How do you know if your startup has a positioning problem?
Key symptoms that don't announce themselves and how to recognize them.
There are too many things that keep early-stage founders up at night: fundraising, hiring the right talent, building the early version of your product, finding real users who give you real feedback, iterating to make sure you are building something essential, and wait…did someone run payroll and order coffee beans?
Yep. I know the list is long. But often, founders don’t recognize they have a positioning problem until they are too far along in their founding journey. Why?
Because a positioning problem does not announce itself clearly and directly, like a broken feature or a user who churns. The positioning problem hides under the skin of your startup, showing symptoms that defy easy diagnosis, misleading you to address those symptoms instead of the root cause.
Here are a few symptoms that I’ve seen after helping many early-stage startups with their positioning.
The problem of talking about the problem
When I begin working with a founding team on their positioning, I interview all the key people in the company, as well as the startup’s advisors and VCs. I ask all of them the same set of questions, and one key question is: Describe the problem you are solving. You’d be surprised how often this question is not answered directly and clearly. More often than not, people will talk about the product or solution they are building but not the problem they are trying to solve. This is called “inside-out thinking”. Inside-out thinking starts with the product first vs. “outside-in thinking” starts with the customer first.
When I summarize the answers to this question and share them (anonymously, of course) with the founders and key members of the leadership team, it becomes evident that they don’t have enough clarity around (a) the problem they want to solve or (b) the way they talk about the problem.
Try this: Just walk around your startup and ask each person this question and see what answer you get. I bet it’ll be quite illuminating!
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Elevator pitch du jour
Another favorite question I like to ask is: How would you describe your startup to someone who has never heard of it before? Of course, each person will have a slightly different way of describing the startup and its value proposition. Often, these differences are not just in the phrasing of the elevator pitch but in the essence of what those words capture.
For example, a more professional and simpler version of Zoom is quite different from an all-inclusive webinar solution. Both answers are about video conferencing but offer completely different value propositions to the end user.
We help companies route their deliveries is quite different from We improve utilization of their delivery fleet. Yes, you operate in the delivery management space, but the unique value you provide in either statement (and to whom you provide that value) is very different.
The answer can also point to a diffused understanding of the user, their particular workflow, and the specific set of problems they are trying to address.
Your product prioritization meetings are a battleground
Unlike some of the other problems that are not easy to spot, this one is easy to spot. Your product prioritization meeting turns into an epic three-hour debate on what features you must prioritize. Here are a few indicators:
The sales team tells you they lost deals because a critical feature wasn’t available.
The team cannot agree on the core product priorities, and the roadmap gets constantly reshuffled.
There is a breadth of functionality that lacks depth and doesn’t solve any single problem completely or almost completely.
There is a lack of rigor in the quality of the features that are being launched. Your product team is in a “launch-and-run” mode. They don’t have the time to go back and iterate on features they’ve released because their roadmap is filled with new feature demands.
Your deal cycles spin for a long time, or deals stagnate at certain stages.
Try this: Map your product roadmap features to one key target persona. It cannot be two or three. Just one. Ask yourself will this feature meaningfully reduce a painpoint for that persona?
You cannot agree on your ICP
One of the reasons your product prioritization meeting turns into a battleground is that you cannot agree on the Ideal Customer Profile (ICP). The sales team is gunning for an ICP that is quite different from what the product team is building its value around. In many cases, the decision maker is not the power user or even a user of your product. But as product-led growth motion becomes more and more popular in SaaS/PaaS products, it’s imperative for the product team to focus on that primary user whose pain points your product helps alleviate. If that user isn’t delighted with your product, it just doesn’t matter. The decision-maker is not going to get on board.
Try this: Identify your product’s primary user. What are they using today in the place of your product? How is your product doing that “job” better than what they are using today?
Losing deals to a competitor with a worse product
When this happens, founders will narrow the problem down to a marketing or a sales problem. Many times the problem is seen as a “growth” problem. A few indicators of how this will manifest itself:
We are not ranking for the right keywords
Our sales decks are not telling a good story
The customer thinks we do X when we actually do Y
You are constantly changing the message on your homepage (love this one)
We are not advertising enough! (another fav.)
Founders will hire a growth marketer or get an agency to spend some money on advertising. Three months later, nothing changes, and you’ve spent a bunch of money with little to no ROI. Sounds familiar? This is because you haven’t answered foundational questions. You haven’t made difficult choices yet.
Who is your primary user? What is your core value proposition? Can your product deliver on this value proposition? What is different between what your product does vs. all the other similar alternatives out there?
Without answering these types of strategic questions thoughtfully and making clear choices about who you are and, more importantly, who you are not, it’s impossible for a growth person to deliver results. Don’t fire them. They are not the problem.
It’s for everyone means it’s for no one
Founders are driven and ambitious. The pressure to build something useful, viable, and scalable is real. Sometimes, ambition can take the driver’s seat, and it becomes difficult to make a choice. When your product is for everyone, it is for no one. Even a product like Notion, which is arguably used by everyone in an organization, focused on early adopters who heavily used collaboration tools: product teams. And a product like Datadog designed to address the pain points of the infrastructure team is no less successful because of its clear focus.
Positioning is ultimately about making a choice. I don’t know who said this, but it’s my favorite quote for positioning: You can’t be all things to everyone, but you can be something great for someone. This someone doesn’t have to be defined in a narrow way with a job title.
Try this: Make a list of qualities and attributes that make a great user for your product. Try to be very specific (example: they already use Gong, they make over 10 demos a day, the spend an hour entering data into Salesforce). This will help you get closer to your user and be more critical about who can benefit the most from your product.
These symptoms are not just for early-stage startups. I’ve seen them at startups at much later stages as well, like Series B or even Series C. But the earlier you recognize these symptoms and address the root cause—the lack of a clear and differentiated positioning—the better. The further you kick this can down the road, the harder it becomes to reposition yourself.
Finally, if you skipped all that stuff and jumped down here, then heya, welcome! If you remember one thing from this post, then please make it this one:
Positioning is not a marketing problem. Positioning is a company problem.
It shows up in marketing. It shows up in sales. It’ll even show up in customer success. But those teams and those functions cannot solve this problem alone. It requires the leadership of the company to come together and answer those difficult, elephant-in-the-room questions and make strategic choices about who you will choose to be and, more importantly, who you will not become.
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This was very insightful! Thank you.
Love this article! Especially this part "You haven’t made difficult choices yet." In early stages it feels like there are so many easy wins, so much potential as you build and grab at opportunities, but those easy wins are useless without foundational deep work first.