[00:00:00] Rosalyn Santa Elena: Welcome to the Revenue Engine podcast. I'm your host, Rosalyn Santa Elena, and I am thrilled to bring you the most inspirational stories from revenue generators, innovators, and disruptors, revenue leaders in sales, in marketing, and of course in operations. Together, we will unpack everything that optimizes and powers the revenue engine. Are you ready? Let's get to it.
Understanding your total addressable market or TAM is incredibly important to your business. Not only understanding the total market size and opportunity, but understanding where and how to focus to really help build out the right go to market strategy.
[00:00:53] Sponsor: Today's podcast is sponsored by Outreach.io. Outreach is the first and only engagement and intelligence platform built by revenue innovators, for revenue innovators. Outreach allows you to commit to an accurate sales forecast, replace manual processes with real-time guidance, and unlock actionable customer intelligence that guides you and your team to win more often. Traditional tools don't work in a hybrid sales world. Find out why Outreach is the right solution at click.outreach.io/RevEngine
[00:01:32] Rosalyn Santa Elena: In this episode of the revenue engine podcast, Ryan Detwiller the founder of Scalepath shares best practices around how B2B companies can assess and validate their TAM and identify the best growth opportunity.
So please take a listen to this long-time leader who has experience across product communications, marketing, and market intelligence and analytics.
So excited to be here today with Ryan Detwiller the founder Scalepath for anyone who's not familiar with Scalepath, Scalepath helps B2B companies validate their TAM, the total addressable market and identify their best growth opportunities.
They are on a mission to help organizations achieve more by enabling better market decisions, faster. So welcome Ryan. And thank you so much for joining me. I'm super excited to share your story and just learn from you.
[00:02:32] Ryan Detwiller: Thanks so much Roslyn excited to be here in chat today.
[00:02:34] Rosalyn Santa Elena: Awesome. So, well, let's start by maybe talking a little bit about your journey right before Scalepath.
I mean, you've had a long career in a variety of leadership roles I saw through marketing communications and product, and you've also done some market intelligence and analysts. So maybe can you share a little bit more about your backstory, you know, your career journey sort of prior to Scalepath?
[00:02:56] Ryan Detwiller: Yeah, for sure.
So I started off in marketing since, I mean, high school days probably. It took me a little bit to gravitate towards technology. So spent some time in a large insurance company and doing some non-profit work. And then yeah, found myself working for a small managed service provider in the technology space probably about 10 or 15 years ago.
And that was really. Things came together. Whereas for my love of marketing, my love of technology yeah, it just came into play. So from that, I joined a really small startup as the first employee. There was a hardware company that had a SAAS platform and we had a really great product that customers love.
And so we grew quite a bit we were acquired by a company that company was acquired again, and I found that. You know, in a much larger organization working in, in marketing strategy, customer analytics work directly with the chief marketing officer as they were preparing to IPO. So went from, you know, super small, super early stage all the way through to almost almost IPO at that, that company.
I think this is part of that experiencing going from the small startup, where you have the opportunity to get your hands in a whole bunch of different areas, right? The product side of things is how we're working with customers operations. You know, it starts are great for that experience of just understanding the business overall and what, what moves the needle.
And then, so when you go to larger companies you have the opportunity to be, you know, still involved and, and, and to bring that broader understanding of a business to those marketing roles, to those revenue type roles. And so, yeah. That was a lot of, a lot of fun, especially as you know, the company was growing so quickly and we were on this path toward IPO to kind of bring that scrappy startup experience and.
Yeah, just help the company, explore new opportunities and continue to grow.
[00:04:50] Rosalyn Santa Elena: That's awesome. That's great. So it's interesting because I definitely think small company versus big company, so many, so many differences. It's interesting because a lot of folks will say, oh, I want to work for a startup.
And they think it's a certain way, but until you've actually worked in a startup and know that that's for you, it's sort of a, it's a different beast. I think it's sometimes not for the faint of heart, for sure.
[00:05:13] Ryan Detwiller: Yeah, absolutely. It's it is inexperienced. You know, I don't recommend to everyone, if you want, you know, sort of a, a stable job that you can can do.
I'm not saying that all large companies have those jobs available to them, but most startups really don't. Right. You need to be kind of willing to, to jump in with both feet in a startup and sort of, you know, make sure you get the things done that you need to get done to move the business forward, but also be willing to, to, to change direction, to jump in wherever you needed.
