The go-to-market (GTM) strategy is an important factor in a tech company’s journey to reaching $100 million in annual recurring revenue (ARR), which is often seen as a milestone for considering an IPO. There are three common GTM motions for B2B enterprise companies: bottom-up, middle-out, and top-down. The bottom-up approach involves offering self-serve, freemium, or open-source products that end users can adopt without direct sales involvement. Companies like Datadog and Slack have successfully used this approach. As adoption grows, a sales team is introduced to convert users to paid customers or target new business opportunities.

The middle-out GTM motion strikes a balance between explosive growth and higher average contract values (ACVs). These products resonate with individual contributors, managers, and VPs, often spanning multiple teams or deeper into the tech stack. The sales process involves campaigns, prospecting, product testing by sales reps, and sales-driven purchasing. The ACV falls between $24,000-$120,000, and sales teams play a crucial role in managing change in organizations. The top-down GTM motion relies on sales leaders or teams establishing relationships with C-suite executives to choose products for their teams. Products using this approach have the highest ACVs, ranging from $120,000-$1,200,000.