We use our capabilities in one market and enter a new market with the same expertise. We tailor the marketing and sales to the particulars of the new sector, but our beachhead is to sell what we have already built for an existing vertical. The process is as follows:
1. If we enter a new industry, we may not clearly understand how things work. Trying to develop a new business model causes context-switching problems and a loss of momentum and focus. Selling products and services we can already deliver but to a new vertical gets us in the door.
2. Once we are in the door, we use that as a learning opportunity to understand the vertical’s needs and build our mental models for how the industry works. The best way to learn about an industry is directly from the customers. What are their needs? What are their pain points? What are the tools they are already using?
3. Once we understand the customer, we can build products specific to their needs. This includes developing partner relationships, distribution channels, and tuck-in acquisitions. By building after understanding, we reduce the waste in building new solutions.
4. The last step is to repeat this process to a new vertical.
This approach ensures that the focus is delivering value to the customer from the start as opposed to meandering around.