How to Position a Startup Against the Customer Current Alternative
Position a startup against what the buyer does today: name that alternative first, state the difference in the buyer's own terms, then check that the buyer can repeat it. This suits founders before or around launch who sell to an identifiable buyer. Compare with the option your product would actually replace, which is often a workaround or doing nothing. The main constraint is evidence: you need to have seen the alternative in use.
The choice and its business consequences
This guide is for founders before or around launch who have a narrow segment and need to decide what to compare their product with when they explain it. The wider sequence is in How to Build a Startup Go-to-Market Strategy by Stage, and recording the alternative for one account is in the ICP Template: Buyer, Trigger, Budget, and Current Alternative. The decision here is narrower: which alternative do you position against, and what do you say about it?
April Dunford's site defines positioning as how a product is different and better than alternatives for a particular set of customers. So the comparison comes before the wording. A founder who compares a product with the wrong thing can write a clear sentence and still lose the sale. The choice sets four things:
- The price comparison. A buyer who handles the problem with staff hours compares your price with those hours, not with a rival's plan. The U.S. Small Business Administration's market research guide lists this among the questions to answer: 'Pricing: What do potential customers pay for these alternatives?'
- The proof you need. Beating a rival takes a comparison on results. Beating a habit takes evidence that the change is worth the trouble.
- The sales conversation. Against a rival, the buyer asks which one. Against a workaround, the buyer asks whether to change at all.
- The product roadmap. Features built to match a rival that few of your buyers use take time from the difference that decides the sale.
Daniel's go-to-market mentoring page describes defining 'the positioning and the offer' as a step that comes after validating a problem directly with buyers. That order matters here, because you cannot compare with an alternative you have not seen.
Current customer alternative
Start from what buyers do today, not from a list of companies with similar websites. The alternative is anything the account does in place of your product, and that includes doing nothing. It falls into one of five kinds:
- A spreadsheet or shared document that someone keeps up.
- A person or extra paid hours.
- An outside supplier or agency.
- A competing product, or part of a product the account already pays for.
- Nothing: the account lives with the problem.
The SBA guide also tells businesses to assess 'Indirect or secondary competitors who may impact your success', which covers much of this list.
Do not discount the last item. Samuelson and Zeckhauser's paper Status Quo Bias in Decision Making says 'Most real decisions, unlike those of economics texts, have a status quo alternative' and that its experiments show individuals 'disproportionately stick with the status quo'. A replication by Xiao and colleagues found strong support in three of the four scenarios it retested and did not find substantial support in the fourth. This is research on decisions in general, not on startup sales, so it gives a direction and no benchmark.
List every alternative you have actually seen in your segment, then ask three questions of each:
- How often did you see it? Count the accounts where you watched it in use or saw a record of it. A described process is often tidier than the real one.
- Would buying your product stop it? Name what the account would stop doing or stop paying for. If the account would run both, you are an addition, and the price has to stand on new value.
- Who owns it? The person who carries the cost of the alternative has to want the change. If nobody owns it, find out who would approve a purchase.
Position against the alternative that most accounts use, that your product would actually replace and that an identifiable person owns. Everything else becomes an answer to an objection and stays out of the headline.
Meaningful product difference
A difference counts only when it passes three tests against the chosen alternative:
- The buyer already measures it. Time, money, errors or risk, in terms the buyer uses. Your architecture is not one of them.
- The alternative cannot easily match it. A feature that a spreadsheet handles with one more column is not a difference.
- You can show it today. A roadmap item is a plan.
Write it as one plain sentence: today you do this; with the product you do that; so this changes. Then state what the alternative does better, because the buyer already knows. A workaround costs nothing new, needs no training and has no vendor to manage. Saying so keeps the comparison honest and shows you have looked at it closely.
A familiar reference can do part of this work. Daniel's go-to-market page says he founded Delfast Delivery when one-hour delivery for online retailers was not yet a category and reports positioning it as 'a smartphone delivered as quickly as a pizza'. His Delfast Delivery case page says 'Everybody already understood that pizza arrives in an hour.' The line ties a new promise to a speed people already understood. These are his own accounts and neither describes a test of the line, so read them as one founder's description, not as evidence that the phrasing worked.
