So I think the best way to think about it is it's like context setting for products.02:13It's the context. I position my product in such that customers kind of have an idea like what is this thing? What's it all about? Why should I care? It's a starting point for a conversation with a customer. Can you give me an example when one of the things that really stuck out to me, I was always trying to explain to tech company CEOs with a tech company example.02:37And whenever I did that the tech company CEOs would say, well that's a database that you know and we're not like a database so I thought I need some examples that have nothing to do with technology. They're really simple.02:47So I was trying to come up with example and I was on my way to work and I went to Tim Horton's coffee shop in Canada so I'm standing in line and the guy in front of me is ordering breakfast.02:58It's 8:00 a..m.. and he he orders this thing which is a double chocolate salted caramel muffin and I was like that is some genius marketing stuff right there. So I've got a piece of cake. It is double chocolate caramel cake but if I put it in the muffin format and I call it a muffin everything about that is different The whole context around it is different.03:24It is socially acceptable to to order double chocolate caramel, whatever if you say it's a muffin because I'm now comparing it differently. So if I said it was cake what's cake cake competes with other things that are like dessert.03:40It competes with ice cream and tasu and other things you would order for dessert What does cake cost well if in a restaurant it's $10 $15 um where do I get it? I might go to a bakery but I get it at a restaurant too when I'm talking about a muffin well muffin's totally different a muffin's breakfast it competes with a bagel and a donut What do I charge for a muffin I charge a dollar $2 for a muffin the whole context around it is different The product however is the same like that thing that you're eating is a piece of cake whether whether it's in cake form or muffin form So I can choose to position it as a muffin it's the same product but the assumptions about that the competitors are different Your value is different The assumptions that customers have about that product are different because I've placed it in a different context. I'm just going to talk about the market category so the category that the product is positioned in so I walk out and I say I've got this amazing thing it's revolutionary next generation thing but it's cr M customer relationship management if you're tech people and you know what a CRM is you will make a whole bunch of assumptions about that product just because I called it a CRM so you'll say well you must compete with Salesforce they're the absolute leader in that market the gorilla in that market so I will just assume that you compete there I will make assumptions about what that product does I will assume that it track tracks deals across a pipeline I will assume who the buyer of that is I'll assume it's the head of sales, vice president of sales I'll even make an assumption about the pricing even though I said nothing about what that thing is or who the expected customers are of that thing.09:08But if you assume that Salesforce is my big competitor because they're the absolute leader in that space, I'm not charging more for my CRM than Salesforce is. So this is how this works. What it does is I positioned that product in a market category that market category has set off a set of assumptions in the customer's mind about that product.09:33If I do this well it sets off a set of assumptions about that product that are true and that's great. Now I've saved marketing and sales a whole lot of time energy effort. I don't have to tell you exactly who my competitors are.09:46It's assumed I don't have to list every single feature, a lot of that stuff is considered table stakes in the category but it works the same way if I do a terrible job of it so if I do a terrible job of it I position position my product in a market category such that it sets off a set of assumptions about my product that are not true now marketing and sales has their work cut out for them on doing this damage that your positioning is already done where they're like no no no we don't do that no no no I know you think that no no no it's not that it's just other thing so if I'm trying to compete with Salesforce should I do that in a way where I have a product it's it's probably inferior because I'm a startup right uh and so we can't go toe-to-toe on every every aspect how do we position that in a way to a consumer, which in this case would be a business, a business that's a buyer.10:39The most common way that tech companies successfully position is they find an underserved subs segment of the market, and then they attempt to dominate that subs segment and then push out from there. So I can give you an example.10:57I worked at a company called Jan systems. And at the time, this was quite a while ago. So Seil or Salesforce was a small company at that point, and only selling to the very low end of the market. But the gorilla in that space at the time was a big, big company in Silicon Valley called Seil.11:14And so they were fantastic company, two billion revenue, fastest company to ever get to a billion revenue in the history of Silicon Valley. amazing success story. They were positioned as enterprise CRM. they were the absolute kings of enterprise CRM.11:28We had a product that was also enterprise CRM. So we would position ourselves as enterprise CRM. And so not surprisingly, we would get a meeting with a customer and the customer would say, okay, so your enterprise CRM, their enterprise CRM, how are you better? And the answer that question was, we simply weren't better than them.11:48They had, we had, you know, we had 2 million revenue. They had two billion revenue. They had 400 customers. We had six, they had thousands of employees. I was employeed 26 or something. I mean, we were just no comparison at all.12:03However, we had a feature that they could not copy. That was really interesting. and we thought it would be really valuable to customers. We didn't really understand the value of it for customers, but we always showed it