Archive for February, 2007

Using Positioning to Emphasize Your Competitive Advantage

Friday, February 2nd, 2007

For the most part nowadays, new start-ups don’t usually produce revolutionary, ground-breaking ideas. Rather, they add a twist to an exisiting idea. This usually comes in the form of new features. However, a more interesting and potentially lucrative strategy is to focus on positioning rather than feature set.

How often do you hear, “We’re like Flickr but we have an XYZ feature which makes us better”? In many cases, start-ups that compare themselves to the big guns lack a credible offering. In addition, the added feature is often over-emphasized and impractical.

But what if a start-up were to say, “We’re like Flickr, but faster”? All of a sudden, there’s a case to be made. Other interesting examples include:

  • “We’re like Google, but provide more relevant results.”
  • “We’re like LinkedIn, but easier to use.”
  • “We’re like Digg, but navigation is simpler.”
  • “We’re like Yahoo Finance, but the interface is cleaner and less cluttered.”

Having a reference point facilitates the explanation of your value proposition.

People know the big guys. If you can take a similar experience and make it better somehow, positioning as such can work to your favour.

Another approach is to consider is comparing your start-up to a more well-known company, but in a different context. In the early days of YouTube, it became known as the ‘Flickr of video’. Why? Because it encompassed a clean, media portal experience with tagging. The only difference was that YouTube focused on video rather than photo.

Many niche social networks proclaim that they are the “MySpace of ___”. In other words, they are a social network tailored around the BLAH niche. But in saying so, potential users are once again given a reference point which helps them more easily visualize the service.

Using positioning and reference points to differentiate your service against competitors is extremely advantageous. Simply identify your strengths and position accordingly. Understanding your weaknesses is also important as your competitors will probably position themselves against them.

My Definition of Web 2.0

Thursday, February 1st, 2007

I think it finally dawned on me…

A web 2.0 company is one that “doesn’t scale proportionately with its user base”. As it leverages user-contribution and user-generated content (UGC), like photos and videos, much of the manpower is built in via the systems and functionality in place.

Harnessing the power of social media, a web 2.0 site or start-up relies more heavily on the technology than on its internal work force. This is the reason why many small operations have become so large and successful without having to scale up personnel.

Add to that the fact that very little financial resources are needed, manpower aside, and it’s no wonder we see so many start-ups trying to make a go of it.

Traditional Internet plays, like Amazon for example, need to scale in correlation with user growth. Human labour is needed to keep up with demand. For this reason, exponential growth is hard to achieve. On the flip side, Amazon will not plunge either, though a web 2.0 play could very well do so.

If you give people the tools to be successful and productive, let them be. They will do the rest. But be sure to listen to their feedback and constantly innovate.