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And now to the newsletter…
Topic of the Week: The Art of Positioning
I recently read that meal prep company Blue Apron is considering an IPO. While I have no inside knowledge of the business, there is one thing I can say with certainty: Pulling off a successful IPO will be a fascinating case study in competitive positioning.
Despite ~$750M in revenue, rapid growth, and huge market share, Blue Apron has its challenges. Namely, it’s still unprofitable, competes in an industry with limited barriers to entry, and has low customer retention rates. How can the Company position around these negatives?
Blue Apron already fixed their underlying industry issue by repositioning from a meal prep company, to a food system. Essentially they have rebranded a core process of any food distribution company into a new innovative industry. Genius.
Lack of profitability is easy to position nowadays: 1. We spend a lot of money acquiring new subscribers because we can measure return. 2. We’ve made investments in growth that turned forecasted quarterly profit into a sizable loss. 3. Blue Apron is better positioned than any company in history to reshape our food system.
Customer retention is the last issue. Maybe they will solve this by IPO. If not, we will just cite it as a risk and otherwise ignore it.
Ta da! We successfully positioned Blue Apron for IPO. There is just one little problem.
Groupon used this same positioning strategy I just walked through. I even copied and pasted a few positioning points from Groupon’s S1. Remember Groupon? The company that was revolutionizing e-commerce? Maybe this chart will jog your memory.
Yikes. Not pretty and not someone I would want to be compared to. So let me ask you a question. After hearing the comparison of Blue Apron to Groupon, are you starting to see some scary similarities between the two companies? Has your perception of Blue Apron changed or did I reinforce an opinion you already had? If you answered “yes” to any of these questions, you just proved the entire point of me going through this exercise.
Positioning is a powerful tool that can change the way we think about a business, both positive and negative. If you answered “no” to all the above questions, I’m assuming it’s because you’re a Blue Apron investor.
Competitive positioning is the process of changing the way a potential buyer views a business. It allows you to pull out the competitive advantages of a company and serve it up in a way that is most palatable to the market.
It can make or break your company and is something that should be planned for and constantly refined.
How is your company competitively positioned in the market? I’m betting there is some room for improvement. I’ve included a few resources below for you to browse if you’re interested in improving your positioning.
Must read book: Positioning: The Battle for Your Mind
A book that will change the way you think about competitive advantage
Introduction to the theory of “resource-based view,” a method of modeling competitive advantage.
A high-level DIY positioning guide
Five examples of good competitive positioning
When Positioning Crosses the Line to Fraud
Have you heard of greenwashing? It’s a deceptive form of advertising that is used to associate a brand with environmentally friendly initiatives. Ask Volkswagen about this one.
Positioning Practice that Won’t Die
We are the [Uber or insert high profile company that you will never be] of… Don’t do it.
ROND Community Section
Apparently several of you found my use of the word BS fairly amusing last time. I actually tried to use a word that would be a bit more PC. However, upon a thesaurus check, I couldn’t bring myself to use words like “poppycock,” “hogwash,” or “malarkey.” Sometimes things in the professional world are just BS.
One event that I wanted to make everyone aware of is 36/86. Launch Tennessee does a great job of putting this on. There are a lot of great speakers and I highly recommend it.