One of the biggest points in his book (and hardest to digest) is about the existence of 4 Market Types, and the importance of understanding which market your startup is in. According to Steve, everything you do as a startup, including product development, sales, marketing, budgeting, hiring, etc. is based largely on which Market Type you put yourself into. Here are the four types of startup markets:
- Startups that are entering an existing market
- Startups that are creating an entirely new market
- Startups that want to resegment an existing market as a low cost entrant
- Startups that want to resegment an existing market as a niche player
You really do need to read the book to grasp the importance of these four markets. It’s something I’m thinking about constantly, based on all the work I’m doing with my startup and with others. But here’s something that’s interesting…(or at least I found it interesting!)
Yesterday I wrote about the generic, buzzword-laden copy I’ve found on many companies’ websites (specifically digital agencies, social media agencies, website development firms, etc.) And I pointed out that one of the exercises I used in evaluating that copy was to take it out of context – grab text from their websites and put it all in a single Word file. The result is interesting, because you really do get to focus exclusively on the copy. You also start to see patterns that weren’t as obvious before.
And one of those patterns and observations was how companies attempt to define their market (and go-to-market strategy) through copy. The copy we use tells customers what we’re trying to do. When looking at it competitively, it tells me what market my competition thinks they’re in and how they’re positioning themselves in that market. Here are some examples:
(Note: In some cases I’ve used real company names, mostly because I’m highlighting a specific tagline)
The original. The pioneers. The Acme Group is a digital services and creation company…
Clearly they’re entrenched in an existing market (digital services / marketing) and using longevity in the industry as their differentiator.
Interestingly, Ignite Social Media does something similar with their tagline, “The original social media agency.” I’m not sure in the world of “social media” longevity really matters that much, but it might.
Ignite goes on to say:
Unlike public relations firms that look at social media as another way to distribute press releases, or search engine optimization firms that look at social media as a way to boost page rank, Ignite Social Media is one of the first agencies in the world to take a holistic approach to using social media tactics, techniques, networks, and tools for corporate marketing.
This is an attempt (as far as I can see) to clearly define their new market (since they were “one of the first agencies”) by aligning themselves against other adjacent markets.
And another company that does this (very well in my opinion) is ZURB. They’re defining themselves by what they’re not:
We’re not a graphic design firm. We’re not a web design agency. We’re not a bunch of namby-pamby artists. We’re a team of T-shaped interaction designers and design strategists who help grow businesses.
Here’s a company that positions themselves against the “same old” competition, and directly against the jargon that most companies seem so fond of:
Tired of the Twitter? Then experience the healing powers of a Digital Detox. Like you, we’re bored of hearing the same old meaningless bollocks. So we’ve taken a different approach. Our free Digital Detox is all about rejuvenating your mind and business. It’s simple. We listen to your digital woes and then do our thing. No gobbledygook. No egos. No sweat. You’ll feel human again in no time. And better than that, you’ll have a clear, jargon-free idea of what digital can do for you.
They go on to say:
We make our clients happy. We’re good at it – 92% of our business comes from repeats and referrals.
We have a transparent project process with clear deliverables. No waffle, no bullshit.
We’re financially independent. And independent in spirit. No, we’re (mostly) not hippies, but we also don’t follow the heard. We’re free to discover, innovate and have fun while we create the best digital communications there are.
Our process guarantees that as well as providing what we said we would, we make sure that something a bit special gets thrown in to the projects too. Find out more about our process to see how we inject some magic to transform a great proposal to a fantastic result.
They’re positioning some clear differentiators (at least in their minds) — happy customers, transparent project process, financial independence and a process that guarantees results. Plus – and I really like this – they use Surprise as a means of hooking the bait. The most interesting differentiator here is “financial independence” … I’m curious about how that’s relevant in this market?
Ant’s Eye View takes a re-segmentation approach by defining a niche, with their tagline, “We’re in the Brand Promise Delivery Business” I like that. Actually, they might be creating an entirely new market with this approach.
Price didn’t seem like a popular way for companies to define themselves. Of the 50+ companies I looked at, only one used price as a differentiator:
Every one of our clients shares the same objectives: to gain attention, be remembered, and drive results. They also prefer to do it cost effectively and with a true sense of confidence that all of their efforts – advertising, direct response, SEO, paid media, digital marketing, public relations and social influence – amplify each other.
This company aims to position themselves in a new market as a new kind of agency. They spell it out very clearly:
We are a conversation agency. We help brands to listen, understand and engage in conversations in social media. We’re a new kind of agency, but conversations between people are nothing new.
Harmonypark looks like they’ve created a new market by defining themselves as the “cultural construction company”.
Firebelly Design also creates a new market for themselves with the tagline, “Good design for a good reason”. They go on to say:
We create positive world change connecting authentic companies with real people in socially responsible ways.
So now they’ve created a market for web design services tied to doing good. I like that a lot as a strong differentiator.
It’s fascinating to see how other companies define themselves and what they reveal through the copywriting on their websites.
One of the biggest challenges in terms of picking a Market Type is whether it’s a new market or a re-segmentation by defining a niche. It’s not always clear, especially in such a big, broad and messy market like the one I’m looking at here. But I do think it’s important and extremely relevant for these companies and any startup to focus on Market Type. And when you’re doing competitive analysis and research, look at what they’ve written for clues on what they’re trying to do.