April 11, 2017
Product Framing Can Help Grow Your Startup

I frequently talk to startup founders with innovative products that struggle to explain why their offering is really exciting. I frequently think the problem is really one of improper context setting or framing as I like to call it.

What’s framing and why should you care?

Framing is the act of providing context to help prospects understand what you are and why they should care. It works much like the opening scene in a movies does. In the opening scene of Apocalypse Now we see Martin Sheen punching a mirror in in filthy hotel room full of empty booze bottles and we have a pretty good idea about his emotional state of mind before we’ve heard a word of dialogue. Framing helps audiences quickly get oriented so that they can understand what’s going on and focus their attention on the action.

New prospects are like people watching a movie. If we don’t let them in on where we are, who we are, and what we are about to show them, they might be left feeling confused, or worse incorrectly guess the answers to those questions.

In general, startups are bad at framing. In some cases they don’t provide a frame at all, instead focusing on features or technology before they give prospects a clue about what they are in a broader sense. More frequently however, I see startups provide a frame, just not a very good one. Startups will often place their products within a frame that fails to highlight their strengths and often puts their competitors at an advantage. This weak framing is often done unconsciously because they believe that there is only one potential frame. In my experience, every product can be framed in multiple ways and some frames are better than others.

A non-tech example

Let’s start with a non-tech example of product framing to illustrate why it is important and where it can go wrong:

Imagine you are a baker and your specialty is cake. You decide you’re going to make the greatest chocolate caramel cake the world has ever known. You probably weren’t conscious of it but you have made a set of critical decisions before the flour has hit the bowl. These include:

1. Target buyers and sales channels — you will be selling to folks looking for a fancy dessert, either directly at a bakery or food store you will sell to restaurants that serve fancy dinner dessert.

2. Competitive alternatives — you will be competing with other cakes, ice cream, pie, and other dinner desserts.

3. Pricing and margin — you won’t be likely to charge much more than other desserts, since you’ll be sold alongside them.

4. Key product features and roadmap — because you are fighting a war for the hearts and minds of fancy dessert eaters your product differentiator will need to appeal to them (likely high income restaurant goers, or dinner hosts looking to impress guests). You might make your cake organic or gluten free or add fancy French salt to your caramel sauce.

Now suppose instead of deciding to make chocolate caramel cake you decided to make chocolate caramel muffins. The product hasn’t changed — it’s exactly the same cake batter — but almost everything else about your business has changed. Why? Because we changed the frame of reference around the product:

1. Target buyers and sales channels — unlike cakes, muffins get sold at coffee shops and diners.

2. Competitive alternatives — you are now competing with donuts and danishes and hot chocolate.

3. Pricing and margin — muffins sell for a buck or two but you might sell more of them.

4. Key product features and roadmap — you are now fighting for the hearts and minds of a noble class of people that eat chocolate for breakfast. They’re likely not worried about gluten or the origin of the salt in your caramel. They might like your muffin larger or with more caramel or maybe they want it deep fried like a hash brown. (sidebar: deep fried chocolate caramel muffins are mine startup founders, don’t even think about stealing that one).

If I’m the baker — which frame should I choose? Did I even consider Muffins vs. Cakes? What about cupcakes or cake on a stick? The answer is important and will fundamentally change the business.

We do the same thing with new software products. We often decide the frame within which our product operate unconsciously. Frequently, even when we do consciously frame our products, we don’t consider that there are other, potentially better frames that we could have chosen.

A tech startup example

Early in my career I worked at a startup founded by a couple of guys with Ph.D.s in database architecture. Our product was a special kind of database that could do certain types of queries in a fraction of the time it took a relational database. We never questioned the way we framed that product — we were database people and we built a database — what else could it be? The problem of course was that at that time, the world didn’t know it needed another database. When we did sales calls and started with “Hi, we have a database…”, prospects didn’t even let us get to the part where we explained how we were special and different from the database they already had. They didn’t want another database, another query language to learn, another database to integrate with their Oracle systems. VC’s wouldn’t fund us for the same reason — the database market wasn’t growing, we couldn’t beat Oracle at their own game, we didn’t have enough sales traction.

