Differentiation: How To Stand Out
[00:00:00] Peep Laja: If you are just like everybody else, what is your hope? How do you get picked? Welcome to how to win with me, Pep Blauw. A deep dive into stunning winners in B2B SaaS to determine how much is strategy? How [00:00:15] much is luck? And how do you win? Differentiation. It's not about why sign up with your tool over some other tool.
Differentiation is about why choose you. And the problem is that there have never been as [00:00:30] many brands as there are today. The barriers to entry have never been lower. Access to capital is really good. Price of technology has significantly come down. Scott Brinker, has been maintaining this [00:00:45] marketing technology landscape thing, I think since 2011, when there were like 150 more tech tools and now.
There are over 10,000. It's sort of like, listen, the software landscape and marketing is huge. It's not shrinking anytime [00:01:00] soon. It doesn't really matter if it's 8,000 or 10,000 or 20,000. It's more than you're going to be able to evaluate yourself, and so you just need to start to come up with other strategies.
of how you approach tapping into this incredible engine of [00:01:15] innovation and marketing technology. And on G2, if I zoom into any like sub category of MarTech tools, let's say survey tools, I click into it and I see some familiar name, SurveyMonkey, and there's Qualtrics, and [00:01:30] Typeform is in there, and then there are like 50 other survey tools I have never heard about.
They're just like every other survey tool. That is the problem. Sameness is everywhere. The more competitors there are, [00:01:45] the more similar they are because they copy each other. Think about hotels. Close your eyes and imagine that you're walking into a hotel lobby. It's a hotel you've never been to, but already your mind makes up [00:02:00] what the lobby looks like and where's the check in and maybe there's like a restaurant in the back.
Hey, and then you go to the hotel to roll. They offer you a soap, a lotion, a shower cap, but no toothpaste, no toothbrush. How is it [00:02:15] that all the hotels in the world agreed? Yes, let's offer the shampoo and the lotion for free, but no toothpaste. Why? Because they all copy each other. [00:02:30] Sameness and Is the default in every product category.
The concept of USB unique selling proposition, you know, it originates from the 1940s, uh, United States TV advertising, you know, there was a [00:02:45] commercial for, uh, Toothpaste. One of them was for bad breath. Tom, for unpleasing breath, I advise Colgate Dental Cream because only Colgates has proved so completely.
It stops. Bad breath. The other one was [00:03:00] against, uh oh. We treat cavities. Do something about. Cavities now. Brush with Colgate. The largest selling anti cavity toothpaste in the world. Today, you expect every single [00:03:15] toothpaste to do all of it. You know, it's all been commoditized. And so, how can you be different?
Can you compete those features? Well, not for long, classic examples like Snapchat launched stories, uh, in the end of 2013. [00:03:30] A couple of years later, Instagram copied it, and then WhatsApp copied it, and then Facebook Messenger, and then YouTube, and then LinkedIn, and then Twitter. But for a while, the whole internet had stories, which was supposed to be the, the [00:03:45] reason to choose Snapchat, the unique feature.
The differentiation has to come from places other than features because the competition will always catch up. Think about Tesla. It had how many years of advantage of, uh, being the cat category [00:04:00] of one. For the longest time, it was the only one who made electric cars, and today, almost every single car maker is making electric cars that are equally good.
Have at the same range. 2023, ID four Pro [00:04:15] G two. Tesla lost the role of the innovator, and now they're competing on brand, just like every other car maker. And if you look at any, any mature category, you'll find a lot of [00:04:30] products that are basically the same. People ask me all the time, you know, is this A B testing tool different from that one?
And I usually say, it's the same. Well, they're pretty much the same. Once novel features are now table stakes. And markets are getting only more saturated. What do [00:04:45] challenger brands believe is the biggest threat to their life? According to a survey run by Adweek, market saturation. Can you name a product that is objectively better?
Then an alternative [00:05:00] product. It's a very hard question. Google search is still the best search product out there. The second best is not nearly as good. I've heard people at conference when I asked this question, say, Oh, HubSpot. Well, is it really, is it really objectively better? No, I don't think [00:05:15] so. Um, it has a lot of, a lot of flaws, a lot of shortcomings and everything HubSpot can do, other tools can do.
Also, Michael Porter once said that instead of competing to be the best, you [00:05:30] should compete to be unique. Volkswagen is, is a good car too. It meets a different set of needs for a different customer. There is no best. In business competition. That's the wrong [00:05:45] question. In business competition, instead of thinking about the fact that your job is to be the best company, the proper way of thinking about competition is that your job is to create a unique [00:06:00] company.
