Product Positioning: How to ensure your company stands out

What is Positioning and Why Does It Matter?

According to Anthony, positioning can be understood as a simple equation:

Positioning = Segmentation + Categorization + Differentiation

This formula answers three fundamental questions about your product:

1. Who is your product for?
2. What is it?
3. Why is it better than what they're using today?

When you get these three elements right, you create "mental availability" for your product. As Anthony explains:

"If you think of their brain as a bunch of shelves at the grocery store with different types of products, you've told them exactly where your product lives, in which shelf, in which part of the store, so they have a mental framework of understanding what it is, when they would buy it, the value that it offers."

This mental framework is critical because it helps potential customers immediately understand where your product fits in their world. Without clear positioning, prospects struggle to categorize your offering, making it harder for them to make purchasing decisions.

Understanding the Five Elements of Positioning

Anthony broke down the five key elements that make up effective positioning:

1. Workflow - The functional activity people perform (your job-to-be-done)
2. Competitive Alternative - What people are currently using
3. Product Category - What type of product you are
4. Problem with the Competitive Alternative - Why the current solution is lacking
5. Unique Value - The features, benefits, and capabilities that make you stand out

Let's look at how this applies to a real product like Loom:

• Who is it for? People providing regular updates to their coworkers
• What are they using now? Regular meetings
• What is Loom? A screen recording software
• Why is it better? Meetings are unproductive and waste time with small talk
• Unique value: Record your screen and yourself simultaneously for concise, powerful update videos that cut down wasted meeting time

Anthony provided another example with DuckDuckGo:

• Who is it for? People searching and browsing the internet
• What are they using now? Traditional web browsers
• What is DuckDuckGo? A web browser
• Why is it better? Unlike other browsers that track you, DuckDuckGo provides a completely private browsing experience

These examples demonstrate how clear positioning helps customers quickly understand what you offer and why it matters to them.

Positioning is a Long-Term Bet

One of the most important insights Anthony shared is that positioning is not something you can A/B test your way through:

"Positioning is a long-term bet. It's not a short-term experiment."

He illustrated this with two examples:

1. His band's journey: They chose to make pop punk music, and initially got only a thousand streams. Three years later, they receive close to a million streams monthly with roughly 100,000 monthly listeners. Had they switched positioning early, they might never have reached this audience.
2. Calendly's growth: From 2017 to 2023, Calendly maintained essentially the same positioning - helping people schedule meetings without back-and-forth emails. During this period, they grew from $100K to approximately $270 million in revenue.

The lesson? Commit to your positioning and give it time to work. Many startups make the mistake of changing their positioning too frequently, never giving any particular position enough time to gain traction in the market.

"Did we know that was gonna happen three years from when we started? No, because positioning, it's a long-term bet."

The same principle applies to SaaS companies - consistency in positioning allows for gradual market penetration and brand recognition.

Segment Your Market by Workflow

For B2B SaaS, Anthony argues that the most important way to segment your market is by workflow or job-to-be-done:

"The most important way to segment a market is not necessarily by geography or business model or industry or department... the most important way to segment is with the job to be done or the workflow itself."

This approach makes sense because, as Anthony puts it, "in B2B, businesses are made up of workers doing work, and they buy software to help them do specific parts of their work."

A key insight here is that workflows operate at different levels. High-level workflows like "demand generation" break down into smaller sub-workflows like "attracting leads" and "nurturing leads," which break down further into tasks like "running paid ads" and "publishing content."

Each of these represents a different potential market segment, and companies can succeed by targeting different workflow sizes:

• Smaller workflows (like Calendly's meeting scheduling): Lower price point, faster sales cycle, and potential for product-led growth
• Larger workflows (like Gainsight's end-to-end customer success): Higher price point, longer sales cycle, better suited for sales-led growth

Anthony emphasizes an important distinction: workflows are functional activities, not outcomes. "Increasing revenue is not a workflow. It's an outcome of jobs to be done," he explains. This distinction is critical because people don't buy software to "increase revenue" directly - they buy it to help them perform specific tasks that ultimately contribute to revenue growth.

The Dangers of Targeting Multiple Workflows

Many startups try to solve multiple unrelated workflows simultaneously, which Anthony identifies as a common pitfall. He uses Stripe as an example of a company with multiple products serving entirely different workflows:

• Carbon removal (owned by corporate social responsibility)
• Incorporation services (owned by founders)
• Identity verification (owned by security teams)

"These are three completely different unrelated workflows. So they have to position them separately."

The alternative is to follow Rippling's approach of creating a new category ("workforce platform") that brings multiple workflows under one umbrella - but this requires significant resources and market education.

For most startups, trying to tackle multiple workflows simultaneously spreads resources too thin and confuses potential customers. Anthony cautions that different workflows often mean "completely different go-to-market strategies" since the potential champions "don't hang out together. They're not in the same Slack groups. They're not comparing software together."

