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Tag: value proposition

Lessons From 15 Years Ago: 10 Driving Principles of the New Economy

photo (39)This week marked the 15th year anniversary reunion of the launch of the Business 2.0 magazine (first issue July 1998). As their first columnist, I was involved with Business 2.0 during the planning stages, leading-up to the first issue’s release, and working with the founders and original editors and writers. If you are young enough not to remember the magazine, Business 2.0 chronicled the transformational power of the Internet on business, hence the name Business 2.0, and the name came out of a conversation between Chris Anderson (Business 2.0 founder who later purchased TED) and Jeff Bezos at TED. Jeff apparently blurted it out. One of the staples of that first issue was a seminal centerpiece titled “10 Driving Principles of the New Economy”. A small group of 29 advisors that included me, Jeff Bezos, Michael Dell, Halsey Minor, Kim Polese, Steve Jurvetson and others, helped Business 2.0 develop these principles that became the foundational thesis of the magazine’s content for several years ahead.

The Only 5 Types of Messaging You Need

The “thin edge of the wedge” is a popular analogy in startup development to explain how you first need to hook your users with a sharp feature that’s easy to try. If you don’t, customer acquisition becomes a lot harder, if not impossible.

The same metaphor applies for your communications efforts when you’re trying to explain what your company does. The right words matter a lot. Yet, I see many startups not being clear enough with their messaging, in part because they don’t approach it from the point of view of how it all fits together, and often for not applying the rigors of simplicity.

Just like every new product feature relates to another, every messaging component needs to take it further where the other one left off, from the simple hook, to the substance, to the sticky part. This is how our brain’s logic works when it tries to comprehend something that is new. And it’s done that way, the trickle down effect is harmonious instead of messy.

Put Some Order in Your Messaging!

There is a hierarchy for the various messaging components, and the best analogy I could find is to compare it to the structure of a rocket. A simplified list of components that make-up a rocket include 1) the nose, 2) the guidance apparatus, 3) the propulsion system, 4) the fuel reserve, and 5) the fins. The equivalent of these components are 1) the elevator pitch, 2) the market positioning, 3) the value proposition, 4) the product messaging, and 5) the supporting testimonials. These are interrelated, and most importantly they should not be overlapping. They should be additive and synergistic. Your goal is to stimulate the mind of the prospect long enough to grab their attention, and to make them take your product seriously.


The Elevator Pitch is the hook, the intrigue, and the door opener. It should answer why it matters, in a simplified way. And it should leave the listener with a sense of intrigue and wanting to know more. It is best delivered face to face, and should take 10 seconds to blurt out in one single, cohesive sentence. Some examples:

  • We help marketers measure their return on investment.
  • We’re a market place for funding your ideas.
  • We help consumers find the best deals according to their interests.
  • We facilitate buying event tickets online.

The WHAT = Position + Value Proposition

The Positioning Statement is very important because it is what you want your customers and prospects to remember you for. I have written a long post on Positioning: The Battle for Your Startup outlining 8 concepts related to understand it. In a nutshell, positioning starts with your product, but it is not what you do to the product. Positioning is what you do to the mind of the prospect. It is the position you want to occupy inside their mind. You need to create a position in the prospect’s mind that takes into consideration not only your strengths and weaknesses, but also those of your competitors as well. So, it’s relative to what is already known out there. Good examples:

  • A better way to do marketing (Moz) – It’s original, despite being ambitious.
  • A/B testing you’ll actually use (Optimizely) – It attacks the competition.
  • Build, publish & A/B test landing pages without I.T. (Unbounce) – It attacks I.T.

Not so good examples:

  • Online Behavorial Insights (Qualaroo) – It’s not defensible and it is easily copiable.
  • Bootstrap 3.0 Templates Starter Kit (Bootstraptor) —  It’s not grabbing enough. A better one could be: “The easiest and fastest way to start using Bootstrap 3.0”. The templates belong to the value proposition or the product messaging parts.

