

Ask HN: Can you share startup's Market Positioning strategies? - manishsharan

What strategies have you used to position your start-up in the market? How do you determine which position is the best going forward ? Or is positioning irrelevant for startups because of MVP and pivoting ?
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mindcrime
We're still struggling with this at Fogbeam Labs, so I don't have anything
definitive to tell you. But I can share some thoughts, observations, etc.

One: The idea of "positioning" (as written about by Jack Trout, Al Ries, et
al.) strikes me as corresponding roughly to what Seth Godin calls a "lie" in
_All Marketers Are Liars_. So "what's your position" is, IMO, roughly
equivalent to Godin asking "What's the lie you need your customers to
believe?" And one of the points that Godin makes is (paraphrased) "You can't
beat your competitor by shouting their lie louder than them".

The idea is, if there's a competitor in space X, who "owns" the (position|lie)
"we are the cheapest source of X" then you can't really just start screaming
"No, we're cheaper than $COMPETITOR". Now you need to pick a different lie. It
might be completely different "We have the most advanced and functional X" or
it might be related to, but a spinoff from another lie, eg "We're just as
cheap as $COMPETITOR, but our X lasts OVER FOUR TIMES AS LONG" or whatever.

This all seems to also tie into the stuff Steve Blank talks about when he
discusses market segmentation. Are you going for the "low cost" segment, or
the "best product" segment, or the "best overall value" segment, etc.

Of course, if you don't have competitors, your positioning is more about
competing with the status quo. Now you need your customer to believe the "lie"
of "I really need X because my kids will do much better in school if I buy it"
or "This website will help me meet attractive members of the opposite sex" or
whatever. In any case, there has to be _something_ the customer believes about
the world, that makes them (want|need) your product or service.

Again, I'm far from an expert on all this, but I recommend reading
_Positioning: The Battle for Your Mind_ by Al Ries, Jack Trout and Philip
Kotler, _Differentiate or Die: Survival in Our Era of Killer Competition_ by
Jack Trout and Steve Rivkin, _All Marketers Are Liars_ by Seth Godin and _The
Four Steps To The Epiphany_ by Steve Blank, if you haven't already. It's a lot
to digest, and it'll probably take some trial and error and iterating, but
it's not hard to get the basic principles down.

FWIW, since our products are all Open Source, I'm leaning towards starting out
with more of a "lowest price" messsage, since my perception is that people
_expect_ Open Source products to be less expensive. But I think if we succeed,
we can raise prices once we have more credibility in the market. For example,
IIRC, Red Hat Linux was originally much cheaper than the alternatives, but -
as I understand it - modern day RHEL actually isn't particularly cheap.

We'll see though. Part of it depends on if we can actually define a
sufficiently unique market niche to be in a "resegmented" market. Our products
touch on a lot of different areas, so we either have a zillion competitors, or
none, depending on how you define things. This is why we're still struggling
with this.

~~~
manishsharan
(I am currently reading "Positioning: .." and I have already read Seth Godin's
"All marketers .." .)

I think the million dollar question is how do you determine if a lie or a
position will stick in the prospective customers minds? Regardless of what
position you choose, you will be assessed against an incumbent. If your are
going for Blue Ocean Strategy, even then you will be compared to alternatives
and substitutes.

When you are on the whiteboard deciding which way to go, I am assuming you
will be having set of positioning options; how do you pick the best one ? How
do you make it more compelling or sticky.

~~~
mindcrime
_When you are on the whiteboard deciding which way to go, I am assuming you
will be having set of positioning options; how do you pick the best one ? How
do you make it more compelling or sticky._

You're right, that is the "million dollar question"! I wish I had an easy
answer. All I can come up with so far is to go with your best judgment and
iterate, iterate, iterate.

I mean, I could imagine doing some A/B testing and micro-benchmarking on a
small scale, to get an _idea_ of which message resonates best. But what I'm
not convinced of, is whether or not the position that tests well on a micro
level, will still hold up on a broader level.

