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Filling In the Five Blanks to Craft a Positioning Statement

April Dunford, Author

Is there a formula for developing the right product positioning statement?

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Is there a formula for developing the right product positioning statement? 

The positioning statement is arguably one of the most important aspects of any product company. April Dunford, the author of Obviously Awesome, shares with Anna and Christian the impact of getting the positioning statement right. When it’s done well all the other ‘stuff,’ from building out the marketing plan to developing the sales strategy, becomes easy. 

The conversation gives insight into how any company can tackle the perfect positioning statement. One of the key takeaways goes beyond ‘what to do’ - it teaches you how to think about creating these statements. Further, April sheds light on how to use your customer’s feedback - no matter your size - to shape this impactful statement.  

Read the full transcription below.

April Dunford: You have to start with this competitive comparables piece where you go to your customers, your happy customers, your best customers, not your cranky customers, not your customers that are about to churn. People that love you, people that bought quick, they didn't ask you for a discount. They tell all their friends about you. You go to them and you find out who do they compare you with?

Anna Eaglin: Better Products. The only show that takes a behind the scenes look into how digital products are created.

Christian Beck: The business is built around them and how are you to can innovate better products. I'm Christian.

Anna Eaglin: I'm Anna.

Christian Beck: Welcome to today's show. It's Obviously Awesome. We have today's guest April Dunford on the show.

Anna Eaglin: Definitely is. April also happened to write the book, Obviously Awesome, which focuses on one of the most difficult things all product companies face. The positioning statement.

Christian Beck: from April viewpoint. The product positioning statement is almost more important than the product itself. If you don't get this right, then it doesn't really matter if you have an awesome product.

April Dunford: If I could get the positioning right then all the stuff I had to do downstream in terms of building a marketing plan, creating content, figuring out where we were going with the product, looking at our sales strategy, all of that was really easy if I could get the positioning right first and yet that was that first piece was super hard.

Anna Eaglin: April is an engineer by training, yet she ended up working in the marketing department of a startup right out of school and really never looked back.

April Dunford: I decided, this is what I do now. I'm just going to figure this out and this is what I'm going to be. Tech Marketing's going to be my thing.

Anna Eaglin: After about the seventh time of helping grow startups who were acquired, she decided it was time for a change,

April Dunford: So I felt I had done a lot of positioning work. In my head I had a methodology and so I thought I could teach people how to do that and help folks how to do that.

Christian Beck: While she gained a ton of hands on experience, as you often have to when it comes to learning product marketing, she did take some classes on the topic and what she found out was surprising.

April Dunford: The thing that really got me when I started was I didn't have a formal education in marketing. So I thought, "Hey, this positioning thing, it's super important. There must be a way to do it, like an accepted methodology to go do it." And it shocked me that there wasn't.

Anna Eaglin: The methodology for creating these make it or break it statements was less than helpful.

April Dunford: And the closest thing we had to a process or a methodology for how you actually do it was the positioning statement, which of all the dumb business things I've learned in my career that literally takes the cake as the dumbest thing I've ever seen ever. And so it's this mad lib thing where you fill in the blanks of this statement. We are a blank for blank. I'm blank.

Anna Eaglin: There she is sitting in these classes and learning how to position a product for a market. Now at this point in her career, she could pretty much take any product and position it in multiple markets. So she asks, how do you know which statement is right?

April Dunford: And so this guy is telling me I just need to write down in the blank, and in the blank it says market category. I just write down what market I'm in and I'm like, "That doesn't make any sense." So I put my hand up and I'm in the back, I'm that student, put my hand up, I'm in the back and I'm like, "Excuse me. So how do you know what you write in the blank? How do you know which market category is the best one?" And the guy looks at me and he says, "Trust me, you'll know."

Christian Beck: Trust me. You'll know. Super helpful.

Christian Beck: So let's fast forward and say, "Okay, we've got our product positioning statement. We can fill in the blanks of who we are, why we exist, and how we're different." And let's assume we've got it right. Now the question becomes, is this messaging internal facing or external facing?

April Dunford: So in my mind, your positioning, which is the way you think about your product and what your product is all about should be the same internally as it is for customers, right? Because all of your positioning is based on your customer's point of view of that stuff. First step for doing positioning is to think about competitive alternatives or competitive comparables. And we mess this step up a lot because internally we're so smart, we know everything about our competitive landscape and so if you don't understand your own competitive comparables from the point of view of the customer, then you're not going to do a very good job of this positioning.

