If you've ever looked at Scot Brinker's MarTech 5000, then you know the B2B SaaS market is extremely crowded. The modern buyer has a vast amount of options when it comes to software that will help them be more successful in their work. And that's great for buyers, but less so for sellers.
Psst! Click here for a full interview transcript.
So how can you stand out and differentiate within noisy, crowded, and competitive markets?
Well, the answer is positioning.
And to explore this topic in more detail we caught up with April Dunford, an expert on market strategy and positioning in B2B SaaS. Having launched 16 products to market, held multiple executive roles, and secured successful exits, April explains how companies can bring products to market and get them into the hands of customers that are willing to pay for them.
In this episode we explore the world of positioning and what it means for B2B SaaS companies, including:
Stay tuned to the end of the episode where April takes on our fast five challenge and shares her best piece of advice for fellow SaaS marketers.
And let us know what you think by tweeting to us @SaaSGrowthHub
Enjoy the show!
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Links:
April Dunford >> aprildunford.com
Obviously Awesome: How to nail positioning so customers get it, buy it, love it >> aprildunford.com/positioning-book
Positioning: The Battle For Your Mind >> on Good Reads
The Four Steps to the Epiphany: Successful Strategies for Startups That Win >> on Good Reads
Sampler >> sampler.io
Level Jump >> leveljumpsoftware.com
SparkToro Trending >> sparktoro.com/trending
Follow April on Twitter >> twitter.com/aprildunford
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Advance B2B >> www.advanceb2b.com
Follow The Growth Hub on Twitter >> @SaaSGrowthHub
Follow Edward on Twitter >> @NordicEdward
Edward: To kick things off, could you tell us what actually is positioning?
April: Interestingly, positioning is a super old concept and yet if you ask five different people how to define positioning you will literally get five different answers. It’s hilarious to me that positioning as a concept has a positioning problem. It’s ridiculous.
So the concept was defined in the early 1980’s by these guys Reis and Trout in a book called Positioning: The Battle for Your Mind and in it they attempted to define positioning. The book is essentially a book-length definition of what positioning is. You know, I don’t think your podcast listeners want to hear that.
In my mind, I like to think about positioning as a sum of a bunch of components. And specifically there are five components. So in my mind, it’s a clear definition of:
Who your true competitive alternatives are
What your key unique differentiators are when compared to those competitive alternatives
The value those differentiated features enable for your customers
The segment of potential customers that really care a lot about that value
The definition of the exact market that you intend to win
Positioning is actually pretty complicated and it’s kind of a set of everything that more or less defines your go-to-market strategy.
Edward: Yeah, when we hear the word ‘positioning’ we might think of a positioning statement which is something we’re taught in business school but is positioning really that simple?
April: Oh my god, can I rant about the positioning statement for a while? I’m happy to. I hate the positioning statement so much. It’s like my most hated thing.
So when I first started my career in marketing and we’d get to these questions about positioning people would say, “Oh, we’ll just do a positioning statement”.
A positioning statement is like this Mad Libs, fill in the blank thing. Like “We are a blank, for blank, that does blank as opposed to blank.” The blanks are literally those five things, right? Like, who’s my competition, what’s my differentiator, what’s the value, what market I am in.
But the positioning statement exercise is farcical because you’re essentially filling in these blanks but it gives you no clue how to actually come up with the answers to fill them in. So it tricks you into thinking, well, these things are obvious. Obviously we’re in the most obvious market that we could be in because it just says fill in the blanks. And then I’m just supposed to fill these blanks and memorize this frankenstatement, like “We’re a blank for blank for blank.”
The one the you learn in marketing school is the original Amazon positioning statement and it’s like two paragraphs long. It’s ridiculous. No one’s ever going to use this thing. And the important piece of this is, what market are we actually in? I could take almost any product and position it in five different markets. So how do you know which one?
The positioning statement exercise basically just says: Pick the most obvious one. What are our key differentiators? Oh, I don’t have to figure that out, just write it down. It’s ridiculous. How do you know?
And so I think that the positioning statement is not only a stupid exercise to do but it’s potentially harmful because it leads you into thinking that if you don’t know these things, you must be a dummy. It’s just obvious, just write down the most obvious thing. Get this thing done, people.
