Re-Inventing Product-Market Fit – Announcing Glilot Mach5

Dorin Baniel, Head of Value CreationDorin Baniel

August 21, 2022 • 4 mins to read

Mach5 aircarft

Have you ever flown at hypersonic speed? Hypersonic speed is Mach5, one that exceeds 5 times the speed of sound, resulting in massive shock waves from the breaking of the sound barrier and spanning a boom heard from miles away. If you are a technology startup entrepreneur, you know that as an entrepreneur, as in piloting a stealth aircraft, running fast is not a “nice-to-have”, it’s a must have – to raise fast, to hire fast, to get customers fast. But, fast is not enough – you need to do it right.

This is exactly why we built the Glilot Mach5 Program, which is officially being announced today. Glilot’s Mach5 Program is how Glilot’s portfolio company founders achieve product-market fit (PMF) and close their first deals.

Why are we doing this?
Glilot has been dominating the Israeli Value Creation space since its inception in 2011. When we say we are “founder-friendly”, what we actually mean is: We will do anything to take your company to market in the fastest way, assisting with closing your first deals, employees, design partners, and more. So, we have taken it one step further and became the first Israeli VC to implement a structured and data-driven program to help our companies achieve product-market fit.

What is Mach5? Reaching Product-Market Fit Faster, Better. 
It means taking our founders from idea to PMF (and beyond) at Mach5 speed. The program consists of five Mach rounds of strategically generated customer discussions – not just with forward-thinking executives, but with those whose focus areas are correlated to the problem the startup is aiming to solve.

Take Cider Security, for example. We’ve worked with the founders intensively since day 1, with many iterations regarding messaging and over 50 different discussions with potential customers. “We started Mach5 in Cider’s early days and were surprised by the value we got from it,” says Guy Flechter, the CEO & Co-Founder of Cider, “As a previous CISO, I’ve known numerous counterparts, but Glilot brought new, world-leading C-levels to the table that contributed a completely fresh angle to our discussions. This process enabled us to perfect the product development cycle to reach the right fit and win.” Cider achieved PMF within 3 months of starting Mach5 and went on to raise their A round in 12 short months post-Seed.

Founders come out of Mach5 with first deals and an efficient sales model, which has never been more important given current market conditions where growing steady and growing right is crucial.

Why is Mach5 critical for the early-stage founder?
Mach5 takes place after a company has raised its seed funding round. Without having achieved product-market-fit at this stage, a startup can find itself in one of two scenarios:

  1. Failing within two years post-seed funding after not being able to onboard enough customers.
  2. Failing while scaling due to a focus on the wrong audience, a weak value proposition, an in-efficient sales/profitability model etc.

Our data shows that through the Glilot Mach5 Program, companies have reached product-market fit in 5 short months, on average, versus 1-2 years! Additionally, after launching Mach5, it has taken less than a year to secure round A funding, with 100% of our companies who have been part of Mach5 doing so – compare this to the industry average of just 30%. See more stats below.

Before and after Mach5

What does Mach5 actually look like?
We take our companies through three phases:

Mach5 Phases


Phase 1: Product-Market Fit Strategy

During this phase, we will define the most critical questions they want to explore, as well as the guidelines and boundaries they want to maintain. Some examples for questions and definitions we are exploring during this step:

  • Decision Maker vs. User
    • Who is your target decision maker / budget owner?
    • Who is your target user?
    • Are they the same? Is this still unknown?
  • Target Organization
    • What type of organizations to target? (Start wide in Mach 1 and end focused by Mach5)
    • Consider # Employees
    • Consider the tech stack you can support
    • Consider the industry
  • Value Proposition:
    • Pitch & Messaging: Be clear, concise, and keep track of its evolution over time
    • What layers make up your platform? What layers should go in your MVP and why?
    • What use cases can you offer now versus after the MVP?
    • Differentiation: Who are your key competitors and how are you different? This will come up on calls so it’s best to have clear answers ahead of time.

Phase 2: Five Rounds of Strategically Generated Customer Discussions

Our founders experience a slew of customer meetings with hand-picked, forward-thinking executives who are from relevant organizations and who end up becoming the company’s first design partners.

Beyond closing deals, data is consistently collected for our founders and feedback loops are shortened to gain critical market insight from key executives, asking the right questions and getting the answers competitors can’t and thus, conquering the market. Founders get answers to the product-market fit hypothesis, adjusting after each conversation by listening, learning, and applying, in order to understand the trends in the data and therefore, build the right product for the right customers. Major deals are generated as the company gets ready to raise a significant round A.

Why do these C-level executives help our companies? Rishi Tripathi, CISO at Mount Sinai Health System, shares: “Helping Glilot’s Founders is a rare and enjoyable opportunity to make an impact and stay ahead of emerging cyber security risks and new types of technologies to protect against those potential threats.”

Phase 3: Scale! A repeatable sales motion exists.
Now after a PMF is achieved and customers are onboarded the company is ready to expand its go-to-market team with the value proposition that has proven to work, targeting the right persona from the right types of organizations. Onwards and upwards from here. That’s when we come in with:

  • Executive hiring
  • Marketing Support
  • Advisory Board building (for our companies)
  • Strategic Angel Investor deals and follow-on investors
  • Founders workshops

With nearly 100 POCs & deals being closed for our companies through Mach5 per year, generated from hundreds of market discussions, and a 100% rate for companies successfully achieving product-market-fit and scaling, we are truly proud of the infrastructure we’ve built that is going to serve all future Glilot portfolio companies as well.

Learn more about Glilot’s Mach5 Program on our new page.

For any questions or further inquiry, please don’t hesitate to reach out to me at: dorin@glilotcapital.com

 

Dorin Baniel, Head of Value Creation

Written by

Dorin Baniel

VP Value Creation

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