Startup Market Positioning: Less is More

Written by Paul on May 28th, 2010

Looking back at the recent growth of MailFinch, most of the success can be attributed to what the product can’t do. We do very few things but we do those things better than anyone else in the game and we make it drop-dead simple to get started. Now Thomas Thurston, a researcher and consultant based in Portland, Oregon, has come up with a formula that predicts startup success with an 85% accuracy rate. Here’s the gist of his research:

Pretty much every startup you’ll ever meet will say it is better than its competitors. However you want to measure it—speed, technology, revenue model, whatever—a young company will say it outperforms others in its class. What’s more, it’s smaller and nimbler than the big companies, so it will be able to innovate faster and stay ahead of the curve.Just one problem: That’s exactly why it will fail.

What a startup should do instead—to give itself the best chance of surviving—is enter the market at the low end of performance, Thurston says. That is, offer a product that’s not necessarily as good as its competitors, but is cheaper and more accessible. “Lower cost, lower performance, and gets better over time,” is how Thurston puts it.

Less features, more win. I love it.

One Response to “Startup Market Positioning: Less is More”

  • I read that article too and was pretty happy about it since I felt like it described my startup.

    One thing about the description of the startups that succeed is that it felt like what people call a “disruptive” startup or technology. At this point the word “disruptive” has been so overused that it’s almost meaningless, but I think he describes using regular words (instead of buzzwords) and gets the main point across.

    — 05/28/10 at 2:48 pm

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