October 10, 2024
May 22, 2025
The increase in distribution risk
In software, product risk is decreasing fast with everything happening in AI. At the same time, distribution risk is increasing at least equally as fast.
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Working with founders at the very start of their entrepreneurial journey day in, day out, it’s mind blowing to witness what small teams can build in very little time these days.
It’s safe to say that thanks to recent progress in AI, building incredibly powerful (software) products is becoming commoditized fast.
At the same time, knowing how to sell these products is harder and more critical than ever before. As a result, nailing Go-To-Market (GTM) from the start has become absolutely critical to early startup success.
More on that below.

I usually don’t add plugs for what we do to these newsletter, but this one is highly relevant to today’s topic. So please forgive me 😅
To help the founders we back nail their GTM from the start, we publicly launched The GTM Circle exactly a year ago - a highly curated and facilitated network of GTM executives at Seed through Series D startups.
Since launch, The GTM Circle has become the most relevant peer network for the brightest minds in early stage Go-To-Market.
- For members: an inner circle for GTM-related challenges, via access to a confidential network of their best peers to learn from
- For the founders we get to back: the most impactful resource for in-depth GTM support from some of the top GTM experts
- For focal: gives us a scalable edge for GTM value add at the stage where it’s so critical (and it has brought and won us incredible investment opportunities)
Thank you to all the members that make this such a vibrant and high impact community for everyone involved. Here’s to many more years of The GTM Circle.

Building software has become easier, selling it much harder
In software, product risk is decreasing fast while distribution risk is increasing at least equally as fast. Let me explain.
Basically everyone agrees that with recent advancements in AI / coding co-pilots, it’s become easier and faster to build software products than ever before (the combo of Cursor + Claude Sonnet being a recent favorite).

And with English quickly becoming the #1 coding language, this trend will continue.

Historically, simply being able to build a good product was often enough to differentiate. This isn’t the case anymore. Which, from an investor’s point of view, means that product risk has decreased significantly across the board.
This is great for the ecosystem overall, especially for end users.
However, it’s not all good news (depending on who you ask) as this is making other things harder and more important. Most notably, being able to nail distribution (aka go-to-market) from the start.
As most (at least application layer) companies use similar / the same underlying technology stack and can build great products fast, founders need to gain access to proprietary customer data and workflows to train their models as soon as possible to be able to build truly differentiated products. This further increases the urgency to nail distribution earlier in the life of a new company.
On top, with so many smart and driven people able to build great products and bring them to market increasingly efficiently (thanks to the growing number of AI sales tools) it’s now also harder than ever to break through the noise—no matter how great your product is.
As a result, an increasing number of founders and operators argue that nailing go-to-market is now the most critical aspect of early startup success.
What does this mean for founders?
Unfortunately, it’s still rare to come across incredible product builders that also understand the importance of nailing distribution from the start.
Most of them tend to be second or third time founders which is part of the reason why a lot of VCs jump at the opportunity to back them (again) when they choose to start a new company.
I won’t go into detail around nailing distribution from the start in this newsletter (much more to come here) but will leave it at: It’s hard to stress the significance of focusing on and nailing distribution from the start enough.
Sales doesn’t come natural - especially for folks that are technical. But like any other skill, selling well can be learned.
There’s no way around it if you want your startup to succeed. Now’s the best time to start prioritizing it if you haven’t started already. And even if you have started, you’re likely not prioritizing it enough (yet).
Early Go-To-Market expertise and networks
Recognizing the importance of nailing distribution from the start, we (focal) made the decision two years ago to lean even further into our focus on helping the strong technical founding teams we seek to back nail their (B2B) GTM from the start.
We understand early GTM well. But we’re not currently building GTM motions in startups at a time when GTM blueprints are changing every few months.
The ones that are most plugged in / understand what works best in today’s market are the GTM leaders currently in the trenches of early stage startup building. These are the people we wanted to be closer to as a firm.
How to best do that?
As we all know, the best people are the busiest. To get on their radar / get them to spend time with you, you have to offer them something they find truly valuable.
Most (or all) startups don’t really know what they’re doing early on but are rather trying to figure it out as they go. This includes GTM leaders. To get there, they don’t need another networking event, surface level content session, or access to an “expert” that figured out their GTM motion a decade ago.
What they benefit from the most is being able to tap into a network of peers for in-depth, tactical, and confidential discussions that challenge their thinking / give them new input.
The challenge: Most operators are too busy to not just build, but also maintain such a network of great peers.
With The GTM Circle, we build this network for them.
Meet The GTM Circle
The GTM Circle is a 175+ member strong, growing community of revenue leaders at some of the fastest growing Seed to Series D software startups across the US and Canada. Facilitated by focal, we bring together a network of some of the brightest minds in early startup GTM.

Since launching it publicly a year ago, it has become the place for revenue leaders to learn from and grow alongside their best peers.

For us, it’s been incredible to see the level of collaboration, support and connection not just amongst members, but also between members and the founders we back.
It’s safe to say that year 1 has been a huge win for everyone:
- Members: Learn, work, and share “war stories” with some of their best peers in a confidential setting in a way where everyone benefits.
- Founders backed by focal: Draw on and learn from The GTM Circle as they nail their own GTM. On top, members of the network have started to join companies in our portfolio in GTM leadership positions.
- focal: We get to work with amazing human beings and stay on top of the latest and greatest in early GTM to better support the founders we back. Plus members of The GTM Circle have made introductions to many great companies in their network - some of which we ended up investing in.

At focal, we exclusively lead pre-seed rounds and are early-stage GTM specialists, looking to help our founders nail distribution from the start at a time when it’s so critical for success.
The GTM Circle underscores this ambition, allowing our ecosystem to learn alongside some of the best startup revenue leaders as they share valuable insights with each other and grow together.
This is a big pillar of who we are and we’ll continue to lean into this over the coming weeks, months, and years.

Until next week,
Pascal
