Extreme Environments Require Extreme Action
The theory of Phenotypic Plasticity, coined by renowned ecologist Tony Bradshaw in 1965, is the ability of an organism’s genotype to produce more than one phenotype in response to unique external factors. Restated in plain English, organisms adapt when exposed to extreme environments for prolonged periods of time, undergoing behavioral, physiological, and, sometimes, permanent genetic change. For example, mountain-dwelling peoples in high-altitude, low-oxygen mountain ranges, such as the Andes or Himalayas, will produce red blood cells that are unusually massive in terms of both size and quantity to combat the hypoxic conditions. In remote parts of Indonesia, where resources and nutrients are sparse, sea nomads known as the Bajau have to resort to deep-sea diving in order to catch fish, often reaching depths of over 100 feet for several minutes at a time. Due to the incredible strain exerted on the body over hundreds of dives, these people developed a host of physiological adaptations (increased lung capacity, larger spleens, etc.) that have enabled their survival.
Organism or Organization?
While the above examples are specific to humans, the ability to adapt to dynamic, harsh environmental settings is shared across all walks of organic and inorganic life, and at PeakSpan, we believe that even extends to organizations. The word “organization” itself shares the same Greek root with the word “organism,” and it also shares a very similar set of developmental challenges. We consider organizations to be living, breathing entities; software companies, particularly in their earliest growth stages, must compete for resources, fend off predators, and cope with a litany of unexpected external events. The world of a young growth-stage company is a dynamic one that becomes increasingly complex over time, and we are here to help our partners adapt and thrive at every step along the way.
Company Evolution and GTM Scaling
In the formative stages of a company’s life, this biological phenomenon may not be as pronounced with only a CEO, a few select employees, and a dream. As product-market fit begins to take shape and companies begin building out their first sales, marketing, or customer success teams, they encounter an entirely new set of challenges that require the coordination and orchestration of multiple constituent groups. Software companies, as opposed to widget manufacturers, are inherently people-driven; they are the amalgamation of the aspects that make us human and thus require intense cooperation to optimally function. To quote Rudyard Kipling’s The Jungle Book, “the strength of the pack is the wolf, and the strength of the wolf is the pack.”
Cliché as it may be, this sentiment certainly rings true in the context of go-to-market scaling. To ensure a smooth transition from start-up to scale-up, the symbiotic relationships between marketing, sales, and customer success must be tightly orchestrated, and communication must be crystal clear. Agreement and alignment around a tight ideal customer profile (ICP) provides a critical foundation, underpinning the company’s goals for all functional groups. A clear vision, well-defined positioning, and persistent, uniform focus from all members of the pack enables more efficient communication, more decisive action, and more effective execution, both internally and externally. Organizations must mitigate internal friction across functional groups while ensuring that external interactions with customers, partners, and ecosystem participants are consistently, thoughtfully positioned, and, more importantly, customer centric. Interestingly, this dynamic can best be explained by yet another biological corollary: the human brain.
A Quick Science Lesson
As we take our biological microscope a layer deeper, it may be helpful to conduct a brief science lesson reminiscent of 9th grade Biology to add some additional context. Every movement, sensation, thought, or memory is governed by the nervous system, a series of connected nerve cells that weave throughout the body and are centrally connected to the brain via the spinal cord. Like Grand Central Station in New York City, the brain ensures that the right signals are getting sent to the right parts of the body at the right time. Within the brain itself, there is an even more complex network of over 86 billion individual nerve cells called neurons (helpful diagram available here) that communicate with one another via short electrical impulses.
These charges fly between neurons via veritable superhighways called axons. Like an insulator to a wire, axons are coated in what is called the myelin sheath, enabling faster, more efficient communication between individual neurons. For context, myelinated neurons transfer signals at a rate 100 times that of unmyelinated neurons. Just as Myelin supports and enables efficient transmission of information between neurons, coordination and orchestration across the GTM organization plays an integral role in driving efficiency and efficacy for growth-stage businesses.
GTM Coordination is the Myelin Sheath of a Growth-Stage Revenue Engine
Much like the billions of interlacing axons within the brain, the lines of communication that run between sales, marketing, and customer success are critical to organizational success. These functional groups do not exist within siloes, and executing an independent strategy without regard for feedback from other teams can prove disastrous. The best go-to-market engines we have seen at PeakSpan are those that are aligned and relentlessly focused on serving a specific ICP; continuously iterating on their processes in pursuit of a common goal. In other words, the best GTM engines we have seen at PeakSpan are those that are the most myelinated. Increased cohesion, communication, and collaboration between the components of the revenue engine have a meaningful impact on both internal and external operations. Seamless knowledge transfer and clear delineation of responsibilities create strong-form internal efficiencies, which, in turn, cascade into more impactful and productive engagements externally. However, myelinating the axons of your GTM organization is easier said than done, and the consequences of myelin degradation can be pernicious.
The Dangers of Demyelination
Much like Rome and growth-stage software businesses, the myelin sheath is not built in a day. Myelination of the body’s axons begins at birth, is most rapid in a child’s first two years, and continues for up to 30. Interestingly, software companies follow a similar pattern. Although internal cooperation and productivity remain a chief concern for enterprises in later stages, it is within those formative years during the transition from start-up to scale-up where the real work happens. If the right processes are not in place and the right internal mindset is not adopted in that critical stage of company development, the foundation for continued organizational success can become unstable. The dangers of demyelination are very real in both clinical and corporate settings, and have long-lasting and severe impacts. The less myelin within the brain, the less efficient the communication between individual neurons, and the less efficient the overall system is at executing even the simplest of tasks. One of the most debilitating degenerative diseases, multiple sclerosis, eats away at the myelin sheath and can cause severe health complications such as loss of vision, mobility issues, and chronic pain. With total erosion, neurons may not function whatsoever, existing in independent siloes unable to communicate or enable the body to function properly. Though not nearly as severe or life-threatening, demyelination of the enterprise can have serious implications on overall organizational health. Without unified alignment on ICP and a constant flywheel of communication, it is nearly impossible for organizations (especially at earlier stages) to function properly. One functional group cannot execute a company’s mission on its own, and interactions at each stage of the customer journey must inform one another through constant iteration and refinement. Through decades of experience in growth-stage software investing, PeakSpan developed a brief playbook for ensuring that your enterprise remains healthy and myelinated.
Tips and Tricks for Myelinating Your Enterprise
To make certain your go-to-market organization is firing like a fully myelinated neural network, we have laid out the following tenets to serve as guideposts on your GTM journey:
While much easier said than done, we believe that the above rules-of-thumb, when executed properly and consistently, yield massive and long-term benefits in the world of growth-stage software.
Success is a Product of Successful Adaptation
On average, software companies fail 90% of the time. Like Himalayan highlanders or the deep-sea diving Bajau people, they live in some of the most extreme conditions the business world has to offer. The crucible that is today’s hyper-competitive startup environment crushes most, but those that are malleable enough, thrive. Underpinning this hyper-adaptability required to survive is the life blood of any growth-stage software business, the go-to-market organization. Collaboration, constant communication, and orchestration of GTM efforts are all critical to sustained success. Without them, corporations are at the risk of suffering from the potentially crippling effects of demyelination, but that fate can be avoided by remembering one simple phrase:
“When developing your Go-To-Market Strategy, remember… Grow That Myelin Sheath!”