Anna Eaglin: Okay, so the messaging should be consistent. Is there an exception to this? Let's hear what April has to say.

April Dunford: The only exception I'll make to this is if you're a startup and you're raising money, your positioning for investors is often very, very different from your positioning for customers because investors are more concerned about the farther future. So they're more concerned about, what are you going to look like in 10 years and how are you going to get to be $1 billion business? And what's your vision for where this thing goes that makes you a good investment? Customers care less about that. I mean, they want you to be in business in five years, but they don't really care that much about what the product looks like or whatever. They're paying you now to solve a problem for them now. So they kind of want to know what you're all about right now. And not only that, sometimes your vision is kind of disruptive to a market and frankly terrifying to a customer because what you're saying is, "Oh yeah, 10 years out, all the investment that you made and all that legacy stuff that you thought you were going to use forever?

April Dunford: Yeah, we're wiping that out." And even if your customer might love that, 10 years from now they might not necessarily want to hear about that right now and it isn't necessarily going to be the best way for you to sell something right now. So, you know, internal versus external to customers, I think the positioning should be consistent because it should be positioning from the customer's point of view. But to investors that's a little bit different and you have to be careful, particularly if you're a startup, you have to be careful. If you've been fundraising a lot and spending a lot of time pitching to investors, you have to be a little bit careful that that investor pitch doesn't start creeping into your sales pitch because often you don't want that at all. You want to keep those things really separate.

Anna Eaglin: So you mentioned understanding the competitive alternatives is very important to having a good positioning.

Anna Eaglin: What are some other important inputs that you need?

April Dunford: Well, so this is the thing. So I got in my head where I said, you know what, if I look at the positioning statement, the bits that are important are the blanks and the blanks essentially make up the component pieces of positioning. And in my mind there's five things. One is competitive alternatives, two is unique capabilities or features. What can you do that your, the alternatives cannot? Then there's value, which is the answer to so what? So you got those features. So what for me as a customer, so what's the value you can deliver for me and my business? And then the, the next piece is customers that care, which is essentially your customer segmentation, which is what are the characteristics of a customer that makes them really, really think your value is important. These are the people you're trying to sell to.

April Dunford: They're your good fit customers. And then the last piece of this is market category, which is, what are you, what market is it that you intend to be? Those are the five things. So for me, the interesting process went like this. I said, "Okay, if I break positioning down into pieces, and I got these five things. All I have to do is figure out what's the right answer, the best answer for each of those things." That's how I'm going to do positioning easy, right? But then that's where everything got really tricky is because if you look at it, all the pieces have a relationship to each other. So my value, my differentiated value is completely dependent on my differentiated capabilities. But my differentiated capabilities are only differentiated when I compare them to competitive alternatives. So those three things are related to each other.

April Dunford: And then even backing up a step from that, my target customers are dependent on what my value is because that's how we figure out who our best customers are. They're the people that care the most about the value we deliver. And then lastly, you've got this market category thing, which is another way of saying what is the context I can position my product in that makes my unique value obvious to the customers I'm trying to communicate to. So you have these five components, but you actually have to work through them in a certain order. Otherwise what you're going to end up with is positioning. It just not, it might not be differentiated or it might not be true from a customer standpoint. So in my methodology, you have to start with this competitive comparables piece where you go to your customers, your happy customers, your best customers, not your cranky customers, not your customers that are about to churn.

April Dunford: People that love you, people that bought quick, they didn't ask you for a discount. They tell all their friends about you. You go to them and you find out who do they compare you with and you start with that. That will get you to unique features in the mind of your customer. So you've got to get the right competitive comparables that gets you to your unique capabilities because you're doing the right comparison that then maps to value and that value is going to lead you to, what is it about my target customers that makes them really, really want that value? That gets me to my target customers and then I take a step back and say, "Okay, this is the value I could deliver. These are the people I'm going after," and you figure out what is the best context to weave around this thing to make that value obvious to those people, so that's the way it has to flow. It has to go in that order. If it doesn't go on that order, then you may end up with great positioning that is either not differentiated or just plain not true.

