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Lesson 09

Go-to-market, channels & economic valueModule 02 · Customers, innovation & market focus

IGNITE EXTENDED / LESSON 09

Go-to-market, channels & economic value

Why might a better product fail to sell?

A route-to-market map and an EVC argument.

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09 / OpeningGo-to-market, channels & economic value

The decision and the learning goals

  • Map the participants required for adoption
  • Explain who gains and loses from a channel change
  • Use an EVC comparison to diagnose a selling barrier
90-minute workshopOpening 5 minConcepts and original examples 35 minPractice 25 minDebrief 15 minReview 10 min
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09 / TheoryGo-to-market, channels & economic value

The channel performs work that the product cannot perform alone

A go-to-market system must create awareness, explain value, establish trust, make the sale and deliver the result. Some products also require installation, training or ongoing service. Different participants may perform these activities.

The Aqualisa discussion shows why a technically attractive product can encounter a channel that has little reason to recommend it. An installer may prefer familiar equipment, predictable work and low callback risk. A consumer benefit does not automatically become a benefit for that installer.

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09 / TheoryGo-to-market, channels & economic value

Economic value to the customer uses the next best alternative

Economic value begins with the customer’s relevant alternative and adds the monetary consequences of the difference. Include purchase, installation, operating and service costs over a consistent period. Distinguish a demonstrated saving from one that depends on an uncertain behavior change.

The resulting value creates room for a price, but it does not mean the company can capture all of it. The customer needs a reason to switch, and other channel participants may need compensation. Perceived risk and access to capital can also constrain the purchase.

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09 / TheoryGo-to-market, channels & economic value

Four go-to-market questions

A route to market must perform the work that makes adoption possible. A technically attractive product can stall when a necessary participant lacks incentive or capability.

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Segment

Name the end user, buyer and buying situation. A homeowner may want a better shower while an installer strongly influences which unit is selected. Their interests need separate attention.

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Essential work

Map explanation, trust, qualification, installation and support. Determine where adoption currently stops. In a product requiring installation, awareness alone does not guarantee a completed purchase.

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Participants

Assign each task to a capable participant and examine the reward. If a faster installation reduces the installer’s billable time, end-user value may coexist with channel resistance.

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Route

Compare direct, indirect and mixed arrangements against that bottleneck. A demonstration or installer trial should test a specific adoption mechanism and measure completed behavior, rather than only attention.

The channel diagram makes the dependencies visible. The later distinction between value creation and capture explains why everyone may not support the same innovation.

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09 / TheoryGo-to-market, channels & economic value

A channel is a system of incentives

A channel is a system of incentivesProducerDistributor /retailerInstallerEnd customer

Each participant must have a reason and the capability to do the work required.

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09 / TheoryGo-to-market, channels & economic value

Essential work goes beyond making the product

  • Explain the offer and establish trust.
  • Find and qualify demand.
  • Sell, install, deliver and support the result.
  • Decide which participant can do each task economically and reliably.
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09 / TheoryGo-to-market, channels & economic value

Economic value to the customer

VALUE OF BENEFITS + COSTS AVOIDED − ADDED COSTS
Baseline
What the customer would otherwise use or do.
Value in use
Consequences over the relevant task or life cycle.
Price
How the resulting value is divided among participants.

Illustrative job: old hardware $100 + labor $80 = $180; new hardware $130 + labor $30 = $160. The customer saves $20 if the comparison is valid.

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09 / Deep diveGo-to-market, channels & economic value

EVC for Relay: choose the baseline first

The same product shows very different value depending on which alternative it is compared with.

EVC compares Relay with what the clinic would otherwise do: phone its waitlist. The headline figure compares Relay with doing nothing, which overstates the value by about $30,000 a year. Use the status-quo figure in front of owners, because it survives their own arithmetic.

Even on the conservative baseline, EVC is about 15 times the annual price. With a gap that large, the selling problem is not price. It is trust, switching effort and front-desk adoption, so the inducement should lower those barriers rather than the price.