in meetings.12:18So we'd go in, we show the thing and it was this neat feature and we say, hey, here's the feature. It's really great and customers would look at us and say, hey, that looks cool. What do we do with that? And we'd say any anything you want And then the customer would say, okay, well that's confusing.12:34What else you got? And then we'd say, well, you know, really cheap. If you want us to be really cheap because we're desperate to close business how we got out of that mess And eventually landed on Positioning. That was really good for us is we, uh, we sold a deal to an investment bank and it was kind of by accident.12:51We hired a sales rep that had a relationship with somebody very senior at the investment bank that we did a good pitch in there. We showed them our magical feature and what that customer taught us is that feature was actually very, very valuable to investment banks.13:08And the way that they wanted to manage relationships inside the bank, once we figured that out, then it was like, okay, we actually have a feature that's really, really valuable for a sub segment of this big market. And we knew at the time, CEL couldn't copy us on that feature.13:25So we narrowed down the positioning and instead of saying we were enterprise CRM, we were CRM for investment banks. And the great thing about that is that we never got into a real head-to-head against those guys again. So we would come in and say, hey, we're CRM for investment banks and the customer would say, oh, well, wait, doesn't SeeL do that.13:46Like don't you guys compete with Seel And we say, ah, seeL, we love those guys. So big, so smart so many people they're like the world's greatest general purpose CRM for like call centers and manufacturing plants and I don't know what but not you wolf of Wall Street, you need something special.14:04Let me show you this thing and we would show them the thing and talk about the thing. And so our plan was to absolutely dominate that space. And then once we had dominated that, we would be building the product and making the product more mature.14:18And our dominance and investment banking was going to allow us to get into retail banking. So we were going to expand the market from there. And then if we were successful in retail banking that would allow us to get into insurance.14:30At that point we would reposition ourselves as CRM for financial services. If we were successful there then we'd be big enough and successful enough to challenge the market leader and take over and be enterprise CRM, which was still the long-term goal.14:44So is this the bo shrinking your target market or your ecosystem in a way in which you're going to compete to one where you have an advantage or an edge over somebody else and then expanding from there if you look at most the vast majority of successful companies, they've started by dominating a market that was too small for the market leader to care about we were building a thing. The original conception of this thing was that it was a database, but it was a really fancy database that could do a certain kind of query, really, really, really fast. It was originally developed for bank and there were a set of queries that the bank did that were so difficult to process that They would run them on Friday and the query took all weekend to get the answer back.27:42So you're asking the DAT of this question and it took three days to get the answer back. So these folks, couple super genius database guys came up with this database, fix that problem, And it could run that query in seconds.27:56So it's amazing, aming technology, Fantastic. They got patents on it. Nobody's seen a database like this before. really, really in innovative so the original conception of this thing was that it was a database uh I joined as the head of marketing and we were having a terrible time selling the positioning was terrible like nobody wanted a new database there's an absolute giant in that market they're called oracle everybody's standard on oracle Everybody gets certified on oracle don't want to have multiple database solutions to do something so we would come in and say we've got this nifty new database and the customers would say well that's you know we're oracle shop like we're not married to Oracle We don't think Oracle is the best thing but we can't bring in another platform we eventually repositioned it as a data warehouse which is a specific purpose-built kind of database for doing analytics which is exactly what we're doing when we're doing this big query so we did that repositioning and it was much much better, much better, better.28:58First call was better, much better than we were doing before. The problem was when we looked at we had an assumption that if you had these queries that took three days, you would want to be able to do them in 10 seconds versus 3 days.29:13And it turned out that assumption was wrong. So when we went to the other banks and said hey you're doing this thing and it it takes three days and you could use this thing and it would take 3 seconds and they're like, it's okay nothing's nobody's really doing anything over the weekend.29:27Anyway we don't need the answer right away. So then we had this question well who needs the answer right away. And we had never asked ourselves that question like our whole value proposition is speed doing this query fast. It turned out the only customers that needed the answer right away were customers that were doing the query be for customer service.29:50So their customer calls in they're on the phone and they're like, hey, I need to know this thing. Well, I don't want to wait 3 days to get the answer. They want to do it in seconds. And then we looked at the universe of companies that had data of a scale where our thing was appropriate and needed this query answered to do customer service.30:11And there was literally 10 companies on the planet. And that was it. So the addressable market was so small that it wasn't a viable business. So we had essentially built a product that nobody wanted. It was neat. It was really innovative.30:26It was really cool. But there was no market for it. didn't solve a problem that anybody really had. if you're a startup, you have limited resources and how