Christian Beck: Yeah, that makes a lot of sense. You mentioned something that is in your book, default versus deliberate positioning. You kind of mentioned it in that, the way that I interpreted that was any startup or any tech company really start up through, if they don't do any active positioning, they will have some default positioning that they'll either fall back on ...

April Dunford: You're still positioned even if you didn't pay any attention to it.

Christian Beck: So what's the danger in that?

April Dunford: So there's a lot of danger in that. So I would say that is the most common positioning mistake that I come across is that we just failed to position deliberately. We don't understand positioning. We don't have a methodology for positioning, we don't do it. So it just is what it is. And where this usually comes from is the actual origin of the company itself. So the founder woke up one morning and said, "Do you know what, I'm going to build a better database."

April Dunford: And they built a thing and then they got it in front of customers and customers said, "Oh we like this bit, we don't like that bit." And then they changed it. And meanwhile the whole database market is shifting because there's new people coming into that market and people going out and things are happening and companies buying companies and whatever, fast forward a couple of years and you got this thing and you still think of it as a database because that's the thing you set out to build. But your customer is like "So that's like Oracle? You compete with Oracle?" and you're like, "No, no, no, I don't do that. I don't do that." So you're calling it a database but you're spending all your time saying, "No, but I'm not like any database you've ever seen." And so that default positioning often hampers you.

Christian Beck: It's funny when you were talking I was thinking how often Anna and I look at, so we work with a lot of startups in the Indy area and how often we'll meet them and I'll be honest, I looked at your site and it says, it seems interesting what you're doing and how many times someone's like, "No actually it's more like this." And I'm like, "Well, you should get that on your site."

April Dunford: Yeah.

Christian Beck: [crosstalk 00:11:43]

Anna Eaglin: Why don't you just say that?

Christian Beck: Right? In person is different than your site. So just put that on our site.

April Dunford: You know, I, but I think it's hard, right? It's sometimes a change management thing. It's we're this, the database example I use a lot is I worked at a company that was founded by two guys with PhDs in database science, and they built a database and that's what it was. We were database people selling a database. What else could it be? It just never occurred to us that it could be anything else. But if you looked at what we were really good at, we had this patented fuzzy logic algorithm thing and what it could do is an analytic query super, super fast if you had like a giant mountain of data. And if you think about databases, databases are used for all kinds of things and most of its OLTP it's not actually analytics. And so we're coming in saying, "Hey, we've got this fancy new database and everybody's saying how you're better than Oracle." And we're like, "Oh, we don't really compete with the Oracle. What we do is this super fast analytic query thing." And everybody's like, "Yeah, but an Oracle shop."

April Dunford: And so it was hard for us to take a step back and say, "You know what? We're actually an analytics tool. We're actually business intelligence. We're actually like a data warehouse." But that's just not who we were like, and we kind of never questioned it. It was like, "Oh, we're database people, we do database stuff." But it's hard to kind of step back and say, "Is it though? Is it?"

Christian Beck: So I'd be curious to dive into your thoughts about that part of the journey where a company is actually maturing from a single product position to multiple.

April Dunford: Yeah. So I have lots of opinions about this and I've worked in a lot of companies where we had lots of products and we had to try and figure out how does all this stuff come together. So there's a few things you have to consider in my opinion. So one is you need to think about the sales process. So a lot of companies, what you've got is one main product and a bunch of what I would call add on or follow on products. And you would never buy the add on or follow on products until after you bought the main product. And in my opinion you need to think about how those other things come in a little bit. But your number one goal still remains to sell the main product and then bring these other things in after. Because once that customer is your customer, I could show them all kinds of stuff because I'm in regular communication with them and you know I could even do stuff in the product to make it obvious that these other add on things exist.

April Dunford: So in that case it still feels, positioning still feels like you're primarily one product, your major on a product and you've got some minors. But the main thing is still the main thing. Where it gets trickier is I have multiple entry points into an account. So I have a company and it's got two or three different products and you might buy any one of those two or three as a first thing or you may only ever buy one of them and never ever look at the other one. And in those cases, each product needs to stand alone. So it needs to have its own positioning and fight its own battle against it's own competitive comparables and win. But there also should be a compelling story that brings all the things together, which is your company positioning. And if there is not, then I would say what you have are multiple companies.