Line (per clinic, illustrative)Versus doing nothingVersus phoning the waitlist
Empty slots per week4242
Fill rate gained40%40% - 12.5% = 27.5%
Extra visits per week16.811.6
Recovered revenue per year (x $110 x 52)~$96,000~$66,000
Front-desk calling time avoidedn/a~$5,200
EVC per year~$96,000~$71,000
Relay price per year$4,788$4,788
EVC / price~20x~15x
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09 / Source pageGo-to-market, channels & economic value

Go-to-market strategy in four steps

Go-to-market strategy in four steps; Lattin - Go-to-Market Strategy Slides PDF page 6
Original page · S12 · PDF page 610 / 37
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09 / Source pageGo-to-market, channels & economic value

Aqualisa's route to market as a system

Aqualisa's route to market as a system; Lattin - Go-to-Market Strategy Slides PDF page 7
Original page · S12 · PDF page 711 / 37
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09 / Source pageGo-to-market, channels & economic value

The essential work each participant performs

The essential work each participant performs; Lattin - Go-to-Market Strategy Slides PDF page 9
Original page · S12 · PDF page 912 / 37
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09 / Source pageGo-to-market, channels & economic value

Five reasons a better shower did not sell

Five reasons a better shower did not sell; Lattin - Go-to-Market Strategy Slides PDF page 11
Original page · S12 · PDF page 1113 / 37
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09 / Source pageGo-to-market, channels & economic value

Economic value to the customer (EVC): the build

Economic value to the customer (EVC): the build; Lattin - Go-to-Market Strategy Slides PDF page 12
Original page · S12 · PDF page 1214 / 37
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09 / Source pageGo-to-market, channels & economic value

Does the Quartz create value? EVC with euro figures

Does the Quartz create value? EVC with euro figures; Lattin - Go-to-Market Strategy Slides PDF page 13
Original page · S12 · PDF page 1315 / 37
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09 / TheoryGo-to-market, channels & economic value

Channel conflict is a consequence of changing incentives

A direct route can improve control over the explanation and customer relationship. It also requires the company to perform work that distributors or installers previously supplied. Selling directly can create conflict when partners believe the company is competing for their customers or margin.

Compare routes by the essential work and the economics of performing it. A channel with broad reach can be ineffective if it cannot explain the innovation. A focused demonstration route can be expensive but useful for learning which explanation and installation process lead to adoption.

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09 / TheoryGo-to-market, channels & economic value

Adoption experiments need a defined bottleneck

Low sales can arise from weak awareness, an unclear benefit, distrust, a high effective price or an obstacle after purchase. A marketing action should target a specific explanation. Otherwise a successful or unsuccessful campaign is difficult to interpret.

State which behavior should change and where it appears in the route to purchase. A demonstration may increase consideration without resolving installer refusal. A discount may produce purchases that disappear at the sustainable price. Trace the whole process before expanding the intervention.

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09 / TheoryGo-to-market, channels & economic value

Value created and value captured

A channel participant supports an offer when its own expected consequences are attractive. End-user value alone leaves that incentive question unanswered.

End customer

May gain from easier installation and better use.

Installer or reseller

May lose billable work, face retraining or receive little reward for promoting the new offer.

Worked application

Illustrative application: faster installation can benefit a homeowner but reduce the installer’s billable work. Adoption may require a different payment arrangement, less installation risk or access to additional jobs. Examine the actual participant’s economics rather than assuming resistance comes from ignorance.

Map both the total improvement and how costs, rewards and risks are distributed across the route to market.

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09 / TheoryGo-to-market, channels & economic value

Aqualisa: why innovation did not settle adoption

  • The archived discussion highlights installer caution, unfamiliar electronics and changes in installation work.
  • An existing channel may prioritize familiar products and established margins.
  • A route that worked for an old product may not fit an innovation.
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09 / TheoryGo-to-market, channels & economic value

Direct and indirect routes

RoutePossible benefitTrade-off
DirectMore control over explanation and customer learning.Must perform channel work and may conflict with partners.
IndirectUses existing reach, trust and capabilities.Incentives and attention may not align.
HybridDifferent participants handle distinct work.Boundaries and economics must be explicit.
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09 / TheoryGo-to-market, channels & economic value

A channel experiment needs a mechanism

  • Identify the adoption bottleneck.
  • Change who does the essential work or how they are rewarded.
  • Measure a relevant behavior, not only awareness.
  • Check for damage to the rest of the route.
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09 / Source pageGo-to-market, channels & economic value

How much does Aqualisa capture?

How much does Aqualisa capture?; Lattin - Go-to-Market Strategy Slides PDF page 14
Original page · S12 · PDF page 1422 / 37
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09 / Source pageGo-to-market, channels & economic value

What happened: the market turned through showrooms

What happened: the market turned through showrooms; Lattin - Go-to-Market Strategy Slides PDF page 16
Original page · S12 · PDF page 1623 / 37
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09 / Source pageGo-to-market, channels & economic value

Takeaway: value must be exchanged at every stage

Takeaway: value must be exchanged at every stage; Lattin - Go-to-Market Strategy Slides PDF page 18
Original page · S12 · PDF page 1824 / 37
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09 / Source pageGo-to-market, channels & economic value

Takeaway: go-to-market can matter as much as product-market fit

Takeaway: go-to-market can matter as much as product-market fit; Lattin - Go-to-Market Strategy Slides PDF page 20
Original page · S12 · PDF page 2025 / 37
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09 / Original readingGo-to-market, channels & economic value

Lattin - Aqualisa Quartz (1)

PDF page 4
Lattin - Aqualisa Quartz (1); PDF page 4
PDF page 5
Lattin - Aqualisa Quartz (1); PDF page 5

Click either page to read it at full size. In the reader, use ← → to switch between these two pages.

