What is 'positioning' to help startups escape the 'valley of sorrow' that they fall into?
Some services become hugely successful after their release, gaining tens of thousands of users in a day or hundreds of thousands in a week, but most inventions and services increase their users gradually over a long period of time. The process of decline that continues for a while after attracting some attention due to novelty is called the 'valley of sorrow,' and many companies and services, including large corporations, have experienced this. Johan Friedner, an engineer with experience in marketing strategy, explains how to overcome the valley of sorrow and succeed.
How To Escape The Startup Trough Of Sorrow - Briefmix
Y Combinator , which mainly invests in startups, has drawn the following diagram as the 'startup process.' The startup initially shows growth, as it is considered a 'rite of passage' to be featured on TechCrunch , which distributes news about IT startups, but it soon loses its novelty and goes into a long period of stagnation. This stagnation is called the 'valley of sorrow,' and it is believed that once the startup overcomes the valley of sorrow, it will become widespread and successful.
One five-year-old startup that Friedner consulted for had been in a long slump, unable to generate real growth, with competitors closing in and profits declining. At that time, he said he was able to get the startup back on track by changing its 'brand positioning' and communication.
Brand positioning, according to Friedner, is about 'clearly showing what gives your brand an advantage over your competitors.' Clearly showing your strengths leads to communication that tells specific customers how you can solve their problems better than anyone else.
Brand positioning influences company strategy as well as design, copywriting, advertising campaigns, etc. These are not permanent and need to be tweaked or even changed completely as trends evolve.
Friedner cites the music streaming service Spotify as an example of brand positioning. Spotify offers a monthly subscription service or free music with ads. However, with the economic downturn and the COVID-19 pandemic, many advertisers have cut their budgets. So Spotify shifted to a more successful model by focusing on original content and carefully selected playlists, which resulted in an increase in paid subscribers.
As a methodology for brand positioning, Friedner says that 'research' is paramount. You need to research a variety of broad categories, such as current trends, culture, and consumer behavior, to find insights to use to build your brand idea. As ideas that can help with research and insight, Friedner lists the 'four C's of marketing.'
The first is Consumers, who need to flesh out key insights about consumer behavior and needs from the segmentation research they just completed, and the second is Competitors, who need to do a hard audit of their strategic messaging and efforts to understand where the gaps in the market are.
Third, it is effective to consider the changes and trends in 'culture' that are happening in society, what you can use and what you should take a position against. Fourth, by researching the history and organizational structure of the 'company,' you can establish values and ideas that can support your company's new positioning.
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