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This lecture focuses on the process of creating a crisp and concise value proposition for your start-up. Learn how to answer the essential question, “What is the value you bring to your customers?” without describing the details of your technology. Formulating a good value proposition is an essential step for any start-up and lies at the core of many of the other tools entrepreneurs need to develop, including market analysis, business modeling, finding funding and delivering an investor or customer pitch. http://www.marsdd.com/events/details.html?uuid=27af9124-bd2b-43fe-a920-9fb9295c1357
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Agenda
What is a value proposition?
Examples
Dimensions of value
Your target customer
Personalizing your value proposition
The strategy canvas
The buyer utility grid
MaRS Advisors
EIRs (Entrepreneurs in Residence)
Venture Capitalists
Investor relations professionals (Equicom)
PROBLEM #1: Defining a value proposition
Talking With Scientists:
What do you do?
“Explain the value of your company, not the technology behind it.”
“Your grandmother should understand your business.”
“Will I want to tell people at the next cocktail party I’m at?”
Who cares?
A value proposition is a statement of the unique benefits delivered by your offering to the target customer
The value proposition statement may consist of several components:
1. What your product is
2. The target customer
3. The value you provide
4. Why your product is unique
Good: “Winners is the only department store that offers fashion conscious consumers the latest brand names for up to 60 per cent off.”
Bad: “Winners is an off-price department store owned by TJX that employs international sourcing and buying power.”
“Winners is the only department
store that offers fashion conscious
consumers the latest brand
names for up to 60 per cent off.”
customer
value
what unique
Good: “Google is the world’s largest search engine that allows internet users to find relevant information quickly and easily.”
Bad: “Google uses a patented page-ranking algorithm to make money through ad placement.”
“Google is the world’s largest
search engine that allows
internet users to find relevant
information quickly and easily.”
what
customer
value
unique
Good: “A1 Industries has developed a cheap and easily applied additive that allows paint manufacturing companies to reduce the environmental impact of their products”
Bad: “A1 Industries has discovered a chemical isomer that bonds with carbon to allow an overall reduction in VOC emissions.”
“A1 Industries has developed a
cheap and easily applied
additive that allows paint
manufacturing companies to
reduce the environmental impact
of their products”
what customer
value
unique
Templates
Templates
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Usability
Social Inclusion
Health
Aesthetics
Status
Newness
Environmental
Self-Actualization
Ethical
Selling to Business
Selling to Customer
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
- Overt values
- Rational decision making
B2B Sales:
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Selling to Business
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
Usability
Social Inclusion
Self-Actualization
Health
Aesthetics
Status
Newness
Environmental
Ethical
Selling to Customer
- Latent values
- Emotional decision making
B2C Sales:
Saving/making money
Saving time
Lower risk
Enabling function
Convenience
Quality
Customizable
Usability
Social Inclusion
Health
Aesthetics
Status
Newness
Environmental
Self-Actualization
Ethical
Selling to Business
Selling to Customer
Get out of your office
Day in the Life Scenario
Ernie: fixes airplanes
Current situation & desired outcome
Problem encountered & economic consequences
Enabling factors of your product
New outcomes and economic rewards
Before
After
Get in the head of your customer
MaRS Market Intelligence Databases
Industry specific vendors
IDC Forrester Gartner
Lux Research Cleantech Group Thomson Pharma
MedTrack Business Insights
Recap
Multiple Industry coverage vendors
Frost & Sullivan BCC Research Total Patents Datamonitor
Venture Source Innography
Aggregator of other vendor
resources
Dialog Pro Market Research
Factiva
1. Access to reports from 20 databases
2. Access to industry analysts through inquiry
time
Key: Red – ICT Green – Cleantech & Nanotech Blue – Life Sciences
Who has the most compelling problem?
Who has the biggest financial problem?
Which market is easiest to access?
What values do you bring your target customer?
Prioritize your market segments
“A1 Industries has developed a
cheap and easily applied
additive that allows paint
manufacturing companies to
reduce the environmental impact
of their products”
“A1 Industries has developed a
cheap and easily applied
additive that allows _________
_________________________ to
reduce the environmental impact
of their products”
“A1 Industries has developed a
cheap and easily applied
additive that allows plastic chair
manufacturers to
reduce the environmental impact
of their products”
“A1 Industries has developed a
cheap and easily applied
additive that allows ____________
______________ to
reduce the environmental impact
of their products”
“A1 Industries has developed a
cheap and easily applied
additive that allows solar panel
manufacturers to
reduce the environmental impact
of their products”
Different stakeholders have �different values
Stakeholder Values
Teacher - Saving time, curriculum-aligned, engaging students, simple to set up and deliver,
Student - Fun, building self-confidence and social inclusion
Parent - Helping their child socially, academically,
Principal - Raising standardized scores, addressing priorities of the board (bullying, lowering suspension rates)
Superintendent - Addressing priorities of board, increasing communication between “family” of schools
Trustee - Get re-elected, broader community engagement;
Ministry - Broad policy: raising achievement, reducing achievement gaps, increase public confidence
Procurement officer
- Buy software and textbooks that are proven effective, that teachers will use.
“Google is the world’s largest search engine that allows internet users to find relevant information quickly and easily.”
customer
“Google is the world’s largest search engine that allows internet users to find relevant information quickly and easily.”
end user
“Google is the world’s largest search engine that gives advertisers access to millions of potential customers by personalizing ads based on searched content.”
customer
Double-sided business models
Double-sided business models
“The PeePoo Bag is a cheap, disposable outlet for human waste, providing a hygienic option for refugees in camps across East Africa.”
“The PeePoo Bag is a cheap, disposable outlet for human waste that turns into high quality fertilizer, perfect for low income East-African farmers to increase yield and avoid using expensive fossil fuel-based fertilizers.”
Product differentiation
Blue Ocean Strategy, Kim & Mauborgne, Harvard 2005
What is the criteria people use when solving their problem?
How does your business rate on that criteria?
High
Medium
Low
Product differentiation
The goal is not to be the highest in each category, but to have a unique profile that highlights where your value lies.
Blue Ocean Strategy, Kim & Mauborgne, Harvard 2005
Added Value How do customers perform research on the product they want to buy?
How do you deliver the product to your customers?
How do your consumers use your product?
How do customers maintain the product over time?
How do you support the use of the product?
How do your customers dispose of your product?
Blue Ocean Strategy, Kim & Mauborgne, Harvard 2005
Adding Value: on-line banking
Blue Ocean Strategy, Kim & Mauborgne, Harvard 2005
The value proposition statement may consist of several components:
1. What your product is
2. The target customer
3. The value you provide
4. Why your product is unique
Summary
Go home and write one!
