5 Critical Go-to-Market Red Flags That Doom Startups

Following my recent post on VC deal-killers, I’ve received numerous messages from founders asking for a deeper dive into go-to-market strategy specifically. As both a former founder and current investor, I’ve seen otherwise promising startups crumble because of fundamentally flawed GTM approaches.

Let’s examine the five most dangerous go-to-market red flags that consistently derail startups, even those with strong products and talented teams.

Red Flag #1: The “Field of Dreams” Fallacy

The belief that “if you build it, they will come” remains startlingly common among founders, especially technology founders.

This mindset typically manifests as:

Why It’s Fatal:

• Disregards the reality that distribution is often harder than product development
• Creates dangerous blind spots around customer acquisition costs
• Results in massive cash burn once you realise (too late) how expensive customer acquisition actually is
• Postpones critical GTM experiments that should happen in parallel with product development

What Successful Founders Do Instead:

Effective founders start building distribution channels concurrent with product development. They understand that a revolutionary product with no distribution channel is ultimately worthless.

Before writing a single line of code, they’ve identified initial acquisition channels, created basic outreach messaging, and tested customer receptivity. By the time the product is ready, they’ve already built relationships with potential customers who are waiting to try it.

One AI startup I recently backed had 50+ pre-committed beta users and a waitlist of 200+ before their MVP was complete. This wasn’t accidental — they deliberately built their GTM engine in parallel with their product. When they launched, they weren’t starting from zero.

Red Flag #2: The “Everyone Is Our Customer” Trap

Few things signal GTM naivety faster than founders who claim their target market is “everyone” or similarly broad categories like “all small businesses” or “every enterprise.”

Why It’s Dangerous:

• Makes effective messaging impossible (you can’t speak compellingly to everyone)
• Prevents focused resource allocation to the most promising segments
• Creates inefficient marketing spend across too many channels
• Makes sales cycles unpredictable as you encounter different buyer types
• Leads to product dilution as you try to satisfy too many use cases

The Strategic Alternative:

Successful founders understand that focus is a strategic advantage, not a limitation. They:

1. Identify a narrow initial target segment with acute pain and high willingness to pay
2. Develop laser-focused messaging that speaks directly to this segment’s specific challenges
3. Master the acquisition channels that efficiently reach this segment
4. Build initial product features that solve this segment’s problems exceptionally well
5. Use success with this beachhead to expand to adjacent segments

I worked with a SaaS founder who initially pitched their collaboration tool for “all remote teams.” After struggling with traction, they narrowed to “design teams at agencies with 20–100 employees.” Their conversion rates tripled, sales cycles shortened by 40%, and their marketing budget suddenly became much more efficient.

Remember: You can always expand your target market later, but you need to dominate a specific niche first.

Red Flag #3: Channel Confusion & Misalignment

Many founders develop their GTM strategy in a vacuum, without considering how their chosen channels align with their:

1. Unit economics
2. Buyer behaviour
3. Product complexity
4. Average contract value
5. Required sales support

The Danger Signs:

• Entreprise-priced products with self-service acquisition models
• Complex technical products sold through digital marketing without sales support
• Low-ACV products with expensive direct sales approaches
• Mismatched expectations between CAC and LTV
• Copying competitors’ channels without understanding their economics

The Strategic Approach:

Successful GTM strategies align channel selection with product characteristics and unit economics. For example:

• Self-service/product-led growth works for products with clear value, simple onboarding, and lower price points (typically <€20K ACV)
• Inside sales becomes economical as ACVs reach €20–100K
• Field sales typically requires ACVs of €100K+ to justify the expense
• Channel partnerships require sufficient margin to support partner incentives

A B2B fintech company I advised was burning cash trying to use an inside sales team to sell their €2,000 ACV product. The unit economics were fundamentally broken — they were spending €6,000+ to acquire customers worth €6,000 in lifetime value. By pivoting to a product-led growth model with strategic automation, they dropped CAC by 70% and built a sustainable GTM engine.

Red Flag #4: Underestimating the Sales Complexity

I frequently see founders dramatically underestimate what’s required to sell their product, especially when targeting enterprises or regulated industries.

