Tag Archives: positioning

Seed-Stage Positioning: Lock and Load

With angel and seed money flowing, and a great environment for company creation, I’ve been talking to a lot of seed-stage and pre-seed stage startups of late.  They often ask me about positioning.  Listening to myself talk, I realized that I didn’t really sound like me, and it made me wonder why.

What I Normally Sound Like on Positioning
When people ask me about positioning and messaging, I usually sound like this:

  • As Fausto Coppi said about cycling, positioning is suffering.  The marketer who suffers the most wins.
  • When challenging a marketer in a positioning meeting, the ideal response to every question is: “yes, we thought of that and ruled it out for these reasons.”  You should never be able to come up with something they haven’t thought about already.  Deeply.
  • Positioning is a labor of love.  You need to examine and re-examine all the messages and how they fit together over and over again [1].
  • Slapdash and positioning don’t belong on the same page, let alone the same paragraph or the same sentence.
  • Get Shit Done is the watchword in marketing, today.  There’s no room for perfectionism, except for one thing:  positioning.

In short, I feel about positioning the way David Ogilvy felt about copywriting.

What I Sound Like Talking to Seed-Stage Startups
Lately, in talking with seed-stage startups, however, I’ve heard myself sounding like this:

  • Perfect is the enemy of good.
  • Put in enough thought and build enough consensus that you can execute without wanting to change it every day — but no more than that.
  • Stop worrying about category creation, and worry about proving product-market fit [2].
  • Analysts name categories, not vendors.  Guiding them to the right name is a problem we’ll hopefully get to have in 2-4 years.
  • Just be clear.  The emphasis needs to be 100% on clarity:  make it clear, make it simple, and don’t let confusion interfere.

Think hard but don’t agonize.  Then lock and load.  Debate it, decide it, train the team on it, and then go execute.  Don’t entertain revisiting the positioning unless you get material new information.  Think:  “I’ll write everyone’s concerns down in a Google Doc that we can revisit in two to four quarters — right now we’re in execution mode.” [3]

Why The Difference?
The positioning challenge is fundamentally different between a seed-stage and a larger company.  Managing this difference can be particularly hard for a larger-company director of product marketing who’s just joined their first seed- or early-stage startup.

At a larger company, the product marketer typically works in an existing category and needs to clearly message what their offering does and how it is different from the competition. That often involves amplification of subtle differences in an effort first to position yourself as different and then as better.  You’re trying to differentiate in a market where, to most buyers, everyone sounds the same.  You’re in a why buy mine situation, in a hot and growing market, fighting for share, and in that situation you literally cannot spend enough time and energy getting the optimal answer to the question:  why buy mine?  Anything less than perfect isn’t good enough.

At a seed-stage company you’re trying to see if anyone wants to buy what you’ve built.  Your founder saw a problem and built a solution to it.  But few people, if any, have actually bought it.  You don’t know if they will.  The number one thing your next-round investors will be looking for is how many people didYou’re selling to technology enthusiasts who want to try it because they try everything or, better yet, visionaries who are more than able to map the potential benefits of the product to their business — provided, of course, they understand what the product is.  So your job is simple:  explain what the product is in the clearest simplest, shortest form possible [4].  Anything more than that is wasted effort, better spent on engaging with more people instead of further honing the message.

When seed-stage companies get confused about this, here’s what I think is happening:

  • Perfectionism is winning over pragmatism.  Believe me, I get the desire to want to make it perfect, but in reality you’re just navel gazing.
  • It’s a form of avoidance.  It’s scary that people might fully understand what you built and then say, “no thanks, I don’t need that.”  But that’s precisely what you need to find out.  Relish these conversations, even if reveal that you built the wrong light bulb.  If that’s true, you’ll find out eventually anyway.  Why not fail fast?
  • It’s a failure to understand marketing.  Founders sometimes think that marketing is supposed to dress up their practical but mundane idea so that people will buy it.  That’s wrong.  All that fancy dress-up just interferes with what you should be doing:  finding the right people to hear your idea and clearly telling them what it is. [5] [6]
  • Large-company people not adapting to required small-company practices.

In short, while at larger companies positioning is indeed suffering, at seed-stage companies, positioning is the quick search for simple clarity.

Get it.  Then lock and load.

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Notes

[1] Certainly in your own mind, but also with other people and groups:  customers, prospects, sales, product, engineering … and via market research.

[2] Resisting the temptation to expound on category creation, let me say that the podcast episode linked with Stephanie McReynolds on category creation was, I believe, outstanding.  Listen to it for a great discussion on the topic.

