The Power of a Single Advantage - Tactician #0045

"The power of a single advantage? In tech, that's like having the only phone charger at a party. Suddenly, you're the most popular person in the room."

27/01/2024

The Power of a Single Advantage

Jason Cohen ,Founder at WP Engine, emphasizes the strategic value of focusing on a single, strong competitive advantage, particularly in sales and marketing in order, to win customers in “Pick one and own it”

• The Power of a Single Advantage:

  • "Hanging your hat on just one advantage that you can own completely is stronger than diluting your message by making many assertions."

• Application in Sales Calls:

  • "You should go through this exercise because this skill is valuable in every sales call. Sometimes you’re defending the few advantages you have over a specific competitor. Sometimes you’re arguing the virtues of small businesses over large ones."

• Focused Messaging Across Platforms:

  • "Your homepage becomes laser-focused. Your advertisements become pointed, powerful, pithy, and other words starting with 'p.' Your 30-second pitch becomes compelling."

• Advantage of Being 'Most Expensive':

  • "We’re the Cadillac tool—the most expensive, but also the best... See, we don’t line our pockets with that revenue, we spend it making you maximally effective."

• Countering Budget Concerns:

  • "When you factor in the cost of the tool, also factor in the cost of failing to be successful with the tool... What’s best for you and your company is to bet on the best."

• Don’t dilute your message:

  • "Why try to defend ten points when you only need one or two to make your case? It’s already hard enough to stake out a niche in this massive world! Don’t dilute your message."

Using Scarcity to Get Resourceful

Jake Gibson, Founding Partner at Better Tomorrow Ventures, emphasises the value of bootstrapping and resourcefulness in the early stages of a startup in “Signals: The lost art of “F*ck around and find out”

• Humble Beginnings and Gradual Growth:

  • "In its first year in 2009, NerdWallet made $75. The second year, that rose to about $60,000. In the first nine months of 2023, the company generated $465.7 million in revenue."

• Lean Startup Phase and Bootstrapping:

  • "In those first lean years, when my co-founder Tim Chen and I lived on Subway sandwiches. We couldn’t afford to hire until 2012, almost three years after founding NerdWallet."

• Advocating for Resourcefulness and Hyper-Focus in Early Stages:

  • "While bootstrapping like this won’t be for every company... it’s possible to do a lot more with a lot less than is typically assumed."

• Late External Funding and Prioritizing Business Model Fit:

  • "We didn’t take outside funding until 2015, when we raised $64 million in our Series A. By then, NerdWallet already had a 200-employee workforce, built on the back of profits from those lean early-year experiments that paid off."

• Impact of Scarcity on Prioritization and Innovation:

  • "When you can feel the clock ticking, how you spend every minute of your day...become existential questions... Everything you do has to have an impact. You have no choice but to figure out what the right inputs are, and hyperfocus on driving them forward, or you die."

• Avoiding the Pitfalls of Abundant Funding:

  • "When money was raining from the sky, I saw a lot of early-stage founders waste cycles on things like refactoring code bases, paying for coaches, hiring experienced salespeople, changing their company name, or rebranding."

• Using Scarcity to Get Resourceful:

  • "When you're operating in conditions of scarcity... you have to get really creative and really resourceful. This is what ultimately led to the SEO and content marketing strategies that NerdWallet is famous for."

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