Updated: Jun 6, 2021
It is not just investors that need to know. You must know, understand, and live by it as well. How are you different? The opportunity for your business to grow and succeed depends on it. Nothing less. Today’s tech environment is a stark reminder, there is no room for a second place copycat. A Burger King to MacDonalds would not happen today. There’s a dominant brand destination for every new market position. There’s only one AirBnB, only one Google, only one Uber, and only one Wework. Unless you are different. Being different, radically different, is the only means to creating your own market position and the only opportunity to emerge successfully in any competitive landscape today. You have to offer something unique, identifiably different, that can be proven to have an appeal to the general market, a large subgroup, a niche market, or a different cross section, large enough to make your business viable (scale and long term goals are subjects of another chapter), based on merit, values, simplicity, price, quality, you name it, can be a lot of things, that all have in common that they show a clear difference from the competition.
Five Guys Burgers and Fries are different because they offer unique freshness where everything is made at the store level. They bring in fresh meat and raw potatoes, and make a point of showing it in the store, and then they turn it into burgers and fries, inside each location. Nothing’s frozen, everything is fresh. The ordering process is by way of addition and deduction, where you essentially design your own burger. Freshness and built to order are their key market differentiators, and they can shamelessly charge double triple prices because of it, and it makes sense.
Investors liked their idea and invested, seeing the success of their protostore. No investor would however put money on a Burger Jack; an opportunity that looks too similar to something that already exists, you must clearly demonstrate key differentiators.
The foundation for discovering your key differentiators has already been laid. You did it with your expressions of your idea in chapter (i). Now, armed with a well articulated expression, in writing as well as verbally, now you can focus on how to describe the key differentiators, how to distinguish your business from all others. This chapter, like others before it, focuses on organizing your thoughts into a structured and actionable text. In doing so, you may not realize, you are setting the foundation for what kind of marketing campaigns will be designed in the future They will all be about highlighting the difference, why the customer should pick you over the competition based on key differentiators. Through this process you hopefully are able to identify your key and meaningful differences, because if you are not, you should probably scrap the whole thing.
I was once involved with a startup in hair salons that had a key differentiator of catering only to men, with beard trimming and grooming paired with haircuts. The place additionally offered cigars and beer. Different right? Would definitely work in my town and many other hipster centrals. It was a hangout meet, a guys guy haircut lounge. Very millennial. But guess what. A key enterprise partner with enough control decided they were excluding too big of a market segment by excluding women and children, so they scrapped the beer and the cigars. They kept the beard grooming part but hey, the whole architecture changed, the pivot watered down the original idea. In order to appeal to a larger market segment, they sacrificed their key differentiators, and as they started rolling out locations, they looked exactly like Sports Clips with a different color scheme. Did they succeed? Let’s get started on key differentiators.
We will look at three key elements for this purpose;
Identifying a Unique Position
What makes it Different from the Competition
Two and three may appear to be the same thing, but they are not. Once you have identified the unique position, and express it, you must also be able to describe how it compares to the competition, where the differences are present. It’s the nitty gritty part, and that’s why they are not the same.
A benchmark is simply a reference point on which other things can be compared and measured. A benchmark should not in my view be a competitor in the same industry, because then, what you’re striving for, already exists, and you should stop because they have the advantage. Let me explain. Whole Foods is a curated grocery store where everything is made from organic and natural resources with sustainability value as absolute criteria. Walmart can obviously build a section filled with natural organic products, but it’s not the brand. Health, nature and sustainability are the Whole Foods Brand.
If I was building a nature resort destination for the purpose of health rejuvenation, with natural hot springs, spacious natural environments full of magnificent vistas, for walks, activities and meditation under clean, clear skies while breathing fresh air, offering healthy foods only; then my benchmark for comparison isn’t a Hawaiian beach resort, even if it were for vegans only. Instead, I would describe the health resort as "the Whole Foods of Health Resorts." See? You get it! That’s a benchmark. A standard bearer. Someone who does something really well and exemplifies what you intend to strive for and accomplish positionally, within your industry. Just like you, everyone will get it, when it’s a good benchmark. If you don’t get it, it’s not good. Your benchmark is therefore an entity known to your core audience, that idealizes what you are striving to accomplish, separate and distinct from your competition. A benchmark is an ideal that you can model your brand aspiration after, internally, for marketing and in your talks with investors.
