#1 — Positioning 101

Why it matters: Proper positioning can transform a failing product into a market leader.§

The big picture: Positioning is not your tagline, messaging, brand story, or vision. It's strategic context-setting for your product that shapes how customers perceive it. Good positioning creates a set of assumptions about your product that are true, while bad positioning creates assumptions that aren't true—leaving your sales and marketing teams to undo the damage.§

Positioning defines how your product is a leader at delivering something valuable to a specific customer segment in a way that competitors can't match. It's similar to the opening scene of a movie that orients viewers to the context before diving into details.§

Case study: Help Scout successfully positioned against Zendesk by emphasizing how their customer service solution builds deeper customer relationships versus treating support as a cost center, resonating with direct-to-consumer brands.§

By the numbers:§

• 40% of B2B deals are lost to "no decision" (staying with status quo)
• 5-7 people typically involved in B2B purchase decisions

The 5-Component Positioning Framework

1. Competitive Alternatives

Start by identifying what customers would do if your solution didn't exist. This includes:§

• Direct competitors in your market
• The status quo (spreadsheets, manual processes)
• "Do nothing" options

Avoid listing "phantom competitors"—companies that theoretically compete with you but that you never actually lose deals to.§

2. Differentiated Features or Capabilities

Identify what your product has that alternatives don't. These are your unique attributes that competitors can't easily replicate.§

3. Value for Customers

For each differentiator, ask "So what for customers?" Translate your unique features into tangible value. For example, Janna Systems discovered their relationship modeling feature provided investment banks with insights into interpersonal relationships that sales teams could use to start new conversations and understand who might influence deals.§

4. Target Customer Segmentation

Determine which customers care most about your unique value. Create detailed profiles including:§

• Demographics (age, gender, income, education, location)
• Psychographics (interests, values, lifestyle, purchasing habits)
• Needs and challenges they face
• Buying patterns and behaviors

5. Market Category

Position your product in a context where your unique value becomes obvious to target customers. You can either:§

• Choose an existing market category (easier for customers to understand)
• Create a new category (requires significant effort to educate the market)

Contrary to popular belief, 90% of tech companies that have gone public in recent years positioned themselves in existing markets rather than creating new ones.§

Positioning Strategies for Startups

Depending on your unique situation, you might choose one of these positioning approaches:§

• Cost leadership: Position as the most affordable option (effective in price-sensitive markets)
• Differentiation: Highlight unique features unavailable from competitors
• Niche market: Focus on a specific segment overlooked by larger competitors
• Quality positioning: Emphasize superior quality for customers willing to pay a premium
• Convenience positioning: Be the most convenient choice through ease of use or accessibility
• Value-based positioning: Offer the best balance of quality, service, and price
• Lifestyle positioning: Connect your product to a particular lifestyle or identity
• Sustainability positioning: Appeal to environmentally conscious customers
• Innovator positioning: Be first to introduce new technologies or ideas
• Customer-centric positioning: Focus on exceptional or personalized service

Creating a Positioning Statement

While the traditional "fill-in-the-blanks" positioning statement has limitations, it can be a useful tool once you've worked through the positioning process. A basic template follows this structure:§

For (target customer) who (statement of need or opportunity), (Product name) is a (product category) that (statement of key benefit). Unlike (competing alternative), (Product name) (statement of primary differentiation).§

Testing and Refining Your Positioning

Positioning isn't a one-time exercise. To ensure effectiveness:§

1. Test your positioning with prospects and customers
2. Gather feedback from your team and advisors
3. Start with a small-scale implementation before full commitment
4. Continuously monitor market changes and customer preferences
5. Revise periodically as your startup grows and evolves

Common Positioning Mistakes to Avoid

1. Focusing on "phantom competitors" instead of addressing your real competition (often the status quo)
2. Rushing to create a new category when positioning in an existing market might be more effective
3. Using jargon or complex language that confuses your audience
4. Overpromising or misrepresenting your capabilities, which damages credibility
5. Ignoring the emotional benefits of your product or service

The bottom line: Strong positioning creates a set of assumptions about your product that are true, while poor positioning forces your sales and marketing teams to undo damage before they can sell effectively.§