How do we position a product that doesn't have any advantages over the alternatives? Let's start by entertaining the idea that maybe we're wrong about that.
I did a podcast episode on differentiated value and got into it a bit on there. Quite often our key differentiators are rooted in things that are not product features - pricing, services, ecosystem and partnerships, etc.
I have worked in B2B Enterprise services for the last 10 years and every single brand attributed low growth to an undifferentiated product. Admittedly, I have also been guilty of the same.
The structure you have provided to identify the differentiation is very actionable. I know what I will be thinking the entire weekend now 😁
I resonated with your points around neglecting win analysis. The companies that don’t do enough win analysis typically aren’t well-versed in their true ICP.
In many ways, these two go hand in hand - understanding your wins deeply can lead you to narrow down your ICP and arrive at differentiated value.
Hi April, great post. My only bone to pick would be, even in the absence of differentiation you shouldn't lose every deal. Why? Because if you can't differentiate from them, then presumably they can't differentiate from you. Logically, you can't be undifferentiated and worse at the same time.
So, either you're differentiated but inferior, and then yes, you should lose most of your deals.
Or, you're undifferentiated in the sense of commoditized, in which case you should win your coin-flip share. Corollary: just because you're winning some deals doesn't mean you're differentiated.
I think the FAR more common case is the one you rightly raise = you are differentiated but you don't understand it and I like your framework for figuring it out.
That hasn't really been my experience. In the cases where the company truly has no differentiation, there are many offerings that do more and that's how they are winning and growing in the market. In my definition of it - you can have no differentiation and be much worse in the minds of customers.
April, this is hands down one of the best articles I have read for years! Being a compulsory insight addict I read tons of them, picking up useful pieces to my puzzle here and there. What makes this one stand out is how you have managed to bundle really valuable experience and insights with a very clear and practical structure that’s so easy to follow and pick up.
I think this one could very well be the outline of your next book. You’ve really hit a sore nail here - there are so many companies that struggle with this challenge. And, you could easily expand on each section, making it a full chapter.
Just wanted to say thanks, I really do appreciate your work!
In new startups we are often targeting a very small, underserved market at the start. In my mind the initial market needs to be big enough that you can meet your revenue goals, and ideally there is a plan to expand to other adjacent markets in the future.
In my mind we shouldn't worry too much if the market is too small to reach our ultimate revenue goals - your product is going to mature over time in a way that should help you serve a bigger and bigger market. The trick at the start is to pick a big enough market to stay alive while you're building to serve a bigger one.
Well not quite that - you will need to be able to win in that small market. In fact, you should pick the market because you can win there (and it's likely too small for the big leaders to care about).
Segment and differentiation go hand in hand. We need a segment where we can win today - small is ok but big enought to meet the short term revenue goals - in order to survive long enought to reach to other segments.
This past summer I read Sales Pitch, printed out the workbook, grabbed my copy of Obviously Awesome and got to work. I wrote down my answers to each and every point in the workbook, then the positioning canvas and storyboard.
A fair bit seemed repetitive but that was great, it drilled it into my brain and I discovered a couple of things (my company sells ad-free digital elevator notice boards to condos). I thought I had my positioning (ad-free) down after Obviously Awesome but I took Sales Pitch's advice to ditch old baggage and discovered that our positioning can be tweaked to be ad-free, done-for-you digital screens and content creation (we offer both hardware and content which is a differentiator)
When I looked at our wins, I can see that "ad-free" was a no-brainer. The board directors of high-end, luxury condos seek us out because they don't want to clutter their home with ads. Easy enough. But then I looked at other customers... still nice condos, but the ad-free part wasn't perhaps so important. They like the content that we create, so that gave me the a-ha moment of the done-for-you piece.
Some boards think that the manager can take care of communication, but in reality, they just fire out emails. My company has been the bridge between management emails and the screens and I fell into the trap of never highlighting this properly, or clearly showing the difference between us and the status quo (cork bulletin boards are still much in use!)
The workbook exercise was excellent and I ended up with a very honed, gone over back-and-forth document that is right now being mapped to a sales deck.
The only thing I didn't do is totally include my team from the start. I started to, but I found that I was ruminating too much (a common entrepreneurial thing, I think :) and that I needed to take a step back and get immersed in it myself. I filled out the worksheet and then shared it with my team to get their input too.
It's been a great exercise so far; I highly recommend both books, especially for entrepreneurs as that can be an ever-changing landscape. Getting it all "down on paper" has been a huge help.
Also, did you already write about how B2B can differentiate beyond product capabilities?
I did a podcast episode on differentiated value and got into it a bit on there. Quite often our key differentiators are rooted in things that are not product features - pricing, services, ecosystem and partnerships, etc.
This is so well written and so relatable.
I have worked in B2B Enterprise services for the last 10 years and every single brand attributed low growth to an undifferentiated product. Admittedly, I have also been guilty of the same.
The structure you have provided to identify the differentiation is very actionable. I know what I will be thinking the entire weekend now 😁
Hi April,
I loved this post so much!
