starting position on your value and your monetisation strategy.”
Pricing strategies to consider include:
- Premium strategy: where you price your product higher than your competition to increase perceived value.
- Initial low pricing for market penetration: where you enter the market at a low price to grab attention and market share.
- Price skimming: where you charge a high price initially and then lower the cost to attract other potential customers.
- Psychological pricing: where you use consumer psychology to influence the customer’s perceived value of your products, including pricing products slightly lower than a whole number.
- Bundled pricing: where you group products together at a lower price to increase the customer’s perceived value vs if they were bought separately.
3. Know your value proposition
Your value proposition should answer the question of why a customer should purchase your product over another company’s. You’ll have a core value proposition that won’t change, but it will be slightly nuanced depending on who you’re speaking to.
“My conversation with a CIO at a higher education institution is a very different conversation to the one I have with a customer in financial services. I need to address different needs and different understandings of the outcomes and value that technology drives.”
4. Don’t spread yourself too thin
It’s tempting to go wide and try and cover as many geographies as possible. But if you have a good understanding of your market, Stephanie makes the argument for trying to get a strong foothold in your primary markets first where you know your value proposition is working.
“I haven’t allowed Box to go broad-based across Asia. There are so many opportunities that we haven’t uncovered in our nine primary markets yet–the TAM is huge. Every now and then, someone will try and convince me we’re ready to go to Asia, and I’ll ask why and show them how much spend we still have in our existing markets.”
Given the size of the US market, Stephanie’s advice is not to try to do it all at once. “Trying to tackle the whole market will take a toll on you from a bandwidth perspective and your ability to go deep. Force yourself to prioritise where you’ll start.” We’ll cover more on how to figure out where to start under Nuances of the US market.
Experimentation vs focus
Choosing to experiment or focus is often an either/or conversation at a startup. But it doesn’t have to be. Both are an essential part of making your go-to-market motion a success.
If you’re going to try a bunch of different tactics, define what success looks like before you get started to save your time, resources and money.
“You can add some method to the madness of experimentation by setting clear goals and metrics, and holding yourself accountable to them.”
As a big believer that once you write something down, there’s no turning back, Stephanie suggests creating a scorecard covering the objectives and hypothesis of the experiment. “Put a stake in the ground for how long you’ll run the experiment for and then look at the metrics religiously. When you look at the data, you’ll see in some instances very quickly whether it is proving or disproving your hypothesis.”
Sometimes, it takes a little longer to see the results you’re after and it’s easy to fall into the trap of pushing out the timelines to get there. “We’ve all been part of an experiment where you say, ‘Let’s wait a little longer; I think the market will turn.’ But you get to a point where you just have to call it. Ultimately data doesn’t lie, so it should inform your decision.”
This approach to holding yourself accountable and not feeling bad when an experiment doesn’t work as expected is rooted in one of Box’s core values: fail fast. “We learn every time we fail fast. It’s a good thing.”
Scrappy vs process
You’ve done the experiments and identified what you should focus on. Now it’s a question of whether you should keep executing scrappily or build a process around it.
When Stephanie joined Box in 2015, the company had already scrappily built a solid subscription-based business and IPO’d. She attributes a lot of Box’s success to Aaron Levie, its co-founder, who she describes as having an incredible knack for attracting amazing human beings to work there.
“When I got there, I saw they had some pretty rudimentary processes in place that were highly reliant on individuals because they had created such a talented team,” says Stephanie. “But you can’t scale a business with just people; you have to have really robust processes.”
Finding ways to optimise and improve processes plays to Stephanie’s strengths, and she quickly went function-to-function to see where she could unlock value and efficiencies.
“One thing that didn’t exist for example, was a pricing council to determine our pricing strategy. This is critically important when you’re starting a business because it’s hard to unwind certain decisions. You have to be super thoughtful about features vs a product, and when you look at monetising them.”
Over the last 5 years, the implementation of these processes has made Box’s operations more robust and scalable. But they’re quick to check themselves on whether they’ve made things their ways of working too complicated.
“We were looking at streamlining a process for taking feedback from clients and prospects about what’s missing from the platform to a product manager for review quickly. Our first attempt at the process had 15 steps. I said to the team, ‘Time-out. Let’s peel this back’. Two hours later, we had a new process with 6 steps in it using our existing tools.”
Nuances of the US market
Having spent 50% of her career working in Australia and Asia, and the other 50% in the US, Stephanie believes the selling motions between Australia and the US are similar. That said, there are some nuances to understand and tips Stephanie shares to get your US expansion right:
Where should you set up shop?
The US is a big market, and the cost of doing business will differ depending on what part of the country you’re operating from. When you do your market analysis, mapping and competitor profile work, it pays to think about the US holistically, and then focus on where you want to start.
If your product or service has particular industries that are your sweet spot, you can use those to zone in on a specific part of the States. For example, there are biotech hubs in Massachusetts and San Diego, and emerging hubs in Florida and Detroit.
If you have a horizontal market, it makes sense to look at where you have the largest total addressable market.
“Trying to cover the entire [US] market is crazy–I would rethink that as your starting point.”
A nuance of the US market that Stephanie points out are the specific talent hubs associated with universities which can influence where you choose to base yourself. “Utah has a number of compelling institutions like Brigham Young University. Pittsburgh has some great engineering schools. A lot of organisations tap the incredible, and readily available, talent pool in these locations where the cost of doing business is also much lower.”
Do you need boots on the ground?
You don’t need to book a flight straight away to expand into the US. “Covid taught us you can do business with anyone from anywhere in the world. Use that to your advantage. You can start to try a lot of things from your own backyard. You don’t need a business plan that relies on a tonne of expenditure to physically be there.”
When you do start to build your team in a new market, generally speaking, Stephanie believes you need a local as part of your core team. The goal for founders when hiring in a new market is to find individuals who align with the culture you have and want to continue to nurture globally.
“If a founder can relocate for a period of time to handpick these hires, I think that’s highly advantageous. If you can’t do that, you’ll want to find someone that you immediately trust to lead your team because it’s important to get off on the right foot.”
Stephanie’s 5 key takeaways for startups entering the US
- To get started on your go-to-market strategy, identify your key market segments, have a position on your pricing strategy and know your value proposition.
- Experimentation allows you to gather valuable data and insights–just make sure you have clear goals and metrics and keep yourself accountable to them.
- Check that you haven’t over-complicated your operations when implementing new processes.
- The US is a huge market, so dig into the data and understand the nuances as to where it will be most advantageous for you to set up shop and target.
- Culture is key, and where and when possible, founders should make the first hires in a new market to find team members who are the right fit.
