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The SaaS Podcast

5 Steps to Nailing Your SaaS Product Positioning – with April Dunford [252]

April Dunford

5 Steps to Nailing Your SaaS Product Positioning

April Dunford is the founder of Ambient Strategy and author of “Obviously Awesome: How to Nail Product Positioning, so Customers Get it, Buy it, Love it.”

How clear are you on where your SaaS product fits in the marketplace? When you tell potential customers about your product (whether that's on your website, or in-person) do they get it? Do they understand where your product fits?

And more importantly, are they clear about what makes your SaaS product unique, and do they understand how it's better than the alternative solutions?

Positioning is what helps you get that clarity.

And it's not just about writing a positioning statement. Creating your positioning is a process that your company needs to go through to figure out the best way to explain where your SaaS product fits in the marketplace and why your potential customers should choose you.

In this episode, you're going to learn about the five components of effective positioning. We cover each of these in detail and identify critical questions that your company needs to answer. Once you understand these five components, you can pull them together to create the right positioning for your SaaS product – so your customers will also “get it, buy it and love it”.

Transcript

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[00:00:00] Omer Khan: Welcome to another episode of the SaaS podcast. I'm your host over a con. And this is a show where I interview proven founders and industry experts who share their stories, strategies, and insights to help you build, launch and grow your SaaS business. In this episode. I talked to April Dunford, founder of Ambient Strategy and author of Obviously Awesome: How to nail product positioning, so customers get it, buy it, and love it.

[00:00:31] So how clear are you on where your SaaS product fits in the marketplace? When you tell potential customers about your product, whether that's on your website or in person. Do they get it? Do they understand where your product fits and more importantly, are they clear about what makes your SaaS product unique?

[00:00:54] And do they understand how it's better than the alternative solutions. Positioning, is what helps you get that clarity? And it's not just about writing a positioning statement, creating your positioning is a process that your company needs to go through to figure out the best way, explain where your SaaS product fits in the marketplace and why your potential customers should choose you.

[00:01:21] In this episode, you're going to learn about the five components of effective positioning. We cover each of these in detail and identify critical questions that your company needs to answer. Once you understand these five components, you'll be able to pull them together to create the right positioning for your SaaS product.

[00:01:39] So your customers will also. Get it, buy it and love it. Before we get started, don't forget to grab a free copy of the SaaS toolkit, which will tell you about the 21 essential tools that every size business needs. Just go to theSaaSpodcast.com to sign up for that. Secondly, if you're a new or early-stage SaaS founder who needs help launching building or growing your SaaS business, then check out SaaS Club Plus, our online membership and community. Just one of the benefits of your membership is group coaching calls. Every two weeks, you get a chance to jump on a Zoom call with me and other SaaS founders. To discuss and solve problems together. So if that sounds interesting or something that you think might help you make better progress with your SaaS business, then join us by going to SaaSclubplus.com.

[00:02:27] Okay, let's go with the interview. April, welcome to the show.

[00:02:31] April Dunford: Hey, thanks so much for having me.

[00:02:33] Omer Khan: So do you have a favorite quote, something that inspires or motivates you or gets you out of bed every day?

[00:02:39] April Dunford: Well, I don't know if it gets me out of bed every day, but I have two quotes that I really love right now.

[00:02:44] And it probably is because I'm the positioning lady and I'm really into positioning. That's kind of my jam. And the two quotes I love the most about positioning. One is from Warren Buffet, everybody quotes Warren Buffett, but he's got this quote where he says, “How do you beat Bobby Fisher? You play him at any game, but chess”.

[00:03:04] And so I love that quote because it's about differentiation is about the idea that. You know, you might have competitors that are good at some things, but you're going to beat them at something else. The second quote that I really love is from Dolly Parton. I bet you Warren Buffett and Dolly Parton don't get quoted together very much, but my other one is from Dolly Parton? And she has a similar thing where she said her quote is, “Find out what you are and do it on purpose”. And this is very much my philosophy around positioning. You have places where your solution is winning in the market right now. If you can figure out who loves your stuff and why, then you can figure out how to double your business, triple your business, 10 times your business.

[00:03:48] Omer Khan: Yeah. Those are both great quotes. And isn't it great when people can just kind of sum up a concept or an idea in a few words and I'm like, Oh, why didn't I think of that? Okay. So I want to start by talking about like, just kind of help people who might not be familiar, kind of what exactly is positioning, how that's different to messaging or value prop.

[00:04:07] But before we do that, tell me a little bit about your background, because what I think is. Kind of really interesting about you is that even though you said, you know, you're sort of seen as the positioning lady and, you know, kind of spending all your time doing this marketing stuff, you actually have an engineering background, right?

[00:04:27] April Dunford: Yeah, I do. So, yeah, I didn't set out to be here. That's just kinda what happened. Yeah. So my background is this. I have a degree in systems, design engineering, and I, after finishing university, I wasn't really sure what I wanted to do. And I ended up getting a job at a startup and this was a long time ago.

[00:04:48] So back then we didn't even call them startups. It was just called a small business. Software startup and how I got the job was they wanted somebody who was technical because they were selling a very technical thing. It was a database to technical people. So they wanted someone that could kind of not be scared of technology.

[00:05:11] And specifically the role was in product marketing. So they needed someone who could do demos. So you had to know a little bit of structured query language. So you needed to know SQL, but you also needed to be able to do those demos in front of customers or at trade shows or at events. So they also needed somebody who wasn't afraid of public speaking.

[00:05:31] And so I have both those things. Plus I had my friend who worked at the company and she put the word in for me. And that's how I got the job. What happened after that was interesting. The company ended up getting acquired by a big software company in the Valley and fast forward a little bit, my boss left and I just happened to be standing in the right office at the right time.

[00:05:55] And they put me in charge of this big global marketing department, which is kind of hilarious because I literally couldn't spell marketing at the time. But one thing you do get an engineering school is a bit of a big ego. So I was a bit like, well, how hard could it be? You know, figure it out, which I did.

[00:06:13] But basically I had to embark on a bit of a self-study journey. So I read a lot of books. I took a lot of courses. My group did really well. The product we were working on was a raging success. Part of that was good timing in the market and not just marketing, but still, and after I finished that job and was ready to go to the next one, I just kind of was like, you know what?

[00:06:35] This is my jam. Now I'm the VP marketing. And so after I left there, I went to another startup, same thing, put together a team. We eventually, we got acquired. I landed at the big company for a couple of years. Then I left again and went to another startup, which also got acquired. And so in the end I ended up doing seven startups.

[00:06:54] I think six of them were acquired. So that's what I spent 25 years of my career doing. So eventually I decided I had hit the point in my career where maybe I need to go do something else. So I decided to switch to consulting. And I ended up focusing on positioning for a couple of reasons. One, because it felt like one of the hardest things I had to do as a VP marketing.

[00:07:19] And it was also, a thing that it seemed like nobody really knew how to do it. And yet I had done an awful lot of it in my career. I had repositioned 16 products while I was a vice president. So I thought I know how to do this. Maybe I could make a living out of teaching other people how to do it. And so here we are. And that's what I do now.

[00:07:40] Omer Khan: Awesome. Great. Yeah. I think it's a really interesting background and I think it resonates with me because I can see some similarities. Like I started my career. As a developer and you know, it was all about coding and eventually ended up spending 14 years at Microsoft, but most of that time was in product manager or we call program management over there.

