In the early stages of their business, founders often struggle to come up with really strong messaging to describe what they are selling, and this has a huge impact on their ability to raise money, find customers, and attract employees. This is not that surprising, as it can be really hard to arrive at great messaging that is simple and appealing. This post focuses on how to get messaging and positioning right in the early stages of your company.
The Importance of Great Messaging
There are two reasons why you need to have a clear message about what you are offering:
- You need it to connect with customers, investors, potential employees, the press, etc. and if you don’t have a simple, compelling message, they won’t bother to learn more. They won’t take the time to learn about, and ultimately love and share your product. More so, if you don’t steer how people think about your product, the market will make up its own version which may not match your vision.
- Every touch point a customer or potential customer has with your product or company will shape their view of you. It’s critical that each of those touch points send the same message. When you create a clear brand message it ensures your team is fully aligned. This gets everyone moving in the same direction, telling the same story and creating consistent touch points for your customers.
A common tendency amongst technical founders is to describe the product itself, and the features that get them excited. But buyers usually don’t relate to that kind of message, and instead react better to messaging that gets at the heart of the benefits it will bring to their lives.
Another problem is that founders often suffer from being too close to their story, and forget how much work is required for a new person to understand it. They may assume understanding of concepts that are not yet clear to their audience.
Another difficulty in the search for the right messaging comes because founders may not yet have met with enough buyers to know which segment of buyers are their best target, and what messages are resonating with that particular segment. This is classic Customer Discovery work, and it takes hard work to set up these customer meetings. However, even before going into these meetings, it helps to have put work into the messaging to have some idea of what you want to test, and some alternatives to test if the initial ideas don’t resonate.
How do you create this message?
But, how do you create this message? Where do you start and how does it change over time? How do you make it simple when what you’re offering is complex? This post provides specific exercises startups can do to create a positioning statement, and a “One Simple Thing” message. These two pieces are all most startups need in their early stages.
I want to thank Mike Troiano. This post is based on a talk given by Mike, a 25-yr marketing and advertising veteran, who was also a very successful founder (m-Qube). He’s now building the brand and marketing program as the CMO of Actifio. What’s great about Mike is that he’s able to translate advertising speak and classic brand development practices into something immediately useful to startups. This post discusses the key steps in creating your own brand message. I’ve also included video clips from the talk Mike gave to Matrix portfolio companies, so that you can hear first-hand his more in-depth discussion on creating a clear, compelling message.
Start with a Positioning Statement
A positioning statement is the basis for all other messaging and communications. It’s a declaration of who you are, and the value you offer to a specific set of people. When someone asks about your business, I’m sure you are able to passionately describe what it is you do. But, if you’re like most founders, your “pitch” is always a work in progress and you’re likely to modify it based on your audience, mood and the latest features being built. By developing a positioning statement, and writing it down, you will have solved a number of key business issues, and have the beginning of a succinct, consistent way to describe your value proposition every time you are in front of a potential customer, investor or employee. This isn’t to say it won’t evolve, but if done right, it will only change when significant aspects of your business change.
You are dedicating everything to your company. Take the time to clarify your value proposition, discussing it, honing it, and writing it down.
We have found this classic positioning statement to be a useful construct:
For [TARGET] who are [SEGMENT], [BRAND] provides the [CATEGORY] with [DISTINCTION] because of [PROOF]
Your task is to fill in the blanks:
- [TARGET]: Who is the actionable group of buyers you are going after that you can identify and communicate with? (Actionable means that there is some way to target them proactively.) Is it Small businesses? Large businesses? Boat owners? Women? Students? Travelers?
- [SEGMENT]: Within your target, what is the characteristic of the segment of buyers that are most likely to buy? While you may have visions of serving larger markets in the future (e.g. all small businesses), be as narrow as you can at this point (e.g., For small businesses who are hiring ten or more people per year). This will help you focus your messaging, as well as your product, to best meet the needs of this group.
Tip: If you were working a cocktail party room full of people in your target audience, which qualifying question would you be asking to determine who has a problem you can solve? That question points the way to the segment you should focus on.
- [BRAND]: Your company name.
- [CATEGORY]: A competitive frame for the buyer – the short cut they can use to understand what you do. While you may be creating a revolutionary new category and you feel you don’t actually have direct competitors, people still need to a way to understand what you do compared to other products they know. Just be careful about who you compare yourself to and make sure it’s a category your audience understands.
Mike Troiano explains, “I hear a lot of: ‘We have no category. Our competition is inertia, or status quo.’ That’s a problem. Because it means you have to explain to the market what you are. In my experience you are much better off saying “if you need to put us in a box, here’s what that box is”, because at least your target audience understands what that box is. And then you get to say within that box, here’s what makes us unique”.