Original archive · S15 · PDF pages 4 & 526 / 37
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09 / Original readingGo-to-market, channels & economic value

Lattin - Aqualisa Quartz (1)

PDF page 6
Lattin - Aqualisa Quartz (1); PDF page 6
PDF page 7
Lattin - Aqualisa Quartz (1); PDF page 7

Click either page to read it at full size. In the reader, use ← → to switch between these two pages.

Original archive · S15 · PDF pages 6 & 727 / 37
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09 / Reading debriefGo-to-market, channels & economic value

Aqualisa Quartz / summary

Selected reading: PDF pages 4, 5, 6, 7

Quartz changes both the shower experience and installation work. The excerpt shows why commercialization must account for channel behavior and the installer’s perceived risk as well as product capability.

  • Several routes to the customer

    Trade shops, showrooms and DIY outlets perform different roles and serve different expectations. Distribution is part of the offer’s design.

  • Installers influence adoption

    Plumbers favor familiar brands because expertise and service experience reduce the risk of an expensive return visit.

  • A technical change creates new value

    Locating the processor remotely can reduce excavation and simplify installation. The resulting benefit follows from a specific change in the work.

  • Field testing refines the offer

    The pressure and temperature examples show how observed reactions changed product choices that initially seemed technically reasonable.

Reading debrief · S15 · PDF pages 4, 5, 6, 728 / 37
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09 / Reading debriefGo-to-market, channels & economic value

Aqualisa Quartz / discussion

Selected reading: PDF pages 4, 5, 6, 7

Critical points

A benefit and an incentive

Installation time saved has different consequences under different quoting practices and workloads. Investigate the actual installer’s economics before assuming resistance is irrational.

Trial feedback and adoption

Positive reports from field-test installers support the mechanism in that setting. They do not by themselves establish broad willingness to change established behavior.

Several possible bottlenecks

Awareness, reliability beliefs and channel support can each limit adoption. Design an experiment that distinguishes the bottlenecks.

Reading debrief · S15 · PDF pages 4, 5, 6, 729 / 37
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09 / ApplicationGo-to-market, channels & economic value

Aqualisa Quartz: benefits were not shared automatically

The historical case presents an innovative shower that could improve installation and customer experience. Installers and existing intermediaries still had to understand the offer, trust it and see a reason to recommend it. Product value and channel motivation were separate problems.

What route would help the product be specified, installed and supported?

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09 / Current practiceGo-to-market, channels & economic value

Current practice: EHR app marketplaces and platform owners as competitors

EHR marketplaces have become directories, not sales channels

In December 2022 Epic announced it would shut down its App Market, and in January 2023 it opened Connection Hub, a directory open to any vendor with a live Epic connection. In January 2024 it launched Showroom, with tiers that include a $500-a-year Connection Hub listing, curated Toolbox categories and Workshop co-development partners. A listing signals compatibility, but the vendor still does the selling.

The platform owner can enter your category

In August 2025 Epic announced a native ambient AI charting tool built with Microsoft, moving away from relying on partner integrations. In a KLAS survey of 35 Epic customers, 54% said they were likely to adopt Epic's tool within two years, while customers of independent vendors wanted proof of maturity before switching. For Relay, ClinicOS bundling a waitlist is the same risk.

Implication for channel choice

When the channel owner is also a potential competitor, use its marketplace for integration access and credibility. Build demand through routes you control, such as direct sales, referrals and association endorsements, and invest in what the bundle would not match: fill-rate performance and multi-location workflows.

Sources: Fierce Healthcare: Epic plans to overhaul its app market, opens Connection Hub (Dec 2022) · Fierce Healthcare: Epic launches new Showroom website for third-party apps (Jan 2024) · Becker's: Epic's ambient speech push could reshape market (KLAS)

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09 / PracticeGo-to-market, channels & economic value

Repair a channel incentive

Fictional adaptation: a new installation method reduces labor from $80 to $30 while hardware rises from $100 to $130. Installers earn a share of labor revenue; customers see only the higher hardware price. The producer’s existing resellers favor the old model.

Your task

Map the work and incentives. Propose two channel responses and a test. Separate customer value from the installer’s current reward.

