Is Product/Market Fit Happening Fast Enough for Your B2B Tech Startup?
Your brand’s product/market fit should be the primary objective for early-stage tech startup. It comes down to this question:
Can you solve a known problem for enough customers to build a business?
The obstacle standing in the way is always sales. How can you improve your sales process?
Start by answering these critical questions:
- Do customers confuse you for another brand (not a direct competitor)?
- Is your sales process complicated by RFPs, demos, trials, and pilots?
- Do you hear from management — or colleagues — that you have a messaging problem?
If you answered yes to any of the above questions, your brand suffers from a more fundamental issue than your sales & marketing engine ...
... instead, the problem lies in your market positioning.
When your customers don’t understand your solution, or how it uniquely solves their problem, or how you compare to others or why they should care — it’s not them — it’s you.
Your market positioning is unclear.
What is Positioning?
Over the past decade, Geoffrey Moore, Al Ries & Jack Trout have written outstanding books on market positioning. Put simply, market positioning is how your customers view you and your solution in relation to the problem they need to solve.
Do they see you as a:
- category leader?
- an obscure also-ran?
- not see you at all (the worst of the three issues)?
Where do your customers see you fitting in the market?
Sadly, positioning is often misunderstood, dismissed as tactical, unimportant, and marketing jargon. When that happens, you're brand is in trouble.
Our passion at GrowthShift is to change all that!
Get Your Competitive Positioning Audit
Differentiate your B2B tech startup
(before your competition does it for you):
Why is positioning important?
According to Geoffrey Moore, “positioning is the single largest influence in the buying process.”
Positioning affects your product/market fit, success in raising capital, sales growth, talent retention and acquisition and your valuation at exit.
When you position your tech brand in a way customers can understand (and see your brand as a solution to their problem) you make their buying decision easy.
Your goal in influencing your customer's buying decision is this: create a space in the customer’s mind identifying your product as the best solution for their problem.
How you can help customers buy
Know this: developing your brand's positioning is much deeper than brochures, website messaging, and product demos or other marketing tactics.
It helps everyone involved (customers, markets, investors, new recruits, acquiring parties) to start your brand positioning with a way to organize your brand and competing solutions.
Begin with the image of a ladder: it's a great metaphor for how customers prioritize and evaluate solutions to their problem.
Then identify leading brands and where they appear on their industry's ladder:
- Mercedes
- Apple
- Uber
- Salesforce
Where are these brands on their industry's ladder and why are they able to command a premium?
If you said all of those brands are on the top rung on their respective ladders, you're correct.
In today's innovative tech marketplace, there is no shortage of brilliant solutions to every problem customers have. They need to stack-rank competing solutions easily to make their buying decision: who is #1, #2, and #3 in the industry for the problem they are trying to solve?
Here's the brutal reality: if you are not #1, or even in the top 3-5 companies for your category, you may never show up for customers.
So make it easy for them to choose your brand and minimize their decision fatigue.
Think about all the tools customers use to stack-rank their choices: product comparisons, requests for proposals (RFP), and competitive matrices. Where do you rank in the customer's mind?
- Is it even clear what you do?
- Are you on a ladder for your category of solutions?
Create that ladder for your customers (so they don't have to). Identify the problem they have, then distinguish yourself as the single best solution for that problem. And get to work in communicating that consistently across all of your marketing channels.
Apart from building a thriving business, why should you care about categories? Because the companies that might buy you care. Even if you don’t care about positioning, the companies that potentially buy you DO.
What is the role of category in positioning?
Think of a category as one more element in the organizing system for customers. They have a ladder inside each group or category of solutions. Think of:
- the ERP category (Oracle, IBM, SAP)
- the CRM category (Salesforce, HubSpot)
- the Ride Sharing category (Uber, Lyft)
Categories make it easier for customers to identify the solution you provide and stack-rank you on their ladder. If they have a category name (CRM) and a ladder to aid in stack-ranking, making their decision becomes simpler.
This is your job: Don’t leave this to your customers or worse, your competitors to decide.
Why bother with positioning?
How would you like to:
- Accelerate product-market fit?
- Increase revenue?
- Raise capital faster?
- Beat your competition?
- Attract and retain talent, and
- Exit at higher valuations?
Positioning strategy is the key to achieving every one of those goals.
Apart from building a thriving business, why should you care about categories? Because the companies that might buy you care. Even if you don’t care about positioning, the companies that potentially buy you DO.
If your suitors can position your unique solution (among complementary and non-competitive brands) inside of a category or portfolio of solutions they have, you've found a hole in their offering . . .
. . . and they want to fill holes.
Here are two examples:
In 2020, Salesforce paid $27 billion for Slack because they had a hole for messaging software they needed to fill
In 2021, Intuit needed an email marketing solution and bought Mailchimp for $12 billion.
Furthermore, if you are lucky to get on Gartner Research’s radar (arguably the largest technology research firm in the world) they use categories exclusively to group and rank companies.
Have you heard of Gartner’s Magic Quadrant? It's their organizing system, licensed to clients, at a significant cost, to help them make decisions.
Where do you start?
So how do you apply this to your business?
Thought leaders have made it easy for you and me: don't feel like you need to reinvent the wheel.
In Crossing the Chasm, Geoffrey Moore recommends a template for your positioning and story:
For (target customer)
who (statement of need or opportunity)
the (product name)
is a (product category)
that (statement of key benefit – that is a compelling reason to buy).
Unlike (primary competitive alternative), our product (statement of primary differentiation).
When you go through this exercise, it is more important what you don’t say, than what you do say. Say more by saying less.
For example, what is the most important differentiator, relative to your competition, that your customer cares about?
The good news is that properly developed, this template becomes your elevator pitch. Once you think you have it, test it with customers.
Now go back to the drawing board as many times as you need, and then train employees, customers, and your market to speak with one voice about your company.
Again, that is your job.
Get Your Competitive Positioning Audit
Differentiate your B2B tech startup
(before your competition does it for you):