When in fact, these are probably the most important decisions you can make for your entire business strategy. And it treats it like you’re born knowing this stuff, like you’re born knowing who your competitive alternatives are. Even that, that’s really hard to know. And even if you think you know, you’re often wrong. So this positioning statement thing drives me mad. I’ll stop now. [laughs]
Edward: Exactly, I can see that you’re super passionate about this. But following off from that point, I think especially in SaaS, people are obsessed with lead gen, performance marketing and instant results but they rarely talk about positioning, which as you mentioned, has been around for a long time. But if we think about the state of SaaS in particular right now and where we are today, why is positioning so important and why is it so dangerous to overlook it?
April: There’s kind of two big reasons. The first thing you have to understand is that our markets are incredibly crowded. Like so crowded. We say this as marketers all the time to the point where it’s almost a cliché. Markets are crowded, customers are overwhelmed with choice. But the reality is that they are insanely crowded.
The example I like to give is if you look at Scott Brinker’s Marketing Technology Landscape, which is his attempt to model one little part of the market, like just the solutions to solve marketing problems, and if you look at the way that thing has evolved overtime. Like the first time he did one, or at least the earliest time I’ve seen it was 2012 and there’s 350 companies on that, which sounds like a lot of companies.
But if you look at 2018, there are 7,000 companies on that thing. 7,000! That’s how terrible this is. This is just this little corner of marketing technology, never mind stuff for manufacturers or stuff for salespeople or stuff for you know accountants and lawyers. So our markets are super super super crowded.
So our job as marketers, or job number one is we need to have customers understand what our solutions does and why they should care, and we have only seconds to do that in and ocean of alternatives.
This question of how are we different and why anyone should care is super important. Positioning is the fundamental underpinning of that. So strong positioning helps make why you’re special, or your awesomeness obvious to the customers that are most likely to buy from you.
If you think about lead generation, positioning is the inputs into that, right? Who are we trying to go after? What is the value proposition? What actually makes us special? Why do you want to buy? And so we spend a lot of time on lead generation and pushing people through the pipeline, but the input of that is the smart definition who are we, why should anyone care, and what market do we actually intend to win.
And so we don’t spend nearly enough time, in my opinion, on the inputs to that stuff, which is the fundamental underpinning. And again, I blame this on things like the positioning statement, where it’s like, we just know that. Right? Obviously our competitors are this. Obviously we’re in this market.
In my experience, almost every company I’ve worked for and all the products I’ve launched in my career, we’ve mucked around with that stuff. And a shift in that stuff is actually what allowed us to unlock a whole bunch of growth. But without thinking about that fundamental stuff, we would never have found that.
Edward: I totally agree with you there. And following from that, is your positioning then driven by the situation in the market or by the needs of your customer? Or is it more complex than that? Are there a combination of factors at play that influence how you should position your company?
April: Yeah, there’s a whole bunch of things and they’re all kind of interrelated, which is part of what makes positioning actually kind of complicated to do. So even though it’s kind of a simple concept to get your head around to, doing it is pretty hard.
The way I like to think about it is you have a product out in the market, right? And you’ve got customers that love that product. You probably have a bunch of customers that are like, “Yeah, it’s okay.” But you’ve got your superfan customers that love you.
If you think about your product, you probably have a long long list of capabilities, but only a few of those capabilities are really differentiating. And if you think about those customers that love love love you and ask them “Why do you love us?”, They won’t talk about a thousand things, they’ll talk about two or three things. And figuring out the patterns in what those two or things our best customers love us for and why do they love that and what the value is for them is one piece of the puzzle.
The other piece of the puzzle is, what is it about these weirdo customers that makes them love that so much. And getting underneath your segmentation, thinking beyond what I would call firmographics like how big the company is and how much revenue they’ve got, and what geography they’re in, more getting at what is the situation going on in that company that makes them feel this pain more intensely and therefore our solution is desperately needed.
And that’s usually, like it could be a combination of anything. The way they go to market, it could be their particular way they do business, it could be the infrastructure they already have in place for other software that they use that makes them different.
Most companies don’t really get under that. When you ask them who they sell to they’ll say something like, “Oh, small and medium business”. But when you poke at that, it’s not true.
This happens to me with startups all the time. And then I’ll say, “Okay, like convenience stores?” And then they’ll look at me like I’m crazy and say, “No, not convenience stores.” And then I say, “How about car dealerships?” And they go, “What, no. Not car dealerships.” And the more you ask them what they actually mean, you’ll finally get that they meant other software startups. And you’re like, okay, well that’s really different than small and medium business.