The Value Proposition is probably the second most important piece (after the Positioning), but you can develop it before the Positioning statement, because it’s easier to do so. See this recent post I wrote, Introducing Product-Value Alignment: What Comes After Product/Market Fit that goes into how to develop the value proposition. The value proposition is a simple, clear statement of who the target customers are and precisely what key benefits and prices will be delivered to them. In the eyes of a user or customer, value is defined as benefits minus price (or pain/effort)Good example:

  • Chango helps the world’s largest advertisers find new customers and boost conversions using a combination of our exclusive data and real-time buying technology. (Chango)

Missing something example: Connect your app to everything from Dropbox to Gmail in just 2 lines of code and let the Ink File Picker handle the mess of uploading files – we give you a clean, short URL that is easy to store and read from. (Ink File Picker) – This one is missing the target audience: who is this for? Not good examples:

  • “Macaw provides the same flexibility as your favorite image editor but also writes semantic HTML and remarkably succinct CSS. It’s time to expect more from a web design tool.” – It’s mixing the value proposition with a potential positioning statement: “expect more from a web design tool”. A better value proposition would have been: “Stop writing code. Start drawing it” which they have used later. “Code-savvy web design tool” which they have used at the top of the page isn’t powerful enough, and is too passive. (Macaw)

The HOW = Product

The Product Messaging is the set of messages that goes into the details of explaining the features and benefits of your platform, product or solution. For example, you can list here the main functions of your product and what they enable the user to accomplish. It’s typically under the Features section, and it can also include how your technology is different, innovative, or part of your solution. This is where you can also get into more segmentation and tailoring of the messages by industry, solutions or customer roles. You need to make clear the differentiation elements of your product, and you need to influence your prospect that the evaluation criteria to consider is one that fits your view of the world. I’m not providing examples, because this is a long section, and it’s typically an area that most startups do well. Look at the Features or Platform sections typically to find these. But I will add one thing: make sure you are including the Benefits of each feature, and what Advantage it gives the user. We call that FAB: Features Advantage Benefit. It’s a staple of product messaging.


The Customer Testimonials are the ultimate supporting statements you can get for your product or company. There are three types of people you need to be concerned about: prospects, customers and advocates. Advocates are often a neglected segment, but gaining in popularity, especially if they are properly managed as a select group. A small army of motivated B2B advocates is the equivalent of what millions of loyal users can do to your consumer App when they help it to spread virally.  With customer testimonials, it’s important to focus on their quality, not quantity. Preferably, list only advocates testimonials, and make them available to speak to your prospects when appropriately needed. It is a known fact that prospects are influenced by their peers more than by your sales reps when making purchasing decisions.

How to Apply This

If your product is for consumers and they are visiting your website, they will likely be only interested in a positioning statement and a clear value proposition, before they decide to try your product. There is no need to lay out elaborate messaging, unless you have a B2B product where the decision-making process takes a little longer. If your product is a B2B product, then you would use the Positioning Statement to grab their attention, and the Value Proposition to let them quickly realize if your product is for them. Then, the Product Messaging and Supporting Testimonials will help them decide if they want to try it or contact you. If the positioning and value proposition aren’t strong enough, users won’t make it past that stage.

Where to Place this on the Website?

Typically, you place the Positioning Statement and Value Proposition above the fold at the very top of the home page. Below the fold, you can display 3-4 most differentiated Product Messaging elements, along with the most credible Customer Testimonials you can get. A separate Features page could dive into more detailed product and technology differentiation. But if you have a known product that has already gained awareness, you could dive straight into your service offering and make the positioning/value proposition the headline for that.

Common Mistakes to Avoid Checklist

  • Too many messages on the home page. (limit it to 2 above the fold, with an offer)
  • No messaging hierarchy.
  • Positioning is not aimed at the mind of the prospect.
  • Repetitive statements (in meaning).
  • Offer to try is disconnected from the value proposition.
  • Omitting to name the audience segment or type of user/buyer you are targeting (very common mistake). Don’t assume it is obvious.
  • Positioning statements that are passive, or not original.

Five Marketing Activities That Even Successful Startups Botch Up

doh barneyI’m sure there is more than five things that startups botch up. But I’m going to focus on these five marketing activities, because they can make a difference in propelling a company further ahead. The following five themes become increasingly important the more a startup matures and develops, whether they are growing their users or revenues, or both. Let’s dive into them.

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