[00:08:05] And then when I went off and did my own thing the last six years or so, most of that is as being around helping SaaS companies with marketing. And so even now for me mentally, that was kind of like a, still a big shift to make because I still for so long have sort of seen myself as. You know, the guy who likes to write code or is thinking about product design and stuff like that.

[00:08:28] But yeah, it's just interesting kind of where we land up, even though we don't necessarily have a plan for it.

[00:08:35] April Dunford: Yeah. What do we know when we're 20? Right. I don't think we know enough to have a good plan, I think. And I think what happens is you end up sort of gravitating towards the stuff that you like and you're good at eventually.

[00:08:49] Omer Khan: Yeah. Yeah, I agree. All right. So let's stop people. What is positioning? Like? What's the way that you help people to understand that?

[00:08:59] April Dunford: Yeah, so positioning's interesting, man. It's a really, really misunderstood concept, which is surprising because it is not a new concept. It's an old concept. It was invented by these guys, Ries and Trout.

[00:09:13] They wrote a book in 1982 called Positioning the Battle for your Mind. And they described positioning in this very succinct way in this book. And. Most people, if you go to marketing school, you're forced to read that book. When I first encountered positioning, I was this newly minted vice president of marketing.

[00:09:34] And I thought, man, I'd better learn something about marketing. And so I kept coming across this concept of positioning. So I ran the reason book and in there. They described positioning as essentially positioning defines how you are the best in the world at something that a well-defined set of customers cares a lot about.

[00:09:58] And that's a lot to unpack. It's kind of a complicated concept and what's super complicated as you read the book and the book does this great job of defining what positioning is. It just doesn't tell you how to do it. So there's me newly minted, VP marketing. I've actually got to reposition a product.

[00:10:17] And I'm like, I get to the end of this book and I'm like, Crap. This is content marketing, man. These guys just want me to hire them. And I was working with a company where we didn't hire outside people. I called them and they were really, really expensive. And so I thought, well, this is, this is kind of useless. I need to know how to do this.

[00:10:37] And the only people I could figure out know how to do it. Are these guys, they're, they're not sharing. So I kind of embark on this journey of trying to figure out what positioning was all about. And the first thing you see is that people often confuse it with things that you do with positioning once you've figured it out.

[00:10:58] So people will say, Oh, it's the same thing as messaging, isn't it? Or it's the same thing as a tagline or your vision, or some people will tell me, well, there's some positioning, just everything we do in marketing. And it's not all of those things actually flow from positioning, but positioning has to come first.

[00:11:19] Like if I'm going to go write messaging, the first question I'm going to ask you is who's the message for, and you know, in the message, if I'm writing about a product. I need to know what the value proposition for that product is, which means I need to know why that product is better than a competitor.

[00:11:36] So I need to know the competitors. I need to know the value. I need to know what the product's all about. I need to know the audience for this thing, which those are in essence, all components of positioning.

[00:11:49] Omer Khan: Yeah. So like, when I think about. Positioning, you know, having, having looked at your book and I also remember reading the Ries and Trout positioning book many years ago.

[00:12:01] April Dunford: Yeah.

[00:12:02] Omer Khan: For me, it's really about like, you know, how do you want customers to think about your product, right. That's kind of where we're going with this.

[00:12:10] April Dunford: Yeah.

[00:12:10] Omer Khan: Yeah. And then as you said, I think messaging comes from that because with messaging, you're actually saying, okay, we figured out the positioning, how are we going to then reinforce that in terms of talking to our customers?

[00:12:24] April Dunford: Right. Like, like you get this a lot, like people will talk about brand positioning. This is one of my big pet peeves, like brand positioning. It bugs me because there's positioning and there's branding. And those two things are completely separate. Your branding does not determine your positioning, your positioning determines what the brand is all about. You kind of got to know who's my target market for this thing, how are we different? What's our value prop? Who are we competing against? How are we special? I need to know these things first, before I can figure out how I'm going to embody that positioning in the branding.

[00:13:03] Omer Khan: So tell us the story about the access killer product that you were working on, because I think that's a really good example of helping people understand, like, what is positioning and what happens when you don't get it right. Or when you get it right. And how things are different.

[00:13:22] April Dunford: Yeah. So, you know, I had that, this is, this is going way, way back here. This is actually my first job. I'm a little junior marketer and I joined this company and we were famous for compilers. That was our thing. We were compiler people, but the problem with the compiler business was that we had had a good run, but Microsoft was getting into the business and they were going to kill us.

[00:13:45] So we had this decent revenue stream from our compiler business, but we were looking hard for other products we could build because we knew eventually Microsoft is going to kill us in compilers. So we had developed this database product and the way we thought about it in our heads was. It was back at the time, the relational databases were these big heavyweight things.

[00:14:09] If you wanted to install a relational database, you needed a big clunky server, to put it on. And it actually took an administrator to get the thing installed and up and running. And then you needed somebody smart to look after it. We built this thing that was like, we envisioned it as an alternative to a spreadsheet or, or Microsoft access back when people use that, except that use desk QL.

[00:14:36] So it was kind of like an SQL database, but you could run it on a PC and you did install it with two little clicks and we kind of saw it as desktop productivity software that's I always saw it. Like we were nerdy people and, and techies, and we were like, Oh, like doesn't everybody want a spreadsheet that does SQL?

[00:14:55] That sounds awesome. Does that? So we did. And you know, we had done a little customer discovery too, but like Uber are we talking to, we were talking to all the geeky people that were using our compiler. So we thought this thing was going to be a hit. And so we were selling it, it was on-prem and we sold it as, you know, single-user packaged software at Costco, like a hundred bucks.

[00:15:20] So we launched it, we put a big marketing campaign around it. It didn't really sell, like we sold a few hundred copies of the thing, but I mean, at a hundred bucks, we need to be selling thousands of it. And so it was clear we weren't really going to make the money we needed to make on this thing. And so by the time I joined the company, there was this decision, like, yeah, maybe we should just end the life, this product. So I was brand new on the marketing team and they said, Hey, new girl, here's a project for you. Why don't you call all the customers we've got, make a whole bunch of calls and find out what they're doing with this software.

[00:16:00] And whether or not they're going to be super mad if we turn it off, heard, stopped supporting it. So I'm like, okay. So the goal was to the goal is to have a hundred conversations. And if you think about that, that's an insane goal. I wasn't smart enough to say no, but if somebody asked me to do that now I'd probably say no, because what they wanted me to do is get developers and a hundred of them on the phone to talk about their stuff.

[00:16:30] I, so I was new and keen. And so I made it the bajillion calls. I did nothing else for a month. And the first 20 calls I had all went the same. Like I call and say, Hey, I'm calling I'm from this company and you have our product. And the, the guy on the phone would say, no, I don't. And I'm like, Oh, yeah. Yeah, you do.

[00:16:50] You know what? I pull up my spreadsheet and go, yay. Yay. Do you bought it on January 21? Oh, that thing. Yeah. No, we don't use that. Yeah, we bought it. It was a hundred bucks. We messed around with it a little bit, but yet we don't use it. Haven't used that month. And I did 20 calls in a row where there was exactly like that the people didn't even know they had bought it.

[00:17:11] So after the 20th call, I was like, you know what? This is going to be easy. We're going to shut this thing down. No one cares. It's a stinker. No one's using it. But then what happened is I had called 21. So call 21 goes like this. I get the guy on the phone. He goes, Oh my gosh. You're probably, it's amazing.

