Venture Capitalist at Theory

About / Categories / Subscribe / Twitter

2 minute read / Jul 20, 2018 /

Why Your Startup Doesn't Invest Sufficiently in its Differentiators

There are three types of product features, a seasoned head of product told me recently. MMRs, neutralizers, and differentiators. MMRs are minimum market requirements; basic features that every customer expects and demands. Neutralizers mitigate competitive threat. Differentiators are your startup’s competitive advantage. As a product manager, I’d never thought about this type of roadmap segmentation before. But it made a lot of sense to me.

When a startup has established product market fit, the differentiator is clear. This feature set distinguishes the company. It is the reason customers prefer the product to alternatives. The very first buyers buy irrespective of deficiencies. The differentiator is enough to overlook those faults.

As the product team talks to customers, they are likely to hear feedback encouraging more investment in MMRs and neutralizers. “Your product is missing this feature. We need this capability that exists in another piece of software in yours.”

This type of product feedback is important. It has a place in the product roadmap. But it shouldn’t drive all, or arguably even the majority of engineering effort.

In her experience, customers rarely push vendors to further their differentiation. By definition, the unique selling proposition doesn’t exist elsewhere in the market. So advances or improvements to the differentiator may not be obvious to customers. Example: Henry Ford’s faster horses vs a car. Features that reinforce differentiation won’t surface in customer feedback.

The product management team must take responsibility for reinforcing the startup’s differentiator. Once the market recognizes the startup’s advantage, every competitor will race to replicate it. The startup must invest in that differentiation to sustain their market lead.

When I was a PM, sales and support teams pushed prioritize different features that would close large accounts, or minimize competitive weaknesses and churn. The pressure can be acute: e.g., not building a feature loses an account. Push through.

Defending differentiation, investing in it, and reinforcing the startup’s competitive advantage. Is there any higher priority for a product team? Does your startup’s roadmap reflect this strategic reality?

Read More:

The Startup Founder's Almanac