But. If you can do that and you're willing to jump in and just incredible learning opportunities are available to you.
[00:05:50] Rosalyn Santa Elena: Yeah. Yeah, absolutely. Well, so I mean, oftentimes, you know, when I talk to other, you know, founders, it's, you know, they talk about a company got started because they're faced with a problem.
Right. There's a problem they're trying to solve, or maybe there's some type of, you know, aha moment or some kind of event that happens. Was this the case with Scalepath? Like what led you to starting the company?
[00:06:10] Ryan Detwiller: So it was a bit of an evolution. I. Started realizing. How much a deep understanding of the market can really help a company grow.
When I was with, you know, after a few acquisitions, I was with this company that was preparing to IPO and my job was to build out a sort of a customer insights function, or market intelligence function, really, just to understand what is the market look like overall? How does that break down? Between the different product opportunities in our portfolio, the different geographic opportunities sort of like just what's the landscape.
And if the company was, was making some strategic bets, like where should those be made? And what I learned in that process is that, you know, getting that deep, understanding the market. From a quantitative standpoint is pretty tricky, right? So I'm talking about like, you know, figuring out from what you're figuring out, like, what are the segments you should be going into?
How big are they, how fast are they growing? Where do you have a competitive differentiator that can really help your business grow? And so scale past sort of started. Based on that, you know, in this company, we did a lot of work to you know, figuring out the market. Was it a matter of pulling together data from a whole bunch of different sources, cobbling, you know some spreadsheets together and presenting something out that we felt like fairly confident, you know, they were heading down the right path.
You can go to the path of hiring, you know, consultants to do this sort of work for you as well, which has some advantages because they bring, you know, different data sets in and a lens on it as well. I think what was missing certainly at the previous company was with that we're trying to build.
And in a lot of companies, it's just that foundational data-driven view of the market to really understand like who your customers are, how many there are, where are they? Are they growing? Are they shrinking? Like how large are they to really drive some of those other decisions that you need to. As a business.
So yeah, it was, it was absolutely, you know, kind of built out of the pain of trying to do that work manually calling altogether and sort of learning as we, as we go or the, you know, expensive way of, of hiring consultants. I wanted to sort of bring what I had learned to other companies that are maybe a little bit earlier on sort of those growth stage companies and helping them sort of have that foundation of good data so they could build And you make better decisions as it comes to their, their go to market strategy.
[00:08:23] Rosalyn Santa Elena: Yeah. I love that. I love that. So maybe let's talk a little bit more about that assessing the TAM, right. And understanding your market size, you know, what's relevant to your business. You know, Scalepath helps these B2B companies are assess and build this model. And, you know, it's funny because I think.
Does it, everyone needs it. But in my past, you know, I've approached this with a pretty similar process sort of similar framework, right. Regardless of the business. But it's different, right? It's different for everybody. So seeing, I guess, organizations maybe doing right and doing wrong when it comes to doing this market sizing and really understanding the key areas for growth.
[00:09:02] Ryan Detwiller: Absolutely. So let's start with a few things that are wrong. We'll just knock those out of the way. So one of, one of the areas I think companies do wrong when it comes to TAM, but also their strategy is you start sort of chasing TAM, right? You say, Hey, this is a really big market. You know, if we can just get 1% of this market, then we'll have a successful business.
But I think going down that approach, which is sort of that if that tops down view right, saying that, you know, Hey, Yeah, you name it. The market for t-shirts is $20 billion a year. I'm making these numbers up. And so let's make t-shirts without really understandable, like who actually cares that you're making these t-shirts and how are you going to sell to them?
And, and what does that actually look like? So I think to flip that around, having a more customer centric view so figuring out, you know, what value do you provide and who really cares about that a lot and how many people are out there like that building that bottoms of view gives you much more accurate view of the market and sort of the opportunity that you have as a company, you can make some, some good decisions around that.
The other mistake I see companies make quite often is, is doing these projects and they'll come from a particularly. Part of the business. So maybe, you know, sales needs to figure out there how many accounts are out there for them. So they'll go to a sales database and they'll figure that out. And that might work for sales.
But when it comes to like raising funds for invest or, you know, going to investors for a new capital rounds, You can't really use that sales database because it's not comprehensive. There's lots of duplication there just wasn't built for that. So they might hire a consultant to build out a TAM view and it works and you can put that in front of investors and it, and it's fine, but then you can't hand that over to the product marketing team, really for them to like go and figure out, Hey, you know this, you know, this consultant said our TAM is 5 billion and we sell to these five different verticals.