A company that offers something different. A company that offers something unique in which it has an advantage over its competitors. If you think about competition as just [00:06:15] trying to be the best. That often leads you to have a very destructive competition. Where in order for you to succeed, your competitor has to fail.
We find that any [00:06:30] competition which is like that is a very dangerous competition. It's very, very hard to win. Instead, if you think about competition as how to make your organization unique. and different and to deliver something that [00:06:45] the competitors can't offer. That creates a form of competition action that's much more likely to lead the company's success as well as to benefit society, to produce unique products, [00:07:00] to create unique value for the customer.
People have very limited consideration sets. It's not like, oh, I'm going to buy a new A B testing tool or a survey tool or whatever it is, and they're going to look at every single tool in a category and make [00:07:15] like detailed charts and feature matrices and what, no, no. They're not doing that. You know, first they have a, they have their shortlist, like a consideration set.
And that has, it's already very limited, you know, maybe 10 tools. It's the brands that they already are familiar [00:07:30] with, like usually the biggest and the most famous brands in the category or other brands whose marketing they've been following. And then they will lost their peers. They will add a couple of ones and maybe they'll Google some stuff.
I look at G2 and there you go. There's like 10 companies. And the, you know, if you're [00:07:45] CRM, there's 500 CRMs. So how on earth are you going to get into that consideration set of 10? And the consideration set might be only just five. At Winter, we ran this buyer research study where we [00:08:00] learned that the buyers, they narrow their shortlist down to just three companies to get a demo with just three.
And this happens without talking to any sales rep. So they go to a website and they are looking for, [00:08:15] how is this different from Uh, some, something else. And so before you even win that shortlisting battle, you need to win the getting to the consideration set battle, what stands out gets picked. [00:08:30] And, and if nothing stands out, it's just safer to go with the category leader.
It's very hard to get noticed. Again, differentiation strategy is a way to stand out from the noise and give people a reason to choose you over others. Japanese author [00:08:45] Haruki Murakami said that if you only read what everyone else is reading, you will likely think just what everyone else is thinking. The more competition, the stronger the commitment to differentiation should be.
But mostly the opposite is true. It's, it's constant comparison and [00:09:00] benchmarking that lead to conformity. It's tempting to be also a safe and boring company to say safe and boring things, because you're like, if you're safe and boring, you're, you're not going to offend anybody, nobody's going to be upset.
The [00:09:15] problem is that. Uh, also nobody's going to care. MailChimp does not need to be different. You need to be different from MailChimp. The category leader is the status quo. They can say generic shit about themselves. You [00:09:30] cannot. So how can you differentiate? Well, multiple ways. One is through brand Patagonia, who famously on the website homepage said, fuck Trump and the president stole your land and things like this.
It takes a political stance about issues like climate change and [00:09:45] so on and so forth. And so it's polarizing on purpose. So you either love them or, or, or not. Is Patagonia, um, clothing better than their next best competitor? Probably not. Probably it's pretty much the same stuff. The brand story is not bullshit.
[00:10:00] It's authentic. Uh, they live. Um, but so, so now brand becomes a reason to choose them, right? In her excellent book, different Harvard professor, young me, moon details, three types of brands that stand out in [00:10:15] the competitive landscape today. Let's, let's look at these ways. So one is reverse brands like Ikea.
So most brands continually improve their value proposition because they assume customers can never be fully satisfied. However, Reverse [00:10:30] brands assume that although customers do want something, uh, more than the baseline product, they maybe don't want more features. So reverse brands remove certain aspects of a product that customers might expect [00:10:45] and add in new unexpected things.
You know, your normal furniture store is full of salespeople and furniture that maybe last a lifetime, but IKEA provide almost no in store assistance. So Furniture is good for a couple of [00:11:00] years. And you don't even buy furniture, you buy a bunch of parts, right? You get great design at affordable prices.
The stores have an ultra modern look. And you get meatballs, right? And while U. S. furniture stores have steadily [00:11:15] lost out to retailers like Walmart, Ikea has become the largest furniture store in the world and nobody has been able to copy Ikea. The other type is breakaway brands. So breakaway [00:11:30] brands recognize that product categorization is arbitrary.
