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Startup Marketing and Sales
by April Dunford

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Your B2B Startup Needs a Buyer’s Guide

06/18/2015

One of the big differences between selling to businesses vs selling to consumers is the buying process. Most Consumer products are lower priced and purchased quickly because if you make a poor choice, you aren’t out much more than beer money. In B2B not only is there more money on the line, buyers often have to justify a purchase to their boss. A poor choice can cost the company big dollars and (often more importantly) damage the buyer’s reputation.

This is precisely why a Buyer’s Guide is such a powerful piece of marketing content. It is designed specifically to meed the needs of a prospect that has been tasked with making a purchase decision. It’s a piece of marketing content aimed directly at the hottest prospects in your pipeline.

The Buyer’s Guide is Targeted at a Critical Stage in the B2B Buying Process

For B2B purchases, the buying process usually includes a stage where prospects try to figure out what their options are and which ones are best suited to them. For startups selling to businesses, this stage is particularly important. Often the solution is in a new or shifting market space and figuring out the competitive alternatives is a task in itself, nevermind trying to figure out which option offers the best combination of functionality, features, support, community, etc.

B2B Startup Buyer's Guide

For enterprise products, the evaluation phase might be a months-long process that includes a formal RFP process and/or a Proof of Concept. However for many lower-priced B2B solutions, the evaluation process is much more informal and looks more like a manager saying “Go figure out what we should buy and come back with a recommendation”. For those folks, the first task is to come up with a short list of solutions, then figure out how to compare them and how to pick a winner. In short – they have to learn HOW TO BUY before they can buy. A great buyer’s guide solves that problem for prospects while also being one of the best pieces of sales content you can create.

Why a Buyer’s Guide Works

A great buyer’s guide helps prospects set the criteria used to evaluate solutions. If you set the buying criteria, your chance of winning the business goes up exponentially. When I suggest building a buyer’s guide the first reaction I usually get is “But people won’t read my buyer’s guide because we are obviously biased!!!” Yes, you are. And yes, prospects understand that. But that doesn’t make your guide any less useful. Here’s an example – I built a buyer’s checklist where we had a feature that we felt was really important but often not included in evaluations.  We included a set of items on the checklist that wouldn’t be checked unless the solution supported that feature. The first prospect I talked to that had used the guide told me “Yeah, we knew you put that stuff on there because that’s the thing that you guys are good at but you know, it did get us thinking about how important that stuff was so we added it to our must-have list of features.” We were the only ones that had it and we won the deal.

Here’s something else to remember – If you aren’t teaching them how to buy, someone else is. The risk in not trying to influence how prospects set purchase criteria is that someone else will, making it hard for you to recover later in the process.

What Makes a Good Buyer’s Guide

1/ It teaches prospects why they should value what you’re good at – The first step to evaluating a solution is figuring out what the key purchase criteria are. If you are helping to set the purchase criteria you are likely to win a comparison. A good buyer’s guide helps explain why your key value is indeed valuable – it is the ultimate manifestation of positioning for a B2B product.

2/ It speeds up the purchase process – Helping a prospect get through the evaluation phase of the purchase cycle faster means a purchase decision gets made faster and your sales resources free up faster. The buyer’s guide should be clear and simple enough that it helps prospects feel like they are now ready to make an informed decision – one that they can justify to others.

3/ It highlights the weaknesses of your competitors – Not only can a good buyer’s guide highlight the need to make decisions based on the strengths of your products, it can also serve to highlight the weaknesses in your competitors. For example I built a buyer’s guide for a solution where we were clearly a leader in the market and we put a section in the buyer’s guide around how to evaluate customer references, knowing it would trip up our smaller competitors. Similarly I built a buyer’s guide when I worked at a startup that highlighted our lightweight deployment model (How fast can the solution be deployed? What resources will the deployment take? Can the solution be deployed in stages?) – an area where we knew we trumped our larger competitors.

4/ It weeds out crappy prospects – A buyer’s guide can also weed out prospects that aren’t a great fit for your solution by making it obvious who is. This might seem counterintuitive but quickly weeding out prospects that are unlikely to select you frees up sales resources to work with prospects that are more likely to buy.

