How to develop your startup's value proposition

9 avril 2022

Companies succeed or fail on their value proposition. It is not enough to be able to do, manufacture or supply something: it must be worth something to potential customers. The amount of time and money wasted buying into the "if you build it, they will come" mistake is staggering. So before you jump in and take the leap, how do you assess your startup's value proposition to ensure your launch won't be met with a shrug?

While there are no guarantees, of course, I have found the following questions to be extremely helpful when choosing your startup path:

Where is the white space?

It's obvious, but it has to be said: is there a real, unmet market need that your startup can fill? First, start with a classic comparison list and work your way down to see if you can fill in the blank space that exists. If the answer is yes, that's a great first step, but the most likely answer is no. Even so, that doesn't mean you're completely unlucky. Try to see the market from a different perspective and consider a unique positioning for your startup.

For example, Uber as another premium car service is less compelling than Uber as a replacement for a personal vehicle or taxi - or even Uber as a logistics company offering super-fast delivery . Challenge yourself and your team to imagine the market for years to come and use that as inspiration.

Is my product vastly superior to that of my competitor?

If someone else is already doing what you intend to do, or something similar, never fear, there are still ways to show you have an edge, and they all have to do with the quality. In short, everything you create must be 10 times better than your competitor's product.

For example, look at Chipotle. Yes, there are other quick-service Mexican restaurants, but why does Chipotle have lines at the door? It wins in every category: quality of ingredients, ease of customizing orders, value (amount of food for money), overall experience, the list goes on. You can also make the same argument for your startup by showing investors that quality is what sets you apart.

What do my (potential) customers want?

The best advice I can give you is this: do the market research yourself and take the time to interact with your potential customers. You'll get the best feedback from those who would pay for your product (or are already paying you, if you're in beta.) Venture capitalists don't always have the same understanding of buyers' needs as buyers do. same, so it's worth exploring every angle.

For those of you launching a mainstream product, the easiest way to test the market is through Kickstarter, Indiegogo, or another crowdfunding platform. It's a fantastic way to see what people are willing to pay, and there's very little downside if the idea fails. Another easy way to test the market is to use Google's Keyword Planner, which can help you find out what potential customers are looking for and predict the performance of certain keywords.

Could it be advantageous for me to go after a competitor?

Have you ever heard the phrase "The early bird catches the worm, but the second mouse catches the cheese?" The launch strategy is just as important as any other business decision you will make. Often there are significant advantages to being first to market, but not always. Do you remember when Apple's iPod crushed every other MP3 player on the market? While MP3 players have been around for years, Apple has created a superior user interface and intuitive end-to-end user experience, making it by far the best option.
If you can “follow up fast” by letting someone else do all the R&D and absorb the initial backfire, then you can introduce a superior product and leap forward. Ultimately, investors want to know why it's safer to invest with you, and market pull will speak much louder than premature launch.

It is extremely important to check your value proposition from the start, because it is difficult to change your basic DNA along the way.

Launching your startup with a well-defined goal will set your team on the path to success. What they produce, especially when the company is young, will be guided by how well your team knows what, why, and for whom they are creating. An accurate value proposition helps focus and answer many questions before they are even asked.