Proof the buyer understands the offer
Agreement is weak proof. A polite buyer can nod at a sentence they could not repeat, so ask the buyer to say it back. Digital.gov's plain language guide to paraphrase testing describes one-on-one sessions in which a reader goes through a short passage and you 'ask them to tell you in their own words what that section means.' It suggests six to nine participants and advises against questions answerable with a yes or no, because they give little usable information. The guide is written for documents and web pages, not sales, so what follows is an adaptation.
Show the buyer your positioning sentence with nothing else around it and ask:
- What does this do, in your words?
- What would you stop doing if you had it?
- What would you compare it with?
- How would you explain it to the person who approves the money?
The buyer passes when they name the alternative you chose without prompting, state the difference without your wording and can explain it to the approver. Write the answer down as spoken and do not correct it, because a wrong answer is the result. Set your pass line before the first session.
Understanding is not demand. A buyer who repeats the difference perfectly may still not pay, and that is a separate test, covered in How to Test a Customer Problem Before Building a Product.
The positioning comparison grid
Fill in one grid per segment, and tag each cell as said, seen, done or assumed, using the tags from the ICP template. That template records what is known about an account. This grid exists to make one decision: which column your sentence compares against.
| Buyer's term | Current alternative | Nearest purchased option | Your product |
|---|---|---|---|
| What the buyer does | The workaround, as seen in use | What the account would buy instead | What changes once it is running |
| Who owns it | The person who carries the cost | The person who holds that budget | The person who would approve you |
| Result the buyer watches | How it scores today, from a record | How it scores, from its documentation or a user | How it scores, shown and not promised |
| Yearly cost | Money, paid hours that could be reassigned, revenue lost | Price plus setup | Price plus setup plus the effort of changing |
| What it does better | What the buyer would lose by leaving it | What it does that you do not | The one result the others do not give |
| Buyer's own sentence | How the buyer describes it | How the buyer describes it | The buyer's words from the paraphrase test |
Then read the grid and make the decision:
- You beat the workaround on the buyer's result, and the purchased option is rare. Position against the workaround and answer the purchased option as an objection.
- Most accounts already pay for a rival. A budget line exists, so compare directly with the rival on the one result where you can show a difference.
- The effort of changing outweighs the difference in every column. No sentence fixes this. Change the segment or the offer before you rewrite any copy.
- Most cells are tagged said or assumed. You are not ready to choose. See more accounts first, using How to Run a Customer Interview Without Pitching.
A worked decision with explicit assumptions
The following is a hypothetical example with invented details. It illustrates the method and does not describe a real company, customer or measured result.
A founder sells a leak monitor for drip irrigation lines to family vineyards at an intended $2,400 a season. The first homepage calls it an irrigation intelligence platform and compares it with soil moisture platforms. Then the founder visits 10 vineyards. At 7, a worker finds leaks by walking the rows; 2 have a flow meter at the pump; 1 has a soil moisture system. At one of the 7, the founder follows the vineyard manager, who walks the rows at dawn with a metal bucket of fittings in one hand and eyes on the ground, looking for a wet patch.
| Buyer's term | Walking the rows | Flow meter at the pump | Leak monitor |
|---|---|---|---|
| Leak found | At the next walk, up to 4 days later | Same day, but not which row | Same day, with the block and row |
| Seen at | 7 of 10 vineyards | 2 of 10 vineyards | None yet |
| Who owns it | Vineyard manager | Owner | Vineyard manager |
| Season cost | 2 walks a week for 26 weeks at 5 hours each and an assumed $25 an hour, or $6,500 | An assumed $1,800 installed | $2,400 plus a morning per block to install |
| What it does better | Spots other problems on the way and needs no new system | Simple, with nothing in the rows | Names the row |
The decision is to position against walking the rows and not against soil moisture platforms. Walking is what 7 of 10 vineyards use, the monitor replaces part of it and the manager owns it. The flow meter becomes an objection with a prepared answer: it shows that water is leaking, not where. The founder concedes that walking also catches other problems and does not claim to end it. The new sentence reads: 'For family vineyards that find leaks by walking the rows, this shows which row is leaking the same day, so the crew walks only where the problem is.'
