The Value Proposition sits at the heart of our innovative opportunity: it defines the value we must deliver to the market, helps us know the resources we need to have and the things we need to do to deliver that value, and how we ultimately can capture that value back.
Nailing the Solution -> Value Proposition
Nailing the Solution that provides the Benefits our customers want = our Value Proposition
Searching and Learning through GOOD Customer Discovery (and validation) helps us identify the value our market wants and the solution we need to deliver (that our customers will pay for), helps us identify our ability to compete in the market. All of this helps define our value proposition…our promise to our customers that we can deliver the benefits/outcomes they desire and provide the value that other alternatives cannot.
A Value Proposition is about our Solution and its BENEFITS (not features and functions). It is:
- a clear description of the problem we are solving
- describes that we understand our customers and why they desire a NEW solution vs. how they currently solve it
- tells our customers how they benefit from OUR solution – aka, WHY our solution is better than the current alternative
A good and evidence-backed Value Proposition is the anchor to your startup strategy and Business Model. Customer and stakeholder discovery is paramount for you finding your value proposition — that satisfies each of them.
A strong Value Proposition is quite literally the heart of your company – essentially it is your positioning statement and promise to your customer that drives the development of your business model.
Because a good value proposition is built upon key insights from customer and stakeholder discovery, it provides focus and serves as the core driver in designing and delivering a more compelling and valuable solution to your customers. It provides direction for your marketing messaging and what you need to do to deliver the solution and experience your customers expect from you. Your value proposition can also be a significant factor in attracting talent, funding, and potential partners. All in all, your value proposition helps guide the key elements of your business model that have to come together to deliver on your promise to your customers.
Your value proposition is a useful “north star” in knowing what you need to focus on, and, even more importantly, what to say “no” to. Saying “no” to things that don’t strategically fit your value proposition becomes critical for defining your competitive advantage and driving growth and scalable impact. Your value proposition helps your team align around the company’s goals and how each team member’s role helps deliver on the company’s promise to its customers – internally it defines why the company itself matters and, thus, why each employee’s role and the work they do matters.
Value propositions are not general statements. A good value proposition is specific and addresses critical elements such as target audience, the pain you are fixing for them, the desired outcomes your customers will gain, and why you are a better choice than the competing alternatives.
Value Proposition Explained (using the Value Proposition Canvas)
Solution & Benefits: Airbnb example
This article illustrates the Airbnb business model and the various Value Propositions it must satisfy for all of its KEY customers and stakeholders.
Consider YOUR key customer and stakeholders. What assumptions do you need to test to get a clear picture of what you need to be able to deliver to satisfy each of them.