The Real Differentiator in the AI Era: A Sharp, Specific Value Proposition
A proper insight driving a precise value proposition is the best way to stand out and give yourself a chance to win.
How can startups rise above the noise of countless competitors, all of whom promise “faster and easier” through AI?
Two things are needed:
A genuine insight or “secret” into your market / customer
A precise, targeted value proposition
What Do You Know That No One Else Does?
Ryan Hoover (founder of ProductHunt and an active investor) shared this on LinkedIn:
A founder recently asked, “If you were starting or joining a startup today in AI what segments would you look at?”
Answer: “My honest but maybe cop-out answer: The best place to build is likely driven by a secret you discovered from your own experience.
Today, it seems like every rock is being turned over by founders. We’re seeing an increasing number of companies building obvious solutions with AI. Many of those companies will succeed but if I were to start a new company, I’d look for turly novel solutions OR novel (and new) problems.”
Ryan’s being generous when he says, “Many of those companies will succeed.” Some will, most won’t. Without any material differentiation, most AI startups will fail to achieve the scale they’re looking for. And differentiation is incredibly difficult.
I do agree with Ryan that you need a secret. You need to know something that most don’t—a genuine insight or “aha!” that drives everything you do. Finding that secret through your own experience works, but you can also dig very deeply into a vertical where you have less experience and still find insights. Either way, if you don’t have an insight or secret, specifically focused around the problem and why it matters to a targeted user group, you’re in trouble.
Incidentally, AI is not a differentiator.
And, “customers want AI” isn’t a secret. In some cases it’s not even true, despite the rush to put AI into everything.
“Build it and they will come” is still not a strategy
AI has compressed the distance between idea and shipped product. New tools lower build time, reduce costs and scaffold entire features.
It’s amazing what can be accomplished. I’m blown away and loving every minute of it. But just because I can build a complete web application in a couple days through prompting alone doesn’t mean anyone gives a shit.
We’re seeing an explosion of undifferentiated, look-alike products. Each one promises to be “faster and easier to use” than the last one. It’s nearly impossible to prove, and at some point, customers stop caring.
❌ Just because you can build something, doesn’t mean you should.
❌ Just because you build something, doesn’t mean anyone will care.
These statements have always been true.
What Precise Value Do You Provide, And Why Should Customers Care?
In all the hype around AI, people are forgetting about the importance of value propositions. Every startup starts to look the same. It’s impossible to differentiate and customers are getting fatigued trying dozens of tools.
How many more generic workflow automation tools can we possibly need?
My bet: The sharper, more precise your value proposition, the higher likelihood you survive and thrive.
This means narrowing focus, and being very opinionated about what you do and who you serve, as well as what you don’t do and who you don’t serve.
A crystal clear value proposition will tell the world clearly:
“For [specific audience] who [specific context or pain], our product [delivers this outcome] by [unique mechanism or approach], so they can [specific business result].”
If you can’t articulate that quickly, repeatably and with force, I think you’ll lose. I know there are a number of unicorn startups at the moment that seem to serve everyone with everything, but they’re exceptions to the rule. There are also a number of unicorns that are specialized.
Standing out from the noise, which is a pre-requisite to having any chance at success, is insanely difficult. Getting a temporary bump from your launch video is cool…but fleeting. Growth hacks are great (and you should absolutely try them and build them into your product), but there aren’t a lot of secrets anymore. It’s a fairly level playing field.
A precise, narrowly-focused value proposition is different. It puts a line in the sand and declares, “We stand for something. Here it is.” You may piss off a big chunk of “the market” or they’ll simply ignore you. That’s OK, because the people you are speaking to will see your message and say, “Thank you for seeing me and speaking my language. You get me, and this is exactly what I need.”
Make a small group feel like you built the product specifically for them. That is the wedge that earns adoption, referrals, and authority. Then you can expand.
Case study: Webflow’s early focus on designers
Webflow did not become Webflow by trying to be the everything-builder for everyone. Its early focus was explicit and intentional: build a professional-grade website creation tool for designers, especially freelance designers and small agencies who were stuck between rigid template builders and the complexity of developer-only tools.
That wedge came directly from co-founder Vlad Magdalin’s own experience as a freelancer. In Webflow’s early origin interviews, Vlad is clear about where the insight came from:
“Our experience as freelancers and building websites was paramount to understanding what was important to build into the product … we were the customers we were building for.”— Webflow Blog
Webflow’s designer-first thinking emerged long before “no-code” became a category. Vlad and his brother Sergie spent years building sites for clients in WordPress, Joomla, and Drupal, often re-implementing the same patterns over and over. That repetitive, frustrating workflow was the founding insight. Designers wanted control. They wanted custom. They wanted to ship work that looked and behaved like modern web experiences without having to negotiate with developers or learn full-stack engineering.
That is the designer wedge. A specific audience, a specific pain, and a specific promise.
This clarity became Webflow’s moat:
The WHO was designers, starting with freelancers and small agencies.
The WHAT was professional-grade website creation.
The WHY was breaking the dependency on developers and eliminating the friction between design intent and production reality.
Only after Webflow dominated that designer wedge did the company expand into agencies and then enterprises, where its value proposition evolved toward scale, governance, and team collaboration.
Every founder should study this pattern: start narrow. Nail a painful, specific use case for a specific user. Let the wedge pull you upmarket.
A clearly defined primary user is not a limitation. It is an accelerant. Webflow won not because it was broad, but because it began as the most powerful tool for a very specific group of people who were underserved, frustrated, and ready to evangelize a solution built for them. From that base, expansion became inevitable.
A Useful Pattern: Narrow First, Then Expand
Uncover an insight. Find a non-obvious truth about a specific audience. It can come from lived experience or from rigorous research. I often ask founders: “What do you know that no one else does?” Without that, you’re building a generic product for a generic market.