We wouldn't eat cookies for breakfast, but lots of people eat sugary cereal with the same nutritional value as cookies. But it's cereal, so it's okay. [00:11:45] Um, diaper manufacturers had a problem. Like most parents were embarrassed to buy diapers after their baby turned like three years old. So parents potty trained them.
Uh, and that was like, uh, cutting out into [00:12:00] the customer life cycle. The diaper companies came up with a genius concept. They invented pull ups. Diapers that look like underwear. So the, the, the use case was for, uh, kids aged three to five. Now, social stigma was gone. [00:12:15] Kids could keep on crapping their pants and profits soar.
And the third kind is hostile brands. So hostile brands play hard to get. Um, they're not feel good brands. They're intentionally [00:12:30] polarizing. They're like, fuck you. You know, you either love me or get the hell out. Right. And so they're unapologetic about aspects, some aspects of their brand. When Mini Cooper launched in the United States.
The brand made no apologies for being a small vehicle, uh, in a [00:12:45] country that loves big SUVs. So hostile brands, you know, may make us feel uncomfortable, but in the end, their polarizing nature makes them stand out. Then there's, uh, this guy called Fabian Gerhalter. And [00:13:00] he wrote a book called Bigger Than This, and he discusses eight brand traits of successful commodity brands.
Then there's belief. It was like shared values, like a brand that connects, uh, on a, or like, uh, like a shared belief, like a tribalist [00:13:15] thing. Uh, there's, uh, the Black Rifle Coffee Company, you know, they sell coffee beans like anybody else. It's a commodity product, right? But they're unapologetically pro gun, supporting Donald Trump.
Very [00:13:30] polarizing. There's a group of people who love them and buy all their coffee and others hate them with passion. So you need to, to attract a certain type of people and represent a world view. You need to repel. Another group of people, uh, a cause [00:13:45] could be a way to differentiate, you know, think about Tom's shoes, you buy a pair and then like poor kids in Argentina get a lot of free pair.
There could be a heritage, you know, something like goes, like goes long into history. Uh, cause they really deal with tech [00:14:00] products, I guess. Nobody wants the old tech product, but like Coca Cola, you know, is now big heritage. There's transparency. Leading with transparency, uh, to gain trust with consumers. Uh, there's been, uh, SAS companies like [00:14:15] Buffer or ConvertKit who are like transparent with their salaries, if any, inside the companies.
But of course, transparency and honesty take serious commitment. Uh, like, like what would it look like if you ran a radically transparent company? What if [00:14:30] you live streamed internal meetings? Nobody's that brave. You would have no competition. That's for sure. But there's also individuality. So it's like personalized products and experiences.
You make something truly personal. And then another, another way to differentiate [00:14:45] is personal brands. Have founders that stand out. You know, Tesla has Elon Musk. Um, you know, people who like Elon are more likely to buy a Tesla. Who's the, um, who's the CEO of Mazda? No idea. Of a visible [00:15:00] founder. Like Microsoft had Bill Gates and Apple had Steve Jobs.
And we still have visible founders like HubSpot Google. It's just much easier to relate to another human. Uh, then entity now, uh, chat GPT and Sam Altman, another thing, [00:15:15] right? Or, uh, Rand Fishkin, uh, and his new company Spark Toro. Rand is better known and liked than his company. And people use his company because they like Rand.
At, at Winter, um, [00:15:30] in people, um, 70 percent of our, uh, customers that come in found out about it because of me. Um, and you don't even need to be a founder or CEO to use a personal brand for a differentiation. Uh, [00:15:45] Dave Gerhart, who also wrote a book about the power of personal brands. He, he was a VP marketing at Drift when he started to build a personal brand.
As Basecamp founders wrote in Rework, pouring yourself into a product is a powerful way to stand out from the [00:16:00] crowd. As the CEO or the founder, you got to look at all the ingredients you have to grow your business through marketing. I think one of the best ingredients that you have is To build a brand through the founder, because so often the founder of that company has a very unique point of view, a very unique story.
And in the [00:16:15] case of Drift, I went there and David, the CEO, not only did he have a very unique point of view and strong opinions, but he was, uh, he had a, he had an audience, he, he was a former chief product officer at HubSpot, um, him and his co founder, the co founder Elias Torres, they had built a couple of companies together [00:16:30] before.
He had built his own audience. And so the first marketing channel that we really like tried at Drift was to elevate his personal brand and to tell the company story through his social media and through his podcast. And that was created an unbelievable connection with an early in [00:16:45] audience that I haven't seen anywhere else really.
