337: Whatfix: SaaS Go To Market Strategy: A 7 Step Go to Market (GTM) Playbook - with Khadim Batti

Summary

In this insightful conversation, the founder of Whatfix discusses the evolution of their product, the challenges of catering to multiple industries, and the eventual decision to narrow their focus. Initially, the product aimed to solve a broad range of use cases, but feedback from investors and market insights led to a more targeted approach, particularly in the employee experience and insurance sectors. The founder shares key lessons on how narrowing down focus can improve value propositions, sales cycles, and pricing, leading to more significant business growth. Practical advice for entrepreneurs on market positioning and overcoming scaling challenges is also provided.

Takeaways

• 😀 Narrowing your focus on a specific market or use case can lead to more precise value propositions and stronger differentiation in the marketplace.
• 😀 A broad product that serves many industries can dilute your messaging and pricing, making it harder to convey value clearly.
• 😀 By focusing on one key market, you can improve your sales cycle efficiency, win rate, and pricing power.
• 😀 Product-market fit is important, but so is go-to-market fit. Tailoring your message and product to the right buyer persona is key.
• 😀 As a founder, curiosity is a vital trait for iterating and improving your product to meet customer needs more effectively.
• 😀 It's important to manage expectations when hiring in the early days and avoid over-designating employees based on talent attraction rather than experience.
• 😀 Narrowing down to a specific niche allows for the identification of hard business KPIs, making it easier to showcase ROI and price effectively.
• 😀 Targeting industries with clear business outcomes (e.g., reducing processing time in insurance) helps increase the perceived value of your product.
• 😀 Sales cycles and customer relationships become more streamlined when your product is tailored to address specific industry pain points.
• 😀 While horizontal approaches can sound attractive, they often result in inefficient sales cycles, whereas a focused approach can yield faster growth and higher profitability.

Q & A

What was the initial challenge faced by the company in terms of product-market fit?

The initial challenge was that the product, Whatfix, had a broad use case and was designed to help in a variety of sectors such as B2C, B2B SaaS, employee onboarding, and more. This made it difficult to target a specific customer segment, resulting in issues with pricing, differentiation, and messaging.

How did the founder realize the need to narrow the focus of the product?

The founder realized the need to narrow the focus after discussions with investors. They were asked to pick one clear target market and explain the differentiation for that segment. This led to the decision to focus on a specific use case rather than trying to serve multiple industries.

Why was it difficult to differentiate the product when it was aimed at multiple industries?

Trying to cater to multiple industries meant the product lacked clear differentiation. The value propositions for each segment were not strong enough, and the company couldn't create a clear message that resonated with any one group. This made it hard to establish a solid market position.

What role did customer feedback play in the company’s decision to narrow down their market?

Customer feedback highlighted the need for a more focused approach. As the company began to understand deeper, industry-specific use cases, it became clear that certain business metrics—such as improving claims processing in insurance—would be more compelling to specific customers, rather than trying to solve a broad set of problems.

What key business metrics were identified to help narrow down the product’s focus?

The key business metrics identified included improving operational efficiency, reducing support tickets, and enhancing business-specific processes like claims processing time. By focusing on these metrics, the company was able to provide clearer value to specific industries, improving pricing and customer engagement.

How did narrowing down the product’s focus impact the company’s pricing strategy?

By focusing on specific use cases and business metrics, the company was able to increase its pricing. For example, with a focus on improving claims processing time in insurance, the company was able to charge higher fees because the value proposition resonated more strongly with clients, leading to a higher willingness to pay.

What advice did the founder receive from an investor that influenced their decision to narrow the market?

The investor advised the founder to pick one market and go deep. They challenged the founder by asking which segment would be the best to target if forced to choose, which helped the founder focus on a specific use case and build a more differentiated and compelling product.

What is the potential downside of a horizontal approach in product development?

A horizontal approach, while seemingly appealing due to the broad market it can serve, often results in a diluted product offering that lacks strong differentiation. This makes it harder to effectively market, price, and close deals, leading to lower win rates and a less focused sales process.

How did narrowing down the market help the company improve its sales process?

Narrowing down the market allowed the company to refine its messaging and focus on specific value metrics, which resonated strongly with the target audience. This led to shorter sales cycles, higher win rates, and the ability to charge higher prices, as the product now addressed well-defined pain points for specific industries.

What does the founder believe is the most important characteristic of a successful founder?

Curiosity is the most important characteristic. A successful founder must continually question assumptions, processes, and product designs to ensure they are solving the right problems. This curiosity helps them build better products and iterate faster.