April Dunford: So if they, if there is no company story that says, you know what, you want to do business with us because we do all these things and all these things together are greater than the sum of the pieces. If it's just, if we're just an amalgamation of piece parts, then those should maybe be separate companies and you're a holding company or something and you don't even know what those things are. Where I've worked, where we did a really good job of this was at IBM when I was there ages ago. But when I was there ages ago, I worked on a project where we basically worked through the positioning all the way from IBM corporate all the way down to my particular product. So at the time we were talking about this on demand operating environment and we were like across IBM hardware software services, we have the on demand operating environment.

April Dunford: We have one slide on that and then we would say, but within that there is, there are data issues around on demand and we have a concept around on demand data and this is what it looks like. And then specifically within that, what we do is information integration, which is the backbone of on demand data. But we always had to position starting with the macro down to the micro because otherwise, that was actually part of our strength is that it was part of IBM. That's part of the reason why you wanted to buy us because we weren't just going to give you a little information integration thing. If you wanted the whole on demand, all singing, all dancing version of this, we could sell you that too and we got a roadmap to get you there. So you have to, where you have this company versus product position.

April Dunford: You have to start with the macro and then get down to the micro. But I'd be careful about it because a lot of startups in my opinion jumped the gun on this. So they'll say the name of my company is Joey, but the name of my product is John and I have two brands, Joey and John and I need to know that we're John by Joey. And then you look and they're four people and and 100,000 revenue. I'm like, "Oh my God, you're going to maintain two brands for that?" Two brands. At IBM in software group, we had five brands for 50 billion revenue. Five. You don't need two for a hundred grand, you don't. And later you can add other brands. If you decide then, and people say, "Well, I need that because we're going to have multiple products," and whatever, and I'm like, "It would be amazing if you got so lucky that you could survive to have multiple products."

April Dunford: This is a champagne problem to have when you have it and trust me, it'll be totally easy. You'll bring another thing in, no problem, but to try and build two brands around a thing when there's only one thing, company name, product name, just make it all the same thing. We're Slack. That's it. Until we need another product or a brand like Salesforce, forever. The only reason Salesforce has multiple brands is because of acquisitions. Otherwise, everything's just Salesforce. I got the Salesforce sales cloud, I got the Salesforce service cloud, I got the Salesforce, whatever. This is billions of revenue in their one brand. The only reason we ever talk about ParDot or any of that is they bought that stuff. It wasn't their brand. They didn't make that decision. It came in, it's legacy. And what they'd like to call it, what they wish you'd call it is Marketing cloud and stop saying ParDot because it's too hard to understand. All I want you to know is we're Salesforce, we do this and oh by the way, if you want a marketing piece of this buy the marketing thing.

Anna Eaglin: So you mentioned that happy customers is a great place to start to figure out what people like and how they're comparing and thinking about your product. So that would assume you have happy customers. At what point in the kind of startup journey should you start thinking about positioning and are there some kind of milestones that you need to hit first or at what point should that process start?

April Dunford: Yeah, it's a great question because I do get a lot of calls from companies that are super early stage and sometimes they're even prelaunch. So they're about to launch something, they don't really have anything in the market. They don't have any customers. And they'll say, "Look, I've got to have some positioning, I need to write something on the website and so what should it say and how do I do that?" And my opinion on that is that at the beginning you have a theory so the product was built and with a positioning theory and a bunch of assumptions about this is how we're different and better, this is why people would want to buy us and these are the people who would want to buy us. And your best positioning at the beginning is to just run with that theory because you don't have any other data.

April Dunford: And assuming you've done some customer discovery conversations, you're probably pretty good to go with that. But I would caution that you don't want to tighten up the positioning too much because you're often super super surprised when you get the thing out in the market. You know what people love about it, what kinds of people love about it. You can't know everything about every type of buyer and sometimes what you have as a thing, then you think it's really good for one buyer and it turns out it's good for them. But it's actually really, really, really good for some other buyer that you never even thought about. So the analogy I use is you built a fishing net and you built it with the idea that this is going to be really great for catching tuna and you could say, "Hey, this is a tuna net," and then you know, and then go to the tuna part of the ocean and just fish for tuna.

