(2010-09-25) Rao 7 Dimensions Positioning Flow

Venkatesh Rao uses the term Positioning for 7 dimensions of business Flow State (Business Strategy). If the S-Curve-s are clustered close together in time, you get one big Aha! Otherwise you get a series of smaller Ahas! All 7 must be switched on. Otherwise you’ll get a change in emotion and energy, but not a true business positioning. The characteristic sign is that you get a frenzied, high-anxiety, manic energy tempo instead of a harmonious, vigorous and steady tempo. I call the former the “fire alarm” situation, and it will collapse if it isn’t corrected.

  • Marketing: Marketing positioning is not the same thing as finding a “repeatable sales road map” in the sense of Customer Development inside lean startups. Yes, you still have to be agile, and pivot, and get outside the building. But you don’t use the customer development model, which is optimized for sales-led discovery. You focus on typical marketing things like finding good names and taglines. If you talk to potential customers at all, you do so in different ways, to find a creneau. You look for inspiration in pop-culture trends. If it works really well, you may not have to do the sales pavement-pounding and hypothesis testing at all.

  • Operations: Learning Curve, Economies Of Scale. It is the accelerating margin improvements threshold. You can limp along with razor-thin margins for quite a while and call yourself cash-flow positive, but until you hit this phase transformation, your position is very shaky indeed... The fully-refined version of this gets you the classic positioning model of Michael Porter (the five forces model).

  • Sales: in Customer Development, you domesticate a wild customer.

  • Engineering: from Platform concept to Killer App. Brad Feld has labeled “platform” the annoying word of 2010. He correctly notes that you cannot build a platform, anymore than you can make a viral video. The best you can do is build a platform-intent product or service, or a viral-intent video. But platform-intent thinking is crucial. Otherwise if your first and only application idea fails, well, you’re screwed... First you build a minimum-viable platform, and then you start doing several 20% stabs to find your first killer app. Each stab is a Minimum Viable Product hypothesis, but each stab is not necessarily a full repositioning or Pivot.

  • Public Relations: PR is essentially a hidden and delicate backstage influencer activity. You are trying to co-opt a story that’s already “out there,” in service of your brand. Many people have a stake in that story, so at best you can influence the story, not “tell it.”.. Ground Swell has several great examples... Culture isn’t yours to choose. Your Business Model completely determines it, and it will always be a culture driven by a customer-facing function.

  • Finance: Money Metaphor-s are complex beasts. Entrepreneurs think with the entrepreneurship (capitalist) metaphor. But to sell stuff, you must think and talk within the customer’s active metaphor. Get it right, and the Pricing cylinder fires.

  • Innovation: Three conditions have to be met for Disruptive Break Through. First, an innovation is “disruptive” because the place it is born is not the place it can grow. So it needs to be transplanted into a new business unit run by a logic within which the idea is sustaining. Second, you need a grow-in-peace peripheral position next to a major disruptee market, where you are too small to pay attention to, but too big for the incumbent to kill once you gain traction. If you don’t do the first, the business is stillborn. If you transplant, but there is no big disruptee market, you create a small niche business. But if you do both, you can get “breakthrough.”

After much thought, I gave up on Culture. A distinctive culture is an outcome, not a control variable. How you throw the 7 basic switches determines what a corporate culture looks like.

The last candidate is ecosystem fit... I don’t think this is a meaningfully separate distinction with separate legal control variables. Antitrust laws see to that. When these laws can be bent or broken without consequence, or the government gets involved, then you’ve got an eighth switch.


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