 I'm so excited to be here live face-to-face today. I have a really big topic and a really short amount of time to talk about it So we're gonna go pretty fast I'm here to talk about positioning one of the most powerful tools We have at our disposal at startups, but also one of the least understood in fact It's so misunderstood that most of the time when I talk about positioning I have to start by telling you what positioning is not so it is not the same thing as Messaging it's not the same thing as your tagline It's my personal pet peeve is when people talk about brand positioning. This drives me crazy There's branding and there's positioning those two things are actually completely separate concepts In fact most of the things you see on this slide flow from positioning, but positioning actually comes first You can think about it this way everything we do in marketing and sales is the house Positioning is the foundation upon which the house is built Now here's my definition. I define positioning this way positioning defines how our product is the best in the world at Delivering some value that a well-defined set of customers cares a lot about That's a kind of complicated definition, but here's an easier way to think about it It's a bit like context setting for products and context is really important because that's how we figure out things that we don't know too Much about particularly things that are new that we've never encountered before I'm going to give you a goofy example, and then I'm going to give you a less stupid example So here's a product that I encountered once completely out of context surfing the internet You know what I thought this was I thought this was a shoe like you know crocs They're really into ugly shoes and they said how can we make this more ugly? I know we'll open up the toe and we'll put this thing at the back And then I saw it in context and realized oh, that's not what it is at all It's actually something completely different And then if I show you this you get the dog thing right and then I show you this you might say oh She's into dogs. That's a dog thing too. That's like a cone you get for your dog when he goes to the Hospital or something and it turns out it's not for dogs. It's actually for people eating noodles But then the marketers gave you some clues about in the context about what this is for and the clue is that guy You know what this is for this is for making people fall in love with you The marketers they lie they lie that doesn't work that doesn't work the point here is that a Shift in context or positioning can completely transform the way we perceive a product now Context is important particularly for tech products because the markets that we operate in are insanely crowded So I like to show this slide just as a way to like scare you about how crowded markets are This is if we think about all the software and all the land to solve all the problems This is one man's attempt to model just the software to solve marketing problems. Look at that thing There's 8,000 companies on there if I'm a vice president of marketing and I'm trying to figure out who I should shortlist To look at how do I figure this out? It's impossible One of the ways we do this is with market categories So market categories help us narrow things down and we know what to focus on so you can see this guy He's made an attempt to make some sense of this with Macro categories which are the colors like the red stuff is marketing and sales and orange stuff is content and experience And then inside each of those colors There's these little islands and each of those are your own market category So let's say I'm a vice president of marketing. I want to do live chat on my website I look at this thing and go oh man That's that's confusing but maybe it's social in relationships and sure enough There's a little island in there and it's called bots and live chat or something like this and so I've narrowed it down. So this is good. Now. I don't have to think about all 8,000 anymore I only have to think about well to be honest. It's still way too many, but at least it's not 8,000 But that's not all Positioning your product in a certain category does it doesn't just narrow down the competition What it actually does is it sets off a really powerful set of assumptions in the minds of customers about what your product is all about So it works a bit like this if I came to you and just told you the market category of my product You would automatically assume a bunch of things about it So say I came on stage and I said hey, I'm here to picture my product I have a revolutionary next-generation CRM and That's it. You don't get anything else about it. Who's my competition? Salesforce pipe drive Yeah, Salesforce, they're the leader in that market who what's the title of the person that I sell my product to? VP sales head of sales. That's who buys a CRM, right? What are that? What are three or four features that you would expect me to have tracking a pipeline tracking deals across a pipeline? Now here's where it gets crazy. What's the price of my solution? How would you know that I didn't tell you anything I didn't tell you a single I didn't tell you anything except the market category But if you assume that my competition is Salesforce because you assume they're the leader in that market You would also assume that I don't cost more than that. I'm not charging more than the market leader in this. Am I? So here's how this works if I do a good job I position my product in a market category such that it sets off a set of assumptions in The customer's mind about my product and those assumptions are true. Great I just saved marketing and sales a whole lot of time. I don't have to tell you who my competition is It's assumed. I don't have to list every single feature my product has half of that stuff is table stakes Unfortunately, it works the same if I do a terrible job of it So if I position my product in a market category, it sets off a set of assumptions about my product that are not true Now marketing and sales has a lot of extra work to do Undoing the damage that that positioning has already done Let me give you an example So I got