do you go about identifying those pain points then to better position your product? I mean, the ideaChapter- How to identify customer's pain points30:40behind the famous book on this is, uh, Eric Reese, Lean startup. And the, the way the lean startup describes this is you should be out doing something called customer discovery. So before you write anything, you should be out interviewing customer customers or potential customers and validating the assumptions that you have about this market.31:03Is this a thing that people would pay for? How many, how much would you pay for it? Are there a big enough group of people that have this pain to solve it? And in a perfect world, that's what we would all be doing.31:17But often products just don't happen that way. Like often products, you know, like this, this particular company they had built it custom, they had done the deal with the bank in such a way that they owned the IP. It seemed like a good idea.31:29They had a bunch of assumptions baked in there. They never tested those assumptions until later but it was good enough to go raise money. They just went and raised some money and well, okay, now we're going we're doing a thing, So I don't think a lot of startups do enough customer discovery at the beginning to make sure that they've got a thing that people really want.31:47The second thing is that even if you do do customer discovery, it's really hard. it's really difficult. Customers will sometimes tell you things that aren't true. um, or they'll say yes. yes, we would buy that and we would buy it for this much but by the time you've actually built the thing and you have a Prototype of the thing You get it in customers hands of like actually there's a different way to do this and we decided to do it this different way or there's you know that customers have lots of options so startups are very hard because we're we're dealing with uncertainty.32:16we're dealing with a certain amount of assumptions. Our assumptions may prove to be wrong and we have to be able to move and pivot and look for other things and sometimes our first crack it it isn't going to work Then we're going to have to go to the draw back to the drawing board and kind of invent something else and see if that works How do you position your product on a page? A lot of B2b starts with a sales rep or somebody looking at a page for a product The biggest mistake I see technology companies making is they're so certain that the that their features valuable and people will just understand what the value of those features are they're talking about the features but they're not talking about why the features matter so they're they're talking you they're not talking about the benefit in technology companies we get we're very technical people we know a lot about technology we get so close to it we just assume that the customer can make the translation from feature to value but a lot of times they can't and in particularly with something that's really innovative really new they've never seen it before we're going to have to help them understand why those features are important if we think about a lot of consumer tech we've been trained how to do this like if I tell you I've got a phone on my camera and it's 2,000 megapixels you know 2,000 megapixels is way better than 100 megapixels you've been trained we know that but the first time anybody ever talked to you about megapixels you had no idea in order for companies to really stand out in a market that is so crowded and so overwhelmed with messages from brands, we're going to have to get really su syn on.37:57What is this thing? What is the value of this thing? Who is it for? How is it different from the other things in the market? And we're going to have to be so clear about that to break out from the noise and why you should trust us if we're trying to assess the positioning, what really matters is when we are when we have a brand new prospect that comes in that doesn't really know too much about us.40:57How long does it take us before it clicks and they're like, oh I get it. oh I get why you're different. Oh, I get why that's good. Oh, I get why in my career. We do this thing, they're getting into the pitch and you'll see the customer. If it's a video call, you'll see the customer and they'll be making this confused face like and what'll happen is and they're not saying too much and a good rep will stop and be like are there any questions like are you with me still and the customer will go yeah yeah yeah just back it up can you just go back to the beginning back it up and go back to the beginning like pitch it to me again and and there's this fundamental disconnect like I don't even know what bucket to put this thing in like is it a is it a database is it a business intelligence tool is it a thing like you hav't framed it figure you know and so there's something in that positioning that is just confusing the heck out of the customer that's the most common sign you see is the customer looking at it and they're like I just can't figure out what this thing is the second common sign you'll see with weak positioning is the customer thinks they've got it figured out um but they're actually comparing you to something that you don't actually compete with so you'll get to slide three or four and the customer will say yay i get it you're just like salesforce and you're nothing like salesforce you don't compete in that market you're not that and then the rep is like no no no no no let me go back i'll go back to the beginning we'll do this again um so you'll hear that a lot the other thing you'll hear and this is almost the most terrifying one is in these early conversations with a prospect the prospect will say i get it i get what you are i get who you compete with i just just don't really get why we would pay money for that can i just do that with a spreadsheet? Can I just do that with my accounting package? Could I just hire an intern to do that? Why would I pay money to do that? So they kind of understand the product, But again, they don't understand the value of it.43:42Why would I give you money in exchange for that thing who's in charge of positioning at a company? Good question. This has traditionally been seen as a marketing