How to align your startup's sales and marketing to enter new markets

Breaking into a new market is hard for startups. There are two major challenges.

First is about you – it's crossing the chasm between early adopters (buyers who love new things) and the majority (who want easy practical solutions).

Second is about the market – when the market consolidates and creates fierce competition.

The trick is getting your sales and marketing to work in sync. You need to target the right customers and give them what they actually need.

Most startups fail because they don’t align these pieces, but if you do, you’ll avoid the usual pitfalls and start gaining traction. Here's how to make that happen.

The two key challenges for startups entering new markets

Challenge 1: Shifting from early market to early majority

The early market and early majority have distinct buying needs and criteria, leading to a phenomenon known as the chasm.

Many startups fail to cross the chasm, and are unable to achieve sustainable growth.

In the early market is people who love technology and care a lot about the product itself, like its features and its innovations. To sell to them, you have to show them why your product is better.

On the other hand, the early majority are more practical and care about the market leaders, the standards, and the costs.

They want a complete package and none of the inconvenience that early market tends to tolerate.

Competition strategies are different between early-market and early-majority.

In the early market, especially in business-to-business sales, the competition is about getting a share of the money that companies have set aside.

But in the early majority, the money comes from a different budget, and customers need to compare market leaders within a common category and choose the best option.

If there's no clear competition or established market, it's hard to convince customers to buy.

However, this also means there's a chance to create a new category and become a leader in it.

Challenge 2: Market consolidation

The second challenge occurs when a new market category consolidates.

This happens when a market, which started with many small companies, shrinks as some businesses merge, get bought out, or close down. This leaves only a few big companies in control, called the “category king”

To give an example:

• New market category: A decade ago, the concept of ridesharing – summoning a car and driver through a mobile app – was a novel idea. Companies like Uber and Lyft pioneered this new market category, offering an alternative to traditional taxis.

• Consolidation: As the market grew, competition intensified. Several other ridesharing companies entered the scene, each trying to capture market share.

• Category king emerges: Through aggressive expansion, innovation, and strategic marketing, Uber gradually established itself as the dominant player – the “category king.” Smaller competitors, unable to match Uber's scale and resources, struggled to keep up. Some were acquired or merged, while others simply faded away.

• Smaller competitors left behind: Today, while other ridesharing companies still exist, Uber's dominance is clear. It has the largest market share, the most extensive network of drivers, and the most recognisable brand. Smaller competitors find it challenging to attract users and drivers, often having to focus on niche markets or specific regions to survive.

As you can see, being a category king comes with significant benefits such as attracting the best talent, and earning higher profits due to having the largest customers and the ability to command higher prices.

If your aim is to grow, becoming the category king should be your ultimate goal, rather than just focusing on increasing sales.

Alternatively, if becoming a category king is not yet possible, aim to become a beachhead queen (someone who dominates an area with a strong presence like a military force securing a beachhead or a queen securing a chess board).

If you can win in a smaller niche, you can then sell it to the category leader and make a profitable exit.

If there is still room for growth in the market, expanding beyond your niche and creating a new category can be worthwhile.

This gives you the opportunity to strive for the dominant position.

How to tackle market challenges

Step 1: Find your starting point

Start by finding a niche where you can establish yourself as the leader—de facto vendor. Focus your sales, marketing, and partnerships on this niche.

Remember, there will always be a dominant player in each market category, so be aware of potential competitors.

Don't just consider the size of the market, but also the value of solving the problems faced by customers in that segment.

The bigger the problem, the more people will put up with flaws in your product. So at this stage, if you're solving a real pain point, you don't need perfection—just an MVP that works.

Step 2: Build a complete solution

Once you've identified your starting point, build and deliver a product that meets the specific needs of your beachhead.

This complete solution, tailored to the segment, is known as a whole product.

The whole product model helps you understand how additional value can be added to your core product.

Assess your product from the customer's point of view, not from the product manager's perspective. It will guide your development efforts and investments to meet market demands.

In the early stages, tech enthusiasts and visionaries will accept a minimum viable product (MVP). But as you progress, the majority of customers require a complete solution with little inconvenience.

Bridge the gap between your product and market demands by identifying the minimum version of the whole product that satisfies the needs of your segment.

Determine what's missing and prioritise filling those gaps to successfully cross the chasm. You can fill the gaps yourself or through strategic partnerships.

Step 3: Expand your market

Once you've established a strong position, use it as a foundation to enter adjacent segments.

Adapt and simplify your existing product to meet the needs of these new segments.

By leveraging the investments you've already made in product development, you can offer a lighter and more affordable version to attract new customers.

Using your go-to-market strategy

Your sales, marketing, pricing, product development and go-to-market strategy should all be relevant to the stage you’re at.

You can see what that looks like here:

In the product-market fit stage, your anchor point is your product and your early customers. This is used to validate your product and hypotheses.

In the go-to-market fit stage, your anchor point is your niche and your whole product model.

Essentially, the difference between a strategy-driven plan and a sales-driven plan is whether you are focused on a segment (strategy) or an individual customer (sales).

"Any sale is good" is necessary at the product-market fit stage but one to avoid at the go-to-market fit stage.

This approach will make for healthier and more sustainable growth in the long run.

Josephine Too

Josephine Too is a seasoned strategist and certified agile growth coach with over 25 years of experience in strategy consulting, executive management and scaling tech driven (NASDAQ) companies across APAC & Europe.

She brings clarity and confidence to growth-oriented CEOs and their Leadership team to design and achieve Category Leadership.

Josephine is passionate about building and scaling healthy companies, sustainably; inspiring and empowering leaders, and identifying new sustainable ways to solve problems for a better enriched future.

She is the Resident Strategy Coach for many Investor’s Portfolio Companies.