Value propositionand business model

Value Research

Value = Benefits − Cost

Benefits

Cost

Value in design1. Your value as a designer.2. Your customer’s business value created by means of design methods.

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Developers

When there is no BA on a project

Can anyone tell me our value proposition?

Value propositionis a promise of value to bedelivered to your client.

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Main VP points—Users: for who?—Product: why this?—Seller: why from you?

Clients

Heeeeey!I’m here…

Product ≠ producer.Design ≠ designer.You are not what your sell.

Poor VPSimple fix for Dell laptops.Why?A lot of companies fix Dell laptops and that’s not unique.

Effective VPWe fix Dell laptops in just one hour.Why?You sell speed of fixing that no one else can propose.

You should sell experience, not a product itself.

Poor VPOur pizza is the tastest.Why?Every pizza pretends to have the best taste.

Effective VPYou get hot pizza delivered under 30 min – or it’s free!Why?You sell super-fast delivery, not simply a pizza.

I pay for experience, not for the product.

VP usage—Brand slogans.—Landing pages.—Advertising campaigns.—POS materials.—Packaging.—Promo copywriting.

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24/7 engagement accelerator...

Cutting-edge technologies…

We strive for synergy…

Wise designer

Business value

Geoff Moore’s VP—For … (target customer),—who … (need),—our … (product)—is … (product category)—that … (benefit).

VP exampleFor non-designers who have a need to create cards, posters, presentations and emails our product is a web-based layout software that has 3500 fully editable templates.

Venture Hacks’ Pitch—… (prominent example)—for … (new domain).

VP examples(We are) Google for antique clocks.(Our service is) Pinterest of engineering innovations.

Steve Blank’s XYZ—We help X (target users)—to do Y (need)—doing Z (method).

VP examplesWe help managers to increase productivity automating task-assigning process.We help web developers check UI specification by clicking on a mockup.

When a company has no clear value proposition

Vlaskovits & Cooper’s CPS—Client: who?—Problem: what?—Solution: how?

VP exampleClient: medium-sized startups.Problem: complicated process of ROI calculation.Solution: low-cost analytics system for non-technical marketers.

David Cowan's Pitchcraft—Problem scale.—Product.—Differentiation.—Credibility.

VP exampleOne person dies of melanoma every 62 min. We offer a dermatoscope iPhone app that enables people to diagnose their skin. The technology is patented and trusted by the World Health Organization.

Eric Sink’s VP—The most … (superlative)—… (label)—for … (qualifiers).

VP examplesThe most secure payment gateway for mobile e-commerce.The easiest food delivery service for office workers.

Guy Kawasaki’s VAD—Verb.—Application.—Differentiator.

VP examplesShare PowerPoint and Keynote slides including audio.Make a high-fidelity prototype in just an hour.

Take a look at my value proposition!

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Templates OverviewCanvas Usage

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You can not be uniqueif you don’t really know your competitors and market.

Think different!

Just do it!

Results relentlessly!

Global market is a noise place

VP canvas is a template developed by Alexander Osterwalder for effective development of the product value proposition.

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Leaveme alone!Substitutes

Wants

FeaturesNeeds

Experience

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FeaturesBenefitsExperience

“Evernote” examplesFeatures: sync across devices, includes images.Benefits: simple interface, easy to start using.Experience: external brain, everything everywhere.

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CompanyProductIdeal client

“Sketch app” examplesCompany: Bohemian Coding.Product: Sketch app.Ideal client: user interface and experience designers.

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NeedsWantsFears

“Youtube” examplesNeeds: upload videos, share videos with people.Wants: fast buffering, clear sound, 4k support.Fears: Facebook and Vimeo 360° video upload.

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Substitutes

“Pinterest” exampleSubstitutes: folder with pictures, email to yourself.

Strong VP:—Is specific and clear.—Doesn’t equal a slogan.—Can be read in 5 min.—Contains text and visuals.—Can be proved.—Is properly tested.

I’m option B.

She is option A.

Value proposition A/B testing

Audience

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Business model is an abstract depictionof an organization, its corearrangements, productsand strategic goals.

Destiny of companies without clear business model

ValueProposition

ValueArchitecture

Business model

ValueNetwork

ValueFinance

Value proposition—Product benefits.—Promo messages.

Value architecture—Technological structure.—Organizational design.

Value network—Set of clients.—Partner interaction.

Value finance—Costing.—Pricing methods.—Revenue structure.

Famous BMs—Direct sales.—Franchise.—Value-added reseller.—Auction.—Pay what you can.—Pyramid scheme.

Check the damn kerning!

We need it yesterday!

Make one more variant!

“Hellish design studio” business model

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BM canvas is a template developed by Alexander Osterwalder for easy understanding the business model for a company.

KP KA VP

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Designer

Stakeholders

Business Model Canvas

KA VP

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KP Key Partners

“VISA” exampleKey partners: commercial partners, technology alliances.

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KA Key Activities

“Skype” exampleKey activities: product design, platform development.

KP VP CR CS

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Key ResourcesKR

“Amazon” exampleKey resources: warehouses, Kindle platform, robotic technologies.

KP VP CR CS

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Value Propositions

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“Netflix” exampleValue proposition: legal access to huge movie database with personalized service and without advertising.

KA VP

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KP CRCustomer Relations

“Dropbox” exampleCustomer relations: self-service, automated services.

KA VP

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KP CR

CChannels

“Skype” exampleChannels: skype.com, headset partnerships.

KA VP

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KP CR CSCustomer Segments

“Rolls-Royce” exampleCustomer segments: premium car owners; aerospace, vessel and energy companies.

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Cost StructureRevenue Streams

“Google Drive” examples:Cost structure: storage cost, service support, platform development.Revenue streams: free basic account, pro subscription.

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Templates OverviewCanvas Usage

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1—Value Proposition DesignAlexander Osterwalder

2—Thinking in Systems Donella Meadows

3—www.peterjthomson.com4—www.strategyzer.com5—www.investopedia.com

Related topics—Behavioral economics.—Choice psychology.—Service design.—Elevator pitching.