Positioning is everything
By: Pierre Gaubil
Tags: Startup, Positioning, Marketing, Early Stage Startup

This is a very complex topic, no doubt. This is also a critical one. Positioning is helping potential clients understand what you do, how you compare, what you do best, and why they should be intrigued. It’s about occupying a special place in the customer’s mind where you stand alone and unique.

Without proper positioning, sales and marketing will struggle, everything will be hard, and employees will lose faith.

Most startups do it from a product angle; “my product does this well”, “only my product does this”. Understandably, early on, startups are product-driven, and positioning the product is also positioning the company, there is no brand to work with. However, if the frame of reference is a product feature and how the startup perceives the market, we are exposed to all kinds of biases. So how can we separate from the product?

Let’s try to approach this differently with two elements in mind, competition, and the customer.

Initial step

You need to take a step back and ignore your product. Startup founders have a deadly product bias. They have spent countless hours designing and building their product, and while doing this, constructed a mental image of what their product is, and thus how it is perceived. That could be misleading.

Additionally, the product was created with a certain market in mind. Markets are dynamic, and what was true when you started, might no longer be.

So being product-centric freezes your mind to see the product the way you want to see it, on a market that might have evolved.

Photo by Rupert Britton on Unsplash

Competition

Your value proposition is only valuable in relation to alternatives solutions.

It’s been said countless times, but a startup's fundamental is to solve a problem that really exists. If you are solving something worth solving, that means there is customers’ pain, and they have probably a choice of alternative solutions to ease the pain. Without competition, there is no market! So you need to do your homework and understand what that is.

Positioning starts with the competition! You exist in relation to others.

Listing alternative solutions can be a daunting task. It must be done. Here is a simple methodology to get started.

1-Start with what you know:

List known competitors

Ask customers what other means they use that compare to your solution

Analyze what you are replacing

Go back to win/lost deals and ask yourself why

2- Search what you do not know

Google, use every mean including “image”

Look at Crunchbase, CB Insights, …/…

Go to competitors literature and look for competitors of competitors

3- List direct competitors

Categorize them, tier 1, 2, 3

At least 10 to 50

4- Assign criteria to each competitor

Company info (Location, nb of employees, funding, founder experience,…)

Product info (Pricing, version, Tagline, User engagement,…)

Customer info (Sweet spot, Success stories, best reviews, worst reviews,…)

5- Create a visual

I personally need to draw something that summarizes all the work and thinking. It forces me to rationalize, eliminate details and see what really matters. As far as positioning I often like the value chain diagram the best. You might of course use other visual representations, such as the petal diagram. However, please avoid the classic matrix where you end up on the top right corner, that is not credible! With the value chain diagram, I can see where my value is best perceived and can start thinking about how to position my product, and what story to tell.

Customers

Now that you have put some work understanding competition it’s time to talk to clients. Let’s go from theory to reality.

Have you not experienced clients presenting your product in a surprising way, from an angle that was different from yours? If that happened to you, it’s because customers see your product and competing solutions differently from you. Sometimes they can value something that you did not even consider as valuable. You should care about this, customers’ perception is everything. Trying to correct clients’ perceptions is really hard, try instead to understand and leverage it.

The best way to start is to talk to customers that love you. It is very complicated to get valuable insight from clients that simply like you. If it’s just “like” the feedback is going to be basic, expected, with nothing to bite on. A loving client will add emotion and passion and will project in the future.

So get out and talk to loving clients. Ask open questions, do not force them into your reasoning, you want to hear new things. Ask them what they would do if you did not exist. You are trying to understand how they perceive alternative solutions and your own product.

You want to isolate what makes you unique in their mind.

Photo by Guillaume Bourdages on Unsplash

Connecting the dots

We have now a competitive listing and loving customer interviews. Time to try to connect it all.

Define the Value Proposition

Start with what you know you do best. It must be something that clients agreed upon and where competition is not so strong. Do not stay at the feature level. Sales 101 tells you that a feature does not matter, it’s the benefit that we need to get to. If you try to sell me a Ferrari telling me it can go 200 mph, and you never qualified that I actually care about speed, you are missing the point. Characterize the customer perceived value, and frame the value proposition.

Try to match value proposition and target audience

Analyze where your value proposition resonates best. Can you define that market, the customer target?

Markets are essential to help customers position your offering. Look for products with similar key features and analyze how they position on the market. Look for adjacent markets that are growing quickly.

You will end up in one of the three following buckets:

An existing Market. Clients are educated however competition might be strong.

A subsegment of an existing market. There is less competition, it’s easier to differentiate, however, it needs to be poorly addressed by the market leader.

A new market. That is the most complicated situation as you need to spark demand. Start with the problem you are solving. New markets open when we have a technology shift (5G, 3D Sensors, Cloud computing,…); when there is significant customer fatigue with current solutions; when regulations change; when megatrends occur (crises, market shifts).

If you can articulate your target market and ideal customers, explain what makes you unique and valuable, you are positioning your product and helping clients understand quickly why they should or should not consider your offer.

Positioning is extremely critical. If well done it creates clarity for clients, employees, and investors. I hope that helps! Cheers!

Like positioning, we address strategic topics in 34 elements academy. Apply here: https://www.34elements.com/application-form