Sorry. You have no unfair advantage amp; no differentiator (with cheat-sheet)

Point 1:

In the last decade, I started noticing how some TV ads were so generic, particularly for banks and insurance companies. It plays out like this: They feature happy people, eating, playing, studying, or working, in a cozy home, in a park, or in a small business. There is a low-pitch voice-over trying to get some emotion out of you, and it finishes with the logo of the company and “Bla Bla is there for you.”

Now, if you remove the final logo and tagline and put a new business logo and new tagline at the end, it would still work! That’s what I call generic. It’s not about that company or its uniqueness. That type of ad is prevalent among commoditized businesses with little differentiation: Banking, Insurance, Hotel Chains, Airlines, etc.

Point 2:

I was recently reading a slide deck from an entrepreneur, and one of the unfair advantages they listed as a reason they will succeed was a macroeconomic point. In this case, it was a shift in consumer behavior.

Stand up for nothing

Both points above lead to a common root problem: These businesses don’t believe they are unique enough. They either fail to see what makes them different, or they fail to create that difference.

In the 70s and 80s, there was a phrase used in tech circles: “No one gets fired for buying IBM.” It was meant to tell IT managers who have purchasing-power that if they picked IBM, upper management would not accuse them of making a mistake if things went wrong.

That’s what happens with many large and small businesses that want to establish themselves in the market. They want to play safe. They don’t want to stand up for something they fear might offend or alienate a portion of their customers or partners. So they aim for the most common denominator, and when they aren’t able to explain what makes them different.

We are unique because consumers like to shop for watches online. We are unique because more people are traveling for leisure today than ever. We are unique because we identified that schools need help managing their billing using mobile apps. Wrong. Wrong. Wrong.

Standing up for something

Starbucks was clearly able to distinguish itself by selling coffee(!!!). Not only that, but Howard Schultz has made Starbucks stand for a set of values that many in Wall Street called a business mistake, like standing for equality of the LGBT community and even bringing up Race and Racism discussions into its brand.

T-Mobile is another company that is doing a superb job of standing up for something. So did Virgin, Alaska Airlines, and many other businesses you’d consider just a commodity.

Standing up for something is not going to make everyone happy. You might alienate some potential investors; you might lose business, you might even have some excellent candidates not applying to join your business. But not standing up for something (in your business and manifested in your products and services) will lead to price war (eroding your margins) or, worse, not getting any customer to begin with because you can’t break through the noise.

Cheat-Sheet for what makes you unique:

(Not a comprehensive list, and you don’t need to do all of them)

For Pitching Investors:

  • You have a new technology that’s hard to replicate, or you have an exclusive license to an IP (Patents, technology, or data)
  • You have a person or persons on your team that carries unique knowledge or unique abilities that matter to the industry you are getting into.
  • You have a network-effect asset (lots of users, lots of participants in your marketplace, or you’ll build a marketplace, and you have built/acquired one side of it already).
  • You have an exclusive or huge distribution partner.

For your business:

  • You provide services that customers want, and they have nowhere else to buy.
  • Your value is 10x better than the next competitor (either because it’s 10x cheaper, or 10x faster/smaller/larger/etc.)
  • Your company is obsessed with “fast” or “perfection” or “customer support” or “near you” or “real-time” or “quality”…

For your product:

  • A few features that a few users love (not a bunch of features that most users find OK)
  • An experience, a logo, or a language style that distinguishes you.
  • Picking a few dimensions and aiming for the extremes sides (e.g., the industry expects it to cost $10/user/month, you charge zero! The industry expects 10MB of storage per user, and you deliver 1GB. The industry expects updates every 15 minutes, and you do it real-time).
  • There is a feature or two that even though they might not be why people are buying your product, they do add value, and they are the talk of the town.

If you are getting started or growing a business, trying to please everyone and always aiming for the safest decision will likely lead to your business’s commoditization and decline.

Marcelo Calbucci

Marcelo Calbucci

I'm a technologist, founder, geek, author, and a runner.