What if we have no differentiation?

"We don't...really have any differentiation" is a common admission I hear. There are three flavors of this problem.

1. You have hidden differentiation you don't understand

Your customers chose you for a reason. Go talk to your best customers and ask what they'd miss if you disappeared. What would they use instead, and what would be worse about that? If you have any happy customers at all, there's usually a seed of differentiation hiding there.

2. You're competing on the same value dimensions as everyone else

This is often a segmentation problem presenting as a differentiation problem. Segmentation and differentiation are interdependent. You have to iterate on them back and forth until your product is differentiated for a distinct segment, relative to their alternatives. If you're playing the same game as competitors and trying to win by being "better," that's trying to win on effort, not strategy.

Re-examine who you're serving and how you're trying to win with them. Your segmentation should clearly define who the product is and, more importantly, is not for. The ABCs of differentiation exist to make you choose where to be amazing, where to be basic, and where to be crappy on purpose. If your grid has no Cs, you haven't differentiated. The mistake isn't failing to be 10x better at everything, it's failing to choose where to be 10x better.

3. You're genuinely commoditized

Your product does the same thing as alternatives at roughly the same quality and price. This is the hardest case, and it means your value thesis is broken. You need to play a different game or play this one differently. Develop and test a new value thesis: find a different segment and problem where you can actually differentiate, build defensibility, and win.

Regardless of the flavor, differentiation is the challenge you need to solve. Name it and design a strategy to beat it.