Lenny Rachitsky: evaluation

Transcript context

…So I've done a lot of thinking about like, how should we actually do positioning? And so kind of a critical piece of positioning is your differentiated value, right? Like what's the value that you can deliver that no other company can deliver? And so how companies get this wrong a lot is they'll say, okay, well, we want to look at our positioning. So let's get everybody together. Or sometimes they'll say, let's just sit in the marketing department and think about the value. But sometimes folks will get a team together. They'll get a team together and then they'll say, okay, so why does everybody love our stuff? And this is a terrible way to go about it because what you'll get is just a bunch of opinions. And we don't really know how to measure is that good or not. So I actually think the first step in a good positioning exercise is to really understand what do we have to position against? So put another way, it's like saying, what do I have to beat in order to win a deal? So positioning work, we call this competitive alternatives. Now, how people mess up this first step is, I say competitive alternatives and they think competition. So things that look exactly like me. But in B2B, we kind of have two sets of competitors. We have status quo, which is whatever the company is doing to attempt to solve the problem right now, even if it's crappy and not great. And then there's if the company does decide they're going to buy something different, they usually make a short list. So it's whoever else lands on the short list. So I need to be able to put a stake in the ground and say, I gotta beat all that in order to win a deal. Now, most folks will discount the status quo, but they shouldn't because in B2B, we lose about 40% of our deals to quote unquote no decision, which actually means we lost to the spreadsheet, we lost to pen and paper, we lost to interns. And if we're not positioning well against that, we're never gonna get the customer to come off of that. So I got to win against status quo, but I also have to win if it's most of the time, if it's B2B, you don't just buy the first thing you come across. You make a short list of alternatives and I got to win against those as well. So step number one, what am I positioning against? Once I have that stake in the ground, then I can start thinking about what makes us different. So the easiest way to do this is, okay, this is what I have to position against. What have I got capabilities-wise that the alternatives don't have? So feature function or even capabilities of the company, which could be pricing or professional services or other things that you've got, but also capabilities of the product. What have I got that the alternatives don't have? And I can make a giant list of these things. And then I can translate that stuff into value by going down the list and saying, okay, we have this great feature, so what? Like, why does a customer care about it? What is the value that feature enables? hen I can translate that stuff into value by going down the list and saying, okay, we have this great feature, so what? Like, why does a customer care about it? What is the value that feature enables? And when I do that mapping over to value, what generally happens is I end up with two or three value buckets or value themes. And quite often, those value buckets or value themes are different Then what I would have gotten if I got all the smart people in my company together and said, hey, why does everybody love our stuff? When I do it this way, I'm ensured that those value themes are differentiated and not just things that are generally valuable, but any alternative could get it done. So why are we even talking about it? So in my mind, that's kind of how we do it. Once I've got differentiated value, then I can start thinking about, well, look, I could sell this product to any company that has this problem, but not everybody cares about this value the same way. And so what are the characteristics of a target account that make them really, really care a lot about that value? If I do some deep thinking about that, that's going to be my definition of a really best fit customer. And then the last piece of positioning, of course, is market category. And so, again, a lot of people will just start with market category and then try to back up, which I think is crazy because then we don't have any way to judge the goodness of a market category. But if I've got, look, this is the value only I can deliver. These are the kind of people that really care a lot about that value. If I start thinking about positioning as like the context I position my product in, then the best market category is the context I position my product in such that this value is kind of obvious to these people. This is my long-winded way of doing it, but this is the only way I know how to get positioning done. Can you just, so you just basically went through like the steps and the bullet point of things you got to figure out your position. Could you just briefly summarize that just to, for people to have that in their brain?…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.