Yet Another (ex-)VC Blog

In my view, there are two types of product positioning and differentiation: Push and Pull.  Both have benefits and drawbacks.

Push

A Push positioning and differentiation strategy assumes that you understand the market and your customers well enough that you can come up with some positioning that sets you apart from the competition.  You have a vision and hypothesis about why you’re different and better, and you push that message to the masses, without extensive customer validation.

Pros: To develop this kind of positioning, all one has to do is look at the competition’s literature and come up with positioning that seems sufficiently different from the alternatives.  Potentially saves time because it can be done without speaking to customers.  Maybe a good first step in developing a go-to-market strategy.

Cons: The competition may have it all wrong and have no idea about what customers really want, so trying to work around the competition’s messaging may be pointless, since they all have it wrong anyways-and you probably do too since you haven’t spoken to any customers!

Pull

A Pull positioning and differentiation strategy implies that your customers tell you what features, functions, positioning, and messaging that they find most compelling.  You use these “pulled” items as the crux of your messaging and positioning versus a hypothesis about the messaging and positioning that will resonate with a customer.  This is how the Customer Development guys would argue that you should develop your messaging and positioning.

Pros: You’re using positioning and messaging that has been validated by numerous potential customers in your target market.  These are the reasons they see your solution as different…and who are you to argue with the people who have the money?

Cons:  Requires extensive customer interactions to identify the things that customers feel are the differentiated features of your product.  Easier said than done and may require several, iterative cycles of customer interaction.

What are your thoughts on Push vs. Pull?  Are there certain markets or types of products where one strategy is superior to the other?

Related articles by Zemanta

• Market positioning for startups – focus, focus, focus (beyondvc.com)
• Segmenting and Targeting Markets (slideshare.net)
• The Customer Development Manifesto: The Startup Death Spiral (part 3) (steveblank.com)

It has been a little over 6 months since I took the plunge and left L Capital Partners to join VMTurbo.  It has been a great move so far and a huge learning experience.  Unfortunately, this move hasn’t been helpful in maintaining a regular blogging schedule (See “Prioritize relentlessly” section below) so this post has been a long time coming.

I hope some of these personal experiences and observations are helpful to some of my VC friends who have always toyed with taking the plunge, as well as people who may be thinking about careers in VC or in VC backed startups.

And if you’ve played on both sides of the ball, or have thought it about it, chime in with your thoughts.

1) Prioritize relelentlessly. If I was 23, unmarried, with no kids, I could devote 80 hours a week to work.  In fact, that sounds like many weeks at my first startup.  However, I’m now 32, married, and have two kids. :)  Therefore I need to make every working hour as productive as possible-it is just not an option to work on the wrong things.   Fortunately, startups are about results and not “ass time,” so I can be creative with how and where I achieve them.  Another good reason to set 3 goals per day and per week, and devote yourself to crushing them, instead of having 10 TODOs and doing a mediocre job on all of them.  (Better get this blog post done and get back to work…)

2) Beware of spinning your wheels on way-too-early business development. So far I have not heard (or witnessed) any good reasons to put much effort into seeking partnerships right off the bat.  In the software biz, business development is all about taking your product and combining it with the products of other companies to develop a Whole Product.  When you are still doing Customer Discovery and Customer Validation (see Blank and 4 Steps to the Epiphany), you’re still trying to figure that stuff out and aren’t going to have much of an idea of where you can plugin with other companies to make that Whole Product.  An exception to this caveat would be opportunities to use APIs as business development, which in an ever more cloudy world would allow you to create a Whole Product without having to cut any deals.    However, for most behind-the-firewall enterprise software stuff, an APIs as BD strategy isn’t going to make much sense.  (BTW I have heard from friends doing mobile startups that BD is critical in the early stages…so your mileage may vary with this particular tip.)

3) Learn to love “The Ask“. In a startup, you’re constantly asking prospects to take the next step, asking for introductions, asking for feedback, asking for money, asking for references.  You’re constantly asking, when often it is not immediately clear to the receiver of “The Ask” what the benefit will be.  Nothing at a startup happens unless you make it happen-and making stuff happen usually requires an “ask”.  So get comfortable with it!

4) Business development skills and personal network are highly transferable between VC and startup...  Warm intros and getting people to take my calls/emails was a big part of my job as a VC, and its a big part of my job at VMTurbo.  If you’re looking for an escape hatch, moving from VC to business development at a startup is a pretty logical move, and one where your industry network will have the most impact.

5) …and those due diligence tools come in handy, too. Startups play in a world of imperfect information and compressed timeframes, as do their investors.  Being able to get a quick handle on markets, competition, and processes is very important when you’re trying to quickly determine the best route to market, or to pivot and investigate new processes or markets when the first set doesn’t pan out.

6)  Fail.  It’s OK-really. Given the uncertainty within and around early stage startups, there is a better than 50% likelihood that any decision you make on any given day will be wrong.  I’ve never been wrong so many times in such a short period of time :) Just means you need to fail faster.  Get your minimally viable product to the market as fast as possible, hear the feedback, iterate, lather, rinse, repeat.  This really hits home once you actually try it, because you find that erring on the side of releasing something what seems like “too early” is actually the best way to get feedback.  Customers engage most deeply when they can see and touch.  Slide decks and landing pages are nice and can certainly help gauge demand for a solution to a problem, but there ain’t nothin like the real thing.

Note, if you want to do “strategy” (which is a fine endeavor) and nothing else, you have just defined your career as one in large corporation or in a consulting firm. Stay out of startups. Tactics mean tenacious and relentless execution measured in years.

via SuperMac War Story 5: Strategy versus Relentless Tactical Execution — the Potrero Benchmarks « Steve Blank.