5/ It arms your internal champions with the information they need to get approval to make a purchase – In B2B often the person you are selling to needs to get the approval of folks higher up the chain to make a purchase. A good buyer’s guide teaches your champion in the account not only how to select the best solution, but also how to get their selection approved (an example of a hybrid buyer’s guide and get-this-past-your-boss-guide from Kissmetrics is this How to Pitch Marketing Analytics Software to Your Company)

6/ It’s not too long or complicated – If the guide is too long and complicated it won’t get consumed, or worse, it will convince prospects that they need to do more research in order to be educated enough to make a good decision. Sometimes a guide can be as simple as a checklist (See Upshot Commerce – choosing an eCommerce Platform,  Callidus Cloud’s checklist – what to look for in a marketing automation vendor), a categorized list of key features (See the Base CRM How to Choose the Right CRM for your Business) or a combination of all of those things (See NetSuite’s CRM Buyer’s Guide or Marketo’s Things you should know when buying marketing automation).

 

Marketing Strategy Hacks Presentation

06/03/2015

I gave a talk at the Unbounce Conversion Road Trip this week. It was an awesome event with amazing speakers. I decided to go a bit deeper into my thinking around how you would test the underlying assumptions in your marketing strategy, in particular which buyers you are targeting and what market you are positioned in. There is a bunch of new content here that I’ll blog about in the future but in the meantime, here’s the deck.

Components of a Startup Marketing Plan

05/20/2015

Startup Marketing Plan

When I ask startup folk if they have a “Marketing Plan” I get a range of reactions from a slightly embarrassed “Yeah we probably should have one but we aren’t doing much marketing so…” through to the more assertive, “Dude we don’t do plans, because we’re like, you know, a startup!”

At my first startup we didn’t have a marketing plan. We were a small team working on short-term tactical projects. Those tactics changed every couple of weeks and we didn’t see a need to document anything. My first encounter with a marketing plan came after we were acquired by a global company. The experience was awful. The plan was done yearly and had 50 sections, starting with a (completely arbitrary) revenue goal and drilling all the way down to every specific tactic (including PR, email, advertising, events, everything) to be executed across the entire year. The most frightful thing about the Marketing plan was that it wasn’t approved until March, and by June we’d started building the plan for the following year. The exercise seemed pointless to me.

At my next startup however, I found that there were moments when I missed pieces of that marketing plan. I missed having a work plan that tied the schedules for content creation, campaign execution and sales enablement together. I missed having the clarity of approved campaign components like target markets, messaging and goals (at least for the next month or so), and I found I needed a revenue model that mapped my lead generation plan to expected revenue. I wanted a plan that kept the good bits of the big company plan and threw out the useless stuff. I’ve done marketing plans ever since. Interestingly, most of the good startup marketing VP’s I know do similar stripped-down planning. Here are the common components I’ve seen across plans:

Components of a startup marketing plan:

1/ The Inputs: Positioning and Messaging

Things are moving quickly at a startup and I’ve found it’s important to get agreement on the basic underpinnings of the marketing plan. This will save you from starting out with tactical execution, only to have everyone disagree later with the basics of copy or content. The first input is the company Positioning.

I generally capture this in a one-page positioning sheet that looks like this and contains:

  • What do we do?
  • Who are the prospects we are targeting right now?
  • What market are we in?
  • What are the competitive alternatives to our solution?
  • What is the essential value we deliver?
  • What is our main differentiation from the alternatives in our market?

The second input is a short Messaging document. This builds on the Positioning components and provides the baseline that will be used for copy and content in campaigns. My version of this is usually only a couple of pages at the most and covers:

  • a 1 line description of the solution
  • a 25 word description of the solution
  • a 100 word description of the solution
  • 3 key value points of the solution – 1-2 sentence expansion on the value that your customers will see from your solution
  • The features that map to the value points above (what does your solution do differently that allows you to deliver that value)
  • The proof that backs up your value claims – this is usually data from customers, statements from 3rd parties like reviewers or other supporting numbers or statements that prove your claims.

2/ The Tactical Work Plan

This is how you are tracking the list of programs, campaigns and experiments you have running at any given time. There are loads of tools you can use to keep track of this stuff but I use a spreadsheet with a bunch of tabs. I start with a tab for each major tactic group (such as PR, Events, Email, Social/Digital, Referral/Influencer, Website, inside sales calling, etc.). Each tab has a timeline of what is happening when, owners and due dates. Content crosses almost every tab so I usually have a master content plan on a separate tab so I can see exactly what content is being delivered when. Then I have a summary tab shows the master calendar across the month and the quarter.