Most of the time people have it in their heads but it’s just not coming out of their mouths. And their marketing team doesn’t know. So the marketing team is doing this very generic, watered down programs for any old small and medium sized businesses, including car dealerships and convenience stores but that’s not their segmentation at all.
So what you’re trying to do is to figure out this connection, right? You’ve got something special, not everyone loves it but some people do. Why? And how do we make our specialness obvious to these folks that are most likely to buy. That’s the nut of it. And so in order to do that, you have to define all five pieces of positioning. It’s super difficult.
Edward: Yeah, definitely. And in terms of SaaS, should they be feature and functionality driven, or benefit and value driven?
April: Well it’s always going to be benefits and values. The only time when we can get away with features and functionalities is when the customers know enough about the feature or function that they do the translation from feature to value in their heads.
We mess this up in tech a lot because we actually are used to doing a lot of that, we just don’t realize that we’re doing it. So for example, if you go to buy a cellphone, they’ll tell you how many megapixels are on the camera and that is like a feature, right? But we do the translation to benefit in our minds because we’ve been taught that more megapixels is better — more megapixels means a sharper picture, I can zoom in and it still looks good. But we do that translation in our heads.
Most of the time your customers are not so educated that if you say, “Hey, we have way more storage capacity” or something like that, the customer will just be like, “So what?” And you have to tell them what that so what is about. Most of the time they don’t actually care about how you do it, unless again they’re quite sophisticated and they know quite a lot about it.
Most of the time they just want to know what can you do for me, how does this solve my problem. Give me the benefit, I don’t really care how you do it. It could be, you know, blockchain back there, it could be sparkle unicorn magic, I don’t care, as long as you get it done, dude. [laughs]
But we forget about that because in a lot of technology that we buy, we’re sophisticated buyers and we do that translation on our own. But with most of the software, people don’t care how it’s done, and if we try to tell them that, they don’t know anything.
Edward: Yeah, exactly. So how then do you go about positioning? So if our listeners are planning on doing it, what steps can they take tomorrow morning or even now to make sure that their product is positioned right? Can you walk us through some steps or a framework that they can use to figure it out?
April: Yeah, so this has been the thing that I’ve been focused on for the last couple of years. I’ve been really obsessed with the idea that here we have this thing that’s so fundamental to business, it’s so important for all your marketing and sales efforts. It’s an old concept, we know that it’s been around since before the internet. And yet, there doesn’t seem to be an agreed upon methodology to actually do it, which blows my mind.
So when I started out my career in marketing, I kept looking for this thing and it wasn’t there. And then I went up to senior marketers and said, “You must be doing positioning, how do you do it?” And every senior marketer, there was commonality in how they were doing it but then they all kind of made it up as they went along. It was sort of the thing that made you a senior marketer was knowing how to do this. Which is kind of stupid.
So you think, okay, there must be a way to actually break this down into pieces. So I have what I think is a methodology that works. And I’ve used it on all the product launches that I was doing and then more recently as a consultant I do this workshop now with customers, generally startups and you can get it done in a couple of days and I’ve done it dozens of times now, so I feel like it works.
At a super high level these are the five steps. Again, your starting point should be, “Okay, I’ve got a product in market and a bunch of customers that really love it.” If you don’t have that yet, then you’re not ready to do positioning because your product-market fit still isn’t there and I can’t position a product that’s still in flux, and you’re figuring it out. And so we can have a different conversation about what you can do if your product hasn’t launched yet. But that’s different.
Assuming you’ve got a product in market and people love it, the starting point is figuring out what your true competitive alternatives are. In order to figure out what makes you special, you need to understand the comparison your customers are actually making.
Now in startups we often get this wrong in that we’re super focused on the market in that we’re raising money and we look at all the other little startups and say, “Oh, we’re just like those guys, except a little bit different. Our solution is much like these.” But in the minds of the customers, they probably don’t know any of those little startups, so the comparison they’re making would very likely be, you know, using your solution versus using Excel, or using Google Docs, or hiring an intern.
Or if you’re in an emerging market, chances are your customers don’t really even know they have a problem. So the alternative is to do nothing and to keep doing what they’re doing now. And so the first thing to understand is what does the customer compare you to.