April Dunford: And maybe you pull up a couple of tuna. But a better thing to do maybe might be at the beginning to keep it kind of loose and just say, "Hey, it's a net for fish. You know, kind of biggish fish, I don't know, fish." And then you go to the part of the ocean where there's all kinds of different fish and you chuck the thing out there as wide as you can and then you see what you pull up. Maybe it's all grouper and you're like, "Holy cow, I built a grouper net." Then I go to the grouper part of the ocean and kill it over there. At the beginning you just want to keep it kind of loose because you don't know, you just don't know. And trying to tighten it up too much in the beginning might block you off from some types of customers that are actually a great fit.

April Dunford: And you just didn't know when you built it that they were. But that said. So at the beginning you want to keep it kind of loose and what you want to do is you want to start looking for the patterns. So the patterns you're looking for is who loves our stuff and why. So at the beginning what you'll get usually is a whole bunch of different customers and none of them look the same. You'll be like, "There is no pattern here." And my answer to that is generally there are patterns that it just takes a while for them to shake out. We are used to thinking about market segmentation in terms of demographics and firmographics and a good actionable segmentation generally goes way, way, way beyond that.

April Dunford: And so the trick is you need to start looking for those patterns and the patterns need to be deeply descriptive in that you could tell from the outside, these folks are going to love my stuff or they're not going to love my stuff and I guarantee you it's going to go way beyond we're in this industry, we have this many employees, our revenue looks like this. It's going to be like you're in this industry, plus you use these two things, plus you have an IT department that looks like this, plus you look like this and then you're good.

April Dunford: Once you start understanding those patterns, then you can get super tight and super crisp on the positioning and say, "You know what? We're going to position for these folks because we know they're our best people and we know there's enough of them out there to make our number, so we might as well just hone the positioning right in on them so that when they come to our website they say, this is for me, this is built just for me." And then your sales people, when they're talking to people are saying exactly what those people want to hear and yeah, you're going to get some customers that aren't in that segment and that's fine you're going to sell them too, but you're going to hone it in and then you're going to build a marketing plan around going after just those people with that messaging, that positioning.

April Dunford: So to summarize. At the beginning, keep it kind of loose because you don't really know where it's going to go. But once you start to see the patterns, then you want to narrow it in as narrow as you can get it while keeping the addressable market big enough to make your number.

Anna Eaglin: Final question, what does better product mean to you?

April Dunford: You know what? This is what I think better products is. Great product does not exist on it's own, right? Great product is a match between great product, great customer, right product, right customer. So there's two sides of that coin. You can't have great product if you don't understand who the great product is for. So it's actually the match between the two things. So great product is when I got something that a really defined set of customers says that is awesome, I love that thing, I can't live without that thing. That's when you know you've got a great product.

Anna Eaglin: That was April Dunford. Really good conversation. She's said a lot of really good stuff about positioning. But I think one good way to go through it is maybe we start at kind of the startup phase and follow her advice kind of as a company would potentially grow. So one of the things she mentions is the idea that when you want, when you're starting out with positioning, you want to keep it loose. What are your thoughts about that?

Christian Beck: I think she made some points that I don't think I'd ever really considered. And in her book she talks a little bit about what do you do when you don't have any users and basically just well wait. If you don't have any customers yet you don't need to worry about positioning. So I think that that was probably the thing that stuck out to me the most was starting out loose, but also the almost negative side of being too tight in your positioning might close you off. She described that situation really well as a startup, that you have hypotheses and you don't fully know yet so it's almost as if your positioning needs to reflect the confidence you have in your product. So early on you don't know then don't spend too much time on it just yet.

Anna Eaglin: Another point that she made was testing your positioning and starting to look for patterns. And it's so obvious that she has done this many times because she says, "Oh, many people will say, I don't see patterns. There are no patterns." But there are patterns and they will emerge. It's just you have to start looking for those, like she said, deeply descriptive patterns.

Christian Beck: What is that? Yeah, so let's, you kind of understood this pretty well, so she says to look for patterns which I think everybody would be like, "Duh, of course," but she says deeply descriptive patterns. What do you think that means?

Anna Eaglin: Yeah, so the example that she gave that I think that really made it clear for me was she said it may not just be a vertical, it may not just be an industry. So maybe your product is, you're making it for grocery stores, but convenience stores are buying it and CVS's are buying it or whatever you would call CVS. So it's not grocery stores, she said maybe it is stores that are service oriented that don't have a POS system. So again, the deeply descriptive, less segmentation oriented and more really almost more persona oriented. Right? What are the kind of jobs to be done? What are they hiring it to do and kind of what's going on around them.

