Positioning is a crucial step and a foundation of any startup marketing strategy. If you don't do it, your competition will, and in a way that does not put you and your company in the best light.

With that said, I have found that entrepreneurs hate to try and position their companies. Why you may ask. Because it forces a niche approach. A niche approach forces you to decide what you want to be when you grow up. Entrepreneurs typically don't like to address this because it reduces options. If you don't reduce options you become Yahoo!.

So, how does one go about the act of positioning. I have found that a combination of the concepts presented by Geoffrey Moore in Crossing the Chasm (page 161) and Chris Coleman in The Green Banana Papers (page 36) work best. While it takes a lot of research, strategic thought and time (it will take at least 90 days to distill this), simply fill in the blanks or modify to suit your needs.

For __________________
(target customer)
__________________
(company/product name
is a __________________
(category in which you compete)
that __________________.
(functional need filled)
Unlike __________________
(your primary competitor)
we __________________.
(why you are different).

And once you get that down you consistently repeat it. Consistently repeat it.