Category Archives: Competition

Navigating the Mythical Sea of Sameness


Every day I hear more and more about the “sea of sameness” from founders, CEOs, CROs, and CMOs. 

The dialog goes something like this:

  • There are so many products out there,
  • They are getting more similar,
  • Customers are more confused than ever,
  • Unable to see the differences between them.
  • Thus, we are lost in sea of sameness.

I believe the first four statements are largely true, though I might challenge statement two.  But the conclusion — that we are inevitably flotsam in a sea of sameness — is where I beg to differ most.

Somewhere along the way, we got lost.  We’ve turned what should have been the problem statement into an invitation to a pity party.  The correct response to differentiation challenges isn’t “woe is me,” but “that’s why we get paid the big bucks.” 

That’s our job.  That’s what we do here:  differentiate similar products in the minds of customers.  See Positioning.  No, it’s not easy.  But the day you think differentiation is impossible is the day you should turn in your marketing gun and badge.  Differentiation is always possible.  If consumer packaged goods (CPG) marketers can differentiate rice or yogurt, then we can darn well differentiate enterprise software.

While we’re at it, none of these arguments are new.  Thirty years ago, when we were building Business Objects, most customers couldn’t tell you the differences between Actuate, Brio, BusinessObjects, Cognos, Crystal, Discoverer, Essbase, Forest & Trees, MicroStrategy, OLAP@Work, Panorama, ReportSmith, Spotfire, TM1, and a dozen other business intelligence tools.  (Yes, markets were crowded back in the day, too.)

It was not because those differences didn’t exist.  It was because you had to be a connoisseur to see most of them.  But most customers aren’t connoisseurs and don’t want to be.  They’re just businesspeople with problems that they’re hoping to solve.

Differentiation is a key duty of product marketing [1]. You do it in three ways:

  • Essence distillation.  First, you need to find the essence of what makes the product different.  Sometimes those differences are general, sometimes they’re specific to given use-cases. The key questions are:   What’s actually different?  What’s not, but maybe the founders wished it were?  What used to be different, but isn’t any more [2]?  What’s different, but only in shades-of-gray and not in black-and-white [3]?  You need to get to the heart of what’s both actually different and differentiate-able, in the sense that you can explain why pretty easily.
  • Emphasis of differentiated features.  Once you understand what’s different, you need to build a message that emphasizes your differentiation.  One standard approach is to “set the agenda” by turning your differentiation list into your buyer’s selection criteria.  One way to do that is to write an Evaluation Guide that explains the key features buyers should be looking for and which prominently includes your key differentiators and why they matter.
  • Selling benefits and consequences.  Every feature has benefits (the good things that happen when you have it) and consequences (the bad things that happen when you don’t).  Great marketers market both.  Think:  alerting is critical to the successful deployment of your conversational intelligence system [4].  Or:  God help you if your data governance platform can’t manage data assets from the modern data stack [5].  

In short:  if you’re shopping for a product in [category], then be sure to find one that includes features ABC.  If you do, you’ll succeed and reap benefits DEF.  If you don’t, you’ll fail and face consequences PDQ.  See my post on how to build a marketing message for more.

Navigating the Sea of Sameness

So how do you navigate the sea of sameness?  Good old-fashioned product marketing.  But if the answer is so simple, one must wonder, why are people talking so much about the sea of sameness today?  Why is the volume so high on this message?

Are products really getting so similar that customers can’t see differences among them?  Or is it something else?

I think the sea-of-sameness conversation is less about changes in markets, and more about changes in marketers.  That is, the staffing profile of today’s software CMOs.

Back in the day, nearly 100% of CMOs came from product marketing backgrounds.  Today, that’s no longer true.  Because pipeline generation is now the sine qua non of marketing, the vast majority of today’s CMOs come from demand generation backgrounds. 

So, when faced with a challenging differentiation problem, it’s a little too easy for them to blame the market and tell the CEO that we’re lost in a sea of sameness. 

When you’re only tool’s a hammer, problems that don’t look like nails are for someone else to solve.  Many CMOs are, in effect, saying that the problem isn’t marketing’s lack of skills in finding and emphasizing product differentiation, but that such differentiation does not exist.

Hogwash.  The fault lies not within our stars but within ourselves.                   

What’s a founder/CEO to do about all this?

