Growth Snack: Can you win with a “me too” product?

Episode 70 May 11, 2022 00:09:43
Growth Snack: Can you win with a “me too” product?
The Breakout Growth Podcast
Growth Snack: Can you win with a “me too” product?

May 11 2022 | 00:09:43

/

Show Notes

Is differentiation always important? If you are trying to grow, Sean Ellis and Ethan Garr, say it absolutely is, but it is not just about offering unique features. That’s the topic of this week’s Growth Snack: The Breakout Growth Podcast Short. Learn why it iscrucial to understand what the must-have experience looks like through the eyes of your customers, and why that is important in helping you to differentiate your business even in a crowded market.

 

You might be surprised as you learn how Sean approached differentiation when he was interim head of growth at Dropbox. Or, you might find some inspiration as Ethan describes a company he is working with now that is launching a new product that will compete against products that solve the same problem for customers. Perhaps this will get you thinking about new questions to ask your customers to better distinguish your offerings.

 

Either way, we think you will enjoy it! So jump in, and in less than 10 minutes you will have food for thought as you work to achieve breakout growth.




We discussed:

 

* The hot market trap; why copycats struggle to grow (01:03)



* Differentiation is not just about nifty features or lower pricing (01:51)



* What do customers see as unique? A lesson from Dropbox (03:41)



* Why you should never assume fit transfers across products (05:24)



* Fast-followers and other takeaways (07:21)

