Positioning Strategy for Startups

positioning strategy for startupsOver the weekend I read Steven Gary Blank’s The Four Steps to the Epiphany: Successful Strategies for Products that Win. It’s a fabulous business book packed with a ton of valuable insights from the author’s 30 plus years of experience as an entrepreneur and a venture capitalist.

I highly recommend that every entrepreneur running a product-based startup – especially for those in technology – read this book. Mr. Blank argues that the typical model for taking products to market is broken, and that companies spend too much focus on building their product and then forcing it into the market (by guessing about what customers really want and will pay for), instead of using a defined process to discover their markets as they are iterating through product development. He delivers a fascinating explanation of how most venture-funded startups slowly fail, with timelines for the firing of the VP of Sales, the VP of Marketing and eventually the CEO.

This article isn’t meant to rehash the book (as it’s far too valuable and detailed), so please review it for yourself if you’re intrigued. What I did want to illuminate is his positioning strategy for startups.

Positioning a Startup

Early in the book, Mr. Blank gives marketers/entrepreneurs this sage advice that is commonly overlooked in startups:

A startup’s market type dictates early positioning strategy and affects everything the company does

Many high-profile product launches have failed because very smart people did not understand how market types dictate early positioning and marketing strategy.

The first step in positioning a startup is to understand the four market types:

  1. A new product in an existing market
  2. A new product in a new market
  3. A new product attempting to resegment an existing marketing via low cost
  4. A new product attempting to resegment an existing market by creating a niche

The second step in positioning a startup is to understand the specific high-level positioning strategy for each market:

Market Type High-Level Positioning Strategy
A new product in an existing market Your market already knows your competitors, so focus on why your features are better/different than the competition.
A new product in a new market Don’t focus on your features since your potential customers don’t know your product. Sell your vision – sell the problem that your product solves.
A new product attempting to resegment an existing marketing via low cost Fight your competitors head-on focusing on your low price.
A new product attempting to resegment an existing market by creating a niche Focus on how your product is better than specific elements of the incumbent’s product that has fallen out of favor with the market.

Understanding this high-level strategy answers many questions for startup executives, providing a strategic roadmap and clear direction as to what the marketing and sales messages should be.

If you’re working on positioning a new product, read the first four chapters of Steve Blank’s book. And if you’d like more guidance while completing your positioning and brand strategy, check out our marketing tools.

Finally, take a few minutes to hear Mr. Blank himself talk about startups:

COMPETITIVE POSITIONING TEMPLATES / MARKETING PLANS / PROJECT MANAGEMENT

EVERYTHING YOU NEED FOR YOUR MARKETING PROJECT

Learn More