Once you have that, the next step is to say, “Okay, we have a whole bunch of capabilities. Which of those capabilities are uniquely different from the things that I’m being compared to.” And I get a lot of startups that will come and say, “We’re super easy to use.” But you know, what’s really easy to use? Excel. Having an intern is really super easy. Telling the intern to go do it is really good usability. So you do the actual comparison and think about what are our unique capabilities.
In the workshops that I do this is usually a very long list, a whole bunch of things that you’ve got. They’re kind of like features. And we usually start there because tech people love talking about features. So it’s pretty easy to start with a great big long list of features, these are the things that Excel doesn’t have, these are the things that your intern can’t do.
The next step is to say, “These features enable value for the customer”. So why do I care about megapixels? Why do I care about how big the data storage is? So I take all these things and then I have to translate them into value. And generally what happens at that stage is that the value tends to cluster into a handful of themes. Usually two or three themes. So you know one might be, this allows you to get paid on time, or this allows you to save money while you’re doing something. Whatever your software does.
What you’ll end up doing is this mapping and you’ll be saying, “This feature enables this value, so does this one, so does this one. There’s this other value here.” And what you end up with is these three buckets of value and that’s kind of what you do. It’s the value that you bring to customers that is different and unique.
So once you get to that stage you can say, “Okay, this is the value.” And if you think about customers that are in your target market, not everybody cares about that value. Say that your value is that we can get your invoices get paid faster. Someone can say, we don’t have that many invoices and we don’t have a problem with them getting paid late, so we don’t actually care that your product can get my invoices paid faster.
If you look at the customers, you have to be able to say, “If my value is this, what is it about this customer that makes them care a lot about that value.” If the value is that my invoices are going to get paid faster, maybe I only care about that if I process more than a certain number of invoices every month.
I worked at a company where part of what they were doing was that they could get employees paid faster but it was the same thing. They didn’t have a lot of contract employees, why would you care? You don’t. And then you start saying, “Well, what kinds of companies have a lot of contract employees?” And then you can start doing segmentation around that.
So that’s kind of the fourth piece. Okay, so now I know what makes me different, now I know what my value is, and now I have this idea that these are the people that care a lot about that value.
Now I need to take a big step back and say, “Well, if I’m all about getting people paid faster or getting invoices done faster or whatever it is your value is, and I want to communicate it to these people, then what am I?”
Let’s say you did that exercise and you’re a CRM tool and you have this special feature, and when it comes to who cares, the only people who care about that are bankers. Then am I in the CRM business or am I actually just a CRM for bankers? And those two things are different. If I say I’m a CRM, I’m competing with Salesforce. If I say I’m a CRM for bankers then I’m probably going to have an easier time getting a discussion with a banker. I’m probably not going to bump into Salesforce that much, because what do they do that’s special to banking? Nothing.
But I’ve also kind of said, “Hey, I’m not really interested in customers outside of banking.” And so sometimes there’s some hard decisions to be made there. But you’ve got to figure out what is the market we’re in that we intend to win.
So I would only say I’m in the CRM business if I intend to beat Salesforce. Do I really think I’m going to beat Salesforce? And if not, I’d better be more specific than CRM. You’re a CRM for small business or CRM for banking, and that’s the definition that you need.
So that’s kind of a flow. You start with alternatives, you get the differentiator, you get the value, you figure out your segmentation, and then you say, “Well, if this is my segmentation, I’m trying to convey this value to these people, how do I set context around my offering that makes that obvious?”
Edward: Yeah, exactly — this is perfect. And I think the CRM example is super good because we’ve discussed that your positioning is highly dependent on the market you’re operating in and I guess that those could be expanding markets or established markets. So, let’s say you’re operating in an established and noisy market like CRM, how can you use positioning to stand out within crowded and consolidated markets?
April: Right, so every startup has this problem. So if you look at the market, there’s kind of three ways to positioning in the market. So one is, let’s say the market is established and there’s an established leader in that market. CRM is a great example. You have a few choices.
You can either say, “I’m going to take on the leader head to head.” And so if you were to say that I’m in the CRM market, you’re essentially declaring war on Salesforce. You’re saying, “That’s it. We’re better than them, we’re going to beat these guys, we’ve got this.” That’s insane. Right? That’s like saying I’m going into the cola market and I’m taking on Coke.
