Last week students in my Intro to Entrepreneurship course were working through the Startup Marketing lecture. There was a delightful discussion afterwards as the students explored the idea of “positioning.” This is a topic that was very tricky for me until a wise mentor showed me a trick that plays a central role in the lecture: the positioning triangle. This is often summarized as “Good, Fast, or cheap – pick any two :)”. I prefer the more broadly applicable terms of “Premium, Convenient, or cheap,” but they mean the same thing. Below is a graphic meant to help communicate the idea.
The boil down is that, barring revolutionary technology, it is very hard to be all three of these things. Most businesses are lucky if they can pull off one of these, but certainly no more than two is practical for the overwhelming majority of startups. Lets look at each in a little more detail:
- Cheap – Saves me money! This does not mean “shoddy.”
Examples: Dollar stores, the Tata Nano (car), discount retailers, or feature phones.
- Convenient – Saves me time OR gives me more flexibility.
Examples: McDonalds, Toyota Corolla, Walgreens, pre-payed phones
- Premium – Gives me lots of features I can’t get elsewhere, often (but not exclusively) this includes prestige/status
Examples: Whole Foods, Lamborghini, Nordstrom, iPhone
I asked my students to image three versions of their ventures, each version specialized on one corner of the triangle. To help them along, I gave a silly example… Start with the basic idea of a kabob stand. Now apply the three positioning extremes…
- Cheap – low quality (but perfectly fine) ingredients, simple menu, low prices, with the Kabob stand migrating between places they are allowed to loiter at for free. People pay with cash only to avoid credit card processing fees and the logistics of accepting credit cards at a mobile venue. The kabob stand is a re-purposed taco kart lacking frills. It only allows for one employee to operate it and who must Do It All.
- Convenient – Same food, but now the kabob stand is actually a kabob truck. The owner is paying “rent” so he can park at high-traffic locations at the right times of day. He has social media feeds that allow people to find him easily. He takes cash, credit, debit, etc. Multiple people can fit in so they can work multiple windows while a dedicated cook uses nice equipment to crank out the food fast.
- Premium – This is not your father’s taco cart! This is a STYLING vehicle, it oozes the ambiance of the cultural tradition of the food they serve. The employees are dressed up in costume. The skewers are high quality. Ingredients are top notch. The spices and sauces are amazing, and all “secret.” This truck arrives only at the coolest parties, unannounced, and serves out its food along with crazy ethnic music blasting out of a killer sound system. People pay through the nose… but they walk away not only full, having enjoyed a great experience, but with a special kabob stick you can only get from them. Sometimes those sticks are collectors items with crazy promotions written on them.