I generally have a bunch of experiments running as well (tests on parts of the website, tests on new acquisition channels, tests that are trying to streamline our lead to close process, email tests around timing or segmentation of the lists, etc.). Those are tracked separately and winners are folded into the plan.

3/ The Results/Revenue/Budget Model

The last thing I’ve got is a Dashboard that is tracking results across all of my tactics against my targets. I’m usually showing results for what’s happening now but also a prediction of what the resulting revenue should look like based on my assumptions around conversion rates downstream. I’m also tracking my budget/spending across each tactic.

This is essentially a predictive revenue model for the business. What happens if we drop events? What happens if we increase our spend by 5K on advertising? I can give you my best guess by changing the inputs on the model. I can also track the assumptions and model what a change in a conversion rate at any stage in my buying process will have on revenue (for example, if we increased trial to purchase conversion from 30% to 35%, what would be the lift on revenue?).

Instrumenting this is sometimes a pain depending on where you are pulling data from. I usually end up with a master sheet in excel that’s pulling from whatever tools I’m using to capture metrics. The tools don’t matter as long as your report/dashboard is up to date and accurate.

Iterating on the Plan

Most of what made my marketing planning experiences at big companies so painful was the timeframe (a year is eternity for an early stage startup) and the static nature of the plan. I am usually doing a review of my tactical plan every week or 2 to see if there are things we can pull in from our successful experiments or things that we might want to pull out because the results are falling behind other tactics. I also do a regular checkpoint on my inputs. Is the market shifting in a way that might impact my target segments? Have we learned anything that might indicate we need to shift our messaging or positioning? Static plans are useless for a startup – an agile planning process on the other hand is indispensable.

Marketing Strategy Hacks for Startups

04/23/2015

startup marketing strategy hacks

I do a lot of coffee meetings with founders looking for marketing advice. Most of the time people have a specific marketing problem but occasionally I meet with frustrated founders complaining that everything they’re doing on the marketing and sales side just simply isn’t working.

Let’s put aside the very real possibility that there is a fundamental product or product/market fit problem (a big assumption but work with me on this one) – is it possible your marketing/sales strategy is getting in the way of the success of your company? In my opinion, yes that’s very possible. Can you hack your way out of this mess? Yes, again. OK, not always, but it’s worth poking around at a few things to see if it’s fixable.  If I was in charge of marketing for a company in that situation, here are a few things I would try:

Hack the Definition of Your Buyer

If you are selling to businesses there is often a separation between users, economic buyers and executives/approvers. Sometimes selling to the folks that hold the budget is the easiest way to get a deal done, but often it can be easier to either sell to the end users (who feel the pain most acutely and can champion your solution to the economic buyer), or the executive team (who might better understand the overall ROI of the solution across the organization).

For example – at one company I worked at we started out targeting buyers in IT because they would ultimately be responsible for maintaining the integration of the solution with other systems. However IT saw the solution as risky and also secretly hoped the company would allow them to develop a solution in-house. The end-users of the product were sales people and we had a strong value proposition to the sales executive in particular. We switched to selling to sales executives and once we had their buy-in, they easily forced IT to get on board with the solution by getting the CEO’s agreement. As an example of moving the other way – I worked with a startup that moved from targeting the executive team (which in this case were difficult to engage with and didn’t understand the end-user pain) to targeting users directly who could start using the product and then lobby their managers to buy it.

Hack the Definition of Your Market Space

The way you describe what you do will position your solution in a particular market. What market you are in, will determine what prospects see as your competition. Many startup solutions span different markets or are actually transforming an existing market into something new. You may have an opportunity to position yourself in a different market where the competitors are weaker and your differentiation shines through more clearly. For example I worked for a company that sold a database that was excellent at performing queries of large amounts of data with little data variation. When we positioned the product as “a database”, customers immediately started to compare us with Oracle and often rejected our solution because they were “an Oracle shop”. We repositioned the solution as a “Data Warehouse” for machine-generated data, which got us away from comparisons with Oracle.

