Focus on Problems, Jobs, and Gains
Episode #2 of the course How to start a startup with zero budget by Dr. Donatas Jonikas
We’ve already discussed that creating value proposition is step number one in starting a successful startup, and it doesn’t require any financial investment at this stage. To make the process easier, I would recommend using the value proposition canvas introduced by Alex Osterwalder, Yves Pigneur, and Greg Bernarda in Value Proposition Design (2014). This tool helps startup founders design, build, test, and manage their customer value propositions, and can be outlined in five steps.
1. Start by identifying your customers’ most painful problems.
It is important to describe the customer’s problems as precisely as possible. For example, when a customer says, “I hate waiting for videos and photos to be uploaded on a mobile device,” you should also ask about their tolerance for an upload time. A more precise description of the problem would be, “Customer doesn’t want to wait more than three seconds for the video and photo content to upload on their mobile devices.” When you can precisely measure the target customers’ problems, you can create better products and services to solve those problems. List as many problems as you can, but keep in mind, those problems must be real and important to your target customer, not just to you.
Stay till the end of this course, and you’ll get a link to download not only this but also all other related templates and swipe files to stay on track and save your time.
2. Identify all possible jobs and tasks that customer is trying to complete in context of your product.
Jobs describe the tasks your customers are trying to get done in their business, at home, or even during their leisure time. A job could be a simple, routine task they are doing every day (downloading media, for example) or something more challenging and complex they’re trying to implement and complete.
3. Identify all possible gains the customer would appreciate.
Think about as many as possible gains, outcomes, and benefits your customer would be happy to receive. Be as specific as possible. For example, instead of, “