And if you’re like a little startup, it’s just not realistic and it’s not credible. There are cases where there’s a stepwise weird change in technology that might take a an established leader and give them a weakness all of a sudden. Sometimes you’ll have things in the regulatory environment that all of sudden there’s some compliance stuff and the leader has a weakness there that you might be able to tackle. But it’s pretty rare that you can move onto an existing market and take the leader head on. Like even when I worked at IBM, we wouldn’t do that. And we’re IBM, you know? Even they don’t do that because it’s really really hard.
So as I said, generally if you’re a startup, a better way to take that on is to say, “You know what, Salesforce is awesome, we love those guys, because they’re amazing. But they’re not amazing for everybody.”
And in fact, if you talk to Salesforce customers, there are a lot of Salesforce customers that aren’t that happy. And why are they not happy? It’s because they’ve got weird problems. Some of them say, “You know what, our sales process is a bit different and weird and we do that...”
So, you’re a startup and you’re trying to crack CRM, the first thing you’ve got to do is look for is a sub-segment that is not well-served by the leader. So you’re basically going to sub-segment the market and say, “You know what. I’m a cola, I’m coming into the cola market, I can’t take on Coke, but that’s okay because I’m Coke for dogs.”
And what’s cool about that is that what I’m saying is that there’s a sub-segment of that market that has special needs, and those special needs are not met by the market leader. But I get all the benefit of declaring that I’m in that market because I don’t have to explain to you what CRM is. Everybody knows what it is. So it’s pretty easy for you to understand what I am, if I say that I’m Coke for dogs. You’re like, “I get it. It’s probably brown, it’s probably fizzy and maybe it tastes like bones or something.”
You get all the benefit, though, because everyone understands what you do but then you’re saying, “Okay, I’m not for everyone, I’m just for this little thing.” Now people are scared of that because they think that their addressable market seems kind of small if they’re just going after investment banks.
I’m using that as an example because ran marketing at a company that did CRM for investment banks. When we first decided to make that shift and shift away from doing CRM for everybody to doing CRM for banks it was a terrifying decision to make. Our board wasn’t happy. The CEO was quite nervous about it because it looked like, “Oh my gosh, we’re only going to sell to investment banks. That’s not a very big market. Can we actually make our number doing that?”
And so you have to make sure that the addressable market in there is big enough to sustain the business. In our case, it seemed like a small market in terms of the number of investment banks, but we could put a price premium on what we were selling. So we jacked the price up and so each individual deal was actually quite big.
And so our strategy was that we would establish ourselves in investment banking, and then we would branch out from there. So once we had investment banking, we would branch out into insurance and retail and things that were adjacent. And eventually we would be able to take on the leader.
So those are kind of the two things, so if you’re in an established market, you can sub-segment it out. Sometimes what you’ve got, though, is an established market that doesn’t have a clear market leader. So this is what you get in a lot of niche, emerging markets.
So let’s say you’re doing some super high-tech stuff around blockchain or augmented reality or there’s a bunch of markets there where we kind of understand the market but it isn’t clear who the leader is. Those cases you might want to take a run at being the leader. And so again, you get the benefit of the fact that the market’s kind of established and you can say that, “You know, we’re AI for whatever.” Or “We’re augmented reality for manufacturing plants,” and you’ll get the benefit of people saying, I kind of get what that market is. And what you’re doing is taking a run at being the best in that market.
It’s harder to do than going into an existing market and saying you’re going to win a sub-segment of it, because not everybody’s definition of the market is the same. You’re going to have to a lot of education there. And if the market is already established, by definition it means that it’s super competitive.
So you’ll have a thousand competitors there, all vying to be the leader in that market. So you’ll need time and investment to move as quickly as you can to establish yourself. And you’ll have to do that in an environment that’s very competitive, as opposed to a sub-segment of an already established market, you’re generally not in as competitive a situation there.
The third thing that you get in startups, in particular, is my tech is so niche so out there and crazy and no existing market can hold this all, and I’m actually going to have to invent a new market to put it in. And you hear a lot of talk about this in startups, where people will talk about creating a category, and sometimes when people talk about that, they’re not actually creating a new category at all. Like the market category already exists and what they’re doing is fighting to be the leader in that category. People talk about it like it’s an easy thing or worse than that, they talk about it like you’re not a good startup if you’re not doing that, which is crazy.