Sometimes redefining your market space is really a matter of narrowing your focus. Most startups target to broadly and narrowing down to a sub-segment can be the key to early traction. I’ve seen startups do this by moving from being a horizontal solution to focusing on just one industry or by narrowing the focus within an industry to just one slice of it – for example, focusing on Investment banking versus Investment and Retail banking, or focusing on Residential Real Estate versus focusing on both Residential and Commercial.

Hack Your Value Proposition

Startups tend to fall in love with their own offerings and spend too much time talking about features that were technically difficult to build but aren’t critical to prospects. Prospects on the other hand usually don’t buy solutions because of 5 so-so benefits – they buy because there is one key thing that your solution has that they can’t get anywhere else. Sure there are other things your product probably needs to do in order to ultimately win the business, but marketing’s first job is to get a lead hooked. Are you leading with what your prospects think is your biggest strength? At one startup I worked with we went from our site highlighting 5 key features to simply talking about one big benefit to prospects, resulting in more leads and higher close rates. At another we re-trained the sales force to lead every prospect conversation and demo with our key differentiating feature and to only move on to other aspects of the solution after that was well understood. Again, conversion and close rates improved dramatically.

Hack Your Sales Process

Sometimes the problem isn’t the front of the funnel, it’s getting the leads you attract to convert to paying customers. Understanding the friction points in the funnel and testing different ways of bringing prospects along a path to purchase is often a good set of tests to run. For example, I worked at a company that sold large enterprise systems to technical buyers and we often got stuck doing proof of concept tests that never progressed into deals. We started to offer an alternative off-site real data test (we took a sample of their data and ran a test in our own lab) that was faster and more controlled than an on-site POC and led to more sales that closed quicker. At another company we found that we couldn’t close a deal without giving buyers a way to test the system live ahead of time. Even though prospects didn’t ask for a POC we offered it, managed it in a very controlled manner, and closed deals faster. I’ve seen companies do interesting things with free trials and up-selling and cross-selling offers that accomplish the same goal of getting prospects in the funnel unstuck. Looking at not only where deals are dropping out of the funnel but really understanding why can lead you to creative changes in your sales process that move prospects along.

 

Startup Market Segmentation: 5 Steps to Selecting a Target Market

04/02/2015

For startups, breaking your market up into addressable market segments is important. First of all you have limited money and people to execute programs, therefore you have to focus your efforts on the audience that has the highest probability of purchasing. Secondly, focusing on a segment allows you to build early momentum more easily – awareness and word of mouth builds faster across like-minded groups, and success stories resonate well across a segment of similar prospects.

A key element of your company’s positioning is “Who are you selling to?”. It sounds like a simple question to answer but often for startups, a sloppy market segmentation is the root of a lot of marketing (and ultimately sales) problems.

Startup market segmentWhen I ask the question “What’s your target market?” I often get an overly simplistic answer like, “SMB’s”. That’s just too big to be a practical target market for a startup. You aren’t going to close business with every single SMB this year are you? Of course not. You are going to close business with a certain kind of SMB. A special snowflake sort of SMB that gets what you do, loves what you do, and will pay money for what you do. You’re going to sell those weirdo, magical, unusual SMB’s that are willing to ignore the fact that you’re small and broke and you’ve never really done this before. What makes those people so strange and awesome? The answer to that question is the key to your segmentation.

“What are the characteristics of prospects that love my unique stuff the most?”

Here are some steps to choosing a good market to target:

  1. Really get a grip on your key differentiators: There are loads of other alternative for prospects. What makes your offering uniquely different? What can you do that no other competitor can do?
  2. Take a hard look at the value those differentiators can bring to prospects: You’ve got features that make you different – so what? What is the benefit that users get from those features? How do you measure the value that you deliver? Why do people care about the things that make your offering unique?
  3. Identify prospects that care about your key differentiators the most: If you look across the broader market, who cares about your value more than the average prospect? Some prospects will says “yeah, your stuff is cool”, but others will jump out of their chair and yell “That’s AMAZING – I need that right now!”. You are going for the second group. Put a different way – this is the group of folks that are the easiest to sell to right now.
  4. How do I recognize people that have a high affinity for my offering?: Maybe they tend to be a certain size of company, in a certain vertical market, in a certain geography. Maybe they are consumers that already own certain products and also have certain hobbies. This is where you need to get super specific. If you are targeting SMB’s for example, start asking questions – what’s the smallest business that really, really loves this stuff? What’s the largest? Do product businesses love it more that services businesses? Are there locations (urban vs rural) that love it more? Is there a certain type of small business owner that loves it more? Why? Your segmentation will depend you being able to identify the characteristics of an ideal, easy to close prospect.
  5. Is the segment big enough to meet my sales goals yet not so massive I can’t really target it?: Keeping in mind that you aren’t going to close everyone in your target segment, can you realistically meet your sales goals with just this segment? On the other hand, is the target so massive I can’t expect to get noticed? In my experiences the smaller and tighter you can get on your segmentation, the easier it is to get early traction. You can always go broader later.
  6. Can the target prospects buy from me? If not, do I have a way to get to the real purchaser?: This last one is important. Can your target prospects afford what you are charging? Do they have budget authority and if not, who do they have to go to for approval? Can they champion your solution inside their business and make a deal happen? Do they generally buy through a channel (retail, resellers, VAR’s, etc.) and if so, can you sell through that channel? Selling is after all, the purpose of this exercise.

If you understand what makes you amazing and can find people that will pay for that amazing stuff, then you have found yourself a nice target market.

Startup Marketing in New Vs. Established Markets

03/26/2015

Established markets and new markets are not the same so the way that you market and sell to them is different. For startups, it’s really important to know the difference. For each type of market are using different marketing tactics, executed in different ways with different expected results.

New versus Established Markets – The Problem Gap

In an established market, there are prospects out there that understand that they have a problem that needs to be solved. There will also be prospects actively in the process of learning about, shopping for and purchasing solutions.

In new markets, prospects are blissfully unaware that they even have a problem. They aren’t researching solutions or shopping for solutions to a problem that they don’t know they have.

If we think about a typical buyer journey we can see that in new markets, the bulk of buyers are starting at a different starting point than the buyers in a more established markets.

buying process in new vs established markets

 

Creating Demand VS. Capturing Demand

So how are the marketing tactics different for these different markets? For new markets the first job of marketing is to educate your target segment that there is a problem to be solved in the first place. This is counterintuitive for many startup who would rather jump in and talk about why their solution is better than other solutions. Until prospects believe they have a problem to solve, efforts to market solutions will be really ineffective. Why should I care about your solution? I don’t even have that problem!

When there is no demand for your solution, tactics that we typically use to capture existing demand are ineffective. People aren’t searching for solutions so using advertising or SEO to drive people to sign up will have limited success – there simply aren’t enough people ready to buy.

Marketers in new markets have to start by educating the market that there is problem. Many of the tactics you might use here look like tactics you would use later in the buying process but the content used to support them and the “Ask” are different.

For example, let’s say you have a marketing solution for Snapchat. You might decide to create a blog and write a series of blog posts to try to engage with a community of marketers that are likely to use Snapchat as a marketing channel. After talking to marketers however, you learn that most of them aren’t using Snapchat today, nor do they see that as a viable place to do marketing. Your marketing might include blog posts, ebooks, infographics, video, etc. and the content in there will be around demonstrating that marketers are missing the boat on this new platform. You could do this with case studies of how other folks have used it, data that demonstrates the potential of the platform as a channel, examples of content that is already being shared there, etc. You might want to run a snapchat campaign yourself (not to capture marketers who have already demonstrated their cluelessness about the platform) but to gather your own data about how a campaign might potentially work.

If we take the same example but go with the insight that the target segment is already interested in using Snapchat as a marketing channel and might be actively looking for ways to make that easier, you can imagine that some of the tactics would be the same (blog posts, infographics, video) but the content in them would be different. In this case you wouldn’t have to convince your audience that Snapchat is cool, you would have to convince them that your solution is better than whatever they are using today. The content of your marketing content is different because the context is different. In this case there would also be other tactics you could add – paid advertising, email marketing, events, webinars, creating a buyers guide, outbound telemarketing – that are designed to capture folks that are further down the buying process and are already shopping for a solution.