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09 / DebriefGo-to-market, channels & economic value

Worked answer and reasoning

  • Explain total installed value rather than hardware price alone, while checking that the assumed labor saving occurs.
  • One response is a revised service/package price; another is a route through participants who benefit from easier specification or installation.
  • Test actual recommendation and installation behavior, including the effect on existing partners.
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09 / Venture stepGo-to-market, channels & economic value

Venture step: Relay's route to market and EVC argument

Relay · venture step 09

Relay v1 costs $399 per location per month ($4,788 a year). The headline is about $96,000 a year of gross recovered revenue per clinic (illustrative), based on refilling 40% of about 42 empty slots a week at $110. Three routes are on the table: founder-led direct sales (CAC about $2,400); the ClinicOS marketplace, which reaches about 35% of independent clinics but takes a 30% revenue share (CAC about $1,500); and endorsement through a state PT association. The owner signs, the front desk runs it, and ClinicOS controls the API.

Your task

Produce a route-to-market map (participants, essential work, each one's gain and risk), an EVC calculation against the correct baseline, and a recommendation on which route to test first, with the metric that would change it.

Relay · illustrative venture34 / 37
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09 / Venture stepGo-to-market, channels & economic value

Venture step: worked reasoning

  • EVC against the right baseline: the front desk already fills about 10-15% of gaps, so Relay's increment is about 40% - 12.5% = 27.5% of 42 slots, or about 11.6 visits a week. At $110 that is about $1,270 a week, or about $66,000 a year. Add roughly 1 hour a day of front-desk calling avoided (illustrative: 260 days x $20 = about $5,200). EVC is about $71,000 against a $4,788 price, roughly 15x. The $96,000 headline is gross recovered revenue, not value over the status quo; the $66,000 increment is the revenue figure for value claims and pricing.
  • Who gains: the owner, through revenue on capacity already paid for. The front desk saves time but loses control, so they need an easy override. Therapists see fuller schedules, which helps only if their pay or targets reward productivity. ClinicOS gains little from Relay and could bundle a waitlist itself, the Aqualisa sales-force problem in a new form.
  • Essential work: awareness and trust (HIPAA BAA, references), integration with the EHR, front-desk onboarding, and proof of fill rate. Direct sales does all of it, at about $2,400 CAC and limited reach. The ClinicOS marketplace provides reach and integration at a 30% share, which cuts monthly gross profit per clinic from about $319 (399 x 0.80) to about $200 ((399 x 0.70) - 79.80 delivery cost). At 33 months and $1,500 CAC, LTV/CAC is about 7.0 on a channel with no revenue share (PT association referrals) but about 4.4 through the ClinicOS marketplace.
  • Recommendation: keep direct sales with an association endorsement as the trust channel (no revenue share, CAC about $1,500 if referrals convert), and list on the ClinicOS marketplace for integration access, not as the main demand source. Test with 10 association-referred clinics. Switch emphasis if the association route converts under 15% or onboarding takes over 3 weeks (illustrative thresholds).
  • Pricing implication: a 15x EVC/price ratio means price is not the bottleneck. The barriers are trust, switching effort and front-desk adoption, so the inducement should be a free 30-day fill-rate trial with a weekly recovered-visits report, not a discount.
Relay · illustrative venture35 / 37
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09 / DebriefGo-to-market, channels & economic value

Reasoning traps

Measuring against zero instead of the status quo

Relay's $96k headline counts slots the front desk would have filled anyway. Measured against the 10-15% the phone list already achieves, the increment is about $66k of revenue (about $71k of EVC including front-desk time), which is still compelling and is a number a skeptical owner can verify.

Treating a marketplace listing as a distribution plan

A listing gives access and credibility, but the platform owner does not sell for you and may bundle a competing feature. Model the revenue share in LTV and keep a route you control.

Ignoring the person who runs the product

The owner signs, but the front desk decides whether Relay is used. If staff see automatic booking as a loss of control, the account churns however good the economics are on paper.

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09 / ReviewGo-to-market, channels & economic value

What you can now explain

A Relay route-to-market map with each participant's gain and risk, an EVC calculation against the phone-waitlist baseline ($66k incremental revenue, about $71k with front-desk time, vs $4,788), and a channel test with a switching threshold.

  • A route to market is the allocation of essential work (explain, trust, sell, install, support) to participants who each need a reason and the capability to do it.
  • EVC is measured against the customer's next best alternative and sets a ceiling; price sits below it to leave an inducement and to pay the participants who do essential work.
  • A technically better product stalls when the participant who chooses or runs it loses from the change, so diagnose the bottleneck before spending on awareness.

Next lesson: Business models & unit economics

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