So the CRM for investment bankers, we sold for 1.7 billion dollars and people told us, “That market’s too small, you’ll never grow.” It’s like, “Yeah, no. That actually wasn’t a problem at all.” But people will say that the only way to grow or to get a big exit is by creating a market category.
The reality of creating a market category is that it’s very difficult. The reason why it’s difficult is that if no existing category can contain you, by definition that mean that customers don’t know they have that problem. Because if they knew they had the problem, they would be looking for a solution, and there would be a solution category out there for them.
So if nobody’s looking for a solution for this thing, it means they don’t know they have the problem. So your first job as a company is to teach people that they have a problem. So at the beginning, you’re not even marketing the solution, you’re marketing the problem. You’re literally in the problem marketing business. And you say, “Hey you don’t know this, but the way you do X is broken and let me teach you why.”
You might stay at that stage where you’re just teaching people why they have the problem for years until you’ve actually established the category and everyone is like, “Yeah, we get it. We all know we have the problem now and we’ve got to fix it.” So fist, you’ve got to market the problem and then the minute that people understand they have the problem, then you’re in this other style, where the category exists but there isn’t necessarily a market leader there and all of a sudden every little startup in silicon valley is piling into this market, trying to beat you.
So you’ve done all the work establishing the category, but now you have to make sure that everyone understands that you’re the leader. And sometimes what happens is that the company who has established the category gets completely wiped out by a fast follower that just zooms in on the last minute, does it better than them, takes advantage of all their work to create the category, and then just comes in and just like slays the category.
That said, if you’re the person that creates the category, and you do it smartly, it should be difficult for someone else to come in and dominate it because you should be thinking about why is it that I’m the only solution that can really take on this category? What is it that we’ve got that’s patented or special that can’t be copied? If you do that well, it will be hard for other people to come in. But it’s also really difficult to do this category creation. And you’ve got to make sure that you’ve got patient investors and a lot of runway to do that.
So those are the three things.
Edward: This is super good. And I think that the final situation sounded very familiar to what Malcolm Gladwell was talking about in his book. Being the first is not necessarily always the best thing. So could you say then that if you’re operating in a new market, focus on the problem, and if you’re operating in an crowded, consolidated, existing market, then focus on a segment and your key differentiators?
April: Yeah, that’s kind of it. You need to assess how much of your target segment understand that they have the problem. So if they don’t understand that they have the problem, then you gotta fix that first.
If they do understand they have a problem, then great. You can sell them the solution, right? Then your job is to say, “Okay, you know you have the problem, here’s the solution.” Now I’m marketing my stuff and you should pick my solution for these reasons.
So that’s kind of the way it works. Either people get they have the problem, or they don’t. If you have a choice, it’s generally way way easier to sell to people who already know they have the problem. Like given the choice. And that’s the way most markets work. But again, if you want to do this category creation thing, it’s not impossible, you can do it.
Edward: So, who owns positioning? Which team or group of people are typically responsible for positioning in a SaaS company or does in encompass the whole organization?
April: Oh this is a great question and I get asked this a lot. I’ll tell you. So as the head of marketing when I look back at my career and I was kind of like a repeat VP of marketing at a series of like 7 or so companies. And I ended up driving or spearheading the work of shifting the positioning but the only reason why I ended up doing that was that I was in the frontline of feeling the pain of our weak positioning.
So if I look at who’s responsible for setting the positioning, that is a really executive team decision. Because generally a shift in positioning is actually a shift in business strategy. So if I look back at like my example of that CRM company, where we shifted from CRM for enterprises to CRM for investment bankers like marketing isn’t going to make that decision without the whole executive team and the board saying, “Yeah, we’re okay with this.”
It may be marketing that sees the problem and puts their hand up to say, “You know, I think our positioning sucks.” And the reason marketing sees the problem is that you see it as a weakness in the marketing efforts. In my case, I was out there trying to market against a gorilla who’s super well established and basically owns that market and I can’t drive any leads. So I’m trying to promote us and be like, “Hey, we’re better enterprise CRM than the other guys, and it’s kind of not true.” And I’m struggling to come up with differentiators that matter to use in my campaign to try to draw people in.
So then I go back and as the marketing person I start thinking, who really cares? Maybe I need to go fishing in another pond. In our case, what that boiled down to was, you know what, nobody actually cares about our cool differentiators except for the investment banker. And so it was me coming back and saying, “Maybe we need to just fish here.”
