The most common positioning failure I see in early-stage companies is the “small piece of a big pie” fallacy. It goes something like this:
“The Gadzorp market is $5 billion and growing at a 20% CAGR. Even 5% market share would make us a major player!”
“The ecomm and retail vertical has the most accounts. Let’s focus there.”
“CMOs have budget to burn. Capturing just 15% of their tools budget would help us command a major ACV.”
This is the kind of top-down market analysis that you probably presented in your investor pitch. And it makes total sense… on paper.
But here’s the problem. That’s not how it works. EVER.
What’s wrong with this approach?
Building your positioning strategy around securing X% of a specific market is a surefire way to end up with 0% of that market share. And it sets you up to run out of runway before you get a foothold in any market.
In my experience, top-down market analysis leaves you with:
❌ A category that doesn’t highlight your differentiation – where you’re stuck “educating the market” and playing catch-up on basic features
❌ A vertical with challenges and pain points that aren’t aligned with your core competencies – so you end up with convoluted objection-handling docs and awkward sales calls (for more on telltale signs your ICP is a bad fit, check out our guide to avoiding the B2B category tap dance).
❌ A buyer persona that’s inundated with marketing and sales, and where you don’t have a unique “story” or angle – remember, all of your competitors are doing the same calculations you are! The right buyer should be a strategic moat for your startup, not a set of deaf ears for your pitch to fall on.
What should you do instead?
When it comes to positioning, be less data-driven. (Or rather, prioritize different sources of data.)
Consult – and then promptly set aside – industry forecasts and market sizing reports. Instead, obsess over:
➡️ Who are your best-fit customers?
➡️ What are the urgent problems that only you can solve for them?
➡️ How do they think about the value you deliver to them?
If all these questions look familiar, it’s because they’re what you should be asking yourself as you build out your positioning.
The bottom line
Trying to “take a little piece of a big pie” will leave you and your sales team disappointed (and hungry). Don’t focus on high-altitude, industry wide forecasts and generalized reports. Hone in on the data you’re already using to guide your positioning; who are your product’s biggest advocates, what are the urgent problems that only you can solve for them, and how do you deliver them value? Figure out what pie you can take a big piece of 🥧
