Value Proposition

EGR 495
The Lean LaunchPad

Version 6/22/12
Value Proposition
What Are You Building and For Who?
© 2012 Steve Blank
Product/Market
Fit
Value Proposition – Common Mistakes
•
•
•
•
•

It’s too big or amorphous
Value Proposition includes competitive set
“It’s ...
Questions for Value Proposition
• Competition: What do customers do today?
• Technology / Market Insight: Why is the probl...
Key Questions for Value Prop
• Problem Statement: What is the problem?
• Ecosystem: For whom is this relevant?
• Competiti...
EXAMPLE: Key Value Prop Questions
• Problem Statement: Net security without a CTO
• Ecosystem: Small banks under FDIC pres...
Product/Services
Value Proposition ( Physical Products)
• Which are part of your value proposition?
– (e.g. manufactured goods, commodities...
Value Proposition (Services)
• Which core services are part of your value proposition?
– (e.g. consulting, a haircut, inve...
Pain Killers vs.
Gain Creators
Pain Killers
Reduce or eliminate wasted time, costs,
negative emotions, risks - during and after
getting the job done
Pain Killers - Hypotheses
• Produce savings?
– (e.g. time, money, or efforts, …)

• Make your customers feel better?
– (e....
Pain Killer – Problem or Need?
• Are you solving a Problem?
• Are you fulfilling a Need?
• For who?
• How do you know?
Pain Killer Ranking
• Rank each pain your products and services kill according
to their intensity for the customer.
• Is i...
Gain Creators
How do they create benefits the customer
expects, desires or is surprised by, including
functional utility, ...
Gain Creators- Hypotheses
• Create savings that make your customer happy?
– (e.g. in terms of time, money and effort, ...)...
Gain Creator- Ranking
• Rank each gain your products and services create
according to its relevance to the customer.
• Is ...
Stop and Discuss
• Are we “pain” or “gain” and does the level of
pain/gain get customers VERY excited?
• REMEMBER: you’re ...
REVIEW/discuss if needed:
Minimum Viable Product
Define Minimum Viable Product – Physical
• First, test your understanding of the problem (pain)
• Next test your understan...
Define the Minimum Viable Product –
Web/Mobile
• NOW build a “low fidelity” app for customer feedback
– tests your underst...
The Art of the MVP
• A MVP is not a minimal product
• “But my customers don’t know what they want!”
• At what point of “I ...
Where is the MVP already?
Web/mobile startups should have an MVP ASAP!
• When will our MVP be ready to show?
• How simple ...
Time to talk, review findings,
and create TODO lists!
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Mentor update 1 value prop - mentor slides

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  • @The SearchLite absolutely I recently learned about this with when I read about in in the Lean Startup by Eric Reis. I then attended the EBC with Gray Sommerville
    http://www.365daystolaunch.com/
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  • Great stuff Thanks Steve https://twitter.com/sgblank
    I found this site because of a class that I am taking in Charleston, SC 'Entrepreneur Boot Camp' by Gray Sommerville http://bit.ly/1rmiRj5
    I highly recommend any folks in the Southeastern USA take this class. The price is right 'Free'! http://www.365daystolaunch.com/
       Reply 
    Are you sure you want to  Yes  No
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  • We apply Osterwalder's Value Proposition Canvas as Steve presents here ... and are big fans. The only issue we run into some time is the language. So many people have 'needs' and 'desires' engrained in their experience that it sometimes seems like a lot of effort just to translate into the 'pains' and 'gains' ontology.

    Does anyone else have the same expereince?
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Mentor update 1 value prop - mentor slides