But I can put up my hand and say, “I think it’s weak” but the whole team needs to be onboard to shift it. But often, it’s the head of marketing that ends up spearheading that shift because they feel it the most intensely. And sometimes it’s the head of sales that goes, “We need to shift the way we pitch this stuff or we need to shift who we’re selling it to.” But my experience is that it’s usually the VP of Marketing.
In the work I do now as a consultant, I generally get brought in by the founders if it’s a startup. But I dig at what made them decide that they had a positioning problem and what made them contact me in the first place. And that’s usually the head of marketing putting up their hand and saying, “You know what, everything we’re doing here stinks and it’s not because I’m a lousy marketer but it’s because we don’t actually have a super clear definition on why we’re better and who we’re better for.”
And what I do as a consultant, it’s interesting because when I was a VP we did this internally on our own but sometimes it’s super helpful to get an outside person to facilitate that conversation because you’re going to have some fights about it. It’s a big change to switch from one market to another market.
Or you know, we were saying that this was our key differentiator but it’s actually this. People are going to have strong opinions about that and it’s often hard to have that discussion at the executive team level if you know some of the people are brand new and don’t have the political clout and some of the people are the founding team.
It’s an interesting process, but again, I don’t think that marketing can own that. It has to be an executive team decision.
Edward: Since you’ve launched 16 products to market, can you share some real-life stories of positioning, the challenges you faced and how you solved them?
April: Yeah, that’s my number. And that’s interesting because I went back and added them up, like how many products have I launched if I look across seven startups and then of those seven startups six got acquired and in almost every case I went to work for the big company that acquired us and we launched while I was there. And some of those were big established products, and some of them were brand new products and brand new markets.
But what’s interesting is the commonality across all of it was that we did a repositioning at some point because we decided that our positioning was weak and so it’s interesting when you look back at it and the starting point was always the same. We’d be having an internal conversation about who should we target, who should we go after, is that really who we should after. Or we’d be having a conversation about what the heck is this thing anyway.
I’ll give you an example that I use a lot. It was a company early in my career and I got hired as the VP of marketing and the founders of this thing were these PhD’s in database science and this stuff was super sophisticated and they had a bunch of patents on it, and what they invented was a new database. And what this database could do on a mountain of data was that they could do an analytic query on that data super super fast.
So they had built that originally for a big bank here in Canada that had terabytes of data and there was this query that was so big that they had to run it overnight and they invented this database that could do the query in like 2 minutes. And so it was like magic. So they found the company around it and they were going to sell this database.
When I came, they had a handful of customers but they were having a really hard time doing lead generation. And what I realized when I came onboard was that we built this thing that was a database and it’s clearly differentiated, it had this clear value proposition to customers, and yet no one seemed to care. So we would market this stuff, but we would get no leads. It was terrible.
I couldn’t figure it out. And I came from databases and I got it, so I was like, I don’t understand why people aren’t getting it. It’s crazy. So what ended up happening was that I would go out on a bunch of sales calls with my VP Sales to see what was happening in the sales calls and this light came on and it was terrible.
We spent a week on the road doing face to face sales meetings and every single sales meeting was the same. We’d come in and the Head of IT or the Head of Databases would come in and there’d probably be a room full of Database Administrators and we’d get up there and be like, “Hey, we’ve got this fantastic new database.”
And the minute you said the word “database”, everybody in that room would be like, “Oh god.” You could see that they’d be picking up their phone, they’re facebooking, and we've lost them. And then my VP of Sales would be like, “No, no, no. You don’t understand, we’re a special database. We’re very special. We’ve got PhD’s and patents all the P things.”
And finally what would happen is that we’d get to like slide 3, and senior person in the room would get up and say, “Yeah, it’s great. We like that. But you know what we don’t need? We don’t need a database. We’ve got Oracle. We’re an Oracle shop. Everyone’s trained on Oracle and we all do Oracle. And yeah, I get that you can use this data query thing and that’s okay but we use our database for all kinds of things, and we’re not switching off Oracle, and we’re not adding another platform. Get the hell out.”
And they’d kick us out. And we never got to the demo stage, we didn’t even get halfway through the deck. And so it was clear that we had a problem with categorization. Because when we said “database” everyone was like, “I don’t want that.” And we didn’t get a chance to actually pitch why we were cool.
