#002 - Is Your Product Different? Does it Need to Be?

An Intro to Value Proposition, Market Differentiation & Product Positioning

As the go to product guy for many folks in my circle, the most common question I get asked is -

Why should I even bother making a product? There are already so many options in the market.

And over time, my go to response to the go to question is:

Ever been to the supermarket? How many brands of mineral water do you see? How many egg brands? Why are 10 different companies selling me tissue paper?

Corpo consolidation aside, if you have a decent product idea, chances are there is plenty of room in the market for it.

See, comparison is the thief of joy, and most folks think of Apple, Google, Netflix and forget the garages they started from.

‘MOST’ businesses are below 10M USD ARR, heck even more are under 1M, and they are ‘fine’. 

If you have a good product, understand that there is a huge gap in the market and you only need to grasp this fundamental truth.

In order to compete, you need to -
Provide more value for the same cost
Provide same value for a lesser cost

And it is as simple as that. Fundamentally speaking.

Value is not a Feature - The Basics

If your startup is based around a single feature, you are bound to fail. There is a reason we use the term ‘value’ proposition when we talk about your messaging.

Your value should be aligned with a core problem you are setting out to solve.
The feature, or the tool, or the skill you use to solve that problem - is ever evolving.

In the short run it might be fine to stand out based on a feature, but in the long run, you need to solve problems and sell outcomes.

Customers don’t care if your product has an XYZ feature, they care if your product solves their XYZ pain point.

Features don’t connect well with your customers, if you stand on features, you stand at risk of just being another brand on the shelf.

Value communicates emotion to your customers, standing on problems you solve helps you stand out from the bunch.

Features can change over time, industry shifts all the time, your AI feature now will be a fad feature tomorrow.

Value stays over time, people's problems tend to stick around on the long run, and finding new ways to solve the same problems is the name of the game.

Lastly, in the Product world - there is a huge debate on ‘Outcome’ vs ‘Output’ - think of Value vs Features in a similar sense. You want to sell the promise of your product, not the spec sheet.

That being said however, features are an important part - just that, they aren’t the ‘only’ important part - enter

Product Positioning and Market Differentiation

So you understand your value, now how do you arm it properly -

Well enter fancy terms Product Positioning and Market Differentiation - terms that are often confused and misused.

Often thought of as the same thing - 

Basically it’s a perspective difference -

Product positioning involves shaping how potential consumers perceive a product.
Market differentiation, or product differentiation, occurs when a company employs strategies to demonstrate why its product features surpass those of competitors.

(a snippet from https://saqibtahir.com/product-discovery-as-a-service/)

Here’s my general advice for any new startup. Especially ones based around a product.

Focus on one problem to start out with.

That doesn’t mean you need to cut on features
That doesn’t mean you can’t be versatile
That doesn’t mean you can’t cater to a lot of needs

What it means is having the right focus.
You can only have one right focus in the early stages. 
Having identified your key problem will guide you as your north star when making any decisions for your business.

Product Positioning focuses on creating a distinct space in the customer's mind 
Market Differentiation involves making the product unique by focusing your benefits

Product Positioning is more catered to your audience
Market Differentiation is more about the product itself

Product Positioning can be short-term and flexible
Market Differentiation often involves ongoing development

Product Positioning is more about image and identity
Market Differentiation is more about features and benefits

In the end, you need to clearly understand 3 things:

1 - What value am I bringing to my customer base
2 - How am I positioned in the market as an attractive option
3 - Is my product offering features and benefits to differentiate upon

The Road Ahead for ‘your’ product

Hopefully this piece has done a decent job of conveying the importance of value, positioning, and differentiation to you.

But the goal is not to stop executing on ideas, it's to help you get direction on how to improve your ideas.

The market is vast, and there is always room for a new product that offers more value or solves a specific problem.

In the end, whenever you think about Apple and others - just understand

They didn’t get where they are by doing extraordinary things
They got there by doing ordinary things - for extraordinary lengths of time

Keep executing on your ideas, with improved direction.

To close out, I would request you to reflect on these questions, post a reply if you want:

1 - Do you understand the difference between positioning and differentiation?
2 - Do you agree that focusing on Value is better than Features/Benefits of a product?
3 - What is the biggest pain point for you when it comes to thinking of standing out from the competition? 

Further Learning:

https://saqibtahir.com/market-research-for-your-product/
https://www.productplan.com/glossary/product-differentiation/
https://www.linkedin.com/posts/anthonypierri_productmarketing-saas-startups-activity-7199427945923293189-9J8h/
https://www.shopify.com/blog/what-is-product-positioning