August 22, 2022 • 11min

Breakthrough Lessons: Leslie’s Compass

Pattern Breakers

In this episode, Mike Maples Jr. discusses Mark Leslie's framework called "Leslie's Compass" for determining the optimal go-to-market strategy for startup products. The compass helps founders decide whether their product requires a marketing-intensive or sales-intensive approach by examining key variables related to the product and market characteristics. Maples explains that while most startups understand they need both marketing and sales capabilities, they often lack clarity on which should take the lead. Leslie's Compass provides a structured way to make this critical strategic decision.

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Key Takeaways

Leslie's Compass is a framework for determining whether a startup's go-to-market strategy should be marketing-intensive or sales-intensive
The framework examines 7 key variables related to the product and market to determine the optimal strategy
For marketing-intensive products, the product is "bought" rather than sold. For sales-intensive products, the product must be actively sold.
Startups often mistakenly try to force a preferred go-to-market approach rather than aligning with what the product and market actually require
Either marketing or sales should take the lead in the go-to-market strategy - trying to balance both equally often indicates a lack of focus
The market doesn't care about a startup's preferences - the strategy must align with the realities of the product and customer needs

Introduction

In this episode, Mike Maples Jr. discusses Mark Leslie's framework called "Leslie's Compass" for determining the optimal go-to-market strategy for startup products. The compass helps founders decide whether their product requires a marketing-intensive or sales-intensive approach by examining key variables related to the product and market characteristics.

Maples explains that while most startups understand they need both marketing and sales capabilities, they often lack clarity on which should take the lead. Leslie's Compass provides a structured way to make this critical strategic decision.

Topics Discussed

Overview of Leslie's Compass (00:15)

When a startup goes to market, it needs to focus on whether its strategy should be sales-intensive or marketing-intensive
Marketing and sales are counterbalances in nearly every facet of a startup product
Either marketing or sales typically takes the natural lead in getting the product to customers
The compass provides a simple set of heuristics to bring more clarity and focus to the go-to-market strategy

Extreme Examples: Crest Toothpaste vs. GE Jet Engines (02:15)

Crest toothpaste (marketing-intensive):
- Low cost, bought by millions of consumers
- Simple to operate, high fit and finish
- Ready to use immediately after purchase
- Low switching costs
- Must deliver a product that is "bought" rather than sold
GE jet engines (sales-intensive):
- Price tag in the millions of dollars
- Sold to about 100 airplane manufacturers
- Requires extensive engineering and customization
- High-touch, long sales cycle
- Must be actively sold rather than bought

Common Startup Pitfalls (04:16)

Many startups want to emulate Google with a self-service, "bought" product
This approach fails if the product is hard for customers to understand and use on their own
The go-to-market strategy must reflect what it takes to optimally distribute the product
"You can't let the elements of your go-to-market compass be misaligned and inconsistent."

The 7 Variables of Leslie's Compass (06:16)

Leslie's Compass examines 7 key variables to determine whether a product should be marketing-intensive or sales-intensive:

Price: Is this a large or small economic decision for the buyer?
Market Size: Is it easier for customers to find you or for you to find them?
Complexity: Can a customer self-serve to use the product, or is education required?
Fit and Finish: After the product is designed, built and shipped, is there still much more for the customer to do?
B2B vs B2C: Am I predominantly selling directly to people or companies?
Customer Relationship Timeframe: Do I measure successful customer relationships primarily by transactions or longevity?
High Touch vs Low Touch: Does the product require high-touch or low-touch selling?

Detailed Breakdown of the 7 Variables (06:16)

1. Price

Large economic decisions typically require more sales involvement
Small economic decisions are better suited for marketing-led approaches
"You can't afford to sell a $2 tube of toothpaste. The total cost of a typical sales rep wouldn't support it."

2. Market Size

Determined by number of potential customers, not total market revenue
Large markets (e.g. billions of toothpaste users) favor marketing
Small markets (e.g. 100 jet engine buyers) favor sales

3. Complexity

Simple, self-service products (e.g. ride-sharing apps) favor marketing
Complex products requiring education (e.g. enterprise software) favor sales

4. Fit and Finish

Products ready to use out of the box (e.g. toothpaste) favor marketing
Products requiring significant post-purchase work (e.g. jet engines) favor sales
Note: Fit and finish is distinct from complexity (e.g. cars are complex but have high fit and finish)

5. B2B vs B2C

B2C products generally favor marketing-intensive approaches
B2B products often require more sales involvement

6. Customer Relationship Timeframe

Transactional relationships favor marketing
Long-term relationships with increasing revenue over time favor sales

7. High Touch vs Low Touch

Low touch products (e.g. toothpaste) favor marketing
High touch products requiring customization and relationship building favor sales

Applying Leslie's Compass (08:16)

If the majority of answers align with the marketing side, marketing should lead the go-to-market strategy
If the majority align with sales, sales should lead
For marketing-intensive products:
- The product is "bought" rather than sold
- Marketing has primacy and sales serves marketing
- Marketing generates demand through campaigns
- Sales focuses on distribution channels and merchandising
For sales-intensive products:
- The product must be actively sold
- Sales has primacy and marketing serves sales
- Marketing's role is to provide qualified leads
- Sales focuses on converting leads to customers
If answers are evenly split between sales and marketing, it likely indicates a focus problem
"You might be letting your desires for a certain go-to-market strategy cloud your judgment about the best fit strategy that aligns with the realities of your startup's product and market characteristics."

Key Insights for Startups (10:17)

The market doesn't care about a startup's preferences for go-to-market strategy
Strategy must align with the realities of the product and customer needs
Trying to balance marketing and sales equally often indicates a lack of focus
Founders should use Leslie's Compass to determine if their product should be "bought" or "sold"
The answer should guide resource allocation and strategic focus in go-to-market efforts

Conclusion

Leslie's Compass provides a valuable framework for startups to determine the optimal go-to-market strategy based on their product and market characteristics. By examining seven key variables, founders can gain clarity on whether a marketing-intensive or sales-intensive approach is most appropriate.

The framework helps avoid the common pitfall of forcing a preferred strategy that doesn't align with market realities. Instead, it encourages startups to let the nature of their product and customer needs guide their approach.

Ultimately, Leslie's Compass enables more focused and effective go-to-market execution by ensuring either marketing or sales takes a clear lead, rather than trying to balance both equally. This strategic clarity can be a critical factor in a startup's ability to successfully bring its product to market and scale.