Differentiation crops up more often than you might think. Most anyone can recognize that whatever product or service you’re selling will be easier to get into customers’ hands if they can distinguish how it’s different from other offerings. It’s just that differentiation doesn’t stop there.

I often find it easy to file competitors into two categories: those who do what you do, and those who solve the same, or even similar, problem. The first one is obvious, but the second is just as important. It’s easy to identify the people who make the same thing you’re offering, but dangerous to miss the folks competing for the same money.

A classic example I once heard goes like this: who are the Denver Broncos biggest competition this year? The Steelers? or the Saints? Hardly. It’s the Denver Nuggets or the Colorado Rockies. When the Broncos play another football team, win or lose, they make money. It’s other entertainment choices, such as local teams from other sports, that make up their real competition. Money spent on baseball won’t be spent on football at all, whether you root for the local team or someone else.

Sometimes selecting how you advertise is influenced by how your product is differentiated. Suppose you’re a contractor painting houses. Once choice, ServiceMagic, is a web-based advertising product that generates leads from interested consumers. That sounds better than advertising in the paper alright, but you have to look closely at how they do their business. In order to avoid overwhelming the consumer, ServiceMagic provides only three vendors at a time, chosen at random from their pool of contractors. You compete with these three to get the business. No problem, you’re the quality leader and you are confident you can win over your competitors. Except this isn’t a typical playing field where the consumer compares from a wide range of offerings including national companies and mom and pop shops. If your bid just happens to be included with two low cost leaders you look hopelessly expensive, even though, in reality, you’re right in the middle of the range. Your ability to differentiate yourself only works if the consumer gets to see all of the choices. ServiceMagic is going to work well for the big names (they can afford to miss a few deals and look awesome compared to the mom and pops) and small names (he’s that much cheaper? wow!) alike, but the guys in the middle might look worse than they should.

Tech startups face both of these kinds of differentiation problems. They are often offering a first-of-its-kind product, so they may forget that they still have other competition. How many other ways are there to skin a cat! Furthermore, they have to get the word out somehow that is most favorable to their offering and not try to out-shout their competitors. It doesn’t take a genius to think all this through, but it does take some effort. That’s where Eye On Technology can help. We’d love to work with you to identify your issues and make your business development efforts as effective as possible.