Value Proposition Statements are a great way to pinpoint ways of creating value from your business. By forcing you to concentrate on one aspect of your product or service they help you achieve focus and clarity at the same time as creating pitch statements to potential customers and investors.
Tell me a little about yourself
<product and/or service>
who want to
<job to be done>
<verb, e.g. reducing, avoiding><customer pain>
<verb, e.g. increasing, enhancing><customer gain>
A VPS can be constructed once you have completed a Value Proposition Canvas. The idea is that the ‘missing’ elements in the statement are chosen from the elements you have already identified in the Value Proposition Canvas. Ideally, these elements are as specific as possible.
The purpose is to create a statement or statements (you can have more than one) that help you identify the ways in which you can create value for your customers. Once you have created your statement(s) you can decide which is the most valuable definition and focus on creating that first.
The VPS is intended as a way of quickly shaping alternative directions for your business. On first consideration it can seem somewhat ‘throwaway’. However, its real purpose is to force start-ups to pinpoint exactly what value they are creating and how it will affect their customers (and investors). This makes it invaluable, particularly the
<product and/or service> and
<job to be done> part.
One of the reasons it is so powerful is that, during the Value Proposition workshop, start-ups are only allowed as many words as will fit on one Post-it note for any of the sections in the statement. This means that with the VPS they are trying to sum up both the problem and the solution in approximately 50cm2 paper (with large handwriting!). The advantage it has for the facilitator is that it exposes the biggest implicit assumptions of the founders, which makes it a perfect tool for challenging those assumptions.
Another advantage it gives is that it forces the founders to choose what is most important. Although it seems like a simple task (you’ve already created the elements it will contain, after all) it often takes as long or longer to complete as the Value Proposition itself because it is forcing the participants to prioritise.
It is also often the case that founders find themselves adding elements to the VPS which do not actually appear anywhere in the Value Proposition Canvas itself, begging the question as to why those elements were not there in the first place and encouraging a more thorough Value Proposition session.
It can be considered both as a check and balance to the Value Proposition session as well as a way of creating pitch statements to potential customers and investors.
Some real-life examples
Take the case of AskWinston, one of the Geovation Accelerator Programme alumni. Although AskWinston has now pivoted to provide a virtual Personal Assistant service they originally intended to provide a virtual concierge service to people living in blocks of flats.
Their initial version of the
<job to be done> description was:
Seamless delivery of high quality services (without being at home)
It was the word “seamless” that stood out for me. I asked them whether they had mapped out the workflow involved in delivering all of the services they intended to provide, including accounting for issues and problems when things don’t go according to plan.
The answer was “no”.
In that case, I asked, how can the delivery of those services be seamless? As a result it became a top priority for them to map out these workflows. This not only supported their vision but also helped them to expand their business by creating a process manual to give to their employees/franchisees that explained how to do things the ‘AskWinston way’.
In the process of selecting the
<job to be done> an alternative that was considered was:
Trusted delegation of responsibility
This also struck a chord because up until this point in the Value Proposition session they had been talking about how much time/money they would save customers. Their discussions had implied that this was a big issue for potential customers. However, when they asked existing customers what they liked about the service the response was:
You just get stuff done
There was, apparently, no mention of the time/money saved but rather the peace of mind in delegating the responsibility. This was significant because it shaped the way they described their service. Rather than saying:
Use AskWinston because it saves you time and money
they were able to say:
Use AskWinston because we get stuff done. Oh, and we also save you time and money
This is likely to be much more resonant for potential customers.
Another example is Watchkeeper International. Their initial version of
<product and/or service> was:
A mapping platform integrating in-house systems with third-party risk data for situational awareness
On seeing this it immediately became clear to me that this could not be their business, not in the next 6-12 months anyway. So I asked:
Which of these are you? Are you a mapping platform, a systems integrator or a provider of situational awareness?
The answer was that they were not a mapping platform so much as a platform that included a map. Neither did they provide situational awareness services but rather data to support situational awareness. In fact, they are systems integrators. This is incredibly significant in shaping their operational strategy going forward and in determining the experiments to be done.
Give yourself options, but choose a direction
At first glance a VPS may appear to be too constraining, but I believe this is a benefit rather than a cost. You can make multiple VPSs, each of which expresses a different aspect of your product or service. Which statement you use may depend upon who you are talking to. For example, you may have one statement which expresses the value provided by your business to a customer and another which expresses a different, more relevant benefit to investors.
The VPS also has the benefit of providing direction to your team members. By stating in the fewest words possible what it is you are currently trying to do you reduce the possibility of anyone on the team being unsure or of following an incorrect path.
I believe it is vital not only to create statements but to rank them in order of significance. This way, you can focus on creating the most important value first. This gives you a much greater chance of persuading a stranger to part with their hard-earned cash in return for what you produce. Once you’ve cracked that you can build on your offering by executing the next most important statement, and so on until you have built your empire!
The VPS is first and foremost a tool for exploring and for challenging your thinking. Used properly it can be a powerful mechanism for structuring your approach, communicating your purpose and creating a snowball from which a strong business can be built.