Finding your perfect benchmark means digging deep into your business idea, understanding why you are doing it; what its value is to people and society, what you are really offering that is unique and worth pursuing. The benchmark comparison, now that you know what it is, helps you hone this in.
IDENTIFYING A UNIQUE POSITION
In its early years, Tesla was the only electric car company in town, clearly a unique position. Others will catch up over time, but Tesla still enjoys a huge head start. I mention this to make the point of an example's unique position obvious to you. Thinking about your business idea, it is essential to understand what it is, what it is not, and the unique proposition it offers. In describing The Thor Report before, and offering an example description of it, what stands out is startup support with focus on the journey from idea to launch. Now there are many business blogs, and there are a few startup bloggers as well. They are most all vehicles for their authors to become consultants. The Thor Report does not seek this. The Thor in The Thor report is more interested in creating connections, building relations, being invited to conferences to hold lectures, and perhaps earning equity through matchmaking skills. The Thor Report also offers unique resources in support of startup entrepreneurs, tooling, intelligence and more. In other words, the unique positions are both in the pure supportive purpose of it as well as its willingness to redirect your needs to other complementary sources. The Thor Reports’ unique position can be wrapped into a phrase “Support and Information Resources For Startup Entrepreneurs,” from which the Purpose statement was disseminated: “Turning Ideas into Enterprises." As a result, the vision statement became clear and literally wrote itself: “We help entrepreneurs succeed!”
Finding your business’ unique position is hopefully what brought the idea to life. It often is. If it isn’t you must dig for its uniqueness by thinking about all aspects of it.
WHAT MAKES IT DIFFERENT?
You must find the answer to this question. Your business must be different from the competition, otherwise, why bother?
A comparative study helps explain this. Does one electric toothbrush not look and feel like the other? When does it not? Let’s compare Quip to Jet. Quip is smaller, sleeker looking toothbrush, and it has newer technology, where the micro-vibration only requires a battery, not a messy plug-in charge equipment. It’s not a car, it’s a toothbrush. This enabled Quip to go so small and so sleek compared to Jet and other electric brushes, earning the nickname by Forbes; “The Apple of Toothbrushes” (another benchmark comparison), what a claim! Right? It’s high-tech packaged in a sleek design. And it worked. Quip additionally offers subscriptions. You get a refill brush every 90 days. Do the math, 180-260 brushings (2-3 times a day), and you get replenished without having to think about it. All you need to do is change out the triple A battery once a year and you’re set, with a sleek, toothbrush that looks like Apple designed it. It started with technology in research and development, and it ended with technology in marketing and branding.
Think of the most successful business that compares to your startup idea. That one company you are up against, you wish you had the market share of. Now identify what makes you different from them. The differences must be clear and distinct, if you can't identify the difference your idea is in trouble. This is why I am throwing the below Richard Branson quote in as a warning.
“DON’T BOTHER DOING SOMETHING UNLESS YOU ARE
RADICALLY DIFFERENT FROM THE COMPETITION”
- Richard Branson
Your benchmark is your aid in describing the difference between you and the competition. And trust me, you need to know this, because you will be asked this question a hundred times; “How are you different from so-and-so... and you better be armed with a killer answer that leaves no doubt about your difference. It's the difference that establishes your ideas merit.
The format of these advisories is deliberately brief. Many would argue more samples are needed and more in-depth coverage of the nuances would help in clarifying the concepts. Like a college textbook. In today’s fast paced environment, with constant multimedia stimulation to our thoughts and information intake, I am a firm believer that we have all adapted abilities to consume volume of data. Each and every one of us consumes only as much as we need and then we move on to the next set of data. Where we draw the line and move on is somewhere around the spot where the concept becomes clear without having to consume the detail. Startup 411 is essentially designed to be read like that. It is why the blogs never exceed 5 minute reads and the 411 chapter reads never exceed 10 minutes.. It’s designed to be just enough for most entrepreneurs, bright as they are, to grasp the concepts, and go and apply them.
Now you know how to find your perfect benchmark, once discovered it will help you articulate what is unique about your business. Armed with those two things; your benchmark and your uniqueness, you can clearly state what makes you different: It’s not frozen. It’s Fresh.
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