And so in that case, we actually got lucky in that we did a pitch for a guy who was like a friend of the CEO and he agreed to give us an hour, he was a nice guy. And we went in and did the whole pitch, because he was being polite and when he got to the end, he was like, “Oh my god, I love it. It’s so fantastic, I love what you’re doing.”
And we’re like, “Wow. Why does this guy love it and everyone else walks out after slide 3.” And he said, “You know what, at the beginning I didn’t know what you guys were. I couldn’t figure it out, but then halfway through I realized that you’re not a database at all.” And we’re like, “What the hell, how can we not be a database. We’re built by database guys. It can’t be anything else.”
And the guy is like, “You don’t get it. Databases do all kinds of things. Analytics is just one little piece of that. So if I’m looking for a solution to analytics, I don’t buy a database, I buy a business intelligence tool. Maybe I buy a data warehouse. You’re that. You’re not a database.”
And it had never occurred to us. Like going back to my rant about the positioning statement. Like if I did a positioning statement, I would say, “We’re a database that works really fast or whatever...” But in the minds of the customer that’s not what we were. Saying we were a database was like saying we’re going into the database market and we’re going to beat Oracle, which clearly we’re not going to do.
And we never stepped back and said, “You know, we can’t take on the whole database market. We can take on a piece of it. And so when you’re that piece, what is that piece? Or maybe you’re not in the database market at all. Maybe we’re a business intelligence tool, maybe we’re a data warehouse.” And again, these things are super fundamental to the business.
So we went back and had this big fight as the executive team and ended up doing a shift to saying that we were a data warehouse, which at that point was an emerging market. The market existed but there was no clear leader. So we had an opportunity to come in there and be the leader of that market.
And that shift changed everything, right? I never got compared to Oracle again, I never had people get up and walk out. People knew what a data warehouse was, no one had one. They kind of had a thought that maybe could have one. I could go to the exact same customers, pitch them the exact same product and say, “Hey, what we have is this really fancy data warehouse.” And everyone would go, “Mmhm. Tell me more.”
And so creating the context around it so that people understand and my value is right in the middle of that market, as opposed to being something that accelerated the market it’s super important.
Like I could tell a story about every single product that I’ve launched. Like we’d launch it, get it out there, and be like, “You know, something’s wrong here. I don’t know what it is, but it’s just not working.” And the smarter we got about our customers, and what was different about us, and what customers looked at us, and how could we really set context around that thing, we started saying, “Ahh, we’re not actually in this market, we’re in an another market.” And every single product we had that at some point.
Edward: Yeah, that’s amazing. And April, you’re also writing a book called Obviously Awesome. Can you tell us a bit about the book?
April: Yeah, so I decided to write the book because I got super obsessed over this idea of how do you actually do positioning. And then my mind is all blown because there isn’t an accepted methodology to do positioning so I decide I’m going to fix that. So then I get my own methodology and I go there and now I’m quite confident I can fix it. If you’ve got a positioning problem, I know how to solve it.
But not everybody has access to me. Like I’m just a person. I’m a consultant, I don’t have a company of consultants, I’m just me. So if I don’t have time or you can’t afford me, then what I want to do is to point you at something that teaches you how to do it so you can do it yourself. And so that’s what the idea of the book is. So after you read Reis & Trout, I’m the book you’re going to buy and say, “Yeah. This is how I’m actually going to do it.”
Writing the book has been torture. It has been terrible. Never did I think this would be so awful in a million years. I will never write a book again in my life. Well actually, maybe I will, now that I know how bad it is and I’ll do it differently.
But so I’m in the middle of edits for this thing right now and the editing process is super painful because I have this super clear vision of what this thing should be and what it should say, but I’m an engineer and I actually write like crap. And so I have this editor and her and I are having this verbal wrestling match where I feel like she’s taking all the meaning out of my work, and she feels like my work is indecipherable. [Laughs]
And so we’re doing this thing. So I hope that the book that comes out of this is both meaningful and decipherable when it comes out. But right now the goal is to have it out by around March-April. Hopefully the date doesn’t slip. But I’ve been working on this thing for ages, I’ll be so happy when it’s out. It’s like my gift to the universe. That’s it. Don’t call me, just read this book. Go on. Do this thing. If you need a little outside moderation, I’ll be here.