There's a two-fold mission to this statement: one part applies to your startup's value proposition/unique selling proposition and the other pertains to the brand (how your startup makes people feel).
In short, you must know what is out there so you can create something that stands out. Let's break it down using the categories listed above.
Most startups will resort to "lowest price" on this point, but we can do better than that. Instead, ask yourself what are the alternatives to your product and what do they lack that your customers need? Sometimes it's as simple as a better interface or a different distribution method (i.e. Dollar Shave Club going subscription for razor blades). This should indicate what the big selling point of your product is or at least inform you of what is lacking within your competitors. From there, you can adjust your messaging to hit on the specific pain point your customers are looking to ease.
No two companies are alike in nature. Not even if they are in the same industry. Guaranteed, there are cultural nuances and quirks within every company that make them unique and special. Frankly, most of them hide it behind a professional demeanor and an unwillingness to be human. So, your goal is to assess your competitors personalities and find a void to fill. If the majority of them come off as stoic and cold, you have an opportunity to be friendly and vulnerable. Granted, you have to know yourself, since you can't put on a false identity in the hopes of attracting people.
These two bits of research can inform almost every decision your company should make in marketing itself. They give you the reason people should buy your product and why they won't forget you.
My mom is a sales rep who works with pet store retailers. Some small and some large. She told me recently that a store she visits has over 6400 items on sale. 6400!
But that means they sell a lot of stuff, right? They probably need all of those items. Still, my curiosity wasn't satisfied. I asked, "why sell so many?"
Apparently people are more picky about their dog's food being gluten-free, paleo, with/without certain ingredients than most people are with their own nutrition. In short, they are trying to please everyone by having all of those needs met. No matter what pet you have, no matter what its needs are, they are trying to sell it.
I can't know for certain, but I'd imagine 80% of their sales comes from 20% (or less) of those 6400 products.
When Steve Jobs returned to Apple in 1997, the first thing he did was strip away 70% of Apple's products and got them focusing on what really mattered. Surprisingly, despite getting rid of a bunch of products, Apple turned its first quarterly profit the following January (see timeline for comparison). Apple didn't even have 50 products and they still struggled to keep their head above water. Can you imagine the crippling weight of 6400 products?
In-N-Out, the most successful burger chain on the west coast, sells cheeseburgers (with varying amounts of meat/cheese), french fries, shakes, and soft drinks. Each store does about $4.5M in annual sales and they have over 300 across the country. When people come to In-N-Out asking for a change to a menu item, they say "sorry, this isn't for you."
By turning away some people, they have a streamlined business offering and they become known for it. It exudes confidence and even people who can't or won't eat a cheeseburger respect that. The same could be said of Apple and people who want to change their offerings.
In the words of Seth Godin, have the courage to say, "this is not for you, but it is for someone who believes this."
You could have the coolest product in the world, but if you don't show up to help out the community of people you want to serve, you're going to lose them.
I'll give you an example using Webflow, my favorite web design tool.
They continuously post new videos on how to use their software, they host local meetups to help others improve their designs, and they even went as far as hosting a "No Code Conference," to empower designers on the web.
That is showing up everyday to serve. How can you do the same thing to help your group of rebels?