Positioning is one of the most important concepts for startups to understand. It is the process of defining your company’s unique value proposition and identifying the target audience for your product or service. Proper positioning can make or break a startup. A clear and effective position in the market can help you stand out from the competition, attract investors and customers, and build a successful business.
In this blog post, we will discuss the basics of positioning for startups, including how to define your target audience, understand your competition, and develop a unique value proposition. We will also cover some common mistakes to avoid and provide some real-world examples to illustrate key points.
Understanding Your Target Audience
Before you can position your startup in the market, you need to understand your target audience. Who are your ideal customers? What are their needs and pain points? What motivates them to buy? Conducting market research and creating customer personas can help you answer these questions.
Market research involves gathering information about your target audience, including demographic data, buying habits, and preferences. This information can help you develop a more accurate picture of your ideal customer and tailor your messaging to better reach them.
Creating customer personas is another useful exercise. A customer persona is a fictional representation of your ideal customer. It should include demographic information such as age, gender, and location, as well as psychographic information such as values, beliefs, and interests. Customer personas can help you develop a deeper understanding of your target audience and create messaging that resonates with them.
Understanding Your Competition
In addition to understanding your target audience, you also need to understand your competition. Who else is offering a similar product or service? What are their strengths and weaknesses? How can you differentiate your offering from theirs?
Conducting a competitive analysis can help you answer these questions. A competitive analysis involves gathering information about your competitors, including their products or services, pricing, marketing strategies, and target audience. This information can help you identify gaps in the market and areas where you can differentiate your offering.
Developing a Unique Value Proposition
Once you understand your target audience and competition, you can begin to develop a unique value proposition for your startup. A value proposition is a clear statement of the unique benefits that your product or service offers to your target audience.
Your value proposition should be clear, concise, and focused on the benefits to the customer. It should also be differentiated from your competition. Some examples of effective value propositions include:
- Dropbox: “Simplify your life. Work smarter, not harder.”
- Apple: “Think different.”
- Airbnb: “Belong anywhere.”
Your value proposition should be woven throughout all of your messaging, from your website copy to your social media posts to your advertising. It should clearly communicate the benefits of your product or service and why it is the best choice for your target audience.
Common Positioning Mistakes to Avoid
While positioning can be a powerful tool for startups, there are also some common mistakes to avoid. Here are a few to keep in mind:
- Focusing too much on features: While it’s important to communicate the features of your product or service, your messaging should focus on the benefits to the customer. What problem does your product or service solve? How does it make your customer’s life easier or better?
- Trying to be everything to everyone: It’s tempting to want to appeal to a wide audience, but this can dilute your messaging and make it less effective. Instead, focus on a specific niche or target audience and tailor your messaging to them.
- Copying your competition: While it’s important to understand your competition, you don’t want to simply copy what they’re doing. Instead, focus on what makes your offering unique and how you can differentiate yourself from
them. Your value proposition should communicate your unique offering and why it’s better than what your competition is offering.
- Using jargon or technical language: While it’s important to communicate the features of your product or service, using technical language or jargon can alienate your target audience. Instead, focus on communicating the benefits of your offering in simple, easy-to-understand language.
- Ignoring the emotional side of buying: While it’s important to communicate the rational benefits of your product or service, you also need to appeal to the emotional side of buying. What emotional need does your product or service fulfill? How does it make your customer feel?
Real-World Examples
To illustrate the concepts we’ve discussed, let’s look at a few real-world examples of effective positioning by startups.
- Slack
Slack is a collaboration tool that allows teams to communicate and share information in real-time. Their value proposition is “Where work happens,” which clearly communicates the benefits of their product: it’s the place where all the important work communication takes place.
Slack has also done an excellent job of understanding their target audience. They focus on businesses and teams that need to collaborate and communicate efficiently, and they have tailored their messaging to appeal to this audience.
- Dollar Shave Club
Dollar Shave Club is a subscription service that delivers razors and other grooming products to your doorstep. Their value proposition is “Shave time. Shave money,” which clearly communicates the benefits of their service: it saves you time and money.
Dollar Shave Club has also done an excellent job of differentiating themselves from their competition. They have positioned themselves as a more affordable alternative to traditional razor brands, and they have used humor and irreverence in their marketing to stand out.
- Warby Parker
Warby Parker is a direct-to-consumer eyewear company. Their value proposition is “Designer eyewear at a revolutionary price,” which communicates the benefits of their product: it’s affordable and stylish.