- [DISTINCTION]: Within the above category, what is it that sets you apart? What makes you unique? More specifically, why are you better? This is what you alone can do for your customer, and it’s the reason they should care about you. Companies in well known, understood categories are better served tying their distinction into a higher level, emotional benefit. But, if you are in a less understood category, you will likely need to stick to more basic, understood distinctions. For example, when Airbnb started, their messaging focused on offering travelers unique places to rent. Now that renting an individual’s place is understood, their messaging focuses on their community and finding a place where you belong.
- [PROOF]: What is the proof to your claim? This doesn’t need to be complex and data based, but it’s what will convince your customers that you can deliver on your promise – why you’ll be able to do what you say you can do.
This simple positioning statement is very useful to entrepreneurs. It enables you to declare the underlying hypothesis of your business.
A couple tips for working through it:
- When you try to write down the positioning statement for your own company, don’t be surprised to find that this is hard to do. The reason it’s hard is because you are forced to take the many hundreds of things you’d like to say, and cut it down to just one sentence.
- Don’t do this by yourself. Do it with your management team, as you want to get to the point where everyone on your team has a similar way of articulating this. This should stir a lot of conversation among your team, which is the point. It will drive a series of conversations about the segment, category, benefits, differentiation and proof points that will have value elsewhere. Take the time to work through this, iterate and get clear on how to describe what you’re offering. And, it’s great to get different perspectives on this – you may want to separate into a few groups to come up with different possible positioning statements, and then compare and discuss.
- Keep the jargon and marketing hype out of it. Use simple language that you would use in talking to another human being. Not sure? Say it out loud. If what comes out of your mouth isn’t something you’d ever say to a real person in real life, make your language more direct.
- Once you have a statement that you feel good about, test it. Run it by real customers and prospects, not just your friends. You might want a couple versions to test, and if you get confused looks, you may need to go back and iterate some more. Another good test – have the person you share your positioning with explain it to another person and see how well they communicate what you do.
This format works for just about any company. Here are examples for Zipcar and Amazon that they provided on the web.
- For urban dwellers who need a car, Zipcar is the sharing service that gives you freedom from car ownership and the hassle of renting.
- Amazon, circa 2001
- For World Wide Web users who enjoy books, Amazon.com is the online bookseller that provides instant access to over 1.1 million books.
And here are a few positioning statements that we wrote for Matrix portfolio companies based on what we know of them:
- For SMBs looking to grow their business, HubSpot is the Inbound Marketing and Marketing Automation software that increases lead flow and improves lead conversion rates.
- For growing businesses looking to hire hard-to-find candidates in important roles, Lever’s Applicant Tracking System helps them identify, attract and close the best candidates.
- For mid-sized businesses looking for a better way to manage payroll, benefits and HR information, Namely’s HR software provides an integrated solution that engages and delights employees.
- For customer-centric digital marketers who need to drive more revenue, Zaius’s behavioral marketing software provides them with a complete understanding of customer behavior across all channels, and the campaigns that will drive more engagement, loyalty, and conversions.
In this clip, Mike talks through in more detail how to build your own positioning statement and he shares a few more examples.
One Simple Thing (OST) – Why You Need One
Note: The following section is most appropriate for companies that have reached clear product/market fit, and who are comfortable with their positioning statement.
A clear and concise positioning statement provides the scaffolding for a pithy and memorable articulation of your value proposition, often the first step toward a tagline or initial sound bite. More than a clever turn of phrase, such an idea can be an important tool in helping new people cross over from never having heard of you to wanting to learn more about what you do.
The key to a phrase with that kind of power is simplicity. The reason for this is human nature itself, which drives us all to simplify the world around us.
Let’s face it, we’re all busy and distracted all the time and bombarded with information. To cope with this information overload, we categorize the offerings we come across and boil down our understanding into simple concepts that we can remember. If your message is overly complex, it won’t be understood the way you hope, and won’t be remembered. If forced to describe what they heard, your audience will often simplify your message for you, and categorize your product in ways that will horrify you. That is why we need to simplify our messages first.
The best brands understand this and have invested in creating simple messages their target audience can immediately identify with. One of the best examples of this was Steve Jobs describing the iPod as “1,000 songs in your pocket”. This simple short message cut through all the features and boiled everything down to the key benefit that the iPod gave the user. Because it was so simple, clear and memorable, it stuck, and Apple got massive editorial exposure for free. When you look back on all the articles and reviews, they all included the “1,000 songs in your pocket” message in either their headline or the first few sentences.
For startups, try to boil everything you’re doing down into a simple idea that expresses the emotional power your product brings to its users. For example, Airbnb started out as a way rent unique places, and Zendesk is about getting you closer to your customer.
