Differentiating a product by building more features or a better version of competitors’ features isn’t going to separate your startup from the rest. Here are 3 ways to differentiate your startup app idea from the competition.
Identifying, clearly defining, conveying and executing on a competitive advantage is key to turning a startup idea into a profitable venture that lasts. If you want your startup to excel in many ways, that’s great, but chances are you will most likely end up doing OK at many things but not exceptionally well on anything. However, if you can manage to be great at one thing, your startup will be successful which can facilitate greatness in other areas.
Here are 3 ways to differentiate your startup app idea from the competition. Notice how all three are tied together.
In a competitive space, differentiating a product by building more features or a better version of competitors’ features isn’t going to separate your startup from the rest. However, tailoring existing features to an underserved group within the same market is just enough to build a unique startup.
If you’re a restaurant owner, you’re probably more likely to consider a marketing automation tool built for restaurants. If you’re selling pizzas, you may be more open to subscribing to a tool built for pizza restaurant owners.
Niching down can be one of the easiest ways to capture a subset of the market even if the goal is to eventually expand to other markets.
The annual contract value of the email marketing platforms Constant Contact, Marketo and Responsys was around $265, $26,000 and $250,000+, respectively. Each one of these startups exited for over one billion dollars. While they may offer similar features and compete in some ways, they each have a different position in the market.
Your market position starts with your brand and your target. You first need to know what you stand for and who your ideal buyers are. It’s hard to position yourself without understanding the market. Positioning is another simple way to differentiate your startup without necessarily building more features but by reflecting your promise into the market’s core features.
For example, two marketing tools can offer the same set of features with a different position. The first, could be “the tool that will make you money” while the other can focus on being “the best tool to understand your customers.” What can be different is the type of reports and messaging used by each company. The first may focus on presenting the key metrics that entrepreneurs need to consider to boost revenue. They may complement their output with suggestions. The second may focus on presenting detailed data and analyses to help entrepreneurs learn more about their buyers.
We live in a world driven by technology. This has certainly improved lives and made impossible things possible and efficient. This leads us to differentiation through personalization. Finding ways to personalize your offer not only through technology but also by incorporating a human touch can certainly differentiate you from the rest in the market. This goes hand in hand with your position and chosen niche.
While Constant Contact might assign one account manager to many paying customers, each or a few of Responsys’s customers probably has one direct point of contact responsible to help them better leverage the company’s tools to accomplish their goals. One way to disrupt the market is by offering the same level of personalization without charging Fortune 500 bills. This is can be possible without building more features but by focusing on business model innovation.
Zappos was acquired by Amazon for over one billion dollars. What’s Zappos’s main competitive advantage? customer service. In conclusion, if you want to build a successful startup, be different. Differentiation is not just about technological innovation. Focus on an underrepresented and underserved market through personalization and by taking a unique position. Jack Welch once said, “if you don’t have a competitive advantage, don’t compete.”