Products exist in a market that is 16x more competitive than just 10 years ago.
As a default, therefore, all products must aim for differentiation.
I.E. Doing something both unique & valuable enough for a busy consumer or business to stop, actually notice your product, then get a lot of value from the product when they actually use (I talk about how to achieve differentiation in other articles).
What happens when you’ve done all that right, however?
When you feel you’ve historically occupied what we call a Blue Ocean - a part of the market where there is little to no competition - leading to consistent customer growth & high profit margins?
What do you do when your competitors start turning it into a Red Ocean (i.e. lots of competition, price wars, attempts to achieve feature parity with each other)?
That question is what I will address in this article, drawing upon stories from my own business, as well as other real-world case studies.
Prod MBA’s Historical Blue Ocean
Why am I writing about this? Because it’s a question I find us facing as a business.
Prod MBA has been around for over 3 years now.
What has it done particularly well as a business, if I try to analyse it objectively?
Defining & communicating a unique value proposition effectively to attract customers (with zero marketing spend)
Being laser-focused on actually delivering on that unique value proposition
In practice, that has meant we promise the most hands-on, actionable product learning in the market — and it means we deliver the most hands-on, actionable product learning in the market by actually getting Product Managers/Owners to build a real product from zero to revenue.
Over the last year, particularly, I’ve noticed many other product trainings promising “practical, hands-on learning” in some form.
Is that because they saw Prod MBA get traction & copy the approach?
Is it simply because there seems to be a general trend towards more practical learning (look at all the coding bootcamps out there, for example)? A backlash for all the years of signing up to overly-theoretical presentations or video courses? Or platforms like Maven empowering creators to follow a more practical bootcamp-style approach to learning?
To be honest, the reason doesn’t matter.
The reality does.
And the reality is that our Blue Ocean is starting to be occupied by other products & businesses.
(Now, it also doesn’t matter whether these products actually deliver “practical, hands-on learning. The vast majority do not. They are simply overly-theoretical video courses dressed up as practical bootcamps. But if potential customers perceive them to be practical & hands-on, then it starts to impact our ability as Prod MBA to attract customers).
That means there is a strong argument to evolve our value proposition in order to remain relevant.
How to Re-Discover Your Blue Ocean?
When attempting to re-differentiate yourself in what has become a busy market, there are 3 key factors to think about in forming your new, improved Unique Value Proposition (UVP).
1/4 Shifting Your UVP Is A Psychological Battle
The first step is to face up to the uncomfortable truth that what has worked so far may not continue to work in the future.
It feels risky to suddenly throw out a formula that has driven product success &, most likely, career success for you in recent years.
It would be easy to carry on doing what you were doing, blaming poor team performance or bad decisions around feature-building recently.
Not only will that be an internal psychological battle you must face yourself, but it will also be a battle that you need to win with your stakeholders:
Using every storytelling tool you have at your disposal. Two specific tactics that are effective here:
Visualise the shift in market (see my example of an evolving Red → Blue Ocean later in this article)
Craft a story around the old v. new market: How has consumer behaviour shifting, what new technologies might have helped that shift, which new competitors are taking market share and why, etc., to help them understand the need to change
2/4 Ask: Is Your Original Differentiator/s Still Valid?
The second step is to return to first principles, ignoring what you are doing & what your competitors are doing.
Simply ask yourself:
If we launched an entirely new product today, what do we think would be the most unique area of value to offer customers in this market?
In many cases, the unique value is perennial i.e. something that is - & will always remain - valuable.
For example, in Prod MBA’s case, do people still want hands-on, practical learning? Absolutely. Why? Because it is scientifically proven that real-world application of theory, coupled with support from a coach or teacher, then applied again in your day-to-day work, is the best way to internalise and compound learning.
Should, therefore, we throw our focus on hands-on, practical learning out the window?
No.
We must, instead, ask ourselves how we might:
Promise an even more unique, more compelling package to deliver “hands-on, practical” learning
Then makes sure we deliver on that promise in practice
For example, what kind of guarantees could we make around getting promoted or a pay rise? How can we further increase the impact of a student’s learning? How might we make all interactions even more hands-on & supportive?
3/4 Ask: Can We Stack Value In A Way That Doesn’t Dilute Our Unique Value Proposition
It’s very tempting when defining a product strategy to try & do everything. To try to be best in market at every single area of value.
For example, say we build a project management tool. We would want it to be amazing for “collaboration”. But, also, for “ease-of-use”, for “speed”, for “delight”, for “number of integrations”, etc., etc.
In reality, we just aren’t going to be able to be best at all of these things.
Usually - particularly for products that have not achieved Product-Market Fit - that means being laser-focused on one specific area of unique value. For example, even for a hugely successful company like Superhuman, they are still focused on being “the fastest email experience ever” (i.e. speed being their unique differentiator). They don’t get distracted by what else they could add to that.
In other cases, we might see a way to stack different elements of unique value that makes our product offering more compelling to our target customers.
Notion would be a good example of this. Notion isn’t that unique on the surface: It’s just another note-taking/document-sharing product, like Evernote or Google Docs or Dropbox Paper.
However, Notion stands out in two specific areas:
It is incredibly easy to use (for example, everything is created from a list of flexible, drag’n’drop blocks). It is also very collaborative (partly because of this block-like structure).
By blending these different areas of value, we see a unique value proposition emerge: Notion promises to be “the connected workspace where better, faster work happens”.
Connected. Better. Faster.
3 key areas of value in one value statement.
In Prod MBA's case, that might mean remaining focused on being the most hands-on, actionable product learning experience out there. But it also might mean exploring another area of value to blend into our value proposition to make it even more unique.
That might mean a focus on communicating & delivering a certain type of result (e.g. promotion or pay rise), or a different, unique way we can ultimately move their career forward (for example, coaching them to be able to run effective workshops).
4/4 Understand Macro-Trends
Finally, it’s also important to understand what is going on in the broader economy.
If you feel sales are down and/or competitors are starting to eat into your market share, it may simply be because consumers have less to spend. Particularly as I write this (Oct 2023), a prolonged period of inflation & higher interest rates means that people have less money. Add to that a tech recession where companies have been making cuts to budget & redundancies?
It’s not surprising if revenue drops for a period.
Therefore, rather than having a knee-jerk reaction & throwing out what you’ve historically done well, you may be better placed simply reducing the other lever you have at your disposal: Reduce costs.
Remain focused on your UVP, but keep costs down in order to remain profitable (whilst also ensuring you are ultimately able to deliver on your UVP with fewer resources).
Conclusion
All markets evolve:
New technology creates new possibilities. Competitors may simply just copy what your doing. Others might completely reinvent your market category in some way. Or macro-trends may shift consumer behaviour.
Rather than close our eyes to this reality, better to confront it & ensure your product remains relevant. That means:
Can you overcome the internal psychological battle to actually take action
Is your UVP is still relevant? If so, then work out how to do even better
Can you stack more value into your value proposition to make it even more unique & valuable
Are macro-trends driving a change in the market, or is it in fact your competition that is doing something different to take your market share?
Each case will be different, but every product can be improved by methodically addressing these 4 questions.