Tell me more about those verticals and how we can actually go to market to do that. So by, by having it segmented and siloed, sort of within the organization, it's really difficult to have a shared understanding about what the market opportunity is. What that narrative is that you share to investors how your product marketing team is going after prioritizing different verticals and things to go after and so on.
So having. A consistent, shared understanding of what the market opportunity really is, I think is the flip side of that and, and can really power a lot of growth for companies as you're figuring out some of these core decisions, right? Cause if you didn't have that foundational understanding, you spend less time thrashing back and forth on, you know, should we go.
After this association or this trade show, or, you know, this group of customers you can start having some real data-based conversations.
[00:11:33] Rosalyn Santa Elena: Yeah. Yeah. That makes a lot of sense. I think that that definitely makes a lot of sense. I guess along the same lines, like, what is your approach, right. To do this for your clients and how is it different?
[00:11:46] Ryan Detwiller: Yeah. So it's, it's funny. So you go, if you go to our website, you'll see that like scalp has a software product that helps define TAM for companies. And a lot of that was. The result of doing this enough times and coming, going to the same data sources and and presenting the same views that, you know, we felt we could build a software product around it, but I think what's different is actually.
When we onboard a new customer, we don't really talk about the software at all, or even really get into the software. We run through a workshop and we identify sort of the four come, the four CS that really make up your market. So the first thing is figuring out what is the customer potential for the market overall, right?
You solve a problem for someone, how many someones are out there in the world that you can solve this. And then we look at the capture of value or customer value, which is basically, you know, if you solve this problem for some. What, how much value you can. Can you capture out of that? And sometimes that's, you know, if it's a SAAS company, then it's the annual subscription.
You know, there's a number of different revenue models, but just figuring out how, how what's the value capture. So that defines your TAM, which is the big picture view of, you know, the market overall. And then we have a conversation about what are your capabilities and actually. Servicing this market, which defines your Sam.
And that goes into things like, you know, if someone were to call you up organically and say, Hey, you know, I want your product maybe speak this language or I'm in this other country. Or I have this other technology product that needs to integrate with Those are sort of the definitions around what your capabilities are to define that market.
And then we talk about constraints of like, who is your ideal customer. So you know, if you were spending money on ads, like who are you targeting in that segment? And so that, that sort of view of, you know, that big picture, how many customers in the market, how much value can we capture from them?
What's our capabilities to actually service that market today. And then what are the constraints we sort of want to put ourselves around. Really focus in on our ideal customer and growth. And that, that sort of view of the market sort of gives you that it's the broad picture of you, right? Like, you know, your total market.
This is the maximum of what you can, what you can do, but also. Like, where should you be focusing right now? And where, what opportunities do you have to sort of expand that market?
[00:14:01] Rosalyn Santa Elena: Yup. Yup. So that's a great kind of segue, I guess, maybe into the next question, because I mean, you have to have right with that really strong understanding of the total by the total market opportunity.
So you can build out, you know, build out your, go to market strategy and then understand kind of that more focused area that you're talking about. Right. Kind of coming down to where should you invest? Right? Where do you expand? Spend your time and then in what order of priority, right. Because I think understanding that total opportunity that helps you do the longer-term planning and obviously for raising funds, right.
If you need to do that, but it also helps with kind of understanding where do I focus short term and long term. Right? So if I think about, you know, maybe from your perspective, you know, what are some of the other benefits or maybe ways that understanding your market opportunity really helps to drive growth.
[00:14:51] Ryan Detwiller: You really hit it on the head. Right. It's having that big picture view. So you understand, you know, what's the world we're playing in. Like, what's, what's the total opportunity here, but then you can work for some, from some first principles to really understand, you know, what can you like realistically?
What can you service today, realistically? Where do you really have a competitive advantage? Depending on the size of those markets, then you can get into strategy, like, okay, we have a competitive advantage with this customer or with this customer group, then what are the, yeah. What are the events we should be going to, how do we reach these customers?
How do we, you know, become the sort of product or company of choice for these customers? And as you, you know, sort of building in more and more of that eventually a lot of. Made it a wall of like, Hey, there's only so many customers out there. We're a great fit for them, but we need to sort of expand that.