a call once from an investor in Silicon Valley. He said I've got this company. I just invested in them I love them customers love them. I talked to their customers customers love them But when they're doing a first meeting no one can figure out what they do Maybe this is a positioning thing. Can you help them? I say fine. We get on the phone So I get on the phone. I'm like, okay, who are you guys? What's your deal? And they said we're lawyers ex lawyers And what we have is this revolutionary thing. It's email for lawyers And I'm like email like who knew the lawyers needed their own email, but okay email for lawyers I got you and then they said alright, then they jump into the demo and they're showing me the demo I'm like this looks fantastic, but how does the calendar work on your email for lawyers and the CEO says Oh, we don't have a calendar I'm like wait So how do you replace Gmail and Outlook if you don't have a calendar? And he says we don't we don't compete with Gmail and Outlook and I'm like what so the lawyers need two emails I don't get it and then I said wait so the investor says everyone loves you. Why do they love you so much? They say oh, we've got this feature We have a patent on it and what it is is a super secure context-aware file sharing So you got lawyers clients. They want to collaborate on documents This has some AI stuff automatically figures out who should have access to the document who doesn't put it in a secure place Everybody that gets access to it and I'm like wow that actually sounds great But you know what it doesn't sound like? Email like if I wanted to solve that problem would I buy email to do that? No So what these folks have is this really innovative great product that people love Masquerading as shit email Now what if I took this same product and I didn't touch it didn't touch features didn't touch it But I picked it up and I put it in a different market category What if instead I said, you know, it's not email is team Collaboration for lawyers. Ah, that's different different assumptions different competitors I'm not competing with Google anymore. Now I'm competing with Slack and Microsoft teams What do I assume functionality wise? Well, I don't care about calendar. I don't expect it to have a calendar I do expect it to have something fancy for collaborating with lawyers And that's exactly what they have super secure context aware file sharing thing The great thing on this is your assumption about prices really different to and the price just went way up Emails free team collaboration. We pay a lot of money for that Here's another example. This is a company. I worked with in Canada Founded by two guys with advanced degrees in mechatronics engineering They start a company and they're robot guys and they're making robots eventually they come up with this robot here What it does it drives around a manufacturing plant and it delivers things from one place to the other Now if you don't know much about robotics, you might think it doesn't sound so hard turns out this thing is miracle of modern technology It's full of mapping sensors artificial intelligence. It's amazing. So they go to sell it to the manufacturing plant They get the meeting they go in and they say hi We're clear path robotics. We'd like to sell you our fancy new robot and the reaction they get from the buyer is Robots. Yeah We got robots man. We've been buying robots for a decade. In fact, we have approved robot vendors And you're not one of them We know what robots cost your thing is way too expensive and on and on and clear path is like no no no You don't understand. We're special robots special special Innovative robots like no robots you've ever seen before So after a while they get the idea maybe maybe positioning this as a robot is not doing me any favors So they went back and they said well what's special about us its mobility it drives around its mapping sensors artificial intelligence How could we position this so that all of these things would be obvious to customers and eventually they got the idea Maybe what we've invented here is not a robot. Maybe it's a self-driving car Or an autonomous vehicle for industrial uses, which is how they position it now They go in it's a completely different set of assumptions of course it drives around of course It's got artificial intelligence and of course I'm not going to get it from the same vendor that picks up a roll of tape and puts it in a box So how do we actually do this? This is a question that bothered me for not not a joke a decade So I don't actually have a degree in marketing I have a degree in systems design engineering but I get this job in marketing right out of university and We reposition a product and it goes from selling nothing to selling hundreds of millions of revenue and I'm like wow I should figure out this positioning thing. I wonder how the marketers do it So I read a lot of books and I go to school and that the closest I get to a positioning methodology is this thing Have you ever done a positioning statement? Without a word the dumbest thing I have ever learned in university is this thing right here is so super useless So here's how it goes. I learned it in a I learned it at university So the professor comes out he says today. We're gonna learn positioning. Here's how it goes It's mad libs fill in the blanks. We have a blank that does blank unlike blankity blank blank blank And each of those things you fill out one of those things and like like one of those things says market category Now, how do I know which market category is the best one to position myself in? How do I know if I'm email or team collaboration? How do I know if I'm a robot or a self-driving car and the guy says the guy said we just fill it out And that's it you're done and I'm like, well, wait, wait, wait, and he's on to the next topic and I'm at the back I'm like wait stop. No, and I explained the whole thing. I'm like, how do I know you have a blank there? How do I know what's the best thing to fill in the blank? And you know what the guy said to me? He got all professor on me. He's got his glasses put his glasses down. Who said that? I'm like me me I said it. How do you know? How