Last week was busy. There was a noticeable increase in the number of GTM advisory calls I had. This uptick could be a positive indicator for the space, suggesting a growing interest and confidence.
However, a recurring theme across these conversations was the heavy focus on product development. While the passion for innovation was evident, most discussions centered on comparing tokenized products to their traditional financial counterparts. The common consensus was that these tokenized solutions are just as robust.
While building a strong product is crucial, it is often a significant mistake to overly prioritize it at the expense of distribution. Many teams fall into the trap of focusing on product development while neglecting the fundamental question of how to find, reach, and engage their target customers.
Without a clear understanding of who your target customers are, where they are, and how you plan to reach them, you don't have a real GTM strategy—no matter how good your product is.
Let me emphasize this: if you cannot clearly define your customer base and how you will access and sell to them, your product is irrelevant.
Read that line again. Now read it one more time. And repeat the process twice.
Yes, some teams may get lucky and succeed through sheer momentum, but would you really want to stake years of your life on luck?
In this week's research issue, I will provide five essential GTM questions that should serve as your strategic checkpoints:
Who is my target customer?
Is this customer onchain?
Which geographies contain the largest concentration of these customers?
Can I legally target the customers in these jurisdictions?
How do I reach my target customer given the above?
Let’s unpack each question in detail
1. Who is my target customer?
The most successful products seamlessly integrate into a customer's existing workflow or investment process. When considering tokenization, it is essential to examine several key dimensions::
Net worth: the payoff of selling to someone with $500 in bank account vs $5M is very different. The appropriate product would also differ by a wide margin.
Spending power: how much minimum firepower do I expect my ideal customer to have? Different blockchains have different user profiles and that includes different amounts of idle cash sitting around.
Investment preference: someone who earned $5M by getting 100x in 3 meme coins trades is unlikely to find a 2 year fixed income investment a natural investment option. And yes your asset diversification pitch may make sense but it may take a long time for it to make rational and emotional sense to this type of users.
Demographics: If your ideal customer is a 50-60-year-old with a significant net worth, how likely is it that they are already active in crypto?
2. Is this customer on-chain?
I have debunked the myth that broadening access automatically leads to significant influx of capital narrative numerous times before.
If your ideal customer may be all using crypto or digital assets in 10 years, but if they aren’t here today or there aren’t enough of them, who are you going to sell to in the meantime?
Remember the key is to meet your clients where they are. If they aren't already on-chain, how much time and resources are you willing to spend waiting for them to arrive?
I have found that especially if a tokenization team comes from a TradiFi background, they tend to carry the assumption that the onchain customer base is similar to what they are used to dealing with in the traditional financial world.
Remember there are no private credit funds, no RIAs, no brokers like Charles Schwab or Fidelity, no banks like JPMorgan or no prime brokers like Citi onchain. On what basis can you expect there to be customers that are similar in profiles and numbers to those served by these firms?
Sure it is my belief that the entire financial system will migrate onchain one day. But that day isn’t today.
3. Which geographies contain the largest concentration of your target customers?
The current global landscape of digital assets is largely dominated by certain countries when measured by transaction value. To state the obvious, you want your efforts to yield the most profitable outcome. So it is important to know which countries are of the most or least interest.
For example, if you are looking for accredited investors, you need to ask which geographies tend to have a lot of them? And what is the priority of these countries? This digital asset transaction data research should prove useful.
On the other hand, if you are targeting an EM-centric use case, such as stablecoin as a store of value in a volatile economic/political environment, then ask yourself which EM countries offer the largest market for your product? This research looking at EM adoption penetration in the context of tokenized USD cash products may prove helpful.
4. Can I legally target customers in these jurisdictions?
A critical aspect of GTM strategy is ensuring compliance with local regulations. The last thing you want is to build a successful business only to face legal challenges down the line. Make sure you have the appropriate registrations, licenses, and legal documentation in place for the jurisdictions you plan to target.
Depending on the jurisdiction/geography you want to target, the legal/regulatory requirements may be significantly different. Our friend, Charles, over at the law firm CMS could be of assistance if you require expert help.
Remember being regulatory compliant helps you with your GTM. It may even be a competitive advantage.
The answer to this question will also shape your marketing strategy and communication execution.
5. How do I reach my target customers?
In the physical world, users are separated by national borders. In the onchain world, users live on separate blockchain networks.
Each network has its own set of users, payment currencies and capital pools. Understanding these trade-offs is critical to forming a solid GTM strategy. Your choice determines the size of the capital pool you are targeting and the available capital allocator profiles.
This research on top blockchain networks by the amount of USD cash available on them and users’ transacting volume could be useful to you.
Conclusion
For those looking to leave a mark in the evolving financial services industry, or for those aiming to optimize their GTM strategy, these five questions offer a foundational approach. Proper planning and execution can save years of effort and countless resources.
Do yourself a favor. Don’t bet your life’s work on a build-it-they-will-come hope. Spend time and resources really getting to know the market. It will either save years of your life or pay you dividends in spades.
Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
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