When we work with startups, the hardest thing for them to do is to BE HONEST with us — and themselves.

Like the fictional Dr. House always said:

"Everybody lies."

This problem is magnified if:

1) the company has raised a lot of money

2) the money came from a high-profile VC

3) their ARR isn't that high yet

I will ask them extremely simple and boldfaced questions:

Me: "Are people coming to you for help with this specific use case? Or are they coming from this much broader set of use cases that you want to focus on?"

Them: "No, that single use case isn't interesting. They really want us to solve this HUGE range of issues that our product supports."

Then I watch the sales call recording:

Prospect: "We are really just interested in this one use case. That's our most painful problem, and we can think about these other things you do later."

• ----

Me: "So it seems like you probably just compete with this much larger and more successful company that does the same thing as you?"

Them: "No, no definitely not. We are very different from them."

Then on the sales call recording...

Prospect: "We really just want to know how you are different than _______." (competitor I brought up).

• ----

Me: "So it seems like your champion would be a director-level role in this department, right?"

Them: "No, no — we sell directly to the executives."

In the sales call, all the roles were director-level in the exact department I suggested.

• ----

Me: "So it seems like they probably will be interested in the functional aspects of the product... how it works, what it does, etc. Is that right?"

Them: "No, no... they don't care about the product at all. They just want to know the outcomes we can drive."

Then the sales call is 45 minutes of them demoing the product and the customer is asking extremely detailed questions about its functionality the entire time.

• ----

The problem is that when you build a positioning strategy based on what you wish were true...

rather than what is ACTUALLY true...

...it will fail.

I understand you need to tell a cool story to get those big VC checks.

But that is not (and CANNOT!!) be the same story you tell customers.

Being INVESTOR-centric is the opposite of being CUSTOMER-centric.

And product positioning is first and foremost a customer-centric activity.