  • Beware knee-jerk brand spending.  If you follow this line of reasoning, you then say “well, since we can’t differentiate our product, we’re going to need to differentiate our company.  Ergo, we need to spend a ton on branding.”  While brand spend might be a good thing for your company, it might not be.  But God help you if you think differentiating your company is going to be easier than differentiating your product [6].
  • Hire a strong product marketer.  In most cases they should report directly to you — and not a CMO more interested in pipegen or a product leader more interested in roadmap.  While board members might question this as unusual, you’ll find a better product marketer if they work directly for you and remove a potentially uninterested middleman.
  • Work closely with them.  Great product marketers need to interact with (even, interview) the CEO, founders, and product leaders repeatedly, searching for nuggets, and structuring what they hear.  The process is highly iterative and somewhat subjective.  Hopefully with each cycle you improve both quality and consensus. 
  • Support them.  While the product marketer should be able to hold their own in debates with sales, product, and the e-team, there is no substitute for founder/CEO support when trying to standardize a company on a message.  Think:  “I know this may not be perfect, but it’s very, very good, and we’ve iterated ten times with Sandy.  This is what we’ve decided to go with.”

As a founder/CEO you’re likely to already be hearing about the sea of sameness from your sales and marketing teams.  The question is:  what are you going to do about it? 

Blame the product, and set off on a endless quest for potentially irrelevant differentiation – all while investing more and more of your marketing dollars in branding?  Or hire some product marketers who can distill the essence of what you’ve got today and build on it?

There is no sea of sameness.  Only marketers who don’t know how to differentiate.

Notes

[1] Some product marketers think demonstrating value is the job.  And in some situations (e.g., an early-stage startup selling an entirely new thing) you do certainly need to sell value.  But in more developed markets, the game quickly changes from why buy one to why buy mine?   The reward for successfully selling the concept is typically N competitors all selling something similar.

[2] Companies often cling to lost differentiators, well past their neutralization date.  This is likely due to positive reinforcement from past success and, surprisingly, the fact that it usually still works for a while even though the feature is no longer differentiated.  (A mind is a difficult thing to change.) But eventually customers learn that the differentiation is no more, and you lose both product differentiation and credibility with the customer.

[3] And is harder to demonstrate.  So hard, perhaps, that it’s not worth trying.  This is why I often refer to “graying-out” competitive differentiators.  You don’t need to match them functionally; you just need enough to take their formerly black-and-white difference and turn it gray, changing their claim from “only” to “better.”

[4] And you should be able to explain why.

[5] And yes, you should explain in detail the exact problems that God will need to help you with.  The rhetoric is fine, but only if you can back it up.

[6] If you think tech products all look the same to customers, try tech companies.  They’ve all got hip founders who went to Stanford to MIT, tons of venture capital (and no, they can’t tell Redpoint from Sequoia), modern offices, ping pong tables, youthful energy, a “we’re going to change the world” vision, customer focus and integrity as core values (regardless of whether they actually practice either), and a strong conviction that their people is really what differentiates them.  Think hard about really differentiating your company from a dozen others, in your space or not, and then you might find yourself in a real hurry to go back and differentiate your product.

Your Competitive Analyst Should Not Be Named Harvey Balls

Does your competitive analyst introduce themselves like this?


If so, you’ve got a problem. Not only because his younger brother Big is a controversial employee over in DOGE but, more importantly, because old Harvey is not defining his job correctly.

Many competitive analysts effectively define their job as product comparison. In short, to make Harvey Balls that compare products on different features, usually on a 1-5 scale using a circular ideogram. You know, something like this:


Harvey Balls are a useful communication tool. And you can use them not only for product features, but for non-functional product attributes (e.g., useability, performance) and even company attributes (e.g., support, viability).

I’ve got no problem with Harvey Balls in theory. In practice, however, such charts often quickly fall apart because they are entirely subjective and lack any rigorous foundation for the underlying 1-5 scoring. If you’re going to make comparisons using Harvey Balls, you must strive to maintain credibility by documenting and footnoting your scoring system, so a reader can verify the basis on which you’re assigning scores.

Otherwise, Harvey Balls are simply opinion thinly disguised as fact.

So what’s the real problem if your competitive analyst thinks his name is Harvey Balls?

Well, old Harvey has missed the point.

Marketing teams shouldn’t pay competitive analysts to make product comparisons. They should pay them to win deals. To quote one of my favorite movie scenes:

“I know how you feel. You don’t believe me, but I do know. I’m going to tell you something that I learned when I was your age. I’d prepared a case and old man White said to me, “How did you do?” And, uh, I said, “Did my best.” And he said, “You’re not paid to do your best. You’re paid to win.” And that’s what pays for this office … pays for the pro bono work that we do for the poor … pays for the type of law that you want to practice … pays for my whiskey … pays for your clothes … pays for the leisure we have to sit back and discuss philosophy as we’re doing tonight. We’re paid to win the case. You finished your marriage. You wanted to come back and practice the law. You wanted to come back to the world. Welcome back.”