And then we did a similar thing at Privy. I was like, man, I should write, I should write about this because, uh, I think a lot of founders still like are sleeping on, on social media or they, you know, They're just thinking about it wrong. And so I wanted to put down my [00:17:00] thoughts on like how to actually use, um, marketing as a founder beyond like the traditional funnel demand gen stuff, how to use social media, podcasting, building your email list, how to use those things to your advantage, what to say, what to do as a founder.
[00:17:15] And, and mainly because the founder, you know, 99 percent of the time they have some very unique story about why they started the company or, um, you know, or something that happened to them to, in order to start the company. But they're also the person that's uniquely positioned to have something interesting to say.
Those are all the [00:17:30] best ingredients for social media. If you're successful, people will try to copy what you do. Making yourself part of your product or service is a way to protect yourself from the copycats. Then there was, uh, this classic book, Differentiate or [00:17:45] Die, which makes these, uh, makes these suggestions for how to be different.
Like be the first, the first one to do something, you know, like Jasper just exploded onto the, uh, scene with the AI content creator tool. There were first to market and people [00:18:00] preferred them, uh, big time or attribute, um, attribute leadership, uh, meaning that you're better in, in some particular aspect. This is when you double down on a single attribute.
You're known as the best for one [00:18:15] particular aspect or use case. You know, kind of like Zappos is the classic, uh, example for customer support or WP Engine was past WordPress hosting, now a commodity claim. Uh, look, Winter is the only B2B, uh, [00:18:30] message testing tool, the only B2B ICP research tool, just nobody else.
You cannot own the same attribute or position that your competitor owns. You must seek out another. Attribute and definitely don't play the game of category leaders. Play a [00:18:45] different game. If you think about your ICPs, let's say you sell to product marketers, there's, there's product marketing Alliance. Uh, and, uh, you know, they're for sale.
They're, they're like media company. What if you buy their endorsement product marketing Alliance recommends that all product marketers use this type [00:19:00] of thing as an example. You know, HubSpot is a leader after all, there must be a reason for it. So if you are a leader, if you are a number one, talk about it.
And of course, any such claims must be specific and credible. [00:19:15] And then specialize for a target market, you know, focusing on a single target user or use case will make you a specialist. Paperbill is not just scheduling and billing software, but scheduling software for customers. Make your products in a special way.
[00:19:30] Like you focus on a unique design or new unique technology that helps you differentiate your product. The last is be hot. So this is, this is a, about tooting your own horn. It's like the Kim Kardashian strategy. You're popular because you're popular. Think [00:19:45] about Zoom during the COVID crisis. Um, Zoom became the hot thing and there was Clubhouse for a while.
Um, Notion is taking over the world and so being hot or, you know, experiencing tremendous growth can get your [00:20:00] product or company some aptitude. But once you're there, you have, you have to figure out something else to keep you there. Once you find your differentiation. You should double down on it. Or as my friend Noah Kagan says, you're jillion down on [00:20:15] it.
What's working to grow and how much of it are you really maximizing? And I don't think people are actually going to the limit. I wouldn't, yeah, I wouldn't even say doubling. I'd say it's like a fucking jillion down. I think that's a little bit of the difference is I will go extreme on the things that work.
We'll try a lot of things that don't work. [00:20:30] And then when it does work, it's like, okay, let's do this to the limit. So if you're faster, go 10x faster. You have better customer experience? Now do TEDx that. You're super niche? Go more niche. You know, and you [00:20:45] differentiate on service? Well, how can you make that like ridiculous level of service?
And finally, who owns differentiation at a company? It's differentiation is not a Line of copy on a website. It's not something that you [00:21:00] sprinkle on top of your, your share company. You tell that you tell your market, Hey, go, go add some differentiation on our homepage. No, no, no. Differentiation is a CEO problem.
It's a strategic issue. And if you're not. Today, the [00:21:15] CEO needs to build a vision for the company that is differentiated and you have to build toward it because Indian marketing is a game of attention. And if you're differentiated, you get it. And if you're not differentiated, [00:21:30] you won't get attention.
Thank you very much. Thanks for tuning in to how to win, where in each episode, I unpack one aspect of winning in B2B SaaS. All your feedback is much appreciated. For more insights and opinions, follow [00:21:45] me on LinkedIn or Twitter.