I resonated with your points around neglecting win analysis. The companies that don’t do enough win analysis typically aren’t well-versed in their true ICP.
In many ways, these two go hand in hand - understanding your wins deeply can lead you to narrow down your ICP and arrive at differentiated value.
Hi April, great post. My only bone to pick would be, even in the absence of differentiation you shouldn't lose every deal. Why? Because if you can't differentiate from them, then presumably they can't differentiate from you. Logically, you can't be undifferentiated and worse at the same time.
So, either you're differentiated but inferior, and then yes, you should lose most of your deals.
Or, you're undifferentiated in the sense of commoditized, in which case you should win your coin-flip share. Corollary: just because you're winning some deals doesn't mean you're differentiated.
I think the FAR more common case is the one you rightly raise = you are differentiated but you don't understand it and I like your framework for figuring it out.
That hasn't really been my experience. In the cases where the company truly has no differentiation, there are many offerings that do more and that's how they are winning and growing in the market. In my definition of it - you can have no differentiation and be much worse in the minds of customers.
April, this is hands down one of the best articles I have read for years! Being a compulsory insight addict I read tons of them, picking up useful pieces to my puzzle here and there. What makes this one stand out is how you have managed to bundle really valuable experience and insights with a very clear and practical structure that’s so easy to follow and pick up.
I think this one could very well be the outline of your next book. You’ve really hit a sore nail here - there are so many companies that struggle with this challenge. And, you could easily expand on each section, making it a full chapter.
Just wanted to say thanks, I really do appreciate your work!
All the best, Anders
Hey thanks so much - I appreciate that!!
Hi April
Very insightful article.
Curious about one thing.
For very early stage startups, I always suggest to start with the right segment that is best served by their product, especially horizontal products.
But then you look at competition and conclude this segment is not lucrative.
You have two options - change the value or change the segment.
Any recommendations on how to navigate this circular dilemma?
I think the right answer is probably to find a segment that is underserved first.
It's easier to enter that segment, than to change the value prop.
Would love to hear your thoughts.
(And I am bummed to miss meeting you last week in the Bay Area at Dan's event. Had the ticket but something urgent came up.)
In new startups we are often targeting a very small, underserved market at the start. In my mind the initial market needs to be big enough that you can meet your revenue goals, and ideally there is a plan to expand to other adjacent markets in the future.
In my mind we shouldn't worry too much if the market is too small to reach our ultimate revenue goals - your product is going to mature over time in a way that should help you serve a bigger and bigger market. The trick at the start is to pick a big enough market to stay alive while you're building to serve a bigger one.
In other words….pick a big enough market that allows you to participate and meet revenue even if there is no substantial differentiation yet.
And over time, build the differentiation as product matures and we learn from the market.
Is that correct?
My challenge is that I am getting short listed but when compared to some competitions, I fall short because of no differentiation.
How to get out that trap.
Find a new segment or find some differentiation.
Well not quite that - you will need to be able to win in that small market. In fact, you should pick the market because you can win there (and it's likely too small for the big leaders to care about).
Segment and differentiation go hand in hand. We need a segment where we can win today - small is ok but big enought to meet the short term revenue goals - in order to survive long enought to reach to other segments.
I hope this makes sense!
In theory, it makes sense.
You have to start with some differentiation in a specific segment.
This past summer I read Sales Pitch, printed out the workbook, grabbed my copy of Obviously Awesome and got to work. I wrote down my answers to each and every point in the workbook, then the positioning canvas and storyboard.
A fair bit seemed repetitive but that was great, it drilled it into my brain and I discovered a couple of things (my company sells ad-free digital elevator notice boards to condos). I thought I had my positioning (ad-free) down after Obviously Awesome but I took Sales Pitch's advice to ditch old baggage and discovered that our positioning can be tweaked to be ad-free, done-for-you digital screens and content creation (we offer both hardware and content which is a differentiator)
When I looked at our wins, I can see that "ad-free" was a no-brainer. The board directors of high-end, luxury condos seek us out because they don't want to clutter their home with ads. Easy enough. But then I looked at other customers... still nice condos, but the ad-free part wasn't perhaps so important. They like the content that we create, so that gave me the a-ha moment of the done-for-you piece.
Some boards think that the manager can take care of communication, but in reality, they just fire out emails. My company has been the bridge between management emails and the screens and I fell into the trap of never highlighting this properly, or clearly showing the difference between us and the status quo (cork bulletin boards are still much in use!)
The workbook exercise was excellent and I ended up with a very honed, gone over back-and-forth document that is right now being mapped to a sales deck.
The only thing I didn't do is totally include my team from the start. I started to, but I found that I was ruminating too much (a common entrepreneurial thing, I think :) and that I needed to take a step back and get immersed in it myself. I filled out the worksheet and then shared it with my team to get their input too.
It's been a great exercise so far; I highly recommend both books, especially for entrepreneurs as that can be an ever-changing landscape. Getting it all "down on paper" has been a huge help.
Hey thanks so much for sharing that and I'm so glad my stuff was useful!
It was useful and my team just provided me with more value examples too :)
The trickiest part to me was market category; sounds easier than it is lol