Choosing between two overarching GTM strategies can be difficult. It can be like taking a leadership assessment based on your aspirations versus reality. The funnel and the flywheel are both options that are best selected in line with your product, business model and industry. But when it comes down to it - which is the best strategy for your next product launch?
One isn't better. They're just different.
Let's stick to first principles to understand what we mean between the two options. A funnel go-to-market strategy aims to turn prospects into users. It is linear with a clear beginning and end point. The defining metric is the conversion rate. A flywheel strategy aims to turn prospects into champions. It is a cycle with no clear beginning or end point. The defining metric is referral rate.
Contrary to current literature, Bamboo Growth does not believe that one is "better" than the other. Funnels and flywheels are definitionally different, serving different needs. For example, for a product serving an industry that is highly competitive with high value put to "trade-secrets", a flywheel model will not...fly. However, a product serving an industry where collaboration and network effects are key characteristics, a flywheel can help your product sales scale incredibly quickly with low customer acquisition costs. Both types of strategies can be challenging to develop and execute on to meet success criteria. Picking either of these options is just the beginning.
Flywheels
The flywheel strategy is relatively a newer concept. The flywheel strategy is associated with, and the term can be used in lieu of "growth strategy". That is not to say that it is the same as "growth marketing" or "growth hacking". Those two activities are components of the broader growth strategy, or flywheel strategy. The common framework which Bamboo Growth prefers to use to measure success of the flywheel, is the Pirate Metrics Framework - AAARRR. It measures awareness, acquisition, activation, revenue, retention, referral. You can read more about it here. This framework encourages focusing on metrics that directly measure indicators of your company's performance, and aspires to drive experimentation of key business activities to drive step change in these metrics. AAARRR metrics are driven by teams and activities across a company and go-to-market leaders develop the shared game plan that is imperative for such cross-functional collaboration.
Funnels
The funnel, though linear, can govern a complex go-to-market motion driven by a product's role in the broader ecosystem. An example is a company that has many partnerships across tiers to sell its product, each partner responsible for and incentivized by different levers. For example Snowflake goes to market directly with its famously successful account-based marketing approach. But Snowflake also goes to market via partners that white-label Snowflake technology or embed the Snowflake brand and technology, by industry. Snowflake's funnel, however, doesn't end at first sale conversion but rather till a certain threshold is met of usage. Snowflake continues to go-to-market by driving customers to increase consumption of compute resources and even work with other customers within the Snowflake universe to collaborate with. Snowflake carved out a central role in the data warehousing space incredibly quickly in an otherwise crowded industry. The funnel strategy can be remarkably effective when wielded thoughtfully.
To learn more about how Bamboo Growth can help you achieve your success criteria with an effective go-to-market strategy, reach out at natasha@grobamboo.com.
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