How easy is it for your competitors to copy your position of advantage?

Value PropositionAccording to, every year, 1.35 million tech-startups open their doors. A massive number, and as such, no shortage of good ideas. Most of them start to solve a significant problem, a problem that’s both valuable and critical to their target audience. If they succeed, the value will come their way. And here’s where big challenges arrise.

Here’s why: A massive 90% of all start-ups fail for a variety of reasons. The #1 reason is Competition’ (15%), followed by Bad Business Model’ (14%). This tells a valuable story it’s not only about what problem you solve, but it’s also about how you solve it i.e., what you are doing differently to exceed the expectations of your ideal customer in a way no one else can. Or to turn it around, reflect on this question (and do that regularly throughout your product lifecycle): How easy is it for someone to imitate you? If easy, the less valuable you have just become.

I’ve learned two things are key here:

1) Taking the perspective of your target audience, i.e. your ideal customer, not that of your nearest competitor.

2) Ensuring your point of advantage is defensible i.e., hard to copy. It’s hard but essential to your long-term success. We’re all passionate about the technology we have at our disposal, and we can all dream up dozens of potential ideas of cool’ products. Cool doesn’t make it valuable, however. Cool doesn’t make it defensible either.

Let me illustrate this with an example. I’ve been in the business software space for +29 years and most of the time in the heavily competitive and mature market of ERP (Enterprise Resource Planning). That’s back-office software, or, like our CEO used to say, ‘Software you need, not the software you want.’ The market treats this category as a commodity, and as a result, the majority of vendors are fighting the daily race to the bottom i.e., a bloody price competition. Not sustainable for anybody.

We suffered from low win-rates for a long time, losing out against established giants like SAP, Oracle, and Microsoft who all had a far larger market share. It didn’t matter how much functionality we would add to our product offering, how slick we’d make the User Experience, or whether we offered better quality. To win we needed something else.

There was something unique about our solution (luckily). We didn’t tell that story clearly enough, however. It was not until we dug into this deeply, where we realized we were positioned wrongly, or better, to broadly. This led to selling to an audience that didn’t have the problem we could uniquely solve. And this resulted in long sales cycles, poor win-rates and very high discounts (especially at the end of the quarter).

Only by interviewing a large group of customers, we started to connect the dots and found the single characteristic that created our position of advantage. Identifying that resulted in creating a new category (Businesses Living IN Change or short: BLINC). It defined a target market of like-minded organizations which problem we could solve uniquely and in a way that could not be matched or imitated by any of our competitors (unless they would completely rebuild their solution). Once we started to articulate that unique selling proposition and we started to play in the most relevant market for us, purchase decisions started to fall our way: The result: win-rates to +80%, very often sold at a premium.

The key takeaway: Your potential customers don’t care about you or your competitors (or your competitive advantage). They have a problem to solve. They realize they have a variety of alternative approaches to solve it and select the one that will help give them the most significant shift in value or advantage. Just realize, even the savviest negotiators will pay a higher price point, i.e. a premium, for unique value. Price only becomes a thing when all the other factors are equal.

Takeaway two: This is all about your product innovation strategy and product marketing strategy. Defining sharply ‘Who you are for, and who you are not for?’ Understanding what business you are really in, i.e., what you help your customers become as a consequence of using your solution.

To link it back to my previous employer: We were not in the ERP business. No, we were in the business of helping our customers create a position of advantage through rapid business change. It created a ‘can do’ culture that enabled them to stand out in their category and always be one step ahead. That’s about an outcome, not an output.

Once you start with that highly valuable and critical outcome in mind, you can take a big picture approach and solve the problem to achieve that outcome in ways no one has done before. When this becomes the DNA of your solution it’s extremely hard to copy. When you then add the dimension of the business model to it, and it becomes unbeatable. That’s where your market power, customer success, and brand loyalty exponentially grows, and with that, your value potential.

So, back to the key question: How easy is it for your competitors to copy your position of advantage? What’s the first thing you can do to turn that around?

If this is a question that triggers you – and want to be part of an environment where you’re get more of these kind of challenges and level up with peers, consider joining our tribe. It’s created by and for tech-entrepreneurs that are all on a mission to create significant impact in the market.

About the author

Sales Pitch

Ton Dobbe is a former B2B software product marketer who's on a mission to save mission-driven SaaS CEOs from the stress of 'not enough' traction. He's the author of The Remarkable Effect, the host of the Tech-Entrepreneur on a Mission podcast, and writes a daily newsletter on the secrets to mastering predictable traction.