[00:17:29] It's like revolutionize my business. It's fantastic. It's the greatest thing since bread. And I'm like, really? What are you doing with it? And he says, well, this is what we're doing. We got these and you gotta, you gotta think this was like a long time ago. Right? So back then people were just starting to give their sales teams laptops to go out and, and selling the field.

[00:17:52] So he's like, well, the best thing about this thing. It's basically like it's a little relational database so I can load it on the laptops cause it doesn't take up too much space and what it runs SQL. So I wrote a little program on top of that. The sales reps can go out in the field, take an order. Come back to the office and then sync up with the Oracle database at the office before they had to do it by hand and write it down on paper and they'd make mistakes.

[00:18:19] And then they'd have to go back out again. Now he can do it in, in place and it's way more efficient and we're selling way more. And it's, it's been amazing for our business, blah, blah, blah. And I'm like, Well, that's weird man thing to do, but okay. I took a bunch of notes and then I didn't have the heart to tell the guy we were going to kill it.

[00:18:40] So I just, you know, it was like, that's fascinating, you know, thanks for sharing. And I went onto the next call and then I did another, like, honestly, I have like 20 calls where people were like, what? Where no, I don't have that thing. Oh yeah. That thing. Yeah, we don't want that. But then I hit another guy.

[00:18:57] And same thing. He wasn't giving it to sales reps, but he was putting it on a field device that he was given to his service reps and service reps went out and did stuff. And did service calls recorded a bunch of data on this thing? Then they come back to the office, sync up with the Oracle database at the office.

[00:19:17] And so same use case. And I'm like, and he, same thing. He's like, Oh, that's amazing, totally revolutionize our business. Fantastic. So in the end, I did a hundred calls. And I think I had five or six people that were actually using the thing and they were all doing the same weird thing with it, which was something that we had never, ever anticipated.

[00:19:40] So then I had to go back to the exec team, you know, and I'm like, okay, good news and bad news, depending on your definition of good news and bad news, the good news is we want to kill it. 94% of our customers will not care. You can just kill that. The thing you don't like NBD, it's all good. But there are six guys in the land that are going to be very, very disappointed.

[00:20:02] If you shut this thing off and they all happen to be doing this weird thing with it. Let me tell you about it. Now we could have killed it at that point. And it had, I not had conversations with these people. Like if I had just done a survey or something, the survey would have come back, like nobody loves this thing, but because there was such a common thread across the people that loved it.

[00:20:25] We decided like maybe we should take a run at trying to sell it for this other use case. Now that was a really different business. If you think about it, like we were going to go and sell to field sales teams or field service teams. So one, we would need a sales rep prep to go do that too. We wouldn't be selling packaged software for a hundred bucks a pop. It would be like you buy a hundred of these at once. So we decided to do an experiment where we hired a sales rep and he went out and he told me some companies and we attempted to sell this thing and it worked really, really well. And so then we, or it's more sales reps and we heard some were sales reps and the thing yeah, it took off like crazy.

[00:21:08] Eventually we got acquired by a big database company in the Valley called Sybase. And if I fast forward, the crazy thing about this story is at one point, that was actually the growth engine division for Sybase at the time I am this database product. Yeah. I was long gone by then, but yeah. I heard that at its peak, it was close to a billion in revenue.

[00:21:34] Wow. And the product still exists today. Sybase eventually got acquired by SAP. So, but if you go look over an SAP, the product line is still there. I think they're still making good money on it. And here we are, 20 plus years later, you know, more than a billion revenue has been made by this product and almost killed it because we didn't know what we had.

[00:21:57] Omer Khan: So, how are you positioning it at the start? And how did you position it when it sort of started to take off?

[00:22:05] April Dunford: Right. So the original positioning was, this is desktop productivity software. It's a, but it's an access killer. It's a spreadsheet killer that runs SQL. And that's what it is, but what it actually ended up being was an embeddable database for mobile devices.

[00:22:23] This is very, very different positioning. It's very different routes to market. Totally different competitors. Like had nothing to do with desktop productivity. We were actually competing with things that people were doing custom build to try and do, you know, field sales or field service. And then sync stuff up to their systems back at headquarters.

[00:22:44] So if you look at the way the product is positioned now, even, and this is 20 plus years later, it's not all that different there it's, it's still an embeddable database for devices or mobile devices, but they talk a lot more now about internet of things and using it for that. But at one point, like literally, almost everybody, if you had a cell phone, that database was on now.

[00:23:05] Omer Khan: Yeah. We're kind of showing our age, but I remember those days when, you know, kind of Compaq laptops being rolled out for the first time and they're just running MS-DOS, did you have to kind of install software and floppy disks?

[00:23:22] April Dunford: And you can't put anything on, right? No memory. They had no hard disc and they were all stripped down and nothing would run on them and all this stuff. And we had this little database. That would just run like crazy. Took up, no resources took up no space on the drive. It was like, it was perfectly designed for a mobile device, even though it definitely was not designed for that.

[00:23:46] Omer Khan: And that's a great story. So let's talk about sort of the five components of what you described for effective positioning. And I want to kind of. Dig into each one of these and hopefully give people listening to this, like a good understanding of those five that they could walk away with and think about how they can apply it to their business.

[00:24:09] So just as an overview, we're going to talk about number one, competitive alternatives. Two is the unique attributes. Three is value and proof. For his target market characteristics, and five is market category. And all of these are in the book, but we'll sort of talk about these and then there's a bonus component as well that we're going to cover as well for people who stick around.

[00:24:37] So from what I understand, like this is like, when you sort of went back to the, so the recent trout positioning statement and the blanks that you had to fill in. This was really the, sort of the process you went through in the journey you went to sort of figure out, okay, well, what is the methodology? How do I figure out what those blanks should be?

[00:24:58] And sort of that led you to sort of, you know, doing these things. One of the things that I know you said in the book is that these need to be done in the right order. And if you don't, then you can kind of create more problems. So. Maybe that will, I think, make more sense to people as we get into the details, but I thought that was an important distinction to make in terms of do it sequentially, don't just jump into one of these, cause it sounds like the most exciting thing to do cause it might, or pretty quickly if you do it that way.

[00:25:33] April Dunford: Exactly. Exactly. So like I tell me a little background of how I got there, right? So I mentioned that, you know, I, wasn't a marketer by training. I kept coming across this concept of positioning and I was like, I got to figure out how to do this, but there didn't seem to be this accepted methodology. The closest thing I got was this.

[00:25:54] The positioning statement, which honestly is one of the dumbest business concepts I've ever come across to tell you the truth. If you're not familiar with it, what it is is this kind of mad libs fill in the blank exercise where you say we are a blank and you write down the market category that does blank for blank.

[00:26:14] And you, you know, you write down. Who your target customers are, who your competitors are, what your value is, et cetera. But what really bugs me about that as an exercise is that, you know, those blanks were thinking it was like market category was a blank and I was supposed to figure it out by just writing it down.

[00:26:33] And that didn't make a darn bit of sense to me because like, let's say the example I just walked through. How would I know. That my product was the market category should have been embeddable database for mobile devices versus desktop productivity software. Like I can take that product and position it in multiple different mass-market category.

