My learning in B2B positioning: Don't try to be perceived better or cheaper - Build your own category

My favorite B2B SaaS company is HubSpot. While there are so many examples of B2B SaaS companies with brilliant growth models, HubSpot is a personal favorite because I am a user & a proverbial word-of-mouth advocate. What is the biggest learning I derived from HubSpot's model? The default route for positioning your product is to showcase you are either better or cheaper than your competitors, but the more sustainable route for positioning is to create a category of your own, like HubSpot did!

HubSpot introduced the concept of 'Inbound Marketing' and educated their potential customer base about how this is the need of the hour for B2B organizations. Umpteen number of marketing teams, including our own, got ourselves trained on how to enable Inbound Marketing as part of our GTM. Once people started realizing how useful this marketing philosophy is, they started looking for tools that can help in accelerating Inbound Marketing in their company. And voila! You discover HubSpot's tools.

Therefore, my learning from HubSpot, and from countless other B2B Enterprise & SaaS startups has been that the key to B2B positioning is 'Defining a new category' that solves existing customer problems, albeit differently. Here are 3 reasons why I think it is critical:

1. Escaping the Anchoring Effect

When I learnt about inbound marketing as a process, I thought about how it fits into our marketing & sales goals. I obsessed about how this will enable us to generate more leads. You know what I did not obsess about? I did not obsess about CRM & Sales funnel management tools - hence I did not get anchored to SAP, Salesforce etc. I focused on the outcome I wanted to achieve in my lead gen, & not the best tool out there I need to be using. In comparison, when a vendor approached me with a CRM that is 10X cheaper than Salesforce, the conversation got me anchored to Salesforce. So, Salesforce is probably the best, but these guys are cheaper than them, so they must be doing that at some expense - what is that? This vendor had the early mover advantage, but lost out on the positioning. This is the 'anchoring effect' trap that you can fall into as an early stage B2B startup. As a large corporation, you may be able to power though this perception trap through aggressive marketing & lots of money put into positioning - but as a startup, this can be the death knell.

2. The flexibility of (re)defining the metrics for the industry

The biggest advantage of creating a category of your own is that you do not have to play by the rules set by your predecessors. Traditional sales management tools let you track your sales funnel in a linear manner, with account onboarding as a successful end point. Great! Some sales management tools will make it easier for you to track this funnel vs others. Sure! But let us talk about a different metric - have you thought of customer marketing? How are you enabling your customers to be your sales champions? How about a way to measure your customer marketing, referral programs, advocacy marketing, and how it relates to better Customer Acquisition Cost, and lower Churn? Can we help you track that, as a pioneer in that category? Sure HubSpot - you can!

If you are just a better, cheaper, lighter CRM, you have little room for flexibility. But if you are a tool enabling a new category of marketing, you can educate your customer on what new-age metrics can help customers in the 0 to 10X, and 10X to 100X phase.

3. New is always beautiful!

Everybody likes to try out the new and shiny thing. Inherent human curiosity always makes us gravitate towards something different and new, that might solve our problems disruptively, instead of incrementally. Remember, your customers are living and breathing the problem you claim to solve, for a long time - may be much longer than your existence as a company. Hence, the chances that they have tried out existing solutions to mitigate their challenges is very high. Therefore, positioning how you will solve your customers existing problems differently (and not just better), by helping them re-frame the problem, or by tackling it from a different angle, really helps get the attention. It helps in getting the customer to the table. It gives you that one chance you need - to hook them in. Remember - if you don't get noticed, you lose 100% of your customers.

At Myelin Foundry, we have endeavored to build a category-defining positioning for our products. For example, our streaming product Fovea Stream, enables OTT players to provide superior quality video viewing even in low network areas, using on-device AI. When we started positioning the product, we ran the risk of being compared to existing solutions, such as AI video codecs, that help in improving video delivery through better compression. The talk was always about video infrastructure, compression, and supplementary technology that makes the delivery faster, better and easier. The Content Delivery Networks (CDNs), the Online Video Platforms (OVPs) & the Codecs would all talk that language with the customer. Therefore, we differentiated on our positioning by focusing on the benefit to the end user. The mobile phones that viewers watch content on have A LOT more capability to do complex operations, than what is used today for streaming. There is still a huge gap between device capability and quality of content available. Viewers have HD screen phones but most often get SD quality due to poor Telco network. Similarly, viewers buy 4K TV sets and yet hardly get access to 4K content. We positioned ourselves as the company that can help bridge that gap between device & content. The category was no longer video delivery - it was device-aware video experience for the consumers of OTT players. It is a challenging task to establish a new category, but it is what has enabled us a seat at the table, and the attention of not just our potential customers in OTT, but also the CDNs and the OVPs who are market leaders in the video delivery space.