Warby Parker has also done an excellent job of understanding their target audience. They focus on millennials who want stylish, affordable eyewear, and they have tailored their messaging to appeal to this audience. They have also differentiated themselves from traditional eyewear brands by offering a home try-on program and a socially responsible business model.
Positioning Strategies for Startups
There are several positioning strategies that startups can use to stand out in the market. Here are a few examples:
1. Niche Positioning: Niche positioning involves focusing on a specific niche or target audience. By narrowing your focus, you can tailor your messaging to better appeal to that audience and differentiate yourself from the competition. For example, a startup that offers organic, plant-based baby food could focus on new parents who are concerned about their baby’s health and want to give them the best possible start in life.
2. Value Positioning: Value positioning involves offering a product or service at a lower price point than your competition. This can be an effective strategy for startups that are looking to disrupt an established market. For example, a startup that offers affordable, high-quality mattresses could position themselves as a more affordable alternative to traditional mattress brands.
3. Quality Positioning: Quality positioning involves positioning your product or service as high-quality and premium. This can be an effective strategy for startups that are looking to differentiate themselves from low-cost, low-quality competitors. For example, a startup that offers high-end, artisanal chocolates could position themselves as a premium alternative to mass-market chocolate brands.
4. Benefit Positioning: Benefit positioning involves positioning your product or service based on the benefits it provides to your target audience. For example, a startup that offers an app for mindfulness and meditation could position themselves based on the mental health benefits their app provides. This strategy can be especially effective for startups that are in the health and wellness space.
Tips for Effective Positioning
Here are a few tips to keep in mind when developing your positioning strategy:
1. Focus on your target audience: Your positioning should be based on your understanding of your target audience. Make sure your messaging speaks directly to their needs, pain points, and desires.
2. Be clear and concise: Your positioning should be clear and easy to understand. Avoid using jargon or technical language that might confuse your audience.
3. Differentiate yourself from the competition: Your positioning should differentiate your product or service from your competition. Identify what makes you unique and highlight it in your messaging.
4. Use your brand voice: Your positioning should reflect your brand voice and tone. If your brand is fun and irreverent, your positioning should reflect that. If your brand is serious and professional, your positioning should reflect that.
5. Test and iterate: Your positioning should be an ongoing process. Test different messaging and see what resonates with your target audience. Iterate based on what you learn.
Examples of Poor Positioning
Here are a few examples of poor positioning by startups:
1. Juicero: Juicero was a startup that offered a high-tech juicing machine that squeezed pre-packaged juice packs. Their value proposition was “Farm-to-glass quality at the touch of a button.” However, their product was criticized for being expensive and unnecessary, and the company ultimately went out of business.
2. Quibi: Quibi was a short-form mobile video platform that raised over $1 billion in funding. Their value proposition was “Quick bites of captivating entertainment.” However, the platform failed to gain traction and shut down after only six months.
3. MoviePass: MoviePass was a subscription service that allowed users to see unlimited movies in theaters for a monthly fee. Their value proposition was “Go to the movies every day for a low monthly fee.” However, the company was criticized for poor customer service and ultimately filed for bankruptcy.
In each of these cases, the startups failed to understand their target audience and differentiate themselves from the competition. As a result, their positioning was ineffective and their businesses ultimately failed.
Positioning for Growth
Positioning is not just important for launching your startup, but also for growth. As your business grows and evolves, your positioning may need to change as well. Here are a few tips for positioning for growth:
1. Revisit your target audience: As your business grows, your target audience may change. Make sure you are still focused on the right audience and adjust your messaging accordingly.
2. Revisit your competition: As your business grows, your competition may change as well. Make sure you are still differentiating yourself from your competitors and highlighting what makes you unique.
3. Emphasize your track record: As your business grows, you will have a track record of success. Emphasize your successes in your messaging to build credibility with your audience.
4. Highlight your future plans: As your business grows, you will likely have plans for future growth and expansion. Highlight these plans in your messaging to show that you are a forward-thinking and ambitious company.
Putting It All Together
Effective positioning is critical for the success of any startup. By understanding your target audience, your competition, and your unique value proposition, you can develop a clear and effective position in the market. By avoiding common positioning mistakes and learning from real-world examples, you can position your startup for success.
When putting together your positioning strategy, remember to focus on your target audience, be clear and concise, differentiate yourself from the competition, use your brand voice, and test and iterate. And as your business grows, revisit your positioning to make sure it is still effective and relevant.
By following these tips and strategies, you can position your startup for success and build a business that stands out in the market.