To reiterate for Harvey’s sake: you’re not paid to make product comparisons, you’re paid to win.

What does that mean?

  • The goal of competitive is not to produce research for the sake of knowing, to support product management, or to tell sales so they can figure out how to use it.
  • The goal is to win deals, which does require in-depth product and competitive knowledge.
  • Competitive intelligence is an applied function — they must apply the knowledge gained from research into creating sales plays to win deals.

And note that the research need not be limited to product — it can and should include the competitions’ sales plays (i.e., what they plan to do to us and how to defeat it). And it can and should include company research (e.g., executive biographies to anticipate strategies).

Let’s elucidate this via an example. Let’s say your competitor sells a data analysis product that demos really well. Yours looks like a clunker by comparison, especially in quick reactions to end-user demos. Let’s also say that competitor has poor governance, administration, and security controls. Yours look great by comparison. Furthermore, let’s say you know your competitor is going to run a sales play called “the end run,” where they want to leverage the end-users’ love for the product to effectively ram it down the throat of a resistant central data team.

Let’s contrast three approaches:

  • Product comparison: create Harvey Balls that show the relative strengths and weaknesses in useability vs. administration.
  • Holistic research: include warning your sales team to expect the end-run as the competition’s standard sales play.
  • Win-deals: use all that information to create a sales play called “the Heisman” where you leverage the central data team to anticipate and block the end users to avoid purchasing a system with insufficient security and administration. That includes reframing user sentiment from a selection criteria to a hygiene criteria (i.e., it needs to be “good enough”).

Don’t get me wrong. Good product knowledge is critical. But it’s simply the foundation of the win-deals approach which also factors in company- and sales-level intelligence and then applies everything to creating sales plays that win deals.

If you had to put a metric on all this, it would be win rate. Competitive’s job is not to produce reports. It’s to increase head-to-head win rate vs. chosen competitors. If they sign up for that, then the rest should follow.

Please God, Don’t Run Your Own Race

Of all the dime-store clichés that pass for business strategy, the one I hate the most is, “run your own race.”

Why?

  • As a quote from the winner, it’s almost always survivor bias. “How’d I win? Well, I ran my own race.” Well, I’m sure most of the losers ran their own race too, but nobody’s interviewing them for pearls of wisdom.
  • It’s frequently used to imply that you should ignore the competition. “Oh, I didn’t worry too much about the other runners, I just ran my own race and stuck to the plan.” The part they leave out is that the plan was designed to beat the other runners. Sticking to the plan was all about the other runners, even if reacting their every move wasn’t part of it.
  • It sounds oh-so-good to say. So focused. So above the fray. So wise. So unencumbered by the competitive market. And it paints such a pretty picture: just run your own race, don’t get tangled up in distractions, and you will win.

Look, it’s not a bad response to an interview question. It’s arguably a very good one. But it’s rotten management advice. “Run your own race” isn’t strategy. It’s solipsism.

Sure, if you’re running a race recreationally, by all means run your own race and I hope you have a great time.

But if you’re in business, if you’re running a startup and trying to apply this advice, then you need to consider yourself an elite competitor. You are running to win. So, if running your own race means sticking to your race plan, and that race plan is a plan to win and one that you can execute, then go ahead and run your own race. Because, by transitivity, it is a plan to win. Which is one definition of strategy.

One thing I dislike is when great executives from great companies who were in unique situations talk about “running your own race” as if everybody should. Don’t be too focused on the competition. Just focus on customers. The rest will take care of itself.

And it will — if you’re, e.g., Tableau and it’s 2010. They had an amazing product, a great team, a greenfield market — and virtually no viable competitors. They ran their own race for a long time, and it worked. But just because they could run their own race doesn’t mean that you can run yours. If you’re the number four vendor in a high-switching cost, platform market, then running your own race is more dangerous than being an Alaskan crab fisherman.

In some deep vertical SaaS markets, I’ve found companies that can ignore the competition and run their own race. That’s either because there is no competition or it’s a handful of low-growth, bootstrapped companies in a space where everyone can achieve their objectives without smacking into each other too much. (Think: there’s enough market here for everyone.)