And then you can have a conversation around, do we try and go up market? Or do we go downmarket or do we introduce a new product to sell to the same group of users? Do we introduce new geos? And if so, like which shows, which ones are actually going to move the needle for us. So having that foundational view of the market helps you drive those really strategic decisions.
Cause otherwise you're. You're guessing, right? You might have a notion of, you know, what might move the needle. But having that foundational view, I think really helps you have better conversations as a team and, and ultimately a better direction for.
[00:16:12] Rosalyn Santa Elena: Yeah. Yeah. That makes a lot of sense. That's great.
So let's shift gears a little bit. Data, right. Hot, hot topic all the time. Right. We all know how critical having data is. Right, right. Data at the right time to the right people all the time we talk about this, but I think, you know, even more important than having that accurate or comprehensive data is making data actually.
And I've been on a little bit of a soap box and a little bit of a rant lately about making data actionable. So it's a great, great, you know, kind of top of mind for me to ask you, you know, I think focusing on the right data to make those informed decisions, right. With marketing. I mean, it's just. Broad.
Right. And there's just so many data points and points in, you know, the overall kind of journey, the prospect's journey to consider. So what are the key data points? You think revenue teams should really be focused on, right. To help validate their marketing strategy and their approach.
[00:17:06] Ryan Detwiller: That is there's so many data points that you could be focused on, right?
Like there's, there's so much data out there. Right. When you boil it down to sort of validating your, your marketing strategy approach when it comes to market specifically the right customers, the right content, the right channels. I think of four, four areas. So first of all is tracking like inbound pipeline.
So just understanding, you know, are people finding you, are they understanding what you do enough that they're willing to. To have a conversation about if your company is a right fit for them. So that's kind of like, you know, top of, top of funnel win rate. So understanding like, as you get into a conversation with customers, like, are you winning deals, losing deals?
What does that look like? Who are you losing to just, you know, that's sort of a validation of the market as well. Like it's not necessarily just that one deal, but it's looking at In the market overall, if you're targeting the right people, if you're in the right space, you should be winning more deals.
Third, I would look at deal size. So again, if you're targeting their customers, if you're in the right space you should see a lift in your deal size, as long as your pricing strategy can kind of, you know, can capture some of that as well. And finally sales cycle length, I think is another one, right?
If you're in the right markets, you should see that start to shrink because you're finding the right people, you're giving the right content and everything else. So I know there's a lot and. I probably said the wrong things here, or people can debate me on this. A lot of those are four that I, that I think of that can be helpful indicators, but there's not like one magic catch-all metric for this, right.
Like go to market is, is hard. And so it's part of it is figuring out like, what is the right data we need to have and how do we, how do we measure that? How do we capture it over time? There's a lot of. A vanity metrics out there for sure that, you know, sometimes they're leading indicators, sometimes they're not.
So it's gonna be a little bit different for every
[00:18:55] Rosalyn Santa Elena: Yeah, yeah. I, 100% agree. I think it's, there's no one size fits all for sure. But I love the fact that you kind of talk about win rates and deal size and some of those other things. So a lot of times when we talk about marketing, we're really concerned about top of funnel, right?
We're always talking about demand, gen interests, people visiting your website, downloading content, but what you know is the number of. Touchpoints or the number of leads really that important? Or is it how much of that is we're converting and we're actually winning, right? Because at the end of the day, it should always be tied back to revenue.
Right. But then leading indicators are all these other things, but yeah, I think we talk oftentimes then somebody would gave me the analogy of the leaky bucket, you know, where you can continue to pour everything into top of funnel. But if you don't have the rest of it sort of built out, you have a leaky bucket is just gonna continue literally to fall through.
So that's great. I love that. Yeah. What about for teams that don't have great data? Do you have any advice or maybe tips for things that people should start doing today to start at least moving in the right direction?
[00:19:59] Ryan Detwiller: Again, this is a pretty broad, a broad topic. I would say that, you know, just get started collecting some data and, and hold those two things in mind of what is the market data that's out there.
And then what is. Our customer and prospect data that we can get. And the closer you can align, those two things. I think the better you're going to be longer term because you can sort of track your progress against the market, against the customer groups that you really care about. And just get a really good understanding of, of where you are, not just internally and how you're, you know, how you're doing compared to last quarter, but how you're doing compared to the market overall, if the market has changed, Are you changing with it or are you going a different direction?
