How sales innovation can drive product-market fit

Sales model innovation is the most underrated challenge in conversations about product-market fit. Failing to experiment and innovate on the sales layer causes many startups to lose hope in markets, problems, and solutions with huge potential. Founders assume that because their solution isn’t selling, it must be an inadequate solution, or the market and problem they’ve identified are not big enough. Many teams expect product innovation to solve the product-market fit problem single-handedly, so they abandon anything that isn’t easy to sell, and burn their early-stage runway on product iterations. Often, some discipline and experimentation in the sales process could’ve successfully brought their early solutions to market. The problem with the typical framing of the product-market fit mental model is that it suggests that a startup will succeed so long as it finds a big problem and solves it. Unfortunately, it is rarely this simple. I encourage startups to adopt a disciplined, data-driven approach to marketing and sales to expand their criteria for product-market fit to consider the suitability of the sales model to the market and the product.

Each stage of the sales funnel validates something different about your product and market, so gathering feedback from the sales process is the most critical research a startup can conduct. Below is an example of how I look at early-stage sales funnels:

These criteria for these funnel stages should be easy to map onto all sales funnels, from traditional SaaS to enterprise and product-led growth (using data collection).

As measured by the funnel above, outcomes tell teams how suitable their market, product, and sales model are, enabling product and sales model innovation. For example:

What is notable about the advice above is that there are often sales and marketing solutions to these adoption roadblocks. By focusing too much on the product side of product-market fit, sales problems start to look like product problems.

The case against sales innovation

The flip side of this argument is the idea that great companies address severe problems with groundbreaking products, to the point that the acquisition model doesn’t require any innovation because the need for the product is so great. Based on this, the most ambitious founders should focus purely on product innovation and abandon any ideas that require experimentation to find an adequate sales model. This mindset is fair if your goal is to create the next Tesla, AWS, or Facebook. But, it also leaves a lot of complicated, niche, and highly-valuable problems unsolved. Every problem too small for the most ambitious entrepreneurs is an opportunity for others to create some serious value. For these opportunities, sales model innovation is one of the key reasons why it often takes multiple attempts from different parties to solve old complicated problems.

11 July, 2022

Subscribe for updates

Subscribe for weekly advice covering product strategy, development operations, building teams and more.

Privacy and terms

I care about privacy as much as you do. I will only use your email address to send you this newsletter or to reach out to you directly, and you can unsubscribe at any time. I will not share, sell, or rent your email address to any third party, though I do store it the software I use to dispatch emails.

The information provided on this blog is for informational purposes only and should not be considered investment advice. The content on this blog is not a substitute for professional financial advice. The views and opinions expressed on this blog are solely those of the author and do not necessarily reflect the views of other organizations. The author makes no representations as to the accuracy, completeness, currentness, suitability, or validity of any information on this blog and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its use. The author may hold positions in the companies or products discussed on this blog. Always conduct your own research and consult a financial advisor before making any investment decisions.