[00:26:56] So how do I know which one is the best one? And no one had an answer for that. Nobody. So I thought, well, this is a useless exercise. Not only is it useless, it's potentially dangerous because it tricks you into thinking that there's only one right. Answer for each of the blanks when nothing could be further from the truth.

[00:27:15] And it tricks you into thinking that the right answer is the first one that pops into your head. And that's not true either. So I started thinking to myself, well, how do we solve this then? Like, and, and so, you know, me being an engineer, I took a bit of an engineer approach to this. So I said, okay, we're going to break it down into pieces, figure out the pieces and then smash them together and fall up.

[00:27:38] Good positioning. So. The pieces are the component pieces of positioning. We're pretty easy to figure out because they're more or less the blanks and the positioning statement. So then they're the ones you just said, market category, competitive alternatives, unique capabilities, or features value I can deliver for customer.

[00:27:56] And who's the customer segmentation. Who's the customer I'm going after. Those are the five things then you say, okay, well, if those are the five components, all I got to do is figure out what's the best answer for each of those five components. And boom, I got it. Good positioning. So here's where it starts getting ugly though.

[00:28:14] So you look at it and you say the first thing you notice when you're trying to figure out what the best one is, is that all of the components have a relationship to each other. So if I pick any one of those, let's pick a value. The unique differentiated value that I can provide for customers is completely dependent on my differentiated features or capabilities.

[00:28:39] So those two things are totally different. I can't figure out one without the other, but my differentiated capabilities or features are only differentiated when I'm comparing them to a competitive alternative. So those two things are related. What about target customers? My best-fit target customers for my offering are literally the people that care the most about my value.

[00:29:04] So those two things are related. And then you look at market category and at a philosophical level. Your products, best market category is in essence, the context you would position that product in so that your value is obvious to your best-fit customers. So I need those two things before I can determine the market category.

[00:29:29] So where do I start? And so for the longest time I puzzled on this, like there's no starting point. Everything relates to everything else. So there no starting point, it's like an, it's a nasty circle. And for the longest time, and when I say longest time, I'm talking five years for five years. I am decided that there was no starting point.

[00:29:53] And what you had to do is pick a spot solve for the other four components. That would be your candidate positioning. You would take that out. You would test it. If it didn't work, you threw it out and you came up with another candidate. Position. If it weren't great, you just ran with it. And I did that for five years.

[00:30:10] Wow. Because that's it, is it an unsolvable? We don't know that's as good as we're going to get. That's why nobody ever had a methodology for this. So how I actually, the breakthrough I had on this was after five years of doing that, I got deep into jobs to be done. Stuff. So I got reading Clayton Christiansen and listening to Bob stuff, and I started doing a lot about, and so if you don't know anything about jobs to be done methodology, we could probably spend two hours on that.

[00:30:42] But there's a concept there that, that a customer there's your product to do a job. The trick is it's not always easy to figure out what that job is. But, and there were lots of examples and mainly it was to be done was it was being used by product people to figure out feature prioritization. Like what should we build next?

[00:31:01] But I had this flash of insight that actually, you have to start with competitive alternatives. If you don't, you'll end up with neat potentially positioning. That sounds really good. It just doesn't win because it isn't differentiated. And so the trick is you have to start with competitive alternatives and then the other trick is.

[00:31:25] The competitive alternatives may not be obvious. So if I back it up and say, let's look at my, at my database product that I just talked about, my embeddable databases for mobile devices. If I talk to all the people that didn't love it and said, what's the competitive alternative, they would have said Microsoft Access or Excel.

[00:31:47] And I couldn't win that fight. But if I went to my five, six people that were using it as an embeddable database for mobile devices and asked them what competitive alternative is? I get a really different answer. And the competitive alternative is do nothing or write it myself. And I can beat that. And so this wasn't, this was a really mind-blowing sort of change.

[00:32:12] And so the idea was okay, first I got to know for the customers that really love my stuff. If I didn't exist, what would they do? That's who I got to beat. And then once I get that, then I can say, what do I have that, that doesn't happen? Yeah. Those are my unique features. And then once I get my unique features, then I can say, okay, These are my unique features.

[00:32:35] So what for customers, what is the value that customers get out of those features? That gives me my value. And once I got the value, then I can say, well, what are the characteristics of a company that makes them really, really care a lot about that value that gets me to my target customers. And then the last bit is, okay, look, I'm trying to position my product in a context where that value is obvious to those people. What is it? The best market context I can weave around that and that's how I get market category. So that's the whole story. That's how I came up with it. It literally took me 10 years.

[00:33:11] Omer Khan: Right. And, and everyone's going to get the benefit of that in, in, under, yeah. Yep. Okay. So number one is competitive alternatives. And I think, as you said, it's about asking your best customers, you know, if you didn't exist, what would they use? And I think you make a good distinction between alternatives are not the same as competitors.

[00:33:40] April Dunford: Right. So there's a lot of money. I used to mess up step one in this process. And so the first way people mess it up is they're looking at the wrong competitors, and they're not looking at it the same way, your best customers look at it.

[00:33:55] So I have about a conversation a week with a startup that I say, Hey, what are you? You know, who do you guys compete with? And, and this startup people will say, Oh, we compete with, you know, and they'll give me some lists of startups that nobody's ever heard of. And then I'll say, okay, so how are you better than them?

[00:34:13] And they'll say, well, ease of use, man. Like if you, if you use those other guys, takes you 15 clicks to get a thing done, but you know, you look at us, we just, we just do it in two clicks. So the UI is lovely and ease of use is better we're just better that's why people pick us. But then if you ask them the question, like, do you actually see those people in deals?

[00:34:32] Like, are you really competing with them? Like, what would your customers do if you didn't exist? And especially if you go talk to the customers, often the customer we'll say things like, well, geez, these guys didn't exist. We just use a spreadsheet or we hire an intern to do it. So you're out there talking about a value proposition around ease of use.

[00:34:55] And do you really think you're easier to use than the intern? No, you're not the intern super easy to use you say, Hey, Joey, give me a coffee while you're at it fill out the spreadsheet. Super easy. I don't have to do anything.

[00:35:10] Omer Khan: So in that example with like the, with Joey, like how should they be thinking about competing against him.

[00:35:16] April Dunford: Yeah. Joey's beheaded a lot of stuff. Joey makes mistakes. He's not that smart. He can't save a customer profile. Joey can't remember that the customer likes these nine things and not those other nine things. Joey screws up stuff and downstream. It's a catastrophe. Your offer doesn't do that. Joey leaves you, and then you got to get a new Joey and you got to train the new Joey and the new Joey doesn't know anything. And the new Joey does it different than the old Joey. My software doesn't have that problem.

[00:35:50] Omer Khan: Joey, if you're listening, nothing personal.

[00:35:53] April Dunford: Sorry. So that's one way to mess it up. You're looking at the wrong competitors. Here's the second way to mess it up. And, and again, this was kind of a jobs to be done thing. Like if you look at my example of that embeddable database for mobile devices, if I had just done a survey of all my customers and asked them what's the competitive alternative, the overwhelming answer would have been Microsoft Excel or Access.

[00:36:21] Right. And that's the wrong answer because all those people that said that hate my stuff. They don't even use it. Answer. The only answer I should've been paying attention to was the people that were happy and a good fit. So this is the other way you mess this up is you say, Oh, I got a whole bunch of customers I'm just going to give them a survey and I'm going to look at what they say and that's my competitive alternative. No, because that data. Is polluted with bad fit customer answers. So I learned this the hard way I had this job and I was attempting to do this with a survey. So we had maybe 50, 60 customers.

