Mastering Strategy, Vision, and Positioning

0:01 welcome to the positioning show where we discuss topics related to the practical application of positioning for Marketing sales and product teams I'm April Dunford a consultant author and the world's leading expert on positioning for B2B technology companies hey everybody welcome to another edition of the positioning show with me April Dunford this week's episode is brought to you by me and my new book if you haven't been paying attention I launched a new book this month it's been going really great

0:31 actually I've been on the road quite a bit going to a bunch of conferences this conference season so I've been all over the United States and all over Europe talking to people directly about my old book obviously awesome and the new book sales pitch and it's been really really fun like it's been great talking to people about how they've used my work and what they've done with it like so it's not just clients that have worked

0:51 with me directly but also folks that have just bought the book and work through stuff on their own anyways that's been really cool and I have had a lot of fun in the last month doing that but anyways today let's move on to the episode one of the things that really confuses folks when we talk about positioning is the difference between strategy and vision and positioning and I think those three things are really really different so I wanted to talk

1:16 about that this episode and see if I could maybe help clarify that a little bit for folks that are kind of confused so let's start with vision your vision is the picture of your future state so I like to call this the all singing all dancing thing you're going to be at some point in the future sometimes that's five years out or 10 years out or maybe longer and so in this Vision your product does a lot of things for a lot

1:44 of people it delivers value and all kinds of amazing things that it does not do today by definition the vision doesn't exist yet that isn't something that we have right now it's a picture for where we want to go strategy on the other hand is the path that you're going to take to get there you are what you are today your product exists as it exists today the strategy defines the steps that you're going to take from

2:11 where you are today to where you want to be in the future now there's been a lot of books written about strategy and what the difference is between a good strategy and a bad one one of the classic books on the topic of strategy is Richard rummel's book called good strategy bad strategy a lot of folks have read that book in it he talks about a strategy as being a plan for overcoming obstacles a good strategy has

2:37 coherence coordinating activities policies and resources all to accomplish an important end that end being to overcome this set of obstacles so if we think about it we are where we are today we're trying to get to the vision the strategy again is our plan for overcoming the obstacles all the things we need to bring to bear to get us from A to B then we get to positioning positioning is all about the present so positioning is about how do we win in

3:07 the market today it defines how we are the best in the world at delivering something some value that a well defined set of customers cares a lot about it defines who or what we need to beat in order to win a deal it defines how we are fundamentally different from the other approaches it defines the value we can deliver that no one else can it defines who exactly is a really good fit for our stuff it also defines the market

3:37 that we intend to win right now or at least in the very short term positioning defines how we're going to generate business right now it's not the vision we aren't there yet that that's where we're going that's the place we're going but we're not there yet it certainly isn't defining our strategy because it isn't defining how we plan to overcome obstacles to get from where we are right now to where we want to be in the future

4:01 one of the really confusing things for startups is that when you're pitching to investors which are really doing is telling a story about the vision so investors are making a bet on you and that bet is that you'll be able to accomplish the things that you say that you're going to accomplish in the future investors have a longtime Horizon they're actually not terrifically concerned with where you are right now at least in the early stages of of a

4:29 company but they are very concerned about where you want to go and in some cases the plan you're going to take to get from where you are right now to where you want to go so what we have a lot of times is early stage startups will get very good at telling this story to investors about the vision but that is not the same story that we would tell to a customer about why they should pick

4:54 us over the other Alternatives right now by definition division doesn't exist yet so so because it doesn't exist yet it's really really hard to sell that to customers customers won't want to exchange their money for something that doesn't actually exist right now customers look at you in a completely different way than investors do customers are evaluating you on the value that you can deliver for them today so they're in the market today they care a little bit about the near

5:24 future obviously they want to make sure that you're still going to be in business they care a little bit maybe about the future road map what are you going to what are you going to put out this year what are you going to put out next year but in general especially in a B2B purchase no buyer is going to be able to convince their boss that you should be spending money on something right now that isn't actually going to

5:47 get delivered until a year from now or two years from now in fact if we get talking too much about the vision to customers what we're really doing is convincing them to just put on the brakes and say hey you know what that all sounds great I love what you're talking about there with that Vision thing come back to me two years from now when you actually have it so we need to be very careful positioning is about

6:10 right now how are we going to win right now against the competitors we have right now vision is a little bit different it's something that doesn't exist right now it's coming in the future it's very very interesting for investors but that is a very different pitch to a very different audience with a very different set of timelines and definitions of value as we move along according to the strategy from where we are right now to the vision of where we want to go our