But if you don’t happen to be in that situation. If you’re VC-backed, you’re definitionally playing to win. If you’re PE-backed you’re either playing to win or playing to make plan. (Or win, if you define “winning” as making the plan that gets your investors a 3x in 4-6 years.)

Startups are a competitive sport. Exciting new spaces attract numerous brilliant teams to fight for the emerging market. Too many retired executives forget this, preferring to dish out nostalgia over practical advice. Markets are composed of deals and deals are often streetfights. There’s big money at stake in Silicon Valley startups and lots of management teams come playing to win. Don’t bring a knife to a gunfight.

This is not the environment to run your own race, focus on your world-changing vision, and ignore the competition. This is the environment that calls for strong execution of competitive strategy to win deals and company strategy to overcome your largest obstacles.

Sure, you can run your own race. As long as your plan is the plan to win and within your ability to execute. Then go right ahead. Otherwise, make a new race plan.

Does Your Startup Need a Patent Strategy?

Yes.

And, by the way, I’m not joking with that answer. I’m not saying you need 17 patents. I’m not saying you need any patents at all — but you probably do. I am saying that despite the frenetic life of running a startup, you need to step back from time to time — maybe once a year or maybe on a cycle before your product releases — take a minute to learn (or remind yourself of) the basics of patents, and then sit down with your technical leaders and your intellectual property (IP) counsel to have a chat.

That is, you may not need to file any patents right now, but you do need to understand patents and devise your company’s strategy for them.


Waiting is not a great option for two reasons:

  • If you don’t have patents when you need them, it will be too late
  • You can lose important rights to your inventions if you fail to patent them before certain milestones

To help you with this process, my Balderton colleagues Dan Teodosiu, Andrew Wigfall, and I recently published a Balderton Perspective entitled: Why Your Startup Needs a Patent Strategy.

The three of us work as EIRs at Balderton, where our role is to advise portfolio companies on operational matters. Dan’s a product/technology guy, Andrew’s a lawyer, and I’m a marketer and former CEO. So we’re kind of the perfect trio to write such an article and provide a holistic view of the subject.

The piece discusses the following topics:

  • Why to file patents
  • A quick introduction to patents
  • What a patent strategy is and why you need one
  • How to define your patent strategy

I encourage all founders and technology or product leaders to read it and then get cracking on your company’s patent strategy.

The Balderton Founder’s Guide to B2B Sales

Working in my capacity at as an EIR at Balderton Capital, I have recently written a new publication, The Balderton Founder’s Guide to B2B Sales, with the able support of Balderton Principal Michael Lavner and the entire Balderton Capital team.  This guide is effectively a new edition, and a new take, on the prior, excellent B2B Sales Playbook.

The guide, which is published as a microsite, is also available in PDF format for downloading.

I’ll put the opening quote here that the editors omitted because it’s nearly unparseable:

“I have learned everything I need to know about sales.  Sales is saying ‘yes’ in response to every question.  So, now, when a customer asks if the product has a capability that it currently lacks, I say, ‘yes, the product can’t do that.'”

— Anonymous CS PhD founder who didn’t quite learn everything they needed to know about sales.

In short, this guide’s written for you, i.e., the product-oriented founder who thought they founded a technology business only to discover that SaaS companies, on average, spend twice as much on S&M as they do on R&D, and ergo are actually running a distribution business.

The guide has seven parts:

  • Selling: what founders need to know about sales
  • Building: how to build a sales organization
  • Managing: how to manage a sales organization
  • Renewing/expanding: teaming sales and customer success
  • Marketing: using marketing to build sales pipeline
  • Partnering: how to use partners to improve reach and win rate
  • Planning: planning and the role of key metrics and benchmarks

While there are numerous good SaaS benchmarking resources out there, the guide includes some benchmark figures from the Balderton universe (i.e., European, top-tier startups) and — hint, hint — we expect to release those benchmarks more fully and in a more interactive tool in the not-too-distant future.

The guide is also chock full of links which I will attempt to maintain as sources change over time.  But I’ve written it with both in-line links (often to Kellblog) and end-of-section links that generally point to third-party resources.

I’ve packed 30 years of enterprise software experience into this.  I come at sales from an analytical viewpoint which I think should be relatable for most product-oriented founders who, like me, get turned off by claims that sales has to be artisanal magic instead of industrial process.

I hope you enjoy the guide.  Feel free to leave comments here, DM me on Twitter, or reach me at the contact information in my FAQ.