Marcus: There's a company doing eighty million dollars in revenue. It's growing thirty-five percent a year. And some of the executives are telling their consultant that the product is impossible to sell.
Tessa: Wait. Eighty million? And growing? How is it 'impossible to sell'?
Marcus: Because, they say, it has 'no differentiation'. There's nothing special about it.
Tessa: Okay, that has to be a B2B thing. Like, enterprise software. Because in consumer products, you can just win on vibes. No one's asking you to justify why you bought a certain brand of sparkling water.
Marcus: See, that's what I thought, but this piece by April Dunford argues it's the exact opposite. She says for fizzy water, who cares, you just buy a different one next time. But in a B2B deal, your reputation is on the line. You have to go to your boss and legal and procurement and justify the choice. Differentiation is everything.
Tessa: Huh. So if you have to justify it, and there's no justification... then the $80 million doesn't make sense.
Marcus: Exactly! Which is Dunford's whole point. She says when a company claims 'no differentiation,' one of two things is true. Either it's real, and you're about to go out of business because customers aren't stupid. Or, it's a hallucination.
Tessa: A hallucination. Meaning the differentiation is there, but the team just can't see it.
Marcus: They're blind to it. And she says this is way, way more common. Especially in companies that are actually doing well, like that $80M one. The problem isn't the product, it's the company's perception of it.
Tessa: So why can't they see it? If customers are buying it, the value must be there.
Marcus: She lists a few reasons. One is that new execs come in from a different market and assume the customers are the same, but they're not. They don't take the time to learn why people are actually buying this product.
Tessa: Right, they're pattern-matching the wrong pattern.
Marcus: Another one is that the sales and marketing teams don't actually understand the product's technical value. The product team ships something cool, but they fail to explain why it matters to a customer.
Tessa: I find that one hard to believe. Isn't it someone's entire job to be that bridge?
Marcus: You'd think! But she says she runs these workshops where the product team is just stunned that marketing has no idea what the key features actually do for a customer. And honestly... I don't fully get how that happens. How does a company get to millions in revenue with that kind of internal disconnect?
Tessa: It feels like a miracle of product-market fit. The product is so good it just sells itself despite the organization.
Marcus: Maybe. Then there's my favorite one: comparing yourself to 'ghost competitors.' These are companies that you, the vendor, are terrified of, but that your customers have never even heard of.
Tessa: Oh, I feel this in my soul. You're benchmarking against some obscure company with a perfect feature list, but in reality, your customers are just choosing between you and an Excel spreadsheet.
Marcus: Exactly. They're a ghost that only you can see. And because you see them, you think you have no edge. The final big one is focusing on why you lose deals instead of why you win them.
Tessa: Okay, now wait. I get that for the $80 million company. But if you're a tiny startup, and you lose your first big potential customer, you have to do a loss analysis. You can't just ignore it.
Marcus: Her point is that we get obsessed with the deals we lose, especially big ones, even if they were a terrible fit for us to begin with. Chasing them convinces the team the product is a loser, when you should have been focused on the good-fit prospects you could actually win.
Tessa: I hear that, but it feels like advice for the established. When you have zero customers, every loss feels existential. You don't have enough 'wins' to analyze. The loss is most of your data.
Marcus: But that loss might just tell you 'don't sell to this type of customer,' not 'your product is bad.' Focusing on it might send you on a wild goose chase building features for a customer who will never buy from you anyway. Studying the one person who did buy might be more valuable.
Tessa: Maybe. I'm still not convinced you can just ignore the failures early on. But I take the point that you have to actually study the wins.
Marcus: Right. That's her whole takeaway. You need to deeply understand why customers choose you over their other options. That's where your real differentiation is. It's not a hallucination, you just have to look in the right place.
Marcus: I'm Marcus.
Tessa: I'm Tessa.