Choose Your Product Category Strategically

The product category you choose has major implications for your go-to-market strategy. Anthony outlined three options:

1. Mature, Well-Known Category

Benefits:

• No need to educate the market
• Quicker sales cycles
• Proven market with real revenue potential
• Dedicated budget line items may already exist

Challenges:

• More competition (Red Ocean)
• Price anchoring (customers expect certain pricing)
• Possible negative associations
• Established competitors with strong distribution

2. Emerging, Sexy Category

Benefits:

• Less competition
• No price anchoring (you can set the price)
• No negative associations
• Head start on distribution before big players enter

Challenges:

• High education costs
• Longer sales cycles
• Budget fights (you need to steal budget from elsewhere)
• Risk that the category doesn't materialize

Anthony cited "product-led sales" as an example of a hyped category that didn't fully materialize, leading several startups to pivot or shut down:

"PLS, all these people who spent all this time educating why PLS needs to exist, why you need a PLS platform, suddenly found themselves in a really precarious spot because nobody wanted anything to do with it."

3. Make Up Your Own Category

Anthony generally advises against this approach, noting that most successful categories weren't coined by a single company but emerged collectively.

"Like almost every category wasn't coined by a specific company. Like the media coined it or review people coined it. Like Uber and Lyft did not coin the phrase ride sharing - that had already existed."

The one exception? If you're solving a hyper-specific use case, you might not need to explicitly name your category. As Anthony points out, Calendly didn't call itself a "scheduling automation platform" until 2023, well into its growth journey.

Differentiate Your Product Effectively

The final piece of positioning is differentiation - explaining why your product is better than alternatives. Anthony describes two approaches:

1. Differentiation by Degree: You do the same thing as competitors, but better, faster, or cheaper. For example, Freckle does the same things as Clay (another tool in their space) but with a lower learning curve.
2. Binary Differentiation: You do something completely different, forcing customers to make a clear choice. Anthony uses Campfire (a Slack competitor by Jason Fried of Basecamp) as an example: "The difference is you host it yourself on your own servers and you only pay for it once." This creates a binary choice between paying monthly for a cloud solution or paying once for a self-hosted option.

This differentiation should be expressed through your capabilities (what users can do with your product), features (technical aspects that make it possible), and benefits (outcomes it drives).

Anthony explains that capabilities and workflows are two sides of the same coin:

"If the market looks at a job to be done through the lens of workflows, companies look through the lens of a job to be done through a capability of a product."

For example:

• Capability: Record quick demonstration videos to share with the team
• Feature: Screen and self-recording technology
• Benefit: Cut down meetings by 29%

By connecting capabilities to workflows, you help potential customers understand exactly how your product fits into their daily work.

Applying Positioning to Your Website

Anthony recommends structuring your homepage around these positioning elements:

1. Hero Section: Answer your core positioning questions - who it's for, what it is, why it's better
2. Problem Section: Detail the problems with alternative approaches
3. Solution Section: Re-pitch your differentiation
4. 15-Second Product Demo: Show the features, capabilities, and benefits that make your claims believable

By presenting your positioning visually on your homepage, you move it from a hidden Google Doc to a public statement that guides both your team and your prospects.

Anthony provides an example from eWebinar:

"Run hundreds of engaging webinars without you having to be there."

This hero statement clearly communicates:

• The workflow: Running webinars
• The differentiation: Not needing to be present
• The category: A new approach to webinars (what eWebinar's founder calls an "eWebinar")

Beyond the hero section, your website should systematically build the case for your product:

• Document the problems with traditional approaches
• Explain your solution and its unique benefits
• Show the product in action to make your claims concrete and believable

As Anthony explains, showing the product is crucial because "it's gonna help them picture the workflow that they're gonna use it with. They can imagine sitting down, they can imagine explaining it to the teams."

Focus on Function, Not Just Outcomes

A key takeaway from our conversation is the importance of focusing on functional aspects and capabilities. While business outcomes matter, they're "the final boss in a video game" - the last challenge you face after winning trust earlier in the process.

Most of your positioning should speak to the champions within organizations who understand the day-to-day workflows, not just to C-suite executives focused on high-level outcomes. As Anthony points out, "There are exponentially more directors than CEOs," so target your positioning accordingly.

"You don't write the website for Mark Benioff, right? You're just not gonna get through to him and there's only one of them... What about the tens of thousands of directors that could potentially start this conversation?"

By focusing on how your product fits into specific workflows and solves functional problems, you'll create positioning that resonates with the people who actually champion software purchases.

Conclusion

Effective positioning is crucial for any SaaS company looking to carve out a place in the market. By clearly defining who your product is for, what category it belongs to, and how it differs from alternatives, you create the mental framework customers need to understand and value your offering.

Remember that positioning is a long-term bet. Commit to a clear position based on workflows and functional benefits, and give it time to resonate in the market. As Anthony's examples show, consistent positioning over time can drive tremendous growth, even from humble beginnings.

The formula is clear: identify the specific workflow you serve, understand what alternatives people currently use, choose your category strategically, and articulate your unique value in terms of capabilities and benefits. With these elements in place, you create positioning that resonates with champions and helps them make the case for your product.

As you develop your SaaS positioning, remember to focus on functional value before high-level outcomes. Connect your product to the specific workflows people perform daily, and you'll develop messaging that truly resonates with potential buyers.

The Connection to Micro-Demos

This positioning framework is particularly relevant for products like Glimps, which helps B2B marketers create micro-demos to educate website visitors. The core challenge with complex B2B products is showing—not telling—how your product fits into specific workflows.

Micro-demos allow website visitors to see exactly how your product would help them accomplish specific tasks, bridging the gap between high-level marketing claims and functional reality. By implementing the positioning framework outlined here, you can create micro-demos that clearly communicate your product's place in the market and its unique value proposition.