Positioning As Startup Hypothesis

by Holland-Mark | June 8, 2011

Starting a business is betting your livelihood on a value proposition you believe is significant. Given that, it’s surprising how few startups take the time to make their core hypothesis explicit in the form of a written and agreed-upon positioning statement.

The formulation we use includes the following elements:

  • target – an actionable universe of buyers,
  • segment – the key, predisposing attribute of likely buyers within the target,
  • brand – a name you call yourself,
  • category – a competitive frame that helps the buyer understand what you do,
  • distinction – what makes you unique within that competitive frame, and
  • proof – perceived evidence that your claim of distinction is true.

    String those things together, and you get a blurb that looks like this:

    For [target] who are [segment], [brand] provides the [category] with [distinction] because of [proof.]

    Examples from established brands:

    • – For drivers who value automotive performance, BMW provides luxury vehicles that deliver joy through German engineering.
    • – For people around the world, Coca-Cola is the soft drink that is the real thing since 1886.
    • – For industrial manufacturers who are challenged to differentiate, BASF is the raw materials supplier that makes products better through engineering depth.

    Can you articulate the hypothesis of your startup – the core value proposition on which you’re betting your livelihood – in the form of a positioning statement like that? If so, can you get your team to agree on it? And if so… Does it hold water?

    Give it a shot. Worst case, you’re likely than not to get some clarity from the attempt.

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