Venture Capitalist at Theory

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2 minute read / Sep 14, 2021 /

What is the Product the Customer Buys Before They Buy Yours?

What is the product a customer or a prospect buys immediately before they buy yours?

We’ve all heard the words digital transformation. Now that I’ve given you time to unroll your eyes and let the sarcastic comments dissipate, please give me a chance to make something useful of this idea.

As a customer progresses along their journey, they evolve from a previous inferior state to a new superior one. The journey might be a migration from an on-premises data stack to a modern cloud data pipeline. Perhaps, they are in the midst of modernizing their sales infrastructure from simply Salesforce to a broader suite of call recording, marketing attribution, and sales content enablement. A business could be migrating to a Kubernetes stack to power a microservices architecture with distributed tracing.

For Looker, the preceding step was the adoption of a cloud data warehouse. By partnering with the newest generation companies like Snowflake and Google Big Query, and demoing with them, Looker’s product was part of a packaged pitch (data warehouse and BI together). At the end of many sales pitches, a prospect would say, “I’ll take it all.”

Whatever the journey is, the customer isn’t purchasing just one solution to solve their needs. The typical mid-market company purchases 137 SaaS products, and the figure grows 30% annually. Companies collect tremendous amounts of software, and they layer it on top of one another to ascend a Maslow’s hierarchy of software needs until they reach actualization.

Which is the rung of the software ladder immediately beneath yours? Whatever it is, those are the companies to partner with, develop technical integrations to accelerate adoption, co-sell and generally go-to-market alongside.

After a prospect has adopted the software rung below yours, their eyes will rise to yours, and that’s your opportunity to win the great game of Risk played in software.. Position your startup to be there when they look to the future.


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