We finally broke out of this mess by changing our frame. It started with a customer telling me he didn’t believe that we were a database at all. “We aren’t?” I said, baffled, “What the heck are we?” He went on to explain that in his eyes we were more of a business intelligence tool. This of course wasn’t true in our minds — we didn’t have half of the major features that you would assume a business intelligence tool would have. We did however deliver value that was more clearly aligned with that category of tools than it was with databases. After re-framing our story we immediately saw the difference in first meetings with prospects. We could finally make it slide 2! The re-framing didn’t stop with marketing and sales however, it changed the way we viewed our product roadmap (how should our product reinforce the value we were delivering, how do we evolve into a better BI tool?), it changed our pricing and packaging, and it changed our partnership strategy.

Why are we so bad at this?

Why don’t we do a better job of deliberately framing our offerings? I blame the way we have been taught to do positioning. Since the 1970’s we’ve been taught that “Positioning” is critical to our businesses and we have been instructed to do it by creating a “Positioning Statement” which is normally a variation on this:

The positioning statement: candidate for most useless business tool ever

There is so much to hate about this I barely know where to start. Never has such a useless tool been so widely used. The fact that the output of this exercise is a hilariously awkward franken-statement of meaningless mumbo jumbo isn’t even the worst part of it. No, the worst part of this “positioning exercise” is that it assumes you already know the answers! If I was the baker in my earlier cake exercise, would this help me decide if I would be better off selling cake or muffins? Of course not. I would simply plug in my assumptions as they stand today and voila! I’ve nailed my positioning! Somewhere along the way we have confused teaching people HOW TO DO positioning with teaching people HOW TO WRITE DOWN positioning.

A better starting point — 4 styles of framing

A good starting point for thinking about how you might frame your product is to understand the different ways we can do it. Which style you choose will depend on your product’s strengths and weaknesses, the competitive landscape of the market you choose, your company’s ability to reach a market, your financial goals, etc. Each style has a unique set of potential risks and rewards.

Style 1 — Use an existing frame and dominate the category — You will use this style of framing if you are already the market leader. You will want to reinforce the way the category is defined currently and the criteria that prospects currently use to pick a solution. If you aren’t the leader currently, picking this style says that you think you can beat the leader at their own game. If the current market leader is all about speed, you will have to convince prospects that you are faster, if the leader wins on safety and security, you will have to prove that you have made a breakthrough in safety and security that makes you better. By definition this style of positioning is difficult for startups to pull off unless the market leader has obvious weaknesses that you can exploit, or a clear market leader hasn’t been established yet. You are unlikely to out-Coke Coke but you might still be able to be the best virtual reality headset on the market if you hurry.

Style 2 — Use a sub-market frame and win in a niche category — In this style of framing you can use an existing frame and then make the case for why you are the best choice in a sub-market of the overall category. The benefits of using this style of positioning is that you can frame your product around something that prospects already understand, without having to take the category leader head-on. The downside of this style of framing is that your target market is smaller than the entire category however this is only a problem where your sub-market is too small to support your business goals. I ran marketing for a startup in the CRM space where we had great success framing ourselves as CRM for Banking and Insurance — a market that was more than big enough to get us to $65M revenue before we were acquired for over $1B.

Style 3 — Re-frame an existing category to un-seat the leaders — Similar to Style 2, this style let’s you make use of the existing Category to give prospects a starting point that they already understand. The difference in this style is that your goal is to change the way the market evaluates solutions in this category — in a way that disadvantages the current leaders and highlights your strengths. This style is often used when there is an innovative breakthrough — either in technology, delivery or business model that has the potential to upset the status quo of a market. For startups the risk here is being able to change the way the market thinks about a category and to do this against leaders who will fight to defend the status quo. Tesla for example, has changed the way we evaluate electric cars from fuel efficiency and environmental impact to performance and luxury. Apple upset Blackberry’s early hold on the smartphone market by moving consumer focus away from email to apps.

Style 4 — Create a new category with an entirely new frame — The last style of framing is where you create an entirely new frame for an entirely new category of solution. In this style you are often merging existing categories (or pieces of them) and staking a claim to something completely new. The difficulties here are obvious — you will need to convince the world that this new category needs to exist and isn’t simply a sub-segment of an older category. Your mission is to convince people that what you have seen in the future will become real. This style is by far the most difficult to execute on. You must first educate your prospects on what the category is, then convince them they should care, then convince them that you are the leader in this new emerging category. However, the rewards for getting this style right are also potentially very high — as the first mover in the category, you have the opportunity to shape the boundaries of it and how prospects evaluate solutions in it. Be careful however, the hard work of Style 4 creators is often capitalized on by later entrants that do a masterful job of Style 3 once the heavy lifting of category creation is done.