[00:37:00] This is B2B and a, and I was trying to get at this competitive alternative cause we had a debate about it internally. So. I surveyed everybody. And the results I got were all over the map inconclusive, like, Oh, all kinds of, according to our customers, we compete with everybody. So I get this data and I, I drew this nice pie chart and I took it to my CEO and I'm like, well, here's what you're doing.

[00:37:24] What happened in the survey? I got all these weird answers and there's no patterns. And this, the CEO looks at this thing squints at it and he puts its finger on the pie chart. And he said that. Who said that? Who said we compete with that? That's just stupid. I need to know who said that. I go and I pull out the raw data.

[00:37:46] Right. And I said, let's see bank of Montreal. And he says, ah, okay. Bank of Montreal. We hate bank of Montreal. They're our worst customer. I wish I regret the day we sold to them. They are terrible. We never want to do it. He's like, if this is all about positioning, I want an, a position in a way that I never get bank of Montreal again.

[00:38:09] So don't worry. No thing they say river. So I thought, well, that's interesting too. Then we went down the list and we crossed off all the ones. That were quote, unquote, bad fit. Like yes, they were customers. Yes, they were paying us money, but they were terrible customer. They weren't using us the way the product was intended to be used.

[00:38:29] They called tech support every day, begging for features that no one else was gonna want, you know, eventually they're going to churn on us and we were all going to be happier. So if I took those people out of the picture, then all of a sudden I got patterns. And good positioning does that. Good positioning lets you make it.

[00:38:49] It's super, super clear. This is what we're good at. And this is who we're a good fit fit for. So you essentially get a pipeline full of folks. You look like your best-fit customers. So when you do the positioning exercise, the starting point should be not just who's my competitive alternative, but who's my competitive alternative in the minds of my best-fit folks.

[00:39:14] That's the other way you mess that up. You've got to filter out the, you have to filter out the bad fit customers.

[00:39:19] Omer Khan: So we should move on to the next one. But just one quick question on that is if figuring out the competitive alternatives is dependent on. Me asking my best customers does that mean I can't stop working on my positioning if I'm just getting started and I don't have any best customers yet, or I don't have any customers.

[00:39:43] April Dunford: So here's what happens if you don't have any customers yet what you have at the beginning, if your prelaunch, and even in the early days after you've launched, what you have is a positioning thesis. So you can use this methodology to guess, right. And say, well, this is, this is what I believe my competitive alternatives are.

[00:40:03] This is what I believe makes me better and different. This is my value here is I'm going, what I'm going after. And here's my market category, but it's a thesis you don't know for sure. And you're going to use that as the starting point to launch out in the market. And, but what you're really doing is testing the thesis.

[00:40:20] Is it true out in the market? And often it is not. So the advice that I give to companies that are just starting out and they're not yet clear on the patterns of who loves my stuff. And why is you actually want to keep your positioning a little bit loose? So I have this terrible analogy, but you know, it's the only one I got, so I'm going to use it.

[00:40:43] So it's like this. So you woke up in the morning and you decided you're going to, you're going to design a fishing net and it's for tuna. And you designed this net and it's like, Oh, it's gonna be the world's greatest tuna fishing net. I could put it for sale and say, it's a tuna fishing net. And the tuna fishermen will buy it and go out to the part of the ocean where all the tuna are.

[00:41:03] And maybe it works for tuna. Maybe it doesn't. Or I can say, you know what? I think it's a tuna fishing net, but I don't know for sure yet. Cause that's just the thesis. I'm going to position this thing as sufficient net for big fish. And then I sell it to all kinds of Fisher people and the Fisher people go out and they cast the net out where there's all kinds of fish.

[00:41:23] And then let's see what we pull up and maybe what we pull up as a whole bunch of grouper. And then, you know what you got a grouper net. That's where you'd go. Then you can focus your positioning down in, on grouper net. And you're amazing at that.

[00:41:36] Omer Khan: I think that's a great analogy. I don't think I'm ever going to forget that.

[00:41:42] April Dunford: It took me a long time to come up with that one.

[00:41:47] Omer Khan: All right. Let's move on. So that's competitive alternatives. And then the second component you talk about is unique attributes. And, and the big question that you ask in the book is like, what features or capabilities. Do you have that, those alternatives don't?

[00:42:02] April Dunford: That the alternatives don't. So that's the thing you start with competitive alternatives now, you know what you gotta beat. And so the next question is, what am I got that they don't have? It's easy to start with capabilities. We just start with feature function. And when I say capabilities, like if, what you've got as a services offering, it's not features necessarily, but it's capabilities like.

[00:42:22] Things that you are capable of delivering, and it's easy to start there. Usually when I do this exercise with companies, it results in a great, big, long list of things. The trick is then once you've got that, you need to take those features and map them to value for a customer. Cause it's the value that really matters and value is often a hard thing for marketers to get their head around.

[00:42:49] Right. So give you an example. The feature on my phone is that it's got a 25-megapixel camera. Right. And that's better than a 10-megapixel camera. Why? Well, the vet that is that teach really clear pictures and I can zoom in on that. And I need that for my business because I'm doing print ads and things, and I don't want it to be pixeling and whatever.

[00:43:11] So the feature is interesting, but what the buyer really cares about is what value does it do liver to me and my business. So in the next step, we bang out the giant list of features, but then what we do is we map those features to value and the way this, usually it really works out is the value clusters out in a handful of themes.

[00:43:32] So I've done like a hundred of these workshops and we usually end up with two to three value themes where then essentially all of our features can be put into these value buckets as the way that we enable that value. So that's how we get featured value. And then once I've got the value, then I can say, okay, what is it about, you know, there's, there's, there's customers all over the land that might need this thing, but my best-fit customers choose me over all the other alternatives in the land.

[00:44:08] Why? Like, what is it about them? That makes them really, really care a lot about mine value.

[00:44:16] Omer Khan: Yep.

[00:44:17] April Dunford: It's kind of a  bottoms up way of doing a customer segmentation. If I go back to my embeddable database for mobile device things, that one was pretty straightforward. It was like the if I got a lot of folks in the field that need to do transactions in the field that need to sync up backwards with headquarters. Then you're going to care a lot about my value. If you don't then I got nothing for you. Sorry.

[00:44:41] Omer Khan: Yeah, so that's, that's great. Yeah. I think that the unique attributes, as you said, will make a lot more sense when you know what those competitive alternatives are and you're focusing all of those. Right. So, and I think you made the point that it

[00:44:58] April Dunford: It's no good to just make a list of features, right? Like a list of features is it, this is a pointless exercise you need to say, but like I'm a customer. I am solving this problem today with Joey or with the spreadsheet or with some other piece of software.

[00:45:16] And you're asking me to change why. What do you got that I don't did. I don't ever know. And those are the only features that matter. It's not everything. It's the things that are differentiated from your competitive alternatives.

[00:45:29] Omer Khan: Right. And I think if you're comparing, if you're looking at your unique features and you're thinking of a competitor, which is where I think most people automatically go by default, you might end up, you often kind of go to what I call.

[00:45:41] Like, I think they're are kind of like easier answers. Like, you know, we do something which is faster or cheaper or, you know, whatever. But if you understand that the customer the alternative, they see is Joey. Then you're going to focus on a very different set of features.

