How to differentiate your startup from the competition

Many startups struggle with how to differentiate themselves from their competition.  They spend energy trying to come up with unique features that their competitors don’t offer.  This is typically the wrong approach.  Even if they do implement feature XYZ that their competitor doesn’t offer – how long will it take that competitor to take notice and implement XYZ in their product too?  Features can often be easily copied and do not offer sustainable differentiation in the market.

Many startups struggle with this reality.  If my features are all the same as everyone else’s, then how can I stand out in the marketplace?  Think for a minute on other products like bottled water, tea and coffee.  These should be complete commodities, yet somehow brands are able to get a premium price for their products and are distinct from each other in the market.  If bottled water companies can differentiate their products – then you can too!

So where to begin… start to think about how a customer will understand your company and its products.  A few approaches:

  1. Think about the adjectives a customer would use to describe your product/service and the interactions they have with your brand.
  2. Think about the personality of your company – fun, serious, goofy, nurturing, teaching, elitist, premium.
  3. Think about the typical customer – a certain vertical such as healthcare, financial, small business or academic.  If you can tailor your offering to really resonate with specific people then that will provide differentiation.  Those people will sooner do business with you because you understand them better.
  4. Consider leaving out certain features or avoiding certain markets.  You can be defined by what you don’t do.  This allows you to focus on certain core areas and may attract a different customer.
  5. Usability or customer experience is a great area to shine.  It is highly intangible but the customer knows when an experience is just better.  If your competitors aren’t as polished in their offering then this can be a strong differentiator.  It is likely that your competitors will revamp their experience several times over the years to reduce your advantage but it is much harder for them to improve than simply adding a feature.

Another good technique for understanding your existing differentiation is to ask “why you won?”.  You should be talking to your new customers to find out why they chose your product.  This will tell you what is differentiating you in the market today and you can learn / grow from there.

Marketing, branding and public relations should be used to reinforce your differentiation in the minds of your customer once you have it figured out.  Good luck!