At the time of their initial public offering in 1987, Cisco, a company making routers that allowed different networks to communicate, was already worth several hundred million dollars. At one time, the company’s market capitalization reached a height of nearly $500 billion. However, even by the time they had a public stock offering, Cisco had no professional sales staff, no standard marketing campaign, and didn’t even purchase advertising until 1992, eight years after launching the company. Cisco’s lack of marketing runs counter to the traditional wisdom that a large marketing budget is requisite for success. The reason Cisco succeeded was that they nailed both their product (i.e., the pain and the solution) and their go-to-market strategy. Cisco nailed the product by applying the principles underlying the Nail It Then Scale It method.
In the early days, Cisco made their customers into partners, even to the point of allowing them to modify the router source code. In fact, the multiprotocol router, which came to dominate the market today, emerged because customers felt the pain Cisco was trying to address to such a large degree that they modified the router source code themselves. But Cisco also succeeded because they intimately understood the go-to-market strategy that was relevant to reach their customers. If Cisco’s founders, Len Bosack and Sandy Lerner, had followed conventional Silicon Valley wisdom, they might have spent hundreds of thousands on advertising and marketing that would have been wasted. However, because they had come to understand their customers intimately, they also understood their customers’ buying process and the market infrastructure needed to reach those customers.
Cisco’s success illustrates the power of nailing the go-to-market strategy before spending money on marketing and sales. The purpose of this phase is to develop a deep understanding of the process by which your customers find out about and decide to purchase your product or solution. This involves understanding the job your customers are trying to get done, ascertaining their buying process (the information chain from the moment they find out about your product, through the purchase, to when they dispose of it), mapping the market infrastructure, and closing paid pilot customers. Really understanding this information provides you a heat map of how to target your customers and the facts on which you can build a sales and marketing strategy unique to your business. It requires more than just understanding the “what” of your customers, but more importantly, the “why.”