Fourth Stage: Value Propositions

Research of known effective materials:

Udacity course: How to Build a Startup, Lesson 5: Value Propositions

All sections 1 - 27

Strategyzer: 10 Characteristics of a great Value Proposition checklist

Strategyzer: Sell Your Colleagues on Value Proposition Design

Strategyzer: Value Proposition Design book Preview


Card deck 1 of 6 INTRO

Chapter 1. Value Proposition
What product or service are you building, for who, and what does it
solve for those people?

It's about satisfying a customer need, not just you thinking: "What a
great idea".


1. The features of your products and services.
2. What gain are you creating for customers?
3. What pain are you solving for them?

The goal is the smallest possible feature set that solves these pains
and creates these gains for the customer. 

That is the Minimally Viable Product.

Chapter 9. PRODUCT
Which are part of your value proposition?
-manufactured goods, commodity product...

Which intangible products are part?
-copyrights, licenses...

Which financial products?
-financial guarantees, insurance policies...

Which digital products?
-mp3 files, ebooks....

The product is the whole package of all the above

Chapter 10. SERVICES
Which core services are part of the value proposition?
-Consulting, a haircut, investment advice...

Which pre-sales or sales services?
-help finding right solution, financing, free-delivery

Which after-sales services?
-free maintenance, disposal...

What is it that your product features do?

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Card deck 2 of 6 PAIN

What are you going to reduce or eliminate for the customer?

Chapter 12. PAIN Questions:
Produce savings? Time, money, effort
Feel better? Frustration, annoyance, headaches
Fix solutions? New features, better, faster
End challenges? Easier, eliminate resistance?
Impact social consequences? wipe out negative social
    consequences or add to social status?
Eliminate risk? Financial, social or technical risk 

Chapter 14. PAIN Importance
Rank each pain according to its intensity and frequency

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Card deck 3 of 6 GAIN

What are the benefits the customer expects, desires or is surprised by?

Chapter 15. GAIN Questions
Happy customers? Save time, save money, save effort 
Better outcomes? Higher quality, more or less of something
Exceed current solutions? Features, performance, quality 
Job or life easier?
Create positive consequences? Social (need), business (more sales)

Chapter 16. GAIN Importance
Rank each gain your product and services create according to its
relevance to the customer.

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Card deck 4 of 6 MVP

Chapter 19. MVP Definition
The first instance of your product or service that is delivered to

What is it that customers tell us that they will pay for or use
right now.

It is not a beta, tell customers it is the MVP.

Chapter 17. MVP Physical
Always invest a day or two building a physical product mockup.
Something that customers can see and touch.

Chapter 18. MVP Webmobile
Build a "low fidelity" app or website to test the problem. 

This helps you avoid building products no one wants.

Chapter 21. The art of the MVP
It's based on interaction and iteration and understanding customers
jobs, pains and gains.

For new markets, don't ask about features, ask "How do they spend their

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Card deck 5 of 6 META-Value Prop


It's just a feature of someones else's product
"It's nice to have" instead of "got to have"
Not enough customers care

Chapter 23.  QUESTIONS:

    What do customers do today? Make BMC's for the competition.

Technology / Market Insight:
    Why is the problem so hard to solve?
    Why is the service not being done by other people?

Market size:
    How big is this problem? 

    How do you make it once you understand the customer needs?

Chapter 24: TWO FORMS:

Technology insight:
Typically applies to hardware, clean tech and biotech.

Market insight:
Changes in how people work, live, interact and what they expect.

Both forms need to solve pains and create gains for the customer.

Chapter 25: TYPES

Technology                              Market

More efficient        lower cost     better distribution
smaller               simpler        better bundling
faster                               better branding

combine technology and market insights for the sweet spot of value

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Card deck 6 of 6 Examples

Technology Insights
Ayasdi - topological analysis, solved previously unapproachable problems
Inscopix - smaller fluorescence microscope - created new market

Market insights
Zynga - play more involved games - facebook distribution
Twitter - micro-blog more than blog - solved a need

Pains: cheaper way to wear jersey, eliminate risk of owning traded player
Gain: provide alternative to purchasing counterfeit jersey
Features: single place to rent sports jerseys
MVP: website with rental and stock of jerseys 

Pain: non-renewable petroleum derived feedstock for surfactant industry
Gains: Sustainable, bio-based replacement.
Higher performance
Improved cold temperature tolerance of detergents
Bi-functional molecules
Flexibility in chain length
MVP: chem-mix blue feedstock in 50-gal drums

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Lessons learned:

36 cards with about double the total content of any previous learning stage. Still took linear amounts of time to memorize when grouped into individual card decks. Re-merged with randomization for surprisingly no impact to time required for memorization and incorporation.

Now making a new set of business model canvases for various problems I'm working on with these better value proposition ideas.

The creation of these bmfiddles is showing many new frustrations and lack of clarity. Especially around the value propositions and customer segments - looking at others briefly from the udacity materials, then will recreate full BMC's for practice. Excellent - that instantly shows you were confused about what goes in the customer segment box. It's the persona, not the matching pains and gains. So execute a series of bmfiddles based on teh various ideas you are working on that include:

  1. A pain solved for customer
  2. A gain created for customer
  3. Features for pain solved and/or gain created
  4. mvp

BMC Example
BMC Example
BMC Example