do you know? And he says trust me April? You'll just know Right, so at this point, I'm like nobody knows actually literally nobody knows how to do this So the bit but you know, I think well at this point I've repositioned three products So I think maybe I can figure it out. So this is how I figure it out I start by saying maybe we can break positioning down into component pieces And that actually turns out to be pretty easy because we kind of agree with the pieces are so there are five pieces It the first one is competitive alternatives if you didn't exist What would the company do instead second one is unique or differentiated features or capabilities? The next one is value in particular differentiated value. What does your product enable for customers? The next one is well, what customers so who's my target customers? I'm going after the last one is market category Am I a robot or a self-driving car? These are the things So I figure all I have to do is get the best answer for each of these things smash it together Voila good positioning, right? This is where it gets hard the first thing you realize when you do that is that each of the components actually has a relationship to the others So if I take anything on here, let's take differentiated value the differentiated value that my product enables for customers comes from what My differentiated features that's the only place it comes from like we don't get to make it up It comes from differentiated features, but my differentiated features are only differentiated when I compare them to a competitive alternative Hmm, and then think about it my best fit customers by definition My best fit customers are the customers that care the most about my differentiated value So those two things are related and then market category. This is a little more esoteric But my best market category is the context I position my product in such that this value Makes a lot of sense to these people So if everything relates to everything else, where do we start and for two years? I had no idea. I just started in a random place worked my way around Got candidate positioning took it out to the market tested if it works great We run with it if it doesn't I go back and do it again And that was fine as long as I got it right the first time if I didn't get it right the first time Then my CEO is looking at me going tick-tock like do you want to get fired or not? We've been on this for three months. They really haven't figured this out yet And so how I eventually figured this out is a long story But I got reading Clayton Christensen I went really deep into jobs to be done and after I stood on that for about a year I came out and what I did what I decided was we actually have to do this in a very deliberate order We need to start with competitive alternatives if we do not start there Then we get positioning that sounds good in the office But it doesn't work when we take it out to the market because it doesn't differentiate us sufficiently against the competition So it works like this if you didn't exist What would a customer do and Then once I under that's my stake in the ground This is what I got a beat in order to do a deal once I understand that then I can see well What do I got that they don't have that gets me my differentiated capabilities? Once I have differentiated capabilities, then I can look at all those capabilities and say so what for a customer Why does a customer care and I can map that to value? Once I've got value that I can say well, okay This is the value that that my product alone can deliver who cares a lot about that and why that's going to get me Segmentation and then once I have that I can look at market category and say look I get this value for these people What context can I position that in such that this value makes a lot of sense to these folks? Now there's a million ways to mess this up The most common way to mess it up is the first step around competitive alternatives Most of the time when I talk to companies, they'll come to me and I'll say who do you compete with and and I have Conversations like this every day. I'll say who do you compete with this? Oh? Got all these competitors look There's a million of them little companies in Silicon Valley nobody's ever heard of and I say okay Well, how do you beat them? Well ease of use that's our thing It takes 59 clicks to do their thing and with us it only takes two clicks So we're positioning around ease of use that's how we win and I'm like well Do you ever lose a deal to any of these companies and they'll say no actually we don't actually see them in it Oh Well, so what do you lose a deal to they'll say we lose a deal to no decision? My well if they know decision, how's the company solving the problem? They're just doing it with Excel or interns or something. Ah, so your competition that you're losing to you is the intern Do you think you beat the intern on ease of use? No, the intern is so easy to use. You are like Joey Love you. Get me a coffee. Fill it the spreadsheet come back when you're done easy easy way easier than your product Right. So if you get the if you're not thinking about this right step and thinking about not just direct competitors But also, you know, whatever status quo is in the account then everything downstream from this will be bad There's a lot of other ways to mess this up I wrote an entire book on this you could bid $10 and get a thing that it took me 20 years to figure out The world is amazing. I have one more story to tell and it's an old story But I still like it. So I'm going to tell it again So really early in my career I got a job running marketing at a company that positioned themselves as enterprise CRM Customer relationship management and at the time Salesforce was in the market at the time But people forget this like at the beginning. They were only selling to small small businesses Enterprise CRM at the time was completely dominated by this giant company in Silicon Valley called Siebel So we were positioned as enterprise CRM. They were the undisputed kings of enterprise CRM So not surprisingly we get a meeting with a customer and we say hi We do enterprise CRM and they say that's