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Back to basics: Rethinking positioning for strategic success

Introduction


How do we respond when product-market fit declines owing to changing market and technology trends? In some situations the solution is to go back and rediscover the core value differentiators of the existing product – to redefine and refocus your GTM strategy and product roadmap. 


Context


My initial destination before I arrived in Silicon Valley from Cambridge MA, intermediate as it turned out to be, was Columbus OH, where I joined a $30M document database company.


The company was a spin-off from a non-profit think tank to productize a new document text retrieval product. The product offered three capabilities that were quite advanced for the time and helped drive the company’s growth:

  1. A secure document repository

  2. Natural language search and retrieval 

  3. Relational database features 


From a platform perspective, the company was successful making inroads in the federal, pharmaceutical, legal and higher education segments. And it had a successful Paris office from which it penetrated the European market.


The company took two routes to growth. First, to extend the core product to accommodate other document related activities, for example XML and the new web technologies that were starting to transform the industry. Second, it also tried to build additional vertical solution modules on top of the core database. The most successful of these was a robust library management solution. 


Nonetheless, growth stalled and the company ended up in crisis that ultimately resulted in an equity-based fire sale.


Change can be brutal


While the company was highly innovative, it encountered strong headwinds from a rapidly changing market, both in terms of competitors as well as technical architecture.


  • The database market was consolidating, creating serious barriers-to-entry for niche players.

  • The document management market was evolving into content management with a strong web emphasis.

  • Search vendors with text-based capabilities operating against file systems were growing rapidly. 


Crisp positioning, and hard decisions, were required to navigate these changes. Unfortunately, there were countervailing histories and interests in the company that made this difficult. Sales was committed to a platform-based enterprise sales motion to make their numbers. Technologically, the investment in the unified architecture (together with the installed base) made it expensive and time-consuming to break apart. But even more importantly, politically it was difficult to even contemplate.


As revenue stagnated the tension and competing perspectives were crippling the company. 


Reading the direction that the market was taking the entrepreneurial American PMM/PM team saw the internet as the hyper-growth opportunity, and aspired to transform the company into a major SaaS platform for web-based applications. Another alternative they explored was building vertical market applications around which more targeted GTMs could be developed. 


With adequate funding and resources one or more of these options could have been possible. However, we needed to keep the lights on, yet it was difficult locking in on our core differentiating value – which was hiding in plain sight.


This came to a head for me in a meeting with our European colleagues from the Paris office. The Americans (including me) argued for the inevitability of the internet solutions that we could power leveraging our document repository and search capabilities. Our Parisian colleagues however pointed out that what currently differentiated our product from almost anything else in the market was its rock-solid security architecture. 


It might not have been sexy, but document security was often top-of-mind for our enterprise and federal customers. 


Our Parisian colleagues were right.


The company was too small to really gain traction in the database wars. It had been outflanked by standalone search products. And competing document repositories had moved to a more modern architecture and better UX. But none of these competitors could provide the iron-clad security architecture that was integral to our product.


I will always regret that I was too early in my career to be able to recognize, and balance,  aspirations for the future with the short-term GTM necessity. But the lesson has stayed with me ever since.

 

The value of positioning


When there is an obvious market need, or we have a disruptive new technology, positioning that drives messaging can be relatively transparent. 


However, as I hope the story above starts to illustrate, the pressure to articulate laser-sharp positioning builds when a market is emerging or undergoing structural change and is highly competitive. In these situations positioning is a non-trivial exercise dependent on hard thinking and discernment, listening closely to customers, and analytical acumen. But most of all, it demands the leadership maturity to make hard decisions that will offend or disappoint certain vocal constituencies. 


Several lessons emerge from my early experience. We needed to take a brutally honest approach when considering three key positioning elements:


  1. Customer value. What were the key characteristics of our whole product, whether capabilities, technology, architecture, performance, experience, or customer support or pricing, that customers valued?

  2. Differentiation. What elements were unique to the product vis a vis competitive offerings? Could we connect our differentiation to customer value to erect a barrier to entry for our competition in specific markets?

  3. Competitive positioning. Understanding the structure and direction of the market, how did we compare and contrast our whole product vis a vis key competitors? Could we create a narrative that spoke to our strengths while de-positioning the competition?


The answers to these questions – centering around document security – would have impacted product and marketing decision making. 


  1. Segmentation. We would have identified the customer profiles for which our differentiated capabilities provided the strongest, most concrete value, and defined focused GTM target segments, ICPs and personas, critical to developing high-yield, high-ROI campaigns.

  2. Prioritization.  Defining our value, differentiation, and target segments would have cut through all the debates and clarified priorities for both Product as well as Marketing, with direct implications for the sales motion and organization of the Sales team.

  3. Tailored customer journeys.  With a more focused core value proposition, market segments and personas, we could have constructed assets and journeys that spoke much more directly to the needs of our prospects and customers.


Conclusion


What to do when a product no longer fits market needs?  Sometimes, as I’ve written about in a previous blog, radical innovation and organizational change makes sense. At other times, as in this situation, it is more important to go back and rediscover the core value differentiators of the existing product and redefine the GTM. Hopefully these experiences have provided insights that will be useful when you encounter your next positioning challenge. 

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