Christian Beck: Yeah. I think that's great. I'm glad you broke that down because I mean she did a really good job talking about it, but it's worth reiterating because it's pretty easy to understand the concept of finding patterns, but there's a nuance to the patterns that you just described which I think is a lot more powerful. The other thing in the early stages that she cautions against with your positioning is understanding the role of brand in your positioning and the cost that come with that.

Anna Eaglin: Yeah, I mean that was a really good point to say you don't need to manage two brands in the outset, so your product should be your brand and your brand should be your product. Like I love how she said, if later on you are having a lot of success, you want to bring in another product, that's what she called a champagne problem. It's a great thing you're having that success and then when that happens you just address it when it comes. You don't want to have to manage two brands out of the gate. I think we, for the most part, most of the clients that we deal with are very single brand oriented. But I could see some people being visionary, we're definitely gonna add multiple products. So let's kind of manage these two brands. And it sounds like what she's saying is it's unnecessary extra work.

Christian Beck: Right. Especially when you're in the early stages and you don't fully know what it's going to happen. Every additional brand that you create is more cost. So following the journey. So that's kind of starting out. Let's jump to something that has come up on the podcast in the past. Thinking about Hobson's with Amy [Rights 00:27:22] where she's managing a large product portfolio. So let's talk about the champagne problems. As you find success and you get past maybe series A or whatever, you've got revenue. How does the positioning change for you? And the one thing that you had pointed out was in starting out is your company and brand are fairly one in the same, but as you start adding products they grow. So what's the first thing you think about, when you think about April's conversation, when a company is starting to add a product line to be cautious of?

Anna Eaglin: Yeah, she mentioned a lot that it kind of depends on how people buy your product. So you know, you might have multiple products, but if you have kind of the one main product that people always go to and the others are add on, then you're positioning, you want your position to be very oriented to that product. But if you have multiple products that can operate independently, potentially people can buy one and never buy the other than it sounds like those products need to be positioned specifically to their market, their value props and kind of their capabilities. That's seems really similar to kind of what we've talked about with others. And then you know, you also talked about the idea of when we were talking earlier, how they have to now tie up to the higher company. What are your thoughts on that?

Christian Beck: Yeah. She talked about even in that case that you have multiple products or even if you're selling into different accounts in the company, they still need to roll up to the same story. And she actually brought up Salesforce which, she realized that how relevant that is to us here in Indy, but she had mentioned ParDot. But, but here in Indy obviously we know about Igo Digital being acquired by Exact Target, which then was acquired by Salesforce and then became Salesforce Marketing Cloud. And so when you think about being bigger, you actually have brand equity. And so in that case it would be kind of stupid for Salesforce to not leverage the core story they already have. And so it becomes Salesforce Marketing Cloud. They don't give it some name or to April's point, just kind of name it as closely to what it does as you can.

Christian Beck: And while Marketing Cloud has some marketing speak in it with cloud, it's at least more descriptive than just inventing an entirely new product name or keeping Exact Target's name for that product.

Anna Eaglin: Right.

Christian Beck: So I think when you look at the differences, it seems like there's almost two paths when you grow. In one case where you're just adding additional products, I think you categorize that well where you still have the one main product that April said that's your bread and butter and then other products are kind of ancillary products but you have the one main one. But in the other case, you know, maybe through acquisition and patterns that we saw even with Hobsons and Amy Rights on our show last season or with Salesforce, even with those cases, you still want to make sure that they roll up to a similar story. And so the positioning needs to be tied to that as well.

Anna Eaglin: Thanks so much for listening to the show this week. If you haven't yet, be sure to subscribe, rate and review this podcast. Until then, visit innovate map dot come slash podcast and subscribe to learn how you can take your product to the next level. As always, we're curious. What does better product mean to you? Look us up on Twitter at Innovatemap or shoot us an email a the podcast at innovatemap dot com.

Christian Beck: I'm Christian.

Anna Eaglin: And I'm Anna and you've been listening to Better Product.

Christian Beck: Better Product.

Anna Eaglin: Drop mic.

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