[Matrix Moments] Avnish Bajaj on market gap, strategy, and how it helps startups

“Every founder is starting a business to tap a market. There are two aspects to be considered - one is the product-market fit (PMF), and the other is the go-to-market (GTM) avenue. While the former is your reward, the latter is your risk management strategy,” says Avnish Bajaj, Founder and Managing Partner, Matrix Partners India in this week’s Matrix Moments, a podcast series run by the company. 

He further explains that PMF determines the success or failure of a startup, whereas GTM is your risk management strategy towards PMF. Businesses are aimed at filling a certain market gap, and products are built to address that gap. He warned that while it may sound easy, it is very hard to get everything right at the same time. 

“You need to first develop a product, and then aim it at the right place in the market, which is the GTM. And then hopefully the fit happens,” says Avnish. Taking to football as an analogy, Avnish explains that while the PMF is your goal, the GTM is the game to get to that goal. Who is passing the ball where, the offence and the defense, where you are on the field, and how you pass the ball between various phases of the businesses, is what will determine your success, he adds. 

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Thin edge of the wedge

The GTM strategy is a marketing approach and it is the internet world’s way of defining the 4Ps - price, placement, promotion, and product. How you position your product in the market, pricing decisions, and product promotion is what GTM signifies. It is important to analyse your customers’ or consumers’ pain points and then think about how best to position them. 

Avnish explains that in today’s world, one can combine the best practices of the enterprise side into a consumer company, and vice versa. 

“I think the best articulation of both PMF and GTM is thin edge of the wedge,” says Avnish. When I meet with founders who are pitching, besides their GTM strategy, I also ask them to highlight that one feature that they can build upon. 

“Take Zoom for example - their free 45-minute offering is a freemium model, and nothing but a thin edge of the wedge. Give something for free and then you can build on it,” Avnish says. 

Listen to this podcast here.