State a sharp value proposition. For [specific audience] who [specific context or pain], our product [delivers this outcome] by [unique mechanism or approach], so they can [specific business result].
Validate resonance before you build broadly. Qual and quant. Talk to users, run smoke tests, check willingness to pay, and make sure they repeat your value prop back to you in their own words.
Build the smallest durable product that proves the insight. Every early feature should reinforce the value proposition. The MVP is not dead.
GTM from the niche outward. Start tightly aligned with your audience’s channels and language. Once you win a niche, expand to adjacent roles, workflows, or use cases.
Vertical AI Beats “AI for Everyone” Positioning
There are breakout horizontal platforms with massive network effects that can credibly say “for everyone.” That is the exception, not the rule. For most founders, the highest-probability path is a vertical AI wedge: a specific job, in a specific industry, with a specific solution.
I’ll take this one step further: go after a vertical within a vertical.
It’s entirely possible to win a tiny slice of a market and still build a remarkable business. You can also expand from that tiny slice into something much bigger.
Here are some examples of what “vertical within a vertical” looks like:
Not “AI for law firms”
Instead: “AI for antitrust teams doing merger filings across multi-country jurisdictions.”
Not “AI for healthcare”
Instead: “AI that generates cardiology progress notes for outpatient clinics using a specific EHR template.”
Not “AI for accounting”
Instead: “AI that prepares revenue recognition schedules for SaaS companies with multi-year, multi-entity contracts.”
Not “AI for sales”
Instead: “AI for mid-market outbound sales teams in cybersecurity that automates objection handling with company-specific threat vocabulary.”
The narrower the wedge, the more likely you can dominate it, because the product becomes impossible to copy without deep domain insight and painful attention to detail. You become essential to a group of people who feel like no other tool has ever respected the specifics of their job.
Founders need to get more opinionated, not less. You need to stand for something. Plant a flag and stick to your guns.
“What do you want to be the world’s best at?”
It’s a question I’ve started asking founders. Most startups don’t end up becoming the world’s best at anything or scaling to a point of world domination, but without that target and clarity you stand no chance at all.
Challenging yourself on this question isn’t just for the VC-backed startups that are trying to go public. Maybe you’re building a side hustle to generate a few thousand dollars per month. Or a lifestyle business that doesn’t put you on the venture capital rollercoaster. Totally fine. Love it.
✅ You still have to be great at something.
✅ You still have to stand for something.
✅ You still have to stand out.
How to Craft a Pointed Value Proposition
Use this template. Fill it in without hedging.
For [specific audience] who [specific context or pain], our product [delivers this outcome] by [unique mechanism or approach], so they can [specific business result].
Here’s an example from Webflow (that I’ve written), which could represent their early value proposition:
For freelance designers and small agencies who need to deliver custom, production-ready websites without relying on developers, our product enables them to build fully custom sites visually by translating design directly into clean HTML, CSS, and JavaScript, so they can ship modern websites in hours instead of weeks.
Here’s a more recent Webflow example (again, written by me):
For marketing, design, and growth teams at scaling companies who need to launch and update websites without waiting on engineering queues, our product unifies visual development, CMS, and hosting into one governed platform, so they can move faster, publish safely, and reduce engineering overhead.
Messaging that passes the “for me” test
How does a potential user/customer know if your product is for them?
The value proposition needs to be specific. Try rewriting broad claims into targeted ones.
Too broad: “AI that writes and analyzes contracts.”
Pointed: “AI for antitrust teams that automatically maps merger filing obligations across 130+ jurisdictions and drafts regulator-ready information requests.”
Too broad: “AI for doctors that saves time on paperwork.”
Pointed: “Ambient clinical documentation that generates specialty-specific notes inline with EHR workflows, validated by a top-5 health system.”
Too broad: “Automate your back office.”
Pointed: “Autonomous coding for outpatient encounters that hits >90% automation in emergency medicine with audited accuracy and rapid turnaround.”
When buyers can see for whom, what, and why, they stop comparing generic feature lists and start imagining your product in their workflow.
Your value proposition is your company’s DNA
Your value proposition is not a paragraph. It’s the DNA of your company. It’s the seed that grows your messaging, product decisions, pricing, and positioning. It should be visible everywhere, even when it is never written out in full.
➡️ People should feel it in the tagline.
➡️ They should recognize it in the product benefits.
➡️ They should experience it inside the product.
I love the idea of writing a complete, detailed value proposition like the examples earlier. But that is an internal artifact. In public, it needs to be distilled into language that passes the “for me” test without friction.
Clarity is a superpower. When your product, copy, design, and GTM all reflect a single sharp idea, customers do not need to think hard. They immediately know, “This is for me.”
Insight → Value Proposition → Everything
Let’s end where we started.
Startups win when two things happen:
They discover a genuine insight. Something non-obvious that the market has not fully internalized. You get there through deep experience and/or deep research.
They turn that insight into a precise, targeted, unwavering value proposition. A focused promise for a focused audience with a focused outcome.
In an environment where AI has made building easier than ever, and every startup is promising the “magic of AI” as a value proposition, the winners will not be those who build the most features or slap AI into their tagline. They will be those who build the most meaningful solution for a very specific group of people, driven by a real insight that others overlooked (and probably uses AI to get there).
🧠 Insight drives differentiation.
👽 Differentiation drives a sharp value proposition.
🔪 A sharp value proposition drives traction.
🧲 Traction drives momentum.
⏩ Momentum drives expansion.
This is the wedge.
This is the way.
This is how you actually rise above the noise.
This thinking applies to developing any business! You run out of energy and resources if you try and spread them across too broad a market. Great article!