Intro to value propositions for entrepreneurs - PowerPoint PPT Presentation

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Intro to value propositions for entrepreneurs

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  1. Selena Sol presents….. WHAT IS YOUR BUSINESS’ VALUE PROPOSITION? What investors want to know

  2. if you are an entrepreneur, you’ve almost certainly heard the term, “value proposition”

  3. but what does it actually mean?

  4. take a moment to define it for yourself

  5. come on….don’t cheat…define it before you skip to the next slide!

  6. if you’re like most entrepreneurs, you probably came up with something along the lines of…

  7. a value proposition is, “the value your product/service has for the customer”

  8. this is a perfectly fine answer

  9. it would get you an “A” in most marketing classes

  10. however

  11. that definition is not sufficient

  12. actually, it is only 1/5 of what an entrepreneur needs to know

  13. instead

  14. think of a value proposition as built from 5 parts

  15. 1. valued

  16. 2. valuable

  17. 3. valunique

  18. 4. value chain

  19. 5. valuation

  20. let’s review them all….

  21. PART ONE a value proposition is valued

  22. before anything else

  23. your product or service must solve a problem

  24. some people say, “address a customer pain point”

  25. the first mistake that many entrepreneurs make (especially the engineers)

  26. is to build a cool product because it can be built

  27. and only then, as an after thought, look for customers

  28. this is obviously backwards

  29. instead, every business must start by identifying a customer pain point

  30. how do you identify one?

  31. well you need to go and listen to customers in the wild (notice that I did not say ‘talk to customers’)

  32. a bunch of them (In B-School, we call this Market Research because we need to sound fancy. It’s not. Grab any book on surveys, focus groups, or anything that IDEO puts out for free on the web about Design Thinking)

  33. and ask them why, why, why, why, why (5 times if you are from 6-sigma)

  34. and then you need to watch them

  35. so that you understand what, why, when, and how they buy

  36. but

  37. not all customer pain points are born equal

  38. you’ll be looking for between 1-4 interrelated pain points that create a sense of motivation & urgency

  39. in the mind of the customer (If you are a nerd, check out Maslow’s Hierarchy of Needs on wikipedia)

  40. pains that are so dire that the need to solve them will provide enough motivation that the customers will get off their fat butts

  41. and search for a solution

  42. and then fork over money (that they earned in that job they totally hate)

  43. remember

  44. your biggest competitor is not another firm

  45. it is your customer’s biological and psychological preference to do nothing

  46. your biggest competitor is the status-quo

  47. if you do not find the right set of pain points

  48. you’ve got no hope of motivating the customer to buy (of course, there is always brainwashing, blackmail, monopolies, or violent force . Yay military-industrial complex!)

  49. in other words, you need a product that will be valued by a customer

  50. PART TWO a value proposition is valuable