The founder tests the sentence with 8 other managers, with a pass line of 5 written in advance. Of the 8, 6 explain it unprompted as telling them which row to walk, which clears the line. The other 2 compare it with a flow meter, and that goes into the objection answer. If the monitor cuts walking by half, it saves 130 hours, or $3,250 a season, which clears the $2,400 price by $850. That margin is thin, so the founder offers a paid one-season pilot at 4 vineyards to measure walking hours before making any stronger claim. The assumptions go in the file with the decision: that the saved hours would be reassigned, that walking can halve without missing other problems, that $25 an hour is a fair labor cost, that these 10 vineyards represent the segment and that a restated sentence says something about a later purchase.
Common mistakes and limits
- Naming only rivals. A list of similar companies leaves out the spreadsheet, the extra hours and the decision to do nothing.
- Naming an alternative from memory. A founder's description of how buyers work is an assumption until it has been seen.
- Comparing on your own terms. If the rows are your features, your product wins every row and the grid decides nothing.
- Hiding what the alternative does better. The buyer raises it anyway, later, in front of someone else.
- Counting agreement as understanding. 'Makes sense' is not a restatement.
- Using one sentence for several segments. Segments that rely on different alternatives each need their own grid.
The method has limits. With a handful of conversations, a pass is a judgment and not a statistical finding. It suits products with a buyer you can reach and talk to, while consumer products may need purchase and usage data instead. Positioning also cannot rescue a product whose difference is not worth the switch. The grid, the three questions and the reading rules are an editorial framework, not a measured result.
Related guides and next step
- The wider sequence by stage: How to Build a Startup Go-to-Market Strategy by Stage
- Recording the alternative for one account: ICP Template: Buyer, Trigger, Budget, and Current Alternative
- Testing whether the problem is worth paying to fix: How to Test a Customer Problem Before Building a Product
Daniel's go-to-market page says the first session is free and takes 30 minutes. Book a startup mentoring session to review your startup positioning decision with your actual evidence and constraints, and bring the filled grid, including the cells tagged assumed.
Frequently asked questions
How do you position a startup against a customer's current alternative?
Name what the buyer does today, from what you have seen and not from a competitor list. Choose the alternative that most accounts use, that your product would replace and that an identifiable person owns. State the difference in terms the buyer already measures, admit what the alternative does better, then ask buyers to restate it in their own words.
What evidence should a founder collect for startup positioning?
For each account: what it does today, seen in use or on a record; who owns it; what it costs; what it would stop doing after buying; and the buyer's own restatement of your sentence. Tag each entry as said, seen, done or assumed. A restatement shows understanding, so collect a paid or dated step separately as evidence of demand.
What are common mistakes in startup positioning?
Listing only rivals, naming an alternative from memory, building the comparison from your own features, hiding what the alternative does better, treating a nod as understanding and using one sentence for segments that rely on different alternatives.
Should a startup position against competitors or against doing nothing?
Against whichever option you have seen most accounts use and your product would actually replace. If accounts already pay for a rival, a direct comparison can make sense because a budget exists. If they rely on a workaround or live with the problem, comparing with rivals answers a question the buyer is not asking, so compare with the workaround and treat rivals as an objection.
Sources
- Market research and competitive analysis (Plan your business guide), U.S. Small Business Administration
- Status Quo Bias in Decision Making (Samuelson and Zeckhauser, Journal of Risk and Uncertainty)
- Revisiting status quo bias: Replication of Samuelson and Zeckhauser (Xiao, Lam, Piara and Feldman, Meta-Psychology)
- Paraphrase testing (Plain language guide series), Digital.gov
- April Dunford official site
- Go-to-Market Mentor and GTM Strategy Advisor
- A smartphone delivered as quickly as a pizza (Delfast Delivery case study), Startup Mentor