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Value Proposition: A Key to any startup venture
The document outlines the concept of value propositions in entrepreneurship, emphasizing the importance of understanding customer segments and their unmet needs. It introduces the '4 Us' framework for defining problems—unworkable, unavoidable, urgent, and underserved—and discusses the market needs and solutions that new ventures must address to succeed. Additionally, it highlights the significance of evaluating solutions based on customer gains and pains to create compelling value propositions.
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Value Proposition: A Key to any startup venture
- 1. Entrepreneurship and NewVenture Dr. Alok Nikhil Jha www.linkedin.com/en/alokni khil Alok.nikhil@gmail.com 1 CLASS # 04 : VALUE PROPOSITION 24th Feb 2024
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- 3. Value props: Createa Product People will Actually Buy
- 4. Define Evaluate Build Framework Problem Need Solution GainPain Value Prop Idea
- 5. Value Prop Statement •For (target customer segments) • Dissatisfied with (existing solution) • Due to (key unmet needs) • (your venture name) offers a (product category) • That provides (key benefits of your solution)
- 6. Value Prop Statement •For (target customer segments) • Dissatisfied with current card products • Due to high interest rates • Cardback offers a card points utility & scheme market places • That provides utilization benefits
- 7. Value Prop Statement For(target customer segments) Who is your customer? everyone? a segment? How do you define that segment?
- 8. Define the Problem “Aproblem well stated is half-solved”
- 9. Define the Problem Problemswith 4Us • Unworkable (how painful) • Unavoidable (how necessary) • Urgent (how time sensitive) • Underserved (how many alternatives)
- 10. Unworkable It is goingto cause a problem, consequences are painful or costly. Who gets fired if this doesn’t work? It can have a potential loss of revenue, loss of customers, loss of reputation, or some other significant loss that the unworkable problem causes. Does your solution fix a broken business process where there are real, measurable consequences to inaction? E.g. Broken business process Security risk consequences? Impractical or far too expensive?
- 11. Unavoidable Is the problemso fundamental you can’t avoid it and just have to comply? A problem is unavoidable if there is something compelling people to address the problem or act Is it driven my some mandate or key requirement of governance or compliance? e.g. education Taxes Covid
- 12. Urgent Are you ontop 3-list of urgency or on top lists? • Urgency is relative to other needs • Priority, which determines resources allocated or choice consumers have to spend their money • E.g. cyber security, finding a job, vaccination for covid
- 13. Underserved • You arecompeting for finite resources: • Money • Time • People • Attention • Are there many competitors and alternatives in existence or are there a scant few? • Is there a conspicuous absence of valid solutions to the problem you’re looking to solve • If you’re looking to create a product or solution, you don’t want to enter an already crowded market, unless you have a novel and differentiated way of addressing the problem.
- 14. Does a ProblemNeed to Have ALL 4 Us? A problem may be unavoidable and underserved, but not unworkable or urgent.
- 15. Define the MarketNeed Is it BLAC or white? Blatant Latent Aspirational Critical Is it addressing a white space in the market? An open area of opportunity that you can capture uniquely well 2 1 3 4 Blatant Latent Aspirational Critical
- 16. Define the MarketNeed How does your product fit into the whole solution of the customer? E.g. iPhone What are you Selling has all the problem needs?
- 17. Define the MarketNeed • Does the market need has DEBT? • What are Dependencies involved? • What External factors are involved? • Would you face any Backlash? • What is the Timing? E.g. Tesla, Mobile phone
- 18. Startup Opportunity • Faster •Better • Cheaper Dangerous
- 19. What to do •IP • Location • Scale • Network • …etc
- 20. Define the Solution3D • Disruptive – Technology or Business model (Airbnb, Touch technology) • Discontinuous or evolutionary • Defensible – Persisting technology, niche, segment
- 21. Disruptive • initially caterto niche markets but eventually displace established competitors by offering superior value or accessibility or ease • gain momentum and disrupt established markets by providing more affordable, convenient, or accessible alternatives
- 22. Discontinuous Innovation • involves introducing new products,services, or technologies that significantly depart from existing offerings.
- 23. Defensive Technology Defensibility fromthe outset • Proprietary IP • Government License • Favorable Location • Long term contract • Access to data Defensibility of Scale • Switching costs • Economies of scale • Brand Loyalty
- 24. Define Evaluate Build Framework Problem Need Solution GainPain Value Prop Idea
- 25. The business isgoing to endure and be sustainable
- 26. Qualitative Evaluation Before After Acute PainAbsolute Joy
- 27. Inertia of Adoption DoI really need this? How it is helping me? What is switching cost? What are maintenance costs? Gains Pains
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- 30. Value Prop Statement •For (target customer segments) • With BLAC problem or need • That is 4U • Dissatisfied with (Unworkable or Underserved alternative) • Our product is a (3D new product MVP) • That provides (compelling problem-solving capability – Gain) • That overcomes (switching costs Gain/Pain ratio >10x) • Unlike (the Unworkable product alternative that Underserves the need or opportunity)
- 31. Activity • Design yourValue Proposition • Demonstrated the problem and solution steps along with pain and gain areas