[00:45:57] April Dunford: That's great. If you don't know the true competitor in the minds of the customer, then you, then you could easily be focusing on completely different features and therefore completely different value. And therefore trying to sell the who knows who. Right. So having that starting point is really important.

[00:46:15] Omer Khan: So the third component, and you've already talked about this as kind of like the value and the proof. So, you sort of say, well, if, if the unique attributes. Are your secret sauce, then, then the value is sort of the reason why they care about it that's secret sauce.

[00:46:32] April Dunford: Right. The value is like, so what, so what for my customer? So you got a database that can handle blah, blah, blah, blah, blah. So what. So you have to be able to answer that. And then the other piece, you know, ideally it's provable. So, you know, you get these things like startups will come to me and they'll say, you know what?

[00:46:53] Our value is April it's customer service. That's why people love us. They love us because we love them. We love them to bits and we have really good customer service and we respond really quickly. And that's a hard one, cause it's hard to prove. And it's easy to say, so in fact, all your competitors will say it.

[00:47:10] Like who says they don't love their customers? Who says, Hey, we have bad customer service. Everyone says they have good customer service. Right? So that one's, that one's like what I would call, like, it's a reason to not turn on you, but it isn't necessarily. A thing that brings a new customer in the door because it's hard to prove.

[00:47:29] So ideally, when you're talking about the value, you can deliver it. You've got some proof in the form of, you know, at a minimum customer quotes and things like that. But ideally, you've got numbers, statistics, benchmarks, you know, actual meat that says, not only do we say we can do this, but this is a proven fact. And it's other people are saying it too.

[00:47:54] Omer Khan:  Yeah, you made a good distinction as well in the book. And I think sometimes it's easy when I talk to founders to get confused between this in terms of what's a feature and what's a benefit. And one example you gave in the book was I think it was around like, you know, Hey, you know, we have some sort of patented unique algorithm, but that's not the value of the benefit. That's a feature. And then in terms of the way you describe the benefit, it was more about, well, what that does kind of answering like the, so what question you just said is it lets you get answers from their data in minutes versus hours, which helps them serve their customers better.

[00:48:34] Right. So. Right. That's the thing you need to focus on.

[00:48:38] April Dunford: And their customers' better piece that starts getting it value. Right? It's like, even though, like you could say the benefit is we can, we can get you this answer in minutes and then it's kind of like, well, so what, like what, where does the situation, my business, where I actually need the answer in a minute.

[00:48:53] Oh, well, in customer service call, if they call up and you need that answer in a minute, cause they're on the phone. Oh, now we're getting that value. Now we're getting at how this impacts my business.

[00:49:02] Omer Khan: So I think being able to prove that is, is a really important point, but beyond like customer testimonials, what are other ways that a SaaS company could show the proof of the value?

[00:49:19] April Dunford: Right. So, so there’s lots of different ways and it really depends on the actual point of value you're talking about. So sometimes there's no way to prove it other than a customer saying it, but it's important to know that you saying it is not proof. So you're going to be better. Get a customer saying it.

[00:49:34] Otherwise you got zero proof. So a customer is saying it is one, a whole bunch of customers saying it. Is another one independent review is another one. You know, if it's something that when you say, you know, w w we're faster, lighter, or cheaper, like sometimes there's metrics and sometimes you can have those independently verified.

[00:49:56] Sometimes you'll have like, You know, benchmarks or statistics or outside numbers that you can show, Hey, you know, best in class is this number. And we meet it. Sometimes you'll have certifications or things like that. So, you know, customer quote is sort of the minimum viable proof. But anything you can do beyond a customer quote that can give extra meat to this stuff to prove that it's, that it's good.

[00:50:24] That works. Sometimes you'll have things in aggregate. Like for example, today I was doing a workshop with a company and they're more a professional services firm. And so they have an expertise around, you know, delivering a certain kind of solution. And so part of their proof is just the number of projects they've done.

[00:50:46] Around that, you know, is a very difficult number for anyone else to match. So they can say, you know, we've done dozens of these projects and it's kind of new technology and it's kind of new stuff and they can flop that out there and say, you know, there's barely anyone on the planet has done more than more of this than we have, but they can put a number on it.

[00:51:07] Omer Khan: Yeah. Okay. So the fourth component. Is target market characteristics. And the question that you asked here, like who cares a lot about that value that you've just identified?

[00:51:22] April Dunford: Yes. So for example, you might have a value, like they, we're used to thinking about this as demographics, right? Like, you know, small, medium business.

[00:51:34] This is a really bad customer segmentation because it's just not specific enough. You need this to be specific enough to be actionable. I should be able to answer this question with enough detail. That your head of marketing can go run a campaign. So if you're, if you're saying we target small, medium businesses, I can't run a campaign on that.

[00:51:53] Like, like any small, medium business like that, you know, and usually I say this to companies, they'll say, Oh, we charge, we target SMBs. And I'm like, SMBs, like what? Like dry cleaners and then we no, no, not dry cleaners. Well, what then my car dealership. No, not car dealerships, convenience stores? No, no not convenience store I was like walk out of small businesses then, then usually the answer is like software business.

[00:52:17] Small businesses looks just like us? So you got to get specific on that, but generally, there's a reason for it. So. You know, I did a workshop with a company that does, an online calendaring solution or at least that's the way they positioned it before we work together.

[00:52:33] And, but when you do dug into it, what they really did was a lot of enterprise thing. It was like, it was, it was more about if you had multiple locations and multiple different types of agents that they could make an appointment with. This thing had a bunch of really sophisticated matching technology and then would help the customer actually get to the appointment.

[00:52:55] So then you'd have this question. Well, who cares a lot? Well, yeah. Look, if you don't have multiple locations and multiple products and agents with different specializations, then you're just not a target for this thing, because that's, that's what their value is. It's all around that. So these are the kinds of conversations you're trying to have at this stage.

[00:53:16] Like if this is the value we deliver, like what are the characteristics of a company that makes them care a lot about that value and it's, and it's not just the size I guarantee you.

[00:53:27] Omer Khan: Yeah. And I think one, one thing I recall from the book was that you said, you know, Hey, one way to find that if you're not clear is like, Asking yourself, like if you were running out of money and you need to close some sales, like by the end of the month, like who would you be focus on?

[00:53:43] Who would you go out and start talking to? Like who's most likely to buy it. And maybe there's some clues there in terms of identifying the people who care the most.

[00:53:51] April Dunford: That's right. Like, you know, your salespeople are often really good at this. Even if they can't really articulate it, like you'll ask them like, you know, what are the characteristics of a customer that cares a lot?

[00:54:00] And they'll say, Oh, you know, sometimes they'll give you these really vague answers, but then if you tell them, look, you know, if I told you. You have to close a deal this week or you're, we're going to fire you. How would you shortlist a bunch of companies to call? And then they give you this really sophisticated answer.

[00:54:15] Right? Well, you know, I did that deal with so and so, and they close really quick because of such and such. So I looked for another company that had this, that, and the other thing, because I know those guys go close quick. Good. Okay. These, this, that, the thing is important then.

[00:54:29] Omer Khan: Yeah, that's a really good question. I think everyone should keep in the back of their minds. Okay. So, and then the fifth component is market category. And again, the question here is like, what content makes your value obvious for customers. And I think this is a really important one because sometimes we sort of, this is the one that is kind of easy to start out with like, Oh, w e're a CRM for whatever, but it kind of works very differently if you've gone through the first four steps before you get here.