6:38 positioning is going to change this is sometimes a little bit hard for people to get their arms around at the beginning like when I started talking about positioning I would have a lot of people that would say well man like we're going to say we're this and we can't turn around and say we're something else two years from now and in fact that's what every single tech company does in tech companies it is very very normal for us to Define here's

7:03 where we are now here's the vision we want to get to and there's a series of steps we're going to walk through to get from here to there and at each one of those steps the way we Define how we win is actually really really different in Jeffrey Moore's classic book on technology adoption crossing the chasm he described something called bowling pin strategy so this is where the company identifies a segment of customers where the company can easily

7:30 win right now and they Define that as the lead pin so the idea is you aren't going after the entire Market all at once you've defined this easy to win segment you go after that segment first when you've dominated that segment and essentially knocked over the lead pin that gives you a better easier path to get to the adjacent segments so you can now move to the adjacent segments knock those pins over if you knock over enough

7:57 pins then you get to the point where where you're in a situation where you can now challenge the leader in the market to take over the entire market so the way this works at each step in that Journey your positioning will be different so your positioning at the moment where you're just going after the one pin will be something but then as you knock over adjacent pins you're widening out the positioning to go after a bigger and bigger market so let me

8:21 give you a couple of examples so early in my career I worked at a company named Janice systems we were in the Enterprise RM space or at least that was the vision so what we sold investors on was eventually we would become the world's greatest solution for large Enterprises to manage customer information so Enterprise CRM that was the vision what we had in the early days was definitely not that there was a big competitor in the market that was absolutely

8:51 dominating the Enterprise CRM space we didn't have a product that was mature enough or had been in the market enough or trusted enough to really challenge them for that market they were a 2 billion Revenue company we were a little we startup with less than 2 million Revenue so we identified our lead pin and in our case the lead pin was investment banking so we had a special set of features that allowed us to win in Investment Banking against even this

9:21 very very large competitor because we had a thing that could deliver value that they could not deliver so we defined that as the lead pin positioning at that point was CRM for investment Banks now were we planning on being CRM for investment Banks forever no not at all so we had a strategy so the strategy was we would start an investment banking once we had dominated Investment Banking then we could move to retail Banking and so at that point our positioning would

9:49 change we would no longer be CRM for investment banking we would be CRM for banking get it Investment Banking and Retail banking so then we would get there then the strategy was okay well once we've got that that would actually allow us to get into insurance so once we started knocking down the insurance pin then the positioning would shift again the positioning we would have then would be we are CRM for financial services and then once we had dominated

10:19 that well Financial Services is actually really really big proportion of the market for Enterprise CRM so we figured after that we could then move on and position our our El as Enterprise CRM so when we were selling to investment banks in the very very early days we weren't trying to sell them on our vision we didn't go in and talk to them about oh hey we want to be the world's biggest Enterprise CRM that wouldn't help us

10:43 close any deals and we didn't talk to them about our strategy of hey we're going to do this and then we're going to do this and then we're going to do the next thing that was just something for us internally customers actually didn't care about that at all what they want to know is why are you the right pick for our CRM in an investment bank that's it so the positioning is all about right now the strategy is something that's

11:06 internal we're planning on that and that's how we're going to get from A to B the vision is the all singing all dancing thing in the future and our positioning changes at each step along the path according to our strategy so let me give you another example so I worked at a company called tulip retail in tulip retail our vision was to become this big Omni Channel backend solution for retailers so essentially an Engine That Could seamlessly power anything

11:36 that was happening in stores as well as anything that would happen eCommerce and a combination of those things so similar to the case of Janna the obstacle in this case was that no big company was going to buy us and replace all of their insor stuff and their e-commerce stuff with ours like we're a brand new little little startup people had made giant investments in all those systems that would be a very very difficult thing for

12:05 us to sell so instead of trying to just run at the whole big vision of the market we developed a strategy to defined our lead pin as a sales associate tablet so a way to give Associates on the store floor a way to assist customers in the middle of a purchase inside the store that was our lead pin really easy to get into that market not very much comp competition we had a great solution for that at the

12:31 beginning so that was a place where we could go and win then the way the strategy was defined is then we would add a client telling solution after that we would add a point of sale solution and then eventually we would become a fullblown customer experience platform for in the store and eventually you know we would be able to be this big Omni Channel back in that could do anything in the store and out of the store when

12:55 we were selling to our customers we were not talking about the big Vision because the big Vision was Irrelevant for the thing that we were selling today in order for us to close deals we needed to focus on the thing that the customer was trying to do right now and just sell them that we had a strategy to go through all these different steps and investors understood the strategy we talked about the strategy when we were

