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Developing Your Value Proposition

The document discusses developing a value proposition for a startup through the process of customer discovery. It describes customer discovery as identifying early customers by testing assumptions about the target customer, their problem, and how the product solves it. This is done in four phases: stating hypotheses, testing hypotheses by interviewing potential customers, testing the product concept, and evaluating feedback to determine next steps. The goal of customer discovery is to narrow down assumptions and create a succinct value proposition that has been validated, laying the foundation for the business model.

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122 views3 pages

Developing Your Value Proposition

The document discusses developing a value proposition for a startup through the process of customer discovery. It describes customer discovery as identifying early customers by testing assumptions about the target customer, their problem, and how the product solves it. This is done in four phases: stating hypotheses, testing hypotheses by interviewing potential customers, testing the product concept, and evaluating feedback to determine next steps. The goal of customer discovery is to narrow down assumptions and create a succinct value proposition that has been validated, laying the foundation for the business model.

Uploaded by

gvs_2000
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Developing your value proposition: An

overview of customer discovery


Creating a clear and succinct value proposition that is meaningful to all of a startups
stakeholders, including its staff, customers and investors, is one of the first challenges any
entrepreneur faces.
A value proposition can be defined as follows: A products value proposition is a statement of
the functional, emotional and self-expressive benefits delivered by the brand that provides value
to the target customer.
To learn more about what a value proposition is, read the article Value proposition. To develop
the insights required to make the decisions around your target customer, your customer problem
and the solution that underpins your value proposition, read on.
The process described here is modelled on the first of four steps of Steven G. Blanks Customer
Development Model as described in his book, The Four Steps to the Epiphany. This first step is
called customer discovery, and its primary objective is to identify your first customers. This is
done by taking your main assumptions about who your customer is, the exact problem you are
solving for the customer and how the customer will buy from youand turning those
assumptions into hypotheses which you will then test (mainly through interviews with potential
customers).
As mentioned, the idea is to find your first customers, but not necessarily a broad customer
group. The reason for this is that, by nature, the first customers of a startup tend to be a limited
number. Blank calls them Earlyvangelists; in Crossing the Chasm, Geoffrey Moore calls them
Visionaries. Blank provides the following description of this group which will help you
recognize a potential Earlyvangelist:
1. They have a business problem.
2. They are aware that they have this problem.
3. They have searched for a solution.
4. They have put together a DIY solution.
5. They have access to the budget required to purchase a solution.
The customer discovery step (process) has four phases:













1. State your hypotheses: Write down your core business assumptions in a set of briefs. These
form the basis for subsequent testing.
2. Test your hypotheses: Seek validation for your hypotheses. Speak to those in and around
your target market, including potential customers, analysts and the media. These should not be
sales-oriented conversations.
3. Test your product concept: Once you have a deeper understanding of the customer problem,
test your product idea to get a sense of the relevance and attractiveness of your product solution
and its features. Do this by engaging potential customers and sharing information with your
product development team.
4. Evaluate customer feedback and determine next steps: Reflect on the information obtained
in phases 2 and 3. Are you ready to move forward with what you have? If not, you may need to
conduct another iteration of problem/solution validation or halt the project.
After completing the four phases of the customer discovery step, you will have what you need to
create the following four items:
A problem statement (i.e., an analysis of the nature of the customers business problem)
A product requirements document
A sales revenue plan
A business and product plan
The activities of the customer discovery process will allow you to narrow down and create a
succinct value proposition. The process of formulating a value proposition statement is not only
an essential part of engaging with external stakeholders such as advisors, partners and investors,
but it is a critical step for early-stage startups. This is because developing a value proposition is
one of the first major steps towards creating a business; it precedes and enables the design of
your business model. Reaching a stage where you have a value proposition that has been
validated means that one of the core elements of your business model is in place.
To commence the customer discovery process, proceed to the article Customer discovery (phase
1): State your hypotheses.

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