The Ask: Entertainment VS Education VS Selling

If I am marketing into an existing market and there are folks that are already searching for solutions then it makes sense that I can just get out there and sell to those prospects. On the other hand, if my prospects don’t realize they have a problem worth solving yet, I first have to help them understand the cost of not solving the problem before I can try to convince them that my solution is the best out there and they should buy it. The “Ask” (what I am asking my prospects to do) when they click on my link or hit my landing page can’t be “Sign up for a trial” or “Buy now” for folks in these earlier stages. In new markets, frequently the “Ask” is “please allow me to keep talking to you”. That might mean subscribing to a blog or a newsletter or following my updates on social media. Once I have your permission to do that, then later when you are ready to buy, I can ask for permission sell you something.

The other thing to keep in mind is that prospects that don’t know they need your stuff yet aren’t really all that interested in investing the time to learn anything quite yet. If your content can be funny or inspiring or just generally interesting, you have a better chance of getting permission to keep talking to them.

Here’s a chart I have used in workshops to illustrate the differences between tactics that are used at different stages.

startup marketing tactics mapped to buying process

 

This post was inspired by a post from Boris Wertz over at Version One called How to spark demand when creating a new market space.

When Describing Your Startup as “Uber for X” is a Big Mistake

03/24/2015

Describing what your startup does, particularly when that product is something the world has never seen before, is hard. One of the first steps in positioning an offering is to establish a frame of reference for prospects or investors. By describing your offering as being similar to something else, you can build on what prospects already know and use that to help them make the leap to understanding what you’ve got.

The idea of a “High Concept Pitch” for startups has been around for a while. I fist saw this in a Venture Hacks post (from 2008) that outlined it as a way to “describe the company’s vision on the back of a business card”. Some examples given were:

  • Friendster for Dogs (Dogster)
  • Flickr for video (YouTube)
  • The Firefox of media players (Songbird)

While looking back at these specific example is entertaining (who would compare themselves to Friendster? Imagine YouTube positioning itself against Flickr? What does “the Firefox of” mean anyway?), this method for describing a startup continues to be super popular. A MarketWatch study recently analyzed AngelList profiles of startups and determined Airbnb, Uber and LinkedIn were the top 3 companies used to describe a new company.

Startup Comparisons MarketWatch

Data from MarketWatch Shows Top Startup Companisons

 

As popular as this approach is, there are also some ways that this positioning could be not just ineffective, but downright harmful for your company. Here are some things to consider:

Positioning for a VC pitch is not the same as positioning for a prospect

Whether or not a pitch works depends a lot on the audience and what they are hoping to get out of it. The “Uber for X” pitch works best for a VC audience where you are trying to emphasize the growth potential of your idea by comparing it to other high-growth companies. For prospects however, the value they hope to get from your product could be very different from what Uber, Airbnb or LinkedIn provides. While a VC might be intrigued by the idea of “Uber for kitchen appliances”, a prospect might find “Kitchen appliance rental” easier to understand. If the comparison pitch works with investors, go ahead and use it, but keep in mind that your pitch to potential customers may need to be very different.

It assumes the audience knows the company you are comparing yourself to

This should be obvious but for some of us that spend all day in the startup world, it’s easy to forget that not everyone uses Airbnb and Uber. If my target audience was executives at large companies, the Airbnb comparison might not work at all and I’ve come across buyer segments (CEOs of small manufacturing plants for example) that have never used LinkedIn, nor do they understand why anyone would. Again, for an investor pitch the comparison might work but be careful that it works the same way with a prospect.

The comparison brings both good and bad qualities with it

Comparing your company with Uber could mean you are a business that is growing like crazy by translating online demand to offline fulfillment, but it could also mean that you expect to have loads of regulatory issues, plan on using borderline legal competitive tactics, don’t give a hoot about safety and/or are just kind of crappy human beings all-around. A good example here is Shuddle. When it recently raised a round of financing, it was hailed as “Uber for Kids” in the press. I can imagine this working with investors but I couldn’t imagine a worse comparison for an audience of parents. Go to their website however, and you will see that’s not at all how they describe themselves. “Scheduled rides for busy parents” feels a whole lot better, while still clearly, succinctly explaining what they do.

It may not help answer the question “What is this thing anyway?”