13:19 raising money this is how we're going to get to the big Vision which is why you're investing money in us but that isn't a story that we were necessarily telling to customers because customer just didn't care I've worked with many venture-backed startups where they've gotten very good at telling the investor pitch to the point where sometimes the investor pitch starts to kind of creep into the sales pitch and so we need to be very careful of that we have two very

13:45 different pitches they're for two very different purposes two very different audiences the last thing I want to tackle is this thing that I hear sometimes where people talk about well we need a story about the strategy and I just don't really understand that and I think when people say that there's kind of just a fundamental misunderstanding about what a strategy is all about again if our strategy is to plan for overcoming obstacles that is fundamentally a story

14:15 that's interesting for us internally but that's not something that customers need to know or investors need to know so I don't really understand why we would need a story for the strategy I mean we need to understand the strategy but we don't have stories for everything we're doing internally we're not creating a narrative around our product road map necessarily we're not creating a narrative around our financial plan or

14:46 a lot of other things that we do I think that just seems like a waste of effort for me I don't really understand where it would get used or when it would get used I think people need to understand the strategy to a certain extent but I don't think we need to do this like you know madeup exercise of you know inventing some big flowery story around the strategy I don't really understand what the purpose of that would be the

15:08 other thing that I hear people say is the story is the strategy and that one makes me really concerned because it makes it sound like we're gonna come up with a story and then we would create a strategy based on that story like I'm not exactly sure how that would work either like so we're going to make a story about the obstacles and how we're going to overcome the obstacles like that sounds like a really boring story

15:36 let's be serious people and then that story gets transformed into the strategy which means what I write a strategy document about it it just doesn't make any sense to me at all like what we need is a vision and what we need is a plan for how we're going to get from where we are today to the vision that's what our strategy is I don't think we need to create a narrative around that I think maybe we want a strategy document it'd

16:03 be good to write it down but I don't see the purpose in building a story I certainly don't think we are building a story and then building a strategy out of that like the story is not the starting point for this the vision is the starting point for this where do we want to go where do we want to be that's the starting point for this if we started with a story I think that's a bit of the tailwag and the dog to be

16:26 honest sometimes I think and this is maybe talking out of school a little bit but sometimes I think the marketers tend to get a little bit of this like you know main character energy and they get a bit carried away with we're gonna have 9,000 stories for 9,000 things and then these stories will be so great it will actually transform the direction of the company like no that's not how it works we got a vision where we are today we

16:52 got a strategy to get there Things fall out of that I don't actually think that marketing is is driving the bus to the extent that sometimes we think maybe we should be but I think in cases of things like this it's our job to be a good team player on all this stuff I don't actually think we need to be the center of absolutely everything that's happening in the company but that's just me you know maybe other marketing people would

17:20 disagree with me on that one one thing I worry about with some of these things is that folks are confused about the difference between the vision the strategy the positioning where we are today and so if you're working on this stuff inside a company I think it's really important to sit down with your team and Define what these words mean we have a tendency in marketing to just make up definitions for words and I think that gets people really really

17:48 confused for a long time I really had a problem with the definition of the word branding because people started throwing just anything and everything into branding like at one point somebody somebody came and said your brand is why you win in the market I'm like absolutely not absolutely not I don't know what you're talking about there it isn't in my definition of branding so I'm worried that we're starting to do the same thing with strategy and

18:11 strategy be anything including positioning including our vision including by anything we decide to throw into that bucket on a particular day and I think that's really confusing for junior folks that are trying to figure this stuff out so I think we need to be a little bit careful about how we're using this terminology the story is not the strategy the strategy is the strategy the vision is the vision positioning is positioning we have a VC pitch we have a sales pitch those two

18:39 things are different I don't see any value in trying to muddy the waters on this stuff and throwing it all together and trying to make it one big thing it just simply isn't and I think we run the risk of really confusing people if we try to do that so that's it for this week thanks a lot for joining me again hey you know what I would love it if you folks could do I would love it if you

18:59 could leave a review of this podcast somewhere Apple podcast Lees lets you leave a review I would love it if you left me a review and told me what your favorite episode is I'm trying to think a little bit about episode planning and how this happens over the next couple of months and so I'd like to hear what you folks are enjoying what's good and what's not good we've covered a lot of territory in this podcast so far so I'd

19:22 like to know you know what are the things that you think are great and you'd like to hear more of and what are the things where you think you know what April you could stop talking about that particular thing because it's just not for me I would like to hear that thanks again for joining me and we'll see you next week