[00:55:01] April Dunford: Well, that's sometimes your category. Like what happens a lot with companies is they're sort of a default market category and it's the market category that. The inventor had in their mind when they invented the thing originally.

[00:55:17] So they, you know, they woke up in the morning and said, I'm going to build better email or a better database or a better CRM. But the problem is that, you know, things, aren't static your product. Isn't static. You're adding things in, you're taking things away. As you're working with customers, the market itself, isn't static because your competitors are adding things and taking things away and they're coming into the market and leaving the market.

[00:55:40] And then your customers aren't. Static, you know, just ask anybody who's dealing with the financial situation right now. Like if customers act a certain way and then you have a, you know, something big happens with the financial markets or there's a change in industry regulations and all of a sudden the behavior of the customers change.

[00:55:59] So all of these things are in flux. But if you fallen into this kind of default positioning, you might find yourself two years down the road and your email kind of looks like chat or your, it looks a little bit more like business process, workflow tool or something else. And so, you know, this market category thing in my methodology, we kind of start with, who's your competitor, how are you different? What's the value? Who are you targeting? And then we say, so what are we? And sometimes you get to the end where you say, you know what, we're not calendar software. We're not that that's not what we do. We're appointment setting and that's different because our customers talk about it that way.

[00:56:46] And that makes more sense with what we do. So. Lots of the companies that I've worked with, there's been this kind of default market category. That's rooted in the beginning of, of how the products started. But when you do this kind of bottoms up and you say, okay, well, it's this value for these people? Is that actually the best way to contextualize it? Sometimes you get a really, really different answer.

[00:57:11] Omer Khan: Yeah. And, and the reason it's important to get this right is not so. You know, we as a team internally can say, okay, this is the category. It's because that category is going to help your customer. Understand where you fit much more quickly?

[00:57:31] April Dunford: Well, that's it. The purpose of a market category is to sort of orient your customer around what you're all about. Like, if I were to say to you, Hey, I've got this fantastic new product and it's a CRM. And that's it. I didn't tell you anything about it. You would assume so much about that product. Just from that. I assume that your competitors, Salesforce, you would assume that you do basic CRM functionality tracking a funnel tracking deals.

[00:58:01] You would assume my pricing is less than Salesforce because they're the leader in that market. Like you make an assumption even about pricing, right? And if, all those assumptions that you made about my product are true. Great. So I just saved marketing and sales a whole lot of time because they don't have to tell you explicitly who the competitor is.

[00:58:23] It's assumed they don't have to tell you about every single feature function. Like half that stuff is table stakes, but it works the other way too. If you say. That your product fits in a certain market category. And then the assumptions that, that triggers in the minds of customers, about your competitors, your features, your pricing, your whatever, if the assumptions that it triggers are not true.

[00:58:50] Then your marketing and sales team has to do a whole bunch of work to undo those assumptions.

[00:58:58] Omer Khan: I think in the book, I remember you had an example of email for lawyers.

[00:59:04] April Dunford: Yeah. Email for lawyers. That's usually the example I give is so, you know, the, that example is, you know, I had this team and they were positioning, what they did is email. The lawyers that, you know, so they got on the call and they said, Hey, we're we're ex-lawyers. We built this thing. It's email for lawyers. I'm like, okay. And then they launched into a demo of it. And you know, about part way through the demo. I said, Hey, how's the calendar work on this thing?

[00:59:28] And the guy says to me, Oh, we don't have a calendar. And I'm like, wait, what? You can't be email if you don't have a calendar, like how do you replace Gmail? If you don't have a calendar? And he says, Oh, we don't. And I'm like, wait, so you're saying the lawyers need two emails. They're going to have Gmail and they're going to have your thing like that just fundamentally makes no sense.

[00:59:49] But then I asked the guy like, so what's so special about you. What do you got that the competitors don't have. Right. And he says, well, you know what the lawyers love about us is we've gotten this patented thing. And what it does is they call it super secure context and where file sharing. So you got the lawyers they're collaborating with their clients.

[01:00:08] They need to share documents. What this thing does is it use this patented AI thing, whatever that figures out who should have access to the document, puts it in a super-secure place and only gives access to the, to the people that need access to it, which is actually pretty cool technology. But it's also not email.

[01:00:27] If I wanted to solve that problem, would I, would I expect email to solve it? I don't think I would.  So what I basically have, is this really innovative product masquerading as crappy email, it doesn't even have a calendar, right? So I could take that exact same product, pick it up and move it to another market category.

[01:00:48] So let's say I called it team collaboration for lawyers. The assumptions around that are completely different and I didn't change the product at all. All I changed was context. So if I call it a team collaboration, well now who's my competitor. Well, it's not Gmail anymore. It's like Slack or something else. And would I expect that you would, you know, what sort of features would I expect this thing to have?

[01:01:12] Well, I would expect it would have some kind of specific collaboration feature for lawyers, and that's exactly what their secret sauce is all about. So all of a sudden this thing that didn't make sense as email, it makes perfect sense as team collaboration.

[01:01:28] Omer Khan: Yeah, it reminds me of, I spoke to a guy called Darren Chait. Who's the co-founder of startup called Hugo. And what they do is it's basically sort of centralized meeting notes that, you know, once you got a meeting, everybody can kind of get the meeting notes and then you put them all together and everybody gets a better view. And I remember him having a similar issue where he was saying, you know, we were telling people that we were team collaboration software. And then people say, Oh, so you're like Slack. It's like, no, no, no.  And other people are like, Oh, you like Zoom because that's about collaboration. And it kind of took them a while to figure it out. No, no, no, we just do meeting notes. Right. But it can be really careful because it's kind of like, what is that going to plant in the mind of your potential customer? One question that leads to is what happens if you you've got a product that's a new category. Something that doesn't exist.

[01:02:25] April Dunford: Yeah. So, you know, the, the, the book gets into this in a lot of depth, but, but essentially, you know, most of the time you're positioning products in an existing market category. And that's good because you want that frame of reference to trigger.

[01:02:42] A bunch of assumptions, right? So that you don't have to explain every single thing about your product, but sometimes you've got a product that's so unique, so different that there are no current market category really works for it. And in fact, trying to position it in the market category, we kind of bury the coolness of it.

[01:03:04] And so you would have to create a new category now. That's hard because that's a bit like saying, you know what, I'm not email, I'm not a CRM, I'm not chat. I'm a flu plumber. And you're like, ah, what's a flu plumber. And then I, and then I got a launch into this whole thing. Right. Which is like a, you know, well, and if the market category does not exist, interestingly, what it means is that people are unaware that they have the problem.

[01:03:36] Yeah, because if they knew they had the problem, then solutions to the problem would exist. So if they're unaware that they have the problem, what it means is you don't have the luxury of selling them a solution yet. You got to actually sell them on the problem. So what ends up happening in these with these companies are where they have products that are creating a new category is their early life of the, of the business is all about evangelizing the problem.

[01:04:03] Until eventually there's some common understanding that, yes, this problem exists. Therefore a category of solutions should exist to solve it. And then once you've reached that point, then you have to convince customers that yours is the best possible solution to that problem. But even then you're going to have problems because, you know, the minute the category exists in the minds of customers, but there is no established market leader yet.

