B2B positioning for startups: written for the buyers who are not buying

Positioning feels like a branding exercise, so founders postpone it. It is closer to a distribution decision, and postponing it makes every later channel more expensive.

Ask ten early-stage founders what their company does and roughly eight will describe a category and a feature list. It is an honest answer and it is the wrong artefact, because it is written for somebody who is already shopping. Almost nobody is.

That is not a rhetorical flourish. It is the most useful finding in B2B marketing research, and it should change what you write before it changes anything else.

The number that reframes the problem

Professor John Dawes of the Ehrenberg-Bass Institute, in work carried out for the LinkedIn B2B Institute, put a figure on something practitioners half knew. At any given moment the large majority of your potential buyers are out of market. The Institute's framing is that companies should "prioritize the 95% of 'out-market' buyers who pay a company future cash flows."

The mechanism behind it is unglamorous. Businesses replace providers of things like banking, legal, software and telecoms on multi-year cycles. If the average cycle is around five years, then only a fraction of the market is in a position to switch in any given quarter, no matter how good your offer is or how well timed your email.

Two things follow. First, you cannot argue somebody into being in market; they arrive there when a contract ends, a system breaks or a person changes job. Second, and this is the part that matters for positioning, marketing works by making sure you are the name that surfaces when that moment arrives, which is a memory problem rather than a persuasion problem.

What that means for the sentence you write

A feature list is optimised for comparison. Comparison only happens in market. If most of your audience is out of market, then a sentence built for comparison is being read by people who have no way to use it and will not retain it.

What survives in memory is narrower: who this is for, what it replaces, and what the company is willing to be bad at. Those three are memorable because they are specific and slightly costly to say.

Who it is for

Not a market size. A recognisable person in a recognisable situation. "Operations leads at logistics firms running between fifty and three hundred vehicles" is positioning. "Enterprises seeking efficiency" is a placeholder that survived a workshop.

What it replaces

Every B2B purchase displaces something, and usually that something is a spreadsheet, a person doing it manually, or an incumbent nobody loves. Naming the thing you displace tells a buyer where the budget comes from, which is the question that stalls more deals than price.

What you refuse

This is the one founders skip and the one that does the most work. A company that will not say what it is bad at is describing an ambition rather than a position. Refusals are also the cheapest credibility available: they are checkable, and a competitor cannot copy them without giving something up.

Why this is a distribution decision, not a branding one

Positioning gets postponed because it looks like the kind of thing you tidy up later, before a raise. The cost of postponing it shows up somewhere else entirely, in the price of every channel you run.

Vague positioning makes outbound expensive, because a message that could be sent to anyone gets ignored by everyone and burns list. It makes referral partners useless, because nobody can describe you to a third party from memory. It makes pricing harder, since a buyer who cannot tell what you replace has no anchor to judge your number against, which is the failure our note on pricing a B2B service keeps running into.

It also makes deals stall late, in the way described in why B2B deals stall. A champion who cannot repeat your position accurately cannot defend it in a room you are not in, and in B2B there is always a room you are not in. The composition of that room is the subject of our note on the B2B buying committee.

A test that takes a week

Positioning statements are usually validated by the people who wrote them, which is no validation at all. Two checks are worth more than a workshop.

• The repeat test. Tell five people outside the company what you do. Ask the same five, a week later, to tell you back. If what returns is a category name, the position has not landed. If it comes back with your who and your replaces roughly intact, it has.
• The refusal test. Ask your own team to name a customer you should turn away. If nobody can, you do not yet have a position, you have a preference for revenue.

Neither test needs budget and both fail loudly, which is the property you want this early.

The honest limits

Two things are worth saying plainly, because the 95-5 finding gets over-applied.

It is a statement about averages across categories with multi-year replacement cycles. If you sell something bought on a short cycle or in response to an acute failure, the in-market share is higher and the balance shifts toward capture. Check your own renewal and churn timing before importing the ratio wholesale.

And positioning does not substitute for pipeline. A startup that spends two quarters perfecting a sentence and none of it talking to buyers has optimised the wrong constraint. The point of getting the sentence right early is that it makes the talking cheaper, not that it replaces it. If you have no pipeline at all yet, finding your first B2B customers comes first and the position gets sharper from those conversations.

One adjacent piece is worth reading if your position is clear and deals still stall on price: Khaled Badr's note on building a strong client offer without cutting price deals with the offer layer that sits directly on top of positioning, and the two failures are easy to confuse.