As an angel investor who has considered hundreds of startup opportunities, the concept of a value proposition may be the most misunderstood and taken for granted element that I see in newly formed startups. While entrepreneurs freely throw around the term “value proposition,” they rarely offer a thoughtful explanation for the “value” their business is providing and, more importantly, an understanding of who their real customer is and what valuable benefit their customer perceives they are receiving.
To address this gap, I’d like to discuss a basic value proposition definition below.
The value proposition is a short statement that clearly communicates the target customer, the customer’s problem and the pain that it causes, the unique solution that addresses this problem, and the net benefit of this solution from the customer's perspective.
Let’s consider each of the four elements of the value proposition definition above:
1. The target customer. Many entrepreneurs quote a large market size and impressive dollars spent in the market, but not many entrepreneurs can name specifically who will buy the proposed product or service, and how many of these customers exist. To identify a target customer, it helps to document a customer profile statement, identifying all of the traits known about the customer and what makes them different and unique from the larger market population. Out of this exercise comes a clearer understanding of what makes them a “target” customer. It’s not uncommon that a company serves more than one target customer, leading to a customer profile for each type.
To read the full, original article click on this link: Startup Professionals Musings: Be Sure Your Startup Has a Clear Value Proposition
Author: Joe Bockerstette
