Why Startups Need to Steal the Apple Watch Go-to-Market Strategy

February 18, 2015

apple watch

When Apple releases its highly anticipated Apple Watch in April, the company’s newest product will likely be met with praise and criticism. Apple fans will applaud its utility and design, while critics will justifiably focus on shortcomings like battery life and usability. And by the end of 2015, many will likely judge the success of the device relative to the sales of other Apple products.

For instance, Apple reportedly sold 70+ million iPhones in Q4 alone, and some analysts have projected the company will sell 20-30 million Apple Watches in 2015. But what if demand for the Apple Watch is far less than that? Say, under 10 million units (a number one analyst believes is far more realistic). Undoubtedly, that will lead many “experts” to label it a flop.

If you look a little closer at Apple’s go-to-market strategy for the Apple Watch, I think you’ll find that perspective to be short-sighted and reactionary. In fact, in some ways, it seems that Apple is actually architecting its go-to-market strategy for the Apple Watch around fewer sales to a very specific type of buyer.

Apple Watch’s Early Go-to-Market Focus

Apple spent years fine-tuning its watch product until it was ready for the market, but I’m willing to bet it spent a near-equal amount of time figuring out the right go-to-market strategy for that product. What were the best channels to sell it through? Which personas within its greater market were most likely to be early adopters? Which marketing channels would most effectively target those types of buyers?

While the Apple Watch will certainly be marketed and sold through all of Apple’s traditional channels and to all of its existing customers, it’s also apparent early on that Apple is hyper-focused on one marketing the Apple Watch to one segment in particular: Luxury-oriented iPhone customers who show a propensity to buy premium goods — expensive cars, high fashion, fancy jewelry, etc.

This is evidenced by the business advertising in channels it may not have before (luxury fashion magazines), considering retail environments its products wouldn’t have lived in previously (jewelry stores, high fashion boutiques, etc.), and forging initial partnerships with super-premium brands (Apple recently announced a partnership with Tesla that will allow customers to control their car with their Apple Watch).

And then there’s the product itself.

Like all Apple products, the Apple Watch’s early messaging has largely revolved around its premium features. Want a smartwatch with a gold case and premium leather band? No problem. You’ll just have to fork over a few hundred (or thousand) dollars extra. For the average iPhone user, that’s not a realistic proposition. For someone who drives a Tesla and shops on 5th Avenue in New York, it’s a drop in the bucket.

What Can Startups Learn from this Strategy?

The reality is that Apple is so big and so cash rich that it doesn’t necessarily need to take this hyper-focused approach. In theory, it could blanket the market in ads and messaging that proclaims the Apple Watch’s value to anyone who wears a watch or owns a smartphone. (No iPhone? No problem. Apple will convince you to buy one of those, too.)

The fact that Apple isn’t taking that approach is interesting — and it’s a key lesson for smaller B2B startups.

Sure, your product could probably be used by several functions within any major enterprise. And maybe someday, it will be. But as a smaller, growing company, you don’t have the time, resources, or capacity to reach all of those potential buyers right now. Try to do so, and it’s incredibly unlikely you’ll ever achieve product-market fit.

So, why not focus the time, resources, and capacity you do have on targeting only the buyers who best align with your product and value proposition right now?

3 Great Examples of Startups with Hyper-Focus

The value of having that kind of focus can be immense. If it’s obvious to you and prospective customers why your product or service is valuable, then you’ll spend less time selling to, servicing, and retaining them. Your messaging will be more relevant, your value proposition will resonate more, and because your team will be so in-tune with that market, it’ll be much easier to pull the levers that help you dominate.

Here are a few examples of growth-stage companies in OpenView’s portfolio that have leveraged this approach to achieve product-market fit and scale more efficiently:

  • Socrata: The company’s first idea was to create a vehicle for anyone to put data online. When Socrata’s leadership found that numerous governments were using it as an open data platform, they made the quick decision to totally re-design the product and go-to-market strategies around that segment. Today, the business is widely recognized as the global leader in cloud-based solutions for data-driven governments.
  • FieldLens: There are a lot of task management and communication platforms on the market today, but FieldLens is the only one hyper-focused on the construction industry and, more specifically, site supervisors within that industry. This business is a fantastic example of a SaaS company that started with an industry vertical, honed in on a specific role, and focused all of its energy around a specific use case that had extreme value to that role.
  • Workfront (formerly AtTask): Originally developed as a work management platform that could be used by anyone, the company decided to begin sharply focusing on marketers and developing capability around specific marketing use cases and roles. As it grew, the company’s go-to-market strategy did, too. And today, it provides work management solutions to some of the largest companies in the world.

While it’s true that most good B2B software companies perform market segmentation to some degree, I’ve found that many qualify their best customer segment by an industry vertical or a business size within that vertical. But in my mind, that’s not enough.

When I talk about hyper-focusing on one particular segment, I mean creating a single product and go-to-market strategy that allows you to dominate all of the targets in that segment. When you do that, segmentation will yield more unique characteristics. For instance: Administrative teams at smaller healthcare facilities that use a particular EHR system, and have someone on-staff who is responsible for keeping that EHR operational.

With that description, you have a vertical, function, role, and use case to target, and you can optimize all of your go-to-market and product investments around that market. Do that, and you’ll win more deals, grow more efficiently, and gain a critical competitive advantage over less focused competitors.

Photo by: Justin14

Founder & Partner

As the founder of OpenView, Scott focuses on distinctive business models and products that uniquely address a meaningful market pain point. This includes a broad interest in application and infrastructure companies, and businesses that are addressing the next generation of technology, including SaaS, cloud computing, mobile platforms, storage, networking, IT tools, and development tools.