The other problem with the “Uber for X” comparison is that it might make figuring out what you do more confusing. Comparing your company to Uber may be a good shorthand for helping people to understand the model for your business but not the actual business itself. For example if I told you my business was Airbnb for shipping packages, I’m not sure you would understand it. But if I said my business (like PiggyBee) was shipping packages with travellers, you might understand that better. Not every business that is about using unused capacity for something is best described as “Airbnb for…”

It can make you look less innovative

If everyone is comparing themselves to Uber, does the comparison still work, even for VC’s? In some cases investors are getting tired of it. Jeremy Levine, a partner with Bessemer Venture Partners in New York stated that “It’s no longer quite so inspiring” and that when VC’s hear it, it should give them a “nagging reservation” that the company isn’t unique or innovative.

You might find that saying you are LinkedIn for dogs or Airbnb for babies still works but first make sure that you have spent some time thinking about your audience and the company you are comparing yourself to. Also, a “high concept pitch” isn’t the same thing as positioning or a tag line or even messaging. It’s merely a short form way of describing what you are at a high level. You still have to do the hard work of really positioning your startup by defining who your target segments are, what market you play in, what your key value is and how you are different from other alternatives.

Positioning for Advantage

03/18/2015

I gave a keynote at East Coast Startup Week this week on Startup Positioning. Think of these slides of the skimmable version of my earlier post on Startup Positioning (read that post if you want some color on what these slides are talking about) with the addition of a couple of examples using the template. Plus motorcycles, monster trucks and racing pigs because I know you secretly love all of those things. Enjoy.

A Startup Positioning Template

03/11/2015

As a startup marketing exec that has been through a large number of product launches, I believe that how you position your startup in the market is crucial to early startup success. I’ve also seen that very few startups have a firm grasp of what exactly positioning is, why it’s important and how to do it.

 A Brief History of Positioning

The concept of positioning was first described by Ries and Trout in their marketing classic “Positioning – The Battle for Your Mind”. First published in 1981 this book still frequently shows up on lists of must-read books for marketers. Their idea was that there were two eras that proceeded “The era of positioning”

1/ The Product Era: First we had the product era where simply having a product was enough to ensure that it would be noticed. When there was only one toaster on the market or one vacuum cleaner or one toothpaste – simply putting the product in front of prospects and clearly explaining the features and functionality of that product was enough to make customers listen.

2/ The Image Era – According to Ries and Trout, that era ended with the “image era”. As more and more competitive “me-too” products flooded into the market, it became harder and harder for customers to tell the difference between providers where there were so many similar products with similar features. Brands discovered that image could be a powerful differentiator, convincing buyers that certain products had “more prestige” than others. This Era is represented by the glory days of TV advertising and Mad Men style agencies that could change the fortunes of companies with a clever tag line, jingle or image.

3/ “The Positioning Era”:  Ries and Trout argued that at some point in the early 80’s image started to become as commodity as the products it was supposed to be rescuing. As consumers were flooded with more and more advertising, it became increasingly difficult to get people to take notice of any marketing at all. Inundated with brand messages, consumers became experts at tuning out. Brands had no choice but to focus their messages on the one or two key things that had a hope of breaking through. These messages had to take into consideration not only the key strengths and weaknesses of the offering but also had to effectively place those against the key strengths and weaknesses of the competition. The positioning era was about establishing a leadership position within the mind of the prospect.

Positioning in the Internet Age

Fast-forward 40 years – is the concept of Positioning still relevant? One could argue that it is more relevant than ever before. When Ries and Trout were stating that we were being bombarded with advertising messages, it turned out we were only getting started. Not only were the number of ads used in traditional media ballooning, the internet hadn’t even happened yet. If it was hard to be heard back then, it is almost impossible now.

What exactly is Positioning?

Here’s what it isn’t – it isn’t a tag line, it isn’t messaging, it isn’t your vision statement, it isn’t an elevator pitch. Although all of those things use Positioning as a foundation, positioning is something different. Here’s my definition:

Positioning describes how you are uniquely qualified to be a leader in something that an identified market segment cares a lot about.

The Traditional Positioning Statement They Teach You In Marketing School

So if positioning is so important, how do we do it? Traditionally marketing schools have taught us to capture positioning in a “positioning statement”. This statement usually comes in a form that looks something like this:

For <Target Market> who <Statement of Need>, the <Product Name> is a <Product Category> that <key benefit> unlike <competitive alternatives> our product <primary differentiation>

Here’s an example that’s been used in almost every marketing class I’ve ever taken that touched on Positioning: the positioning statement for Amazon from 2001:

For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, Amazon.com provides a combination of extraordinary convenience, low prices, and comprehensive selection

This tells us a lot about Amazon’s business (back then). The target market was book readers who are on the net, their competition were traditional book sellers, their differentiating feature was the broad selection of books and the value was giving you easy access to that selection at a low price. That’s a load of info about a business in one simple statement.

A Better Positioning Template for Startups

I always felt we could do better than this, especially for technology startups. I appreciate the idea of bringing together a bunch of really important ideas (what market are you in, what is the key benefit you deliver, what makes your offering different, who are your competitors) in as succinct a way as possible. Bringing that all together into one sentence forces you to be really simplify the things that make up your position in the market. On the other hand, forcing this into one pseudo-grammatically correct phrase (or phrases) often results in a statement that is not only awkward to say (let alone memorize) but forces the key elements into a random order that doesn’t necessarily lead to a path of further exploration. In my opinion, the Positioning Statement although short and sweet, is not helping us figure out positioning.

In my opinion a better way to capture positioning would be to bring the elements together into something that I could stick on the wall and refer to often. I’ve usually used a “canvas” – like structure to capture positioning that looks something like this:

Startup Positioning Template

The boxes are pretty simple. Here’s what I mean by each one:

What is it? – this is the one sentence description of what you are. The key here is to keep it really short and use plain English words. This isn’t about describing the value (we will get to that) or why it’s different from other things (we will get there too) – the idea is just to answer at the most basic level, “What the heck is it?”

Target Segment – This box is the description of the target customers you are going after right now. The trick here is to focus on who you will sell to over the next 6 months (not the ultimate market which is typically much broader). This market should be the folks that you are most likely to close in the short term. For B2B startups you will have a description of the target company and the target buyer within that company.

Market Category – This is the market category that you compete in. It’s important because often startups have a choice of multiple categories that they could compete in but the one you choose will define what the real competitive alternatives will be.

Competitive Alternatives – What are the solutions that compete with your solution? This should take the customer’s perspective and can include things that aren’t necessarily products such as “hire an intern” or “do nothing”.

Primary Differentiation – This is different from the Key Benefit but often the Key Benefit is derived from this.

Key Benefit – This is the single biggest benefit that your target buyers get from your offering. This is the one thing you would talk to customers about if you could only talk about a single benefit.

Pivoting on Positioning Components

Now here’s where this type of positioning exercise gets interesting. If you lay it out this way you can experiment changing something in one box and then watching how it impacts the other boxes. In my experience, changing something as simple as the definition of the market you are in or the segments you are going after can result in a dramatically stronger positioning.

Here’s an example. I worked for a startup that had a database product. The key differentiator for this product was that it allowed companies to very quickly analyze a large amount of data. The result was that queries that used to take hours could be run in minutes. The target market was essentially any company with a large amount of data that needed to be analyzed.

The main problem with this positioning was the market category. When we opened sales meetings with “We are a database” the prospect would immediately say “Ah, sorry, we’re an Oracle shop, we can’t bring in another database platform.” By positioning ourselves in a very established market category, we had essentially set Oracle as our competition in the minds of our prospects and had to spend the first meeting undoing the perception that we were essentially a crappy Oracle.

But we WERE a database. What else could we be? The answer came from a prospect in the end. At the end of a difficult sales call a prospect said to us “Ah! I finally get what you are!” To which I responded, “Um, like what are we?” He says “You aren’t a database at all you’re a data warehouse!”

At the time this technically didn’t seem to be true. Data Warehouses back then were defined by specific features/structures (e.g. star schemas, cubes) designed to speed up analytic queries. We were already a very fast database for analytic queries. So in terms of the value we brought to customers, we were very much a data warehouse. Better yet, by repositioning ourselves as a warehouse, we completely changed the vendors we were compared to. Our new competitors were less established and our technology was clearly different from theirs. By changing our market frame of reference, we went from weak positioning to strong positioning.

At other startups I have been part of we pivoted on the target customer by either focusing down on a smaller niche segment, by focusing on a vertical or by focusing on a different buyer (for example a line of business buyer rather than a technical buyer).

The point here is that once you have the positioning clearly laid out you can see where the weak points potentially are and then experiment to see if there is a way to position yourself more strongly in a different market or to different buyers.

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