Warning Signs:

• No understanding of the buyer’s decision-making process
• Failure to identify all stakeholders involved in purchasing decisions
• Unrealistic sales cycle estimates (especially the common “30–60 days” assumption for enterprise sales)
• No clear economic buyer identified
• No validation of actual buying process with target customers
• Dismissal of security, compliance, or procurement requirements

The Reality Check:

Enterprise and mid-market sales processes are complicated for a reason. A typical enterprise sale might involve:

1. Multiple stakeholders (users, technical evaluators, economic buyers, procurement)
2. Security reviews and compliance requirements
3. Legal negotiations and custom contracts
4. Procurement processes and vendor management
5. Budgeting cycles and approval thresholds

I’ve watched founders confidently project “60-day sales cycles” for healthcare enterprise solutions, only to discover the reality was 9–12 months. This mismatch between expectation and reality creates catastrophic cash flow problems.

Successful founders do the work upfront to map the actual buying process. They interview potential customers about how they purchase similar solutions, talk to salespeople in adjacent spaces, and build realistic timelines that account for the full complexity of the sales process.

Red Flag #5: The Magical CAC Assumption

Perhaps the most dangerous go-to-market red flag is the arbitrary, unvalidated customer acquisition cost assumption. This typically appears as:

1. Impossibly low CAC figures with no supporting evidence
2. No differentiation between acquisition costs for different channels or segments
3. Failure to account for sales team costs, content creation, and marketing overhead
4. Linear projections that don’t account for increasing CAC as you exhaust initial channels
5. No competitive analysis of what similar companies spend on acquisition

Why This Destroys Startups:

CAC is the fundamental unit economic that determines your company’s capital efficiency and ultimately its viability. When founders underestimate CAC by 3–5x (which happens regularly), they:

• Run out of cash before achieving product-market fit
• Build teams and burn rates that their economics can’t support
• Make promises to investors they can’t keep
• Miss opportunities to design more capital-efficient GTM models

The Data-Driven Approach:

Sophisticated founders know that CAC assumptions must be built from the bottom up, based on:

1. Channel-specific experiments with measurable conversion rates
2. Fully-loaded costs including personnel, content, tools, and overhead
3. Realistic estimates based on comparable companies
4. Recognition that CAC typically increases as you scale beyond early adopters
5. Sensitivity analysis showing best/worst case scenarios

A founder in our portfolio initially projected CAC of €500 for their SMB security product. Their first channel experiments revealed costs closer to €2,200. Rather than ignoring this reality, they quickly pivoted to a partner distribution strategy that brought acquisition costs back under €700, saving the business before burning through their seed funding.

Turning Red Flags into Green Lights

For each of these red flags, there’s a corresponding opportunity to build a stronger, more resilient go-to-market strategy:

Instead of “If you build it, they will come”:

“We’ve validated these three acquisition channels with experiments showing an initial CAC of €X and conversion rate of Y%.”

Instead of “Everyone is our customer”:

“We’re targeting [specific segment] with [specific pain point], which represents a €X million opportunity we can efficiently reach through [specific channels].”

Instead of channel misalignment:

“Our €X ACV aligns with a [self-service/inside sales/field sales] model, and we’ve validated that our margins can support this approach while maintaining a CAC:LTV ratio of at least 1:3.”

Instead of underestimating sales complexity:

“We’ve mapped the buying process at our target customers and built a sales strategy that accounts for all stakeholders, with a realistic X-month sales cycle and proper resources for security/compliance.”

Instead of magical CAC assumptions:

“Our CAC projections are based on specific experiments across these channels, with fully-loaded costs including personnel. We’ve also analysed comparable companies to validate these figures.”

Conclusion: The GTM Reality Check

Go-to-market execution is the graveyard of otherwise promising startups. The product-obsessed culture of the startup world often neglects the fundamental truth that distribution is just as important as — and sometimes harder than — building the product itself.

The most successful founders I work with treat go-to-market strategy with the same rigour and experimentation mindset they apply to product development. They test assumptions, measure results, and iterate rapidly.

Remember: In early-stage startups, your primary goal isn’t to perfect your GTM strategy immediately — it’s to generate enough data and learning to develop a repeatable, economically viable customer acquisition process before you run out of money.

By avoiding these five critical red flags, you dramatically increase your chances of finding that repeatable process and building a sustainable business.

Originally published on Medium