  1. 1. Value Proposition EGR 495 The Lean LaunchPad Version 6/22/12
  2. 2. Value Proposition What Are You Building and For Who?
  3. 3. © 2012 Steve Blank
  4. 4. Product/Market Fit
  5. 5. Value Proposition – Common Mistakes • • • • • It’s too big or amorphous Value Proposition includes competitive set “It’s just a feature” of someone else’s product It’s a “nice to have” instead of a “got to have” Not enough customers care
  6. 6. Questions for Value Proposition • Competition: What do customers do today? • Technology / Market Insight: Why is the problem so hard to solve? • Market Size: How big is this problem? • Product: How do you do it?
  7. 7. Key Questions for Value Prop • Problem Statement: What is the problem? • Ecosystem: For whom is this relevant? • Competition: What do customers do today? • Technology / Market Insight: Why is the problem so hard to solve? • Market Size: How big is this problem? • Product: How do you do it?
  8. 8. EXAMPLE: Key Value Prop Questions • Problem Statement: Net security without a CTO • Ecosystem: Small banks under FDIC pressure • Competition: Expensive, Custom or DIY • Technology / Market Insight: Small Companies without Big Resources…Fines getting bigger • Market Size: 9000 little banks, 5000 + more • Product: perimeterusa.net
  9. 9. Product/Services
  10. 10. Value Proposition ( Physical Products) • Which are part of your value proposition? – (e.g. manufactured goods, commodities, produce, ...) • Which intangible products are part? – (e.g. copyrights, licenses, ...) • Which financial products? – (e.g. financial guarantees, insurance policies, ...) • Which digital products? – (e.g. mp3 files, e-books, ...)
  11. 11. Value Proposition (Services) • Which core services are part of your value proposition? – (e.g. consulting, a haircut, investment advice, ...) • Which pre-sales or sales services? – (e.g. help finding the right solution, financing, free delivery service, ...) • Which after-sales services? – (e.g. free maintenance, disposal, ...)
  12. 12. Pain Killers vs. Gain Creators
  13. 13. Pain Killers Reduce or eliminate wasted time, costs, negative emotions, risks - during and after getting the job done
  14. 14. Pain Killers - Hypotheses • Produce savings? – (e.g. time, money, or efforts, …) • Make your customers feel better? – (e.g. kills frustrations, annoyances, things that give them a headache, ...) • Fix underperforming solutions? – (e.g. new features, better performance, better quality, ...) • Ends difficulties and challenges customers encounter? – (e.g. make things easier, helping them get done, eliminate resistance, ...) • wipe out negative social consequences? – (e.g. loss of face, power, trust, or status, ...)... • Eliminate risks – (e.g. financial, social, technical risks, or what could go awfully wrong, ...)
  15. 15. Pain Killer – Problem or Need? • Are you solving a Problem? • Are you fulfilling a Need? • For who? • How do you know?
  16. 16. Pain Killer Ranking • Rank each pain your products and services kill according to their intensity for the customer. • Is it very intense or very light? • For each pain indicate the frequency at which it occurs • Is it intense and frequent enough to be a business?
  17. 17. Gain Creators How do they create benefits the customer expects, desires or is surprised by, including functional utility, social gains, positive emotions, and cost savings?
  18. 18. Gain Creators- Hypotheses • Create savings that make your customer happy? – (e.g. in terms of time, money and effort, ...) • Produce expected or better than expected outcomes? – (e.g. better quality level, more of something, less of something, ...) • Copy or outperform current solutions that delight customer? – (e.g. regarding specific features, performance, quality, ...) • Make your customer’s job or life easier? – (flatter learning curve, usability, accessibility, more services, lower cost of ownership, ...) • Create positive consequences that customer desires? – (makes them look good, produces an increase in power, status, ...).
  19. 19. Gain Creator- Ranking • Rank each gain your products and services create according to its relevance to the customer. • Is it substantial or insignificant? • For each gain indicate the frequency at which it occurs.
  20. 20. Stop and Discuss • Are we “pain” or “gain” and does the level of pain/gain get customers VERY excited? • REMEMBER: you’re focusing on “problem!!!” • Are we proving our current Value Proposition? • Need to make it stronger, more unique? How? • Any feedback telling us it’s not so exciting? • Ideas on how to make the Value Prop stronger? • What else do we need to do to be sure?
  21. 21. REVIEW/discuss if needed: Minimum Viable Product
  22. 22. Define Minimum Viable Product – Physical • First, test your understanding of the problem (pain) • Next test your understanding of the solution (gain) – Proves that it solves a core problem for customers • The minimum set of features needed to learn from earlyvangelists - Interviews, demos, prototypes, etc - Lots of eyeball contact
  23. 23. Define the Minimum Viable Product – Web/Mobile • NOW build a “low fidelity” app for customer feedback – tests your understanding of the problem • LATER build a “high fidelity” app tests your understanding of the solution – Proves that it solves a core problem for customers – The minimum set of features needed to learn from earlyvangelists - Avoid building products nobody wants - Maximize the learning per time spent
  24. 24. The Art of the MVP • A MVP is not a minimal product • “But my customers don’t know what they want!” • At what point of “I don’t get it!” will I declare defeat?
  25. 25. Where is the MVP already? Web/mobile startups should have an MVP ASAP! • When will our MVP be ready to show? • How simple can it be? A blog or web page? • What can we do to get customer reaction NOW? • What will the MVP do eventually?
  26. 26. Time to talk, review findings, and create TODO lists!
  1. ¿Le ha llamado la atención una diapositiva en particular?

    Recortar diapositivas es una manera útil de recopilar información importante para consultarla más tarde.

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