“If you don’t create an OST for the market, the market will create an OST for you”
Listen to this clip to hear Mike explain why we as people simplify everything and how top brands have boiled their complex offerings down to One Simple Thing.
Yes, “One Simple Thing” (“OST” as Mike and his partners at Holland-Mark called it) is an abstraction, and some might say an oversimplification. Many entrepreneurs I talk with just can’t see how they can capture everything they offer in a few words. It feels like they’re selling themselves short. But remember, this isn’t all you’ll ever say about your product. The goal is to prioritize your core ideas and simplify your message so that it’s easily consumable and draws people in to hear the rest of your story.
“You’re looking for the stick to lead with when you engage the marketplace.” — Mike Troiano”
Watch this clip as Mike shows three examples of real startups and how they were able to appeal to more people by changing their value propositions from complex to short and simple.
So how do you create an OST? The good news is that there’s a process you can go through to create one; it’s not divine intervention or something that comes to you in the shower. When Mike ran his own branding agency, he would spend weeks and weeks getting immersed in his client’s business, product and culture and working through a multi-step, iterative process to develop an OST. But, most startups won’t be able to bring in an agency like this. Instead, here Mike shares a DIY version of this process that you can utilize with your team.
Your task is to take the complicated and make it simple. Take the simple and make it compelling.
Step One: Data Collection
Collect all the data you can about who you are as a company. Use these five dimensions to analyze your company and create a list of five to ten ideas for each:
- Capabilities – what do we really do, our skills, strengths
- Customers – who pays us and why, how will we sell to them
- Context – how do we define our market, what is the state of the market
- Culture – what do people celebrate; e.g., “to succeed here, you need to be _______”
- Competition – who is it, why will we win/lose
Step Two: Identify Your Fundamental Drivers
Pick the three most important points for each of the five dimensions. Then, boil all of this information down into one emotional clause and one rational clause that answer these questions:
- If you were to make someone associate your company with a single idea, what would the rational idea be?
- If you were to make someone associate your company with a single idea, what would the emotional response be?
Step Three: Create a Word Space
Based on the answers to the two questions above, what words or phrases capture the essence of these fundamental drivers? Do this with your team and write down all the words that come to mind. Once you have a short list of words, rank them against these attributes:
- Is it true? Is your OST true to the capabilities and culture of your organization? It may be somewhat aspirational, but it should be based in truth. Your OST must be realized in the form of your product.
- Is it relevant? Is your OST relevant to the target audience you’ve defined? Do they care? It’s not enough for it to be important to you, it must be important to your customers.
- Is it motivating? Does it change what your target thinks, feels or does? If internalizing your OST doesn’t change anything, it isn’t strong enough.
- Is it distinct? Is it different from your competition?
Source: Mike Troiano
Three tips to help you through this process:
- This is all input. Your final answer is a judgement call. You should discuss, and then decide and commit as a team. You’ll know when you hit on the right OST – believe it or not, it will just feel right.
- This is not easy. It’s not supposed to be. You will likely want to do this exercise over a several sessions, and you may want to assign the data collection to each team member to think through ahead of time so that you can share your different perspectives when you meet.
- You will get 80% of the value from an OST, not the THE OST. It’s very difficult to find the perfect OST. But, going through this process and getting everyone on your team aligned on the same idea will improve your execution, and you can course correct as you go.
Your OST may not be something you communicate to the outside world. Instead, you may need customers to experience your brand and ultimately draw this conclusion for themselves. For example, Zipcar never said they were about freedom, their OST did. But, every feature, service, and message they created went through a filter of whether it supported their OST of freedom.
In this clip, Mike talks through the DIY approach in more detail.
Conclusion – Final Notes
To build a successful business, you need both a compelling product and a way to scale the sales of this product. But, you also need a way to simply communicate what you offer and connect with customers in a way that causes them to take action. That could be getting them to click through on your web site to learn more, or getting them to respond to a sales email, helping them talk to others in their company to build support for your offering, etc. And if you are raising capital for your business, clear and simple messaging is essential to cut through the noise from the many other pitches that investors are bombarded with.
The words you use to communicate your offering are often left to the last minute – usually when you are launching your product or a new feature, or going to a tradeshow. This, I would argue, is too late and too ad hoc. Communicating your value prop is just as important as building your product (it can actually influence what you build), and it’s critical to selling it. The good news is, you have all the knowledge you need to build your messaging. And, I hope the exercises in this post give you a framework to tap into that knowledge and create a simple, compelling, clear message.
For more thoughts on messaging and creating a highly effective positioning statement, Mike Troiano has written a follow-up post here: The Surefire Test of Positioning.