[3] But we’re not going to spend hours every week — often just arguing with ourselves — wondering if we’re describing it optimally.

[4] One great way to do that is often via an origin story:  explaining why the founder built it.

[5] Companies often put more energy into what they want to say than who they want to say it to, and that’s a mistake.  Pitching an innovation idea to a conservative buyer might result in rejection, but not because the idea is bad but because the buyer is risk averse. In Geoffrey Moore terms, you want to find visionaries — people who understand technology and can envision how a given technology might solve a range of business problems.

[6] Don’t worry, if you’re talking to the right person (see prior endnote) with a good idea, they’ll tell you the business benefits.  Later in market evolution you’ll need to explain business benefits to people.  But early on, when you’re selling to visionaries, they’ll tell you.

Marketing Targeting: It’s Not Just Where You Fish, It’s What You Put on the Hook

Back in the day I was taught that marketers do three things, memorized via the acronym STP:  segment, target, position.

  • Divide the audience into different segments.  For example, dividing consumers by demographics or dividing businesses by size or industry.
  • Select the segments that the company wishes to target for its marketing.  For example, choosing small and medium businesses (SMB) as your target segment.
  • Position the product in the mind of the consumer, ideally in a unique way, providing differentiation and/or benefit [1].  For example, positioning your offering for the SMB segment as easy to deploy and inexpensive to own.

I’ve always thought of targeting as the answer to the question, “what list do I want to buy?”  Do I want buy a list of marketing directors at SMBs or a list of chief data officers (CDOs) at Fortune 1000 companies?

The list-buying metaphor extends nicely to events (what shows do these people attend), PR (what publications do they read), AR (to which influencers do they listen), some forms of digital advertising (e.g., LinkedIn where you have considerable targeting control), if not Google (where you don’t [2]).

For many people, that’s where the targeting discussion ends.  When most people think of targeting they think of where on the lake they want to fish.

While an angler would never forget this, marketers too often miss that what you put on the hook matters, too.  Fishing in the same part of the lake, an angler might put on crayfish for largemouth bass, worms for rainbow trout, or stinkbait for catfish.

It’s not just about who you’re speaking to; it’s about what you tell them — the bait, if you will, that you put on the hook.

Perhaps this is too metaphorical, so let’s take an example — imagine we sell financial planning and budgeting software to businesses and our target segment is small businesses between $0M to $50M in revenue.  Via some marketing channels we can communicate only to people in this segment, but through a lot of other important channels (e.g., Google Ads, SEO, content marketing), we cannot.  So we need to rely not only on our targeting, but our message, to control who we bring into the lead funnel.

Consider these two messages:

  • Plan faster and more efficiently with OurTool
  • End the misery and mistakes of planning on Excel

The first message pitches a generic benefit of a planning system and is likely to attract many different types of fish.  The second message specifically addresses the pains of planning on Excel.  Who plans on Excel?  Well, smaller businesses primarily [3].  So the message itself helps us filter for the kind of companies we want to attract.

Now, let’s pretend we’re targeting large enterprises, instead.  Consider these two messages.

  • End the misery and mistakes of planning on Excel
  • Integrate your sales and financial planning

The first message, as discussed above, is going to catch a lot of small fish.  The second message is about a problem that only larger organizations face — small companies are just trying to get a budget done, whereas larger ones are trying to get a more holistic view.  The second message far better attracts the enterprise target that you want.  As would, for example, a message about the pain and expense of budgeting on Hyperion.

I’ll close in noting that marketers who measure themselves by the number of fish they catch [4] — as opposed to the conversion of those fish into customers — will often resist the more focused message because you won’t set attendance records with the more selective bait.  So, as you perform your targeting, always remember three things:

  1. It’s about where you put the boat
  2. It’s also about the bait you put on the hook
  3. It’s not about the number of fish you catch, but the number of the right fish that you catch.

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Notes

[1] The decision to emphasize differentiation or benefit is covered in The Two Archetypal Marketing Messages:  “Bags Fly Free” and “Soup is Good Food.”

[2] In a B2B sense, at least.

[3] Amazingly, a lot of large and very large businesses also plan on Excel, but let’s not confuse the exception for the rule or the point of the example — different messages attract different buyers.

[4] Either literally by putting KPIs on high-funnel metrics such as MQLs or, more subtly and more dangerously, by getting too much inner joy from high-funnel metrics (“look how many people came to our webinar!”)