great. How are you better than Siebel and the answer was We weren't like we pretty much just weren't better than them in any way you could measure like they had 8,000 employees. I was employee 20. They had two billion revenue. We were doing 1.3 Million with an M. They had 400 customers. We had five But we did have One feature that not only did they not have it they couldn't copy it So we could manage relationships in a slightly different way and it looked really good in a demo So we always demoed it so we get in the meeting and they'd say well How are you better than Siebel and we'd say oh cuz we got this thing, you know And then we'd show the thing it's amazing and they look at it and go that looks great What do you do with that and and we'd say anything you want Because we didn't know like we had the feature we didn't know how to translate the feature in a value Therefore, we didn't understand who cared a lot about that feature. So needless to say things aren't going well How we actually got out of this problem is is luck mainly So we hired a new sales rep and the reason We were always hiring sales reps because we weren't selling anything and then we would fire the sales rep and then we'd have to hire a New sales rep so this sales rep came into an interview and he's from New York So he's got some attitude and so he came into the interview and my CEO at the time also has some attitude So they sat down together my CEO says give me one good reason to hire you as a sales rep for my product And the sales rep got all up in his face and said I'll give you one good reason because my buddy runs investment banking at Goldman Sachs, and I'm gonna get you a meeting and we're like Good just can you start Monday? So we hired the guy Literally on that and then he got the meeting with the head of investment banking And so I went mainly because I wanted to see what the office of the head of investment banking at Goldman Sachs looks like It has a helicopter pad outside That's very impressive. Anyways, we go in we do the demo and my rep is great He does a great demo. He gets to the part of our special thing We show him that and the guy gets really excited and he's like back up But are you saying if two people don't work for the same company, but they sit on a board together you can model that We're like, yeah, he's like so two people belong to the same golf club. You can model that He's like we're like, yeah, he says hang on. I need the vice-presidency goes out He gets his vice-presidency come back. He's shown the thing shown the thing So we demo the thing and and they asked the same questions like oh my gosh So if two people sit on a board together, but they work at different companies, you can model that we're like, yes We can so they got all excited. They're jumping up and down speaking their banker language We're cowering in the corner is terrifying finally they and then they're like we love it. We got to have it We close the deal. This has never happened to us before so we think maybe investment bankers love our stuff Let's try it again. So we get a meeting at Merrill Lynch. We go in the same thing happens We show them the thing everybody jumps up and down we close the deal It turns out the value of this feature was very very important to the sales process of an investment banker Once we figure that out, then we just spent all our time selling investment banking. So things are looking up Importantly, it sparked a conversation back in the office about our positioning like are we really? enterprise CRM or Are we CRM for investment banks? Now the back conversation it might sound like a small change, but let me tell you it's not a small change So internally it took us a long time to get our heads around that that sounds like a really small market Are we actually going to grow big enough our investors hated it? We go to the board meeting and we're like, okay We're gonna we're gonna be CRM for investment bank and they're like we did not invest in you to be some Nishi little lifestyle business that only sell us to what 12 investment banks in the land and we're like Here's how we sold it to them. We said look We're not gonna just sell the investment banks forever. Here's how it goes We're gonna sell the investment banks because let's face it. We can't sell to anybody else But we know we can win here and once we win there Then we're gonna use the traction we had there to go sell to retail banking now We're positioned as CRM for banking and then once we win retail banking Then we can use that to go to insurance then we're gonna be CRM for financial services And if we win that that's a gigantic market and then we're gonna be CRM for enterprise and those Siebel guys better watch out But that's how we're gonna take them out Board agreed We did the reposition. It was absolutely transformational for the business The biggest transformation was we never got in a head-to-head deal with Siebel again So we would go in and we'd say we're CRM for investment banking and they're like So do you guys compete with Siebel and we're like oh Siebel? We love them. They are amazing. They're so big so smart So they're like the world's best general purpose CRM for like call centers and Retailers and stuff and not you Wolf of Wall Street. You need something special Let me show you this thing and then we show them a thing and that would be it So we went from two million revenue to a little over 80 million revenue in about 18 months And the end of this story was we got acquired by Siebel because they got so sick of us kicking their tail all over Wall Street For 1.3 billion dollars And the board didn't think we were gonna make any money with that niche she think anyways, that's the end Here's three things Positionings like context setting and context can kill you if you do this badly We need to position deliberately. We can't just we can't just assume that we sit in a certain market That's the best way to position us And the last thing is if you're gonna do positioning you can't just you know, you can't just know You actually have to follow a process if you want to send me an email or tweet at me or something Here's my contact info and that's it. I'm done. Thank you