[01:04:33] That's exactly the point where you get a million billion, me too fast follower companies hopping into the category because now's a good time to capitalize on all that hard work somebody did in creating the category in the first place. So you get this situation where, you know, MySpace, Facebook, or every other search engine that came before Google.

[01:04:55] Like a lot of times the company that made the effort of creating the category had exhausted their resources and the patients and their investors by the time the category was created and they ultimately failed to capture the category after they created it. There's actually very few, examples of category creator companies that started out as category creators and actually survive to win the category.

[01:05:25] Much more common. What we have is companies. Like, I'm trying to think of the name of it. It's a Gainsight that, you know, they're, they're essentially, started out as survey software, that was an existing market category. And once they had gotten pretty big in that category, then decided to expand the boundaries of the category.

[01:05:44] And in essence created new category, that was all about employee engagement. But most of the time you don't see a lot of startups come in from scratch, creating a category. That what, what you see most often is startups coming in and finding an underserved sub-segment in an existing category. They dominate that.

[01:06:09] And then they, they push the boundaries on that sub-segment until it's bigger and bigger and bigger. And then when they get big enough, then they have the opportunity to either knock off the leader in the category or redefine the boundaries of the category or create a new category that makes the old category leader irrelevant.

[01:06:29] But you usually do that, like in the case of Gainsight, you know, your 200 million revenue, 300 million revenue. You're not doing that when you're a million revenue, because you simply don't have the resources to do it.

[01:06:42] Omer Khan: Yup. Okay. So those are the five categories of effective positioning. And at the beginning, we said, if people stuck around, there was one more bonus we would share with them that is relevant trends that this is using trends can also be a really powerful way to land the product in the minds of your customers and why they should care about it. So just quickly tell us about that.

[01:07:04] April Dunford: Yeah. So trends, trends are interesting. Like, so I, I sometimes get the question. Yeah. Like what happens if you have good positioning, meaning it's clear what you are and it's clear why someone would choose you. You're just not cool. I got that question once. And so trends are kind of the answer to that good positioning in a market category answers the basic questions of what is this thing and why do I care?

[01:07:35] But trends are a way that you can answer the question. Why is this important right now? And so, first of all, we, you know, we almost in confused market categories and trends, particularly in tech. So I think of a market category as like a group of solutions, like CRM is a market category, networking gears, a market category databases as a market category.

[01:07:59] But then we have things that are trends like learning is a trend or, you know, cloud computing. If we go back a few years, that was a trend and these can be applied to all, any market category and can often kind of shakeup what that category is all about, but they are not the category themselves. So the way you use a trend is you've still got a position, your product.

[01:08:23] In the market category. Otherwise, if you failed to do that, then I have no clue what you are, but if you can loop in a relevant trend and kind of talk about the intersection between your product, the market category and the relevant trend, then you have something that is not only. Understandable, but it's also kind of hot.

[01:08:44] Like I gotta have it now. And so, you know, so in the book I have a couple of examples of this, but one of my, one of my favorite ones is a company in the UK called Redgate Software that has been around for a while. And they do database tools. It's pretty sleepy market category. They dominated, they make a lot of money they're super profitable.

[01:09:05] They're quite big, you know, nobody would say they're not a successful company. They're totally successful. And proof that you can, you know, you can not be trendy and still have a great business, but in their case, they were noticing that this question of why now was vexing them a little bit. And this was years back now, but so GDPR was just starting to be a thing.

[01:09:26] And so they were finding that in their sales calls, when they talk to IT leaders, which is who they sell to the IT leaders were kind of saying, look, We're, you know, we're really concerned about GDPR and it's kind of sparked the, DevOps transformation effort. And, and so we don't have time for your stuff this year.

[01:09:46] Cause we're all about this DevOps transformation and we're spending all kinds of money on it. So we don't have budget for you. And so they were a bit like, Ooh, maybe we need to be relevant. With this DevOps thing. And so they spend some time looking at that. And curiously, like most of the thinking so far around DevOps never really touched on data and what happens in a DevOps transformation, data and databases.

[01:10:13] And so develop this kind of point of view around what they call database DevOps, which was look, you're doing a DevOps transformation. You better get your arms around. How you do DevOps, like a DevOps way of looking at how your data works and how databases fit into that. And so they wrote a bunch of stuff about this.

[01:10:35] They started going a little bit on the speaking circuit about it, and all of a sudden, they had managed to harness this trend and these guys were hot. So the result of that was one, their salespeople have this great story to tell in how. Well, you know, this is why you care about these database tools right now.

[01:10:54] Cause you're in the middle of this DevOps transformation. And this is a really important piece of that. And then the second thing was, is, you know, it made them kind of hot. So they ended up having this massive uptick in inbound leads or customers calling them because they had kind of struck a nerve on something that people were really interested in right now.

[01:11:15] So this concept of a trend can work really well to take something that is, that is well-positioned and well, and very well understood within a market. But adding this extra layer answers the question. Well, why is this important right now? And why are we going to get this deal done right now?

[01:11:32] Omer Khan: Yeah, that's that's great insight.

[01:11:35] Wow. So we have covered a lot here and I was kind of just looking at the book. It's just like, we've only talked about the first four chapters of 18 chapters in your book

[01:11:46] April Dunford: It's full of density.

[01:11:49] And I think, you know, I would definitely recommend, you know, if you've enjoyed the conversation, you want to figure out your positioning. Going by a copy of the book it's called Obviously Awesome by April Dunford and you know, beyond what we've talked about, you can also learn about the 10 step positioning process.

[01:12:03] We actually take people through step by step on how to figure out their positioning. If people want to find out more about you. They can go to aprildunford.com. And if folks want to get in touch with you, what's the best way for them to do that. You can drop me an email at April@aprildunford.com

[01:12:20] And if they just want to like, you know, follow my stuff, I'm not active on a lot of social channels except Twitter. So I'm @AprilDunford on Twitter. You can see me there. And occasionally I post some stuff on LinkedIn, but not so much, but yeah. And then my website's aprildunford.com and you can, you can hang out there too.

[01:12:38] Omer Khan: Awesome. Thank you April. I really appreciate you making the time to do this and going through so much of this information in so much detail. I, at the beginning of this, I will so told you about this video that I watched a view on YouTube, where you did a shorter sort of version of what we talked about here.

[01:12:54] And if people hadn't already figured out by listening to you that you have a great sense of humor. I think that video for me was like, you know, you could have done stand up. And so if you want another old entertaining version of April's talk, I will include a link to that as well. Yeah. I'll keep that in mind if this positioning thing doesn't work out.

[01:13:16] Yeah. Consider that as my backup plan. Thank you so much. It's been a pleasure. I wish you all the best.

[01:13:22] April Dunford: Yeah. Well, thanks so much for having me. This has been fun.

[01:13:25] Omer Khan: Cheers. All right. Thanks for listening. I hope you enjoyed the interview. You can get to the show notes as usual, by going to theSaaSpodcast.com where you'll find a summary of the episode and a link to all the resources we discussed.

[01:13:37] If you enjoyed this episode, please subscribe to the podcast. If you're in a good mood, consider leaving a rating and review to show your support for the show. That's always appreciated. Thanks for listening until next time. Take care.

The Show Notes

Omer Khan

Hi, I'm Omer, the founder of SaaS Club and host of The SaaS Podcast. I help early-stage founders and entrepreneurs to build, launch and grow successful SaaS businesses. Join me on this journey.