Another note on the topic of "stickiness"... I've had several people suggest
to reading _Made To Stick_ which deals with that very issue. I haven't gotten
around to that one yet though. Someday soon... :-)

~~~
manishsharan
(it seems hat I may have found a kindred spirit -- so I hope to keep the
conversation going)

Lets go back to where you said people expect open source to be low priced . I
am assuming you want to "ride that position" but the questions that arise are
(a)is that position exclusive to your company or is someone else also riding
that low cost bandwagon (b) is that will that position translate to sales. I
work as a consultant in the banking industry ; all managers I have worked with
are wary of opensource thanks to a lot of misleading propaganda. So your
position of low-cost wont work in this segment of the market; this segment of
market wanst SLAs and support and extensive hand holding. Have you done
surveys or had customer interviews to validate your position in your target
market before deciding your position.

I came across this hurdle and tried using some surveys based on Amazon Turk
but I ended up asking questions that were either leading or poorly phrased and
got responses that did not clarify my dilemma.

~~~
mindcrime
_(a)is that position exclusive to your company or is someone else also riding
that low cost bandwagon_

I don't know that anyone in this space has really seized onto that particular
position and really "owns" it in the market-at-large. And, to be honest, in a
lot of ways, out biggest competition right now is "the status quo", not
competing products. Given that our goal is to convert current non-users of
this type of technology, not to steal market-share from $COMPETITOR, we may
not wind up focusing on the cost aspect at all. Well, other than offering some
"earlyvangelist" customers deep discounts just to get in the door and gain
some early traction.

 _So your position of low-cost wont work in this segment of the market; this
segment of market wanst SLAs and support and extensive hand holding. Have you
done surveys or had customer interviews to validate your position in your
target market before deciding your position._

That's an ongoing process for us. We've done a ton of customer interviews and
we're always trying to do more. Note that we aren't yet committed to a "lowest
price" message and strategy, but I'm tentatively leaning that way. And you
make a good point about how, in some segments, that's a non-starter for other
reasons.

The fact that this stuff isn't easy is why I think you're right in calling it
"the million dollar question". :-) Assuming you have a reasonably decent
product/service, it seems that positioning / marketing strategy are pretty
crucial to determining if you become a million (or billion) dollar firm or
just an also-ran.

We're working in the enterprise software, B2B space, where sales are high-
touch anyway, so it's hard to say whether or not we can do any low-cost
experiments or micro-benchmarks that will actually tell us anything useful.
But that's something I've been chewing on for a few days now; trying to figure
out a way to do that.

~~~
manishsharan
A long time ago, I was the Product manager at Computer Associates and charged
with launching their newly minted Windows based Firewall s/w ; we did all the
usual things -- channel promotions, VAR training and we did not make any
impact. Checkpoint continued to rule and our sales were a rounding error. Then
we tried a different track : CA already had a well regarded Anti-Virus product
in the market -- we rebranded our s/w as a "Network Security Option" and we
atleast managed to convert out existing customers to grab a decent marketshare
and achieve profitability.

I bring up this anecdotal evidence as you mentioned "status-quo" as your
competition. We had better results when we leveraged status quo as our "ally
and partner" and used it to succeed. In this case status quo was a sister
product.

In your case, status quo implies that people are doing something already which
could be done better/faster/cheaper with your product. Find out what they are
doing now, which product they use now and try and build a partnership with
that product. Nothing flatters a product manager more that having Business
Development guy from a new company calling up and seeking ways to partner.

If your product can be integrated with sa Microsoft Sharepoint or Biztalk --
get a developer license and build an integration widget with those. Can it be
integrated with IBM or Salesforce or whatever bigger company -- find the best
fit for your case, build a solution that profitable to both and increases the
mind-share for the big dog and have them take you with them to the prospective
CIO office.

Just my $0.02. I also am struggling with positioning for my product which is a
B2C and goes up against Youtube. I would love to hear your thoughts on that.

~~~
mindcrime
Sounds good. Tell ya what, since this seems to be a 2 person conversation, and
since HN isn't maybe meant for extended 1 on 1 conversations, how about we
take this to email? My email is fogbeam@gmail.com