Right. So I think having those, like early simple thing is you know, there's a, there's so much data out there on like, you know, I'll give one example, say you're selling software to law firms. Right. And there's a ton of data out there on how many law firms are out there. How many employees they have, what their revenue is how many locations they have.
I like to start with the market data that's out there and use like the same, the same size segments from data you can get from the market. And then when you're building your internal sized segments to bucket your prospects, as they're coming in, just align it to that. And then you can sort of track.
How you're doing compared to, to the market. So yeah. You know, one really small example, but I like holding those two things in hand. Cause it makes it a lot easier down the road when you're trying to map these things out.
[00:21:25] Rosalyn Santa Elena: Yeah, yeah, absolutely. And I think, I think just getting started, like you said, is already great advice.
I think people sometimes get overwhelmed, right? She's like, oh my gosh, my data's too messy. Don't even try, right? I mean, you have to kind of go get back to the basics of just figuring out what is the data that you need. Right. What are the kind of the basic pieces kind of cut through some of that noise.
So I love that. Thank you for sharing that. You know, as I think about the revenue engine, Podcasts. Right. I'm always hoping others will be able to really learn how to accelerate revenue growth, right. Power, that revenue engine. And I think you've gone through a good number of tips here already. But I think, you know, from your perspective, what are the top, maybe two or three things that you think, Hey, all revenue leaders should really be thinking about today that are going to have the biggest impact right.
On driving and sort of accelerating revenue.
[00:22:14] Ryan Detwiller: Yeah. This might be a bit in the weeds. But when I think about sort of the big impact things I think of, of markets overall. So like, You know, just TAM in general, like, is this market that you're in really big enough to do what you want to do? You know, there's a lot of attractive small markets but those require a different approach, a different strategy and so on.
So a big market that's quickly growing. Typically those are markets where companies that are playing in that space can have an easier time attracting investment, getting a team in place. Ultimately. Driving revenue. So I think just understanding that foundational level of like, what is, what is the market we're in?
Is this really big enough for what we want to do as a company? And then two other areas that are sort of related to that, but understanding like, how is this. Moving if you look at like the headwinds and tailwinds in the market, are there things that you can, that are going to drive your growth if you can get behind them or are there serious headwinds that are really going to hold you back?
An example of that is, you know, if you were. Say you're a technology company that's selling to SAAS companies 10 years ago, right? The growth in SAAS is going to power the growth of your company significantly, versus compared to, you know, selling to newspaper companies. You're gonna have a much harder time selling to newspaper companies.
So just understanding which way those headwinds and tailwinds are blowing, and what's going to power your growth or really hinder it, I think can be. Yeah, just something to think about and maybe a bit beyond like it's beyond the scope of what people consider it beyond the scope. The typical metrics that you look at as a revenue leader in a company, but it may have a bigger impact than any one of those metrics that are just related to your company.
[00:24:03] Rosalyn Santa Elena: Yeah. Yeah. That's great. That's great. I love that. Well, thank you so much for joining me, Ryan. But as we wrap up and before I let you go, I always ask every guest, these two things. So one, you know, what is the one thing about you that others would be surprised? To learn and to what is the one thing that you want everyone to really know about you?
[00:24:26] Ryan Detwiller: Okay. So I've got two things here. The first one is so I'm Canadian. I'm not a very good Canadian. And I think I took French. I took French language studies from, I think. Fourth grade through 12th grade, but actually speak more Thai than French. So one year, yeah, one year in Thailand gave me more time.
I even still to this day than any amount of, you know, sitting through my French French classes. Yeah. The other piece is, you know you talked a lot about TAM and sort of like getting that foundational view of your market and understanding that I'm you know, w we have a product that's out there and, and, you know, we help other companies do this, but we're still learning a lot ourselves.
I try and share as much as I can about that topic. Both on LinkedIn and on our website. So if you want like free resources and even like, you know, templates links to a bunch of data that's available. You can check that out either. Yeah. My personal LinkedIn, just Ryan that will, or, or checking on our site Scalepath.io.
[00:25:25] Rosalyn Santa Elena: That's perfect. Thank you. Thank you so much. I'm sure you'll be getting lots of requests to find out more and get your expertise. So thank you so much again for joining me, Ryan, super appreciative and just grateful of your time and just sharing some of your expertise and learnings. Thank you.
[00:25:39] Ryan Detwiller: Thanks so much, Rosalyn. Really appreciate the time.
This episode was digitally transcribed.