How to Differentiate Your Startup from The Competition – Guest Post by Martin Luenendonk

Guest Post by Martin Luenendonk

Today’s business world moves fast. In 2016, the UK saw a record 80 new companies set up every hour and, while overall numbers of US startups are falling, Silicon Valley still boasts more than 23,000 young businesses. As the market continues to overflow with optimistic entrepreneurs pushing their original concepts, it can seem like there are very few innovative ideas left to bring to market. And in this competitive landscape it has become more important than ever that new businesses are able to differentiate themselves from their competitors.

Being able to accurately place your business in the marketplace is a key step towards securing funding. Does your startup offer a unique? Or a more accessible, efficient service? Can your business get things done at a lower cost? These are things investors will want to know.

Offering a detailed pitch deck to investors is a good place to start that process. With the attention of a captive audience, you have the opportunity to clearly define how your business will outperform the other providers on the market. Ultimately, having a well-defined business will help you to stand out from the crowd.

Analyse The Competition

In order to be effective in positioning your business in a chosen market, you first need to understand who you’re going to be up against. You can’t simply launch into a new venture blind, you have to do some research first.

There’s a wealth of information out there to help you find out who your main competitors will be. You can use Google, media coverage, and industry blogs to identify major players in your market and in your geographic region, or search social media sites such as Twitter and LinkedIn.

Theo primary goal in this research process is not necessarily to prove to investors that you have a competitive advantage – although if you do identify a unique space in the market that your business can fill then you should make that clear – it is to demonstrate that you are an expert in your chosen field.

Assessing the competition will also help you to refine your business plan by identifying what existing providers are doing well, and where their offerings are falling short.

Define Your Values

Once you have identified and assessed your competitors, a major step towards differentiating your business from others is being able to accurately, succinctly, and clearly define your company. According to Business Insider, you should be able to describe your business strategy in one sentence.

The way your business operates will likely evolve out of your core values, which are your way of telling investors what are things that matter to you most. Having core values help both investors and clients get a clear picture of what you’re all about. Even 15 years ago, around 80% of Fortune 100 would publicly tout their key values online.

Building your core values should be a collaborative, with your management team and employees identifying values that overlap. It doesn’t matter what these values are – it could be education, innovation, creativity, or security depending on the nature of your business – but they must be something that you can work openly into your business model.

Ultimately, being able to firmly define the things that your startup values most will go some way to helping your business stand out in a crowded market, and give your startup a definitive identity.

Establish a Precise Target Market

Having a clear picture of who your business will serve, will also be a key factor in precisely positioning your new business for investors. If they are able to understand exactly what your business will be delivering and to whom you plan to target with your services, they will be more inclined to put forward the funding you need.

Start by dividing your market into customer segments. This can be done by age, by geography, by income or by a host of other identifiers. Once you have segmented your market, you need to identify the consumers whose needs your business can best fulfil, and begin tailoring your offerings to suit their needs.

You may identify multiple segments that you would like to serve, but it is worth remembering that brand marketers continue to follow the 80/20 principle, whereby around 80% of your sales will come from just 20% of your customers. It is best to find a small portion of the market that you’re able to serve well than stretch yourself too thin across multiple segments.

Your business is more likely to get noticed if it has a strategy and brand identity that is focused clearly on a sub-set of the market, and you can always expand your target audience once your business is more established.

Identify and Emphasise Your Strenghts

The most obvious means of differentiating your business from competitors is to identify and emphasise your strengths. If you want your startup to success you’re almost certainly going to need a competitive advantage. So, what does your business do best?

It is just as important to conduct an honest assessment of your business’s own strengths and weaknesses as it is to analyse those of your competitors. But if you’re confident enough to be seeking funding, then there must be something you feel that your business can do better than anyone else.

Your company’s strengths don’t have to be as grand as having proprietary technology or high-profile executives, but should be something that gives your business a head start in your chosen market. Maybe your business offers unique personalisation services, or perhaps offer specialist training opportunities.

Whether its convenience, price, technology, or speed that makes your company the best in its class, investors need to know how your business is going to out-do the competition.

Build Trust

With consumers having so many options to choose from, whether they’re buying a new smartphone or booking a flight, companies more than ever must show that they can be trusted. Equally investors want to know that the business in which they are investing has a capable team behind it.

In order to build trust among investors, it is important to be open an honest in describing your management team and their experience. Show investors where you’ve had success before, or if any of your team members have been recognized by professional bodies. If you can demonstrate a positive rack record, then investors can be confident in who they are dealing with.

Equally, consumers want to be assured that their money is being put towards something reliable. So, try to get some testimonials or reviews that support the claims you are making to potential customers.

Today’s more digitally-minded consumer population is more and more inclined to make decisions based on the opinions of their peers, either through social media or in person. Make sure your word of mouth exposure is positive.



Martin Luenendonk is a 2x entrepreneur, former venture capital investor and investment banker. He share everything he knows for free in order to help entrepreneurs (and people interested in entrepreneurship) raise money for their startups.

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