This is the first in a six-post series that outlines a step-by-step process to define your value proposition. You can see the rest of the series here: How To Define Your Value Proposition.
What is a Value Proposition and Why Do You Need One?
What is a Value Proposition?
A value proposition explains how your product offers value to a specific cohort of people.
A good value proposition should be specific and concrete; it should define who uses your product and how they receive value from it. Here are some examples:
- Stylebee is a service which helps professional women who need to look their best but don’t have time to go to the salon by offering an on-demand stylist.
- Reserve lets NYC foodies get reservations at great restaurants that are notoriously hard to get into (e.g. ABC Kitchen), and pay with their smartphone.
A value proposition is not:
- a description of everyone who could use your product (otherwise known as total addressable market)
- a list of features of your product
- a functional prototype
- a growth strategy
Why do you need a value proposition?
A well-defined value proposition is crucial to the success of a new product. A good value proposition answers the following questions:
- Who is your customer?
- What problem do you solve for that customer?
- What is your unique advantage?
Without understanding each of these and how your product adds value to your customer, your organization will never find product-market fit.
When we build new products, we tend to start with the solution instead of the problem. For engineers, this means building working software or hardware. For designers, this mean mocking up screens or user flows. For business folks, this means creating a business plan and distribution strategy.
Starting with the solution is incredibly risky. What if your solution has no customer? What if your solution doesn’t actually solve a problem? What if your solution doesn’t stand out from the competition?
Start with the problem, not the solution. The best way to reduce risk as you develop a new product is to understand who your user is and what problems they have. In other words, don’t waste time or resources building something that no one wants.
How to Define Your Value Proposition
Are you ready to start defining your value proposition? Stay tuned for Part 2 of this blog series, where I’ll discuss how to define your persona, which is the first step to understanding who your customer is and how to find them in real life.
Interested in working with us? Pivotal Labs now offers Innovation Workshops, which facilitate your team from ambiguity to clarity on strategic product decisions such as value proposition and product definition. To learn more, contact us.