Shifting from a product company to a sales/marketing company

At the risk of overgeneralizing (although to be fair as a VC that’s pretty much my job description) and understanding that there’s plenty of grey area here, I’ve really been noticing recently just how challenging it can be for organizations to move from being product focused to sales and marketing focused. It seems worthy of a post (and hopefully getting some feedback on).

Early on in their lives most companies are built around a focus on product. They tend to be engineering heavy, key deliverables center around feature releases and sticking to a dev schedule and success is measured by the progress a business makes on building and releasing product vs. revenue generated from that product.

Then, at some point in an organization’s life this focus starts to shift. It generally starts slowly. Perhaps a sales person or community manager/user advocate is hired. Sales and usage related goals start to show up more prominently in weekly reports. You start thinking about marketing and outreach. Eventually you realize that you’ve fundamentally shifted the focus of the organization from one that existed to build product and get early usage to one that is focused on scaling that early usage and showing that you have a customer/user acquisition model that actually works. It’s not that product goes away or that the product is somehow “done” (all great companies are intensely focused on product in my experience) but that almost complete emphasis that you had on product from the early days is replaced by a true emphasis on customers.

This can be a challenging time for an organization. For starters many CEOs of tech companies are product people. And frankly it’s easier to map out a product roadmap of success (delivery dates, feature completion, etc.) than it is to live in the more spurious world of early customer adoption and sales. I think companies that make this transition most successfully embrace this shift completely. They acknowledge it within their organization. They set clearly defined goals and report openly whether they are meeting them or not. They develop strong feedback loops between sales and engineering to ensure that the future product roadmap reflects the reality on the ground. They measure everything they do on the sales and marketing side to learn what is working and what is not. And, of course, they treat their early sales process just like they did their early product development – getting as much feedback from the market as possible and quickly shifting course (the equivalent of reprioritizing a feature or shifting a design principal) if something’s not working.

I’d love to hear your thoughts on this transition as we have a number of companies in the Foundry portfolio going through this metamorphosis right now.