View Full Transcript

Episode Transcript

Speaker 0 00:00:01 All right. If you are leading growth, building a startup or looking to ladder up your skills, then you are probably really busy. So every other week tune in to growth snack, the breakout growth podcast, short where Ethan Gar and I share one key growth learning to help you on your journey to breakout growth, success. It's food for thought for anyone hungry for growth. Speaker 1 00:00:22 All right, Sean. Uh, so this is an interesting one for you. There's a company I'm working with, that's about to launch a new product, but they already have a legacy product in the same market. This new product solves the, the same problem, but it does it differently, more elegantly. And I think much more effectively other competitors already have products that are in the marketplace with solutions that are similar to this new offering. So my question to you is how important do you think it'll be for them to differentiate? Speaker 0 00:00:47 Well, sorry. I mean, clearly they're, they're familiar with the market, so that's a good thing. Yeah. So at the end of the day, they need to create enough value, um, in, in a way that matters so that they can, uh, they, they can actually differentiate themselves from, from alternatives. So, um, you know, to your question of, of differentiation, I think it's super important <laugh>, but it's not simply differentiating. It's also differentiating and in a way that is important to the customers and it's, uh, it's a classic chat that I see a lot of companies go into, especially startups. They look at a market that seems to be hot. They feel like they can just out execute the competitors, but if they don't start with, why are we uniquely better in for, for at least a certain group of people, better at solving the problem in a unique way? Um, why are we better? They're they're gonna have a hard time. Actually, the, the execution's probably not gonna matter as much. So I think that's the, uh, the important part of what you just went through there. Um, do you feel like the product that you've mentioned is differentiated enough to reach your growth goals Speaker 1 00:01:52 Potentially? Yes. I mean, it is, um, it's differentiated in, in some, in some unique ways and I think what's key is it's not just a lower price. It's not just, um, you know, the same, you know, the same product with the same exact approach. But I do think that, you know, companies often, and I think we've had to avoid this, get hung up on features as differentiators mm-hmm <affirmative> right. If you have a fundamentally, a job to be done, a problem to solve, right. A lot of your other features are gonna be nice to have. So it's not why people came to you. It's not the value that you're really talking about. So I think it's really important to look at differentiation and understand that it comes in different forms. You know, we talked to wizard, uh, and Tony Elli a couple weeks ago and his product, you know, he's got some incredible AI driven features to make prototypes. Speaker 1 00:02:41 Yeah, you can literally Dr. Hand draw something and it'll turn it into a prototype. That's cool. But fundamentally, when he went back and said, what drove our breakout growth success, it was actually not just features it wasn't about writing more code. It was about thinking about what do customers need and thinking about that uniquely in their market. So, um, for us, I think it's gonna be about building trust with users and, um, yeah, I'm, I'm, I'm curious when you were back at, uh, Dropbox as their interim head of growth years ago, how did you view differentiation then? Speaker 0 00:03:13 Yeah, so yeah, I, I had, I had, uh, actually gone after that market in, in a previous company. Um, so kind of discovered that there was an opportunity there and, um, we, we approach it in very much sort of like a business school textbook sort of way, like, okay, what is the category that we're entering? How is everyone else approaching this category? How are we gonna differentiate ourselves? We, we differentiated ourselves on technology, which at the end of the day, customers don't give a crap about the technology. If it doesn't necessarily help them solve the product in a or the problem in a better way. And so I think what I did differently at Dropbox was, um, you know, I, I came in just as, as the team was coming out of private beta. So it was just a team of engineers, but they did a really good job of getting some early users on the product and those early users love the product. Speaker 0 00:04:03 And so for me, I was just all about, you know, what, what is it about this product that users really love? How is it different in their minds and then, and then kind of work from there. So, um, really the way you uncover that is, uh, is the question that we've talked about a lot on the program. Yeah. And, and one that, you know, a lot of companies talk about these days, which is asking those early users, how would you feel if you could no longer use this product? If they say they'd be very disappointed. Usually the reason when I dig more into the answer is that they don't know a single other product that could solve the problem as effectively as this product, where if they say they'd be somewhat disappointed, usually it's why would just use product X instead. And so there's some switching cost pain, but they know something that can solve the product better. Speaker 0 00:04:52 So then, then it's really a question of kind of digging into, um, those who consider it a, uh, something they'd be very disappointed without why would they be very disappointed without it? What is so much uniquely better with this product than, uh, than the product that they, um, maybe previously looked at or previously used. So obviously that, that comes down to you need some early users on the product, right. To be able to answer that question. So I'll, I'll put it back to you with this example that you're sharing or this company that you're working with. Do they have some early users on the product? Speaker 1 00:05:26 Yeah, but I, I think it's a trap. I mean, yes, we have some beta users and it'll be really easy for us to get users from our legacy product onto this product, but I think that's while that's great. I mean, it, it it's, you, it's nice to have that kind of kickstart for your, for your business. The problem with that of course, is that you can, you know, you can think that you have, um, a fit that you don't have. Right. Mm-hmm <affirmative>. So in this case, we have to do the hard work of asking that question and understanding the fundamental differences or the fundamental similarities that are new, that users on this product. Um, find what it, what is it about this product that they, that turns it into that must have user Speaker 0 00:06:07 Experience that. Yeah. So, so kind of take taking that back to you, like from what you originally said, do you feel like maybe that, that just the concept of launch is a, is a flawed concept these days, that it's more like, you know, it's back when we first started working together, there was launch parties all over New York city. <laugh> 20 years ago that they're like, okay, we're done, let's release a product on the world and, and spend a million dollars on a launch party. And we're off to the races where, you know, this idea of kind of, you mentioned private beta, but it's like, you slowly open the floodgates as you get that validation. And so when you say launch, were you thinking like 20 years ago launch or are you defining it maybe in a different way? Speaker 1 00:06:46 Yeah. I'm with you, I'm like, uh, I'm anti launch. Uh, so launch launch is just like the day we're able to put this product out there, but I, I think, uh, it's, you know, anytime you're going for that sort of launch party with technology, you are opening yourself up for the absolute disaster that will happen when your product breaks on the first day. No matter how good you are. So yeah, I think launch is not the right, right. You know, way to think about this. I, um, and I think for our listeners, it's really important to, to, to note that because, um, this is really about the starting point of the new learnings and that's what the differentiation is all about. It's about understanding what we need to know to actually get to that point where we can go into growth mode cuz you can't just assume it. Speaker 0 00:07:30 Yeah, absolutely. Um, so I, I think, I think what's really critical here is that, um, when you're going into a market yeah. There's a lot of companies that kind of go into this fast follower mode where it's, uh, VCs will fund companies where it's like, oh, these guys are on fire. Let's enter that market with a fast follower. I'll execute everyone. But I think the, the, the really essential part is that, um, you, you do need that some level of differentiation, unless you're so early that no one really knows the other competitor yet. And so you can, you can kind of get in there and grab the market, but that implies that there's not a big technical hurdle to launching into that market or a network effect hurdle. Yeah. And, um, so, so really being able to get some early users on a product and then using those feedback cycles to understand why your product is differentiated, you know, uniquely better than, than alternatives. And then building the channels and, and building that flywheel of growth really based on, on learning from those initial users before the other guys can launch a product. And hopefully by the time they copy you, you've already evolved into that market even more. And you're three steps ahead of them. Speaker 1 00:08:44 Yeah, for sure. I think, um, we'll have to wrap it up cuz we're running out of time, but uh, you know, I think just one last note is, uh, brand and, and differentiation and or something that you and I could probably talk about quite a bit too. I mean, mm-hmm, <affirmative>, you know, if you're not Starbucks going into the same market, you're probably don't rely on your brand as your differentiator, but Speaker 0 00:09:03 Yeah. Or, or just being really big, a lot of, a lot of big companies feel like they can launch into a new market. Yeah. Leverage their channel advantage on their brand, but they kind of skip the why is this solution better than anything else that's out there. And, and, and if they do that, then there's a good chance that they're gonna, they're gonna fail at with that innovation, which happens all the time when for sure the companies try to innovate. Speaker 1 00:09:25 All right, well that's all the time we have. Thanks everyone for tuning into this week's growth snack. It's one growth insight to help you power your team's breakout growth success next week, we're back with a full breakout growth, uh, podcast episode, uh, and an interview with a growth leader from another of the world's fastest growing companies. So if you're hungry for growth, keep tuning in.

Other Episodes

Episode 65

April 05, 2022 01:00:26
Episode Cover

When Apple Made App Tracking Harder, AppsFlyer Rose to the Challenge

In this week’s episode of The Breakout Growth Podcast Sean Ellis and Ethan Garr chat with Oren Kaniel, AppsFlyer’s CEO and cofounder. AppsFlyer is...

Listen

Episode 12

January 23, 2020 00:35:04
Episode Cover

Viral B2B Growth for Miro’s Freemium Collaborative Whiteboards

In this episode of The Breakout Growth Podcast, Sean Ellis interviews Yuliya Malysh, Head of Growth and Self Serve Business at Miro, a B2C2B...

Listen

Episode 76

August 30, 2022 00:59:37
Episode Cover

RevenueCat’s Winning Strategy for Helping Mobile Developers Power Growth

In this week’s episode of The Breakout Growth Podcast Sean Ellis and Ethan Garr chat with Jacob Eiting, Co-Founder and CEO of RevenueCat. Building...

Listen