3 Startup Positioning Exercises for Differentiation and Purpose

Get Clear on Your Value Proposition


Dev Garg

3 years ago | 4 min read

Positioning is one of the most important steps after entrepreneurs finish their market, customer and competitive analysis. Knowing competitors plus their positioning, the target audience, the market trends along with the problems and challenges of the customers it becomes easier to position the product competitively in terms of value, audience and price.

Having a clear direction is a key to reach the target destination and strategic positioning give startups just that.

Opposite to general belief, positioning is not just a slogan or a tagline that companies use in their marketing but is a statement that is meant for internal use so that everyone on the team can stay focused, motivated and aligned towards the same goal.

So, let’s quickly investigate 3 key areas entrepreneurs need to look into
when drafting their positioning -

While positioning, our goal is to carve a special niche for our product and position ourselves in terms of value, audience and price.

1. Get Clear on Your Value Proposition

The sole purpose of a business is to bring value to the marketplace. If your startup is not bringing any value, sorry to say, but it should not exist and if it does exist it might fail soon. Each Founder should ask themselves -

  • Why would somebody pay them to use their service or product?
  • What makes their product special?
  • If they were the customer what is the value they were getting out of the product?
  • What is the value they are adding to the market?
  • How significant is that value?
  • You should reflect on discussions with your customers and see what major pain points your product is solving that others are either not solving or are doing a bad job at it.

At this point if you feel you need more discussions with your customers to figure this out…this is a perfect time to do that.

2. Nailing Down the Target Audience or Customers

After the initial market analysis founders might see their product fit in many different target markets. They might see a potential use in hospitals, shops, schools to name a few but they should remember that in the early stage they haven’t established their product in any industry yet.

Their goal at this stage should be to pin down the audience where there is no significant player, or they feel it is easier to establish the product.

For example - It is easier to sell a software to a hospital if you say,

“We have a new task management software that is specifically designed and developed for hospitals keeping patient and doctor privacy plus HIPAA compliance as the top priority”.

Instead of saying,

"We have a new task management software that helps businesses and organizations manage employees and customer records”.

In the initial stages, making a small group of people fall in LOVE with the product is what startups should aim for and after they have established their product in a niche it will be much easier for them to expand to other verticals later.

3. Pricing

This is the trickiest one. Startups need to figure out where they want to position their product in terms of pricing. The first place to start is to have a conversation with your customers and gauge the value and worth of the product to them.

Wherever possible, I always suggest going for value-based pricing where you price your products based on the magnitude of the problem you are solving. Now you can decide if you want to position it as a premium product, a low-cost product or somewhere in the middle as a perfect option for selected audience.

The way you communicate your message, the type of stores and channels you pick to sell your product and the audience you target will be based on how you want to position your product in terms of pricing.

To test the market, you can run Facebook ads to a contest on a simple landing page with different price options and directly ask a small sample of your audience what they’ll be willing to pay in exchange of a gift card, a coupon or something of value.

When you are done figuring out the value proposition, target audience and the pricing… it will become much easier to create a strong positioning statement to help founding teams stay on track with their positioning. If you are thinking that you might need multiple positioning statements, you might be right.

However, entrepreneurs should come up with a company-wide positioning statement that can guide other specific customer segment positioning statements. However, the overall positioning statement should be strong and pure enough that everyone internal to the company can see it crystal clear.

Now after all this study:

If someone is still experiencing a difficult time crafting their positioning statement then the chances are their product might be missing something somewhere and if you are still having a difficult time defining your target audience or a value proposition you should ask questions like,

a. Is your startup really solving a problem that someone is experiencing?
b. Does the product bring enough value to the potential customers that they will happily switch from their current solutions?

Once the positioning is set, it will lead to company messaging, website copy, branding and even product features. It will also strengthen your investor relationships and will showcase the clarity of your goals.

I hope if you are starting a new venture this will help you move a step forward towards drafting your perfect positioning statement that has value, audience, price plus the differentiation at its core.

I am confident that once you do this you will be far more ready and confident to differentiate your products, build and test your MVP, pitch it to the investors and launch your products.


Created by

Dev Garg







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