Founders often come to me because their marketing, their sales aren’t working. Especially around this time, the end of Q1, when the early results aren’t all that great. And there is a trend. Often the founders that seek help are founders of products in competitive markets.
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After explaining the challenges, my question is usually “Have you considered how many competitors you have? You are in AI space, the space right now is a race with tons of products popping every day”. How many competitors do you have and what is your differentiation strategy? How are you different from everything else that’s out there?
Positioning in BLUE VS RED ocean
You know I’m a big advocate of positioning, but especially so when you’re working in a competitive market. You might get away half-assing your positioning in a blue ocean where there is enough fish for everybody. You can slouch a bit, your message can be a bit off, your product can be a bit unfinished. Your differentiation strategy can be weak. It might still work.
For example, when at my last startup, we launched our product in Slovenia first, in our local market, and we grew, we immediately got traction. Why? Because there simply wasn’t a similar app on the market, so it was easy for us to attract the audience as we didn’t really have any competitor. But then when we tried to expand to the United States, it just didn’t work.
Our messaging didn’t work, our positioning didn’t work. People just didn’t understand our product because we tested the messaging on the non-competitive market. You can get away with poor positioning if the market is right, if you have a product that’s truly unique on that market. But the moment you have more competitors or bigger competitors, your product presentations or your positioning, your messaging, your targeting, all need to be a hundred percent on point. You need a strong differentiation strategy.
In a competitive market, you simply won’t get away with a message that just kind of works. Your product needs to stand out and attract your customers immediately.
How do you compete with 3000 companies?
I’m currently in Detroit, known as the biggest city that ever went bankrupt. But the people in Detroit simply won’t let that badge stick.
They changed the strategy they approached and wanted to diversify their economy. They started attracting tech startups, which resulted in Detroit being ranked number one emerging startup ecosystem in the Midwest. And that means the city is now a competitive market. And competitive markets are where positioning thrives because you need your product to stand out.
I spend my days at Tech Hub, the biggest tech startup hub in the area and I’m working with ISM, International Strategic Management Company, which basically helps create these kinds of startup hubs. And it helps undeveloped or developing regions develop their startup ecosystems.
And I’m helping them with positioning because, interesting story when I arrived in Detroit and I had my first meeting, with the CEO of the company, Ferris Alami and we were talking about who their customers are and I had all the typical questions and then we come to the competition and I asked him, can you give me a couple of competitor examples.
What kind of companies do you compete with? And how many are there? How many competitors do you have? And he said, 3000. I’m like, ok, 3000 companies such as yours in the US? And he said, no, in the Detroit area. And that’s how competitive a market this is, if you’re a consultant, a consulting company, 3000 companies making millions and millions of dollars every year just in the Detroit area. You need your product, your service, to stand out. Right?
People are busy; Get their attention!
Plus, everybody’s super busy. For example, my CEO is usually at two meetings at once. He sometimes has a Zoom opened and talks to another person in a meeting at the same time. How are you gonna attract this kind of person with a half-assed message? With a message that is not exactly on point, exactly what they want to hear?
You need to get their attention. So you need to stand out. You need a strong differentiation strategy. When I told him this is what I do. I do positioning, I do messaging. I help your company stand out. He just looked at me and said: ‘To me this is invaluable.’
And so in a competitive market, in a market where you have 5, 10, 50, 100 products that are similar to yours, the only choice you have is to differentiate, to come up with a differentiation strategy, how you’ll make your product different enough to acquire customers because they’ll see the value in the difference on how you approach the problem.
My formula to differentiate
How I like to differentiate is to think about the company’s biggest strengths, both as in team strengths and product strengths, and turn them into benefits. For example, yesterday I talked to one of my competitors and we were talking about our processes. And he said his biggest advantage is that he can get the results to his clients within a day, within 24 hours.
I, on the other hand, am a thinker. I like to think things through, which means I like to spend a couple of weeks working on your project so that I really nail all of the components of positioning. So, if you need something fast, you’ll go to him. If you have a contract to sign with a VC and he just doesn’t see the value, and a differentiation strategy is something that you need to improve in 24 hours because you need a presentation for the VC, you’re gonna go to him.
But if you like things to be well thought through, you’ll come to me. One is not better than the other, it’s just different. I will attract customers who want to get things done in a certain way, and he will attract customers who want things fast.
We will both be attracting sort of the same customers, it’s the same pool of people. But it’s just some people like their problems to be solved in one way and the other people want or like for their problem to be solved in another way.
And that’s the difference. That’s what you, in a competitive market, need to be clear about how your product solves a person’s problem or a company’s problem in a different way to anything else, you need to be different.
And so, as I said, the steps that you need to take are to pick five attributes, five product features that you have, or team attributes that you have, and turn that into benefits. So I am a thinker and that’s why I will get you better results, but the competitor I talked to is faster so he will just get you the results faster, right?
So pick five product features, turn them into a benefit or pick five team attributes and turn that into a benefit for your user. Think about what do the users get from your product? What are the values that you’re getting to them and how you’re different from anything else that’s on.
And if you are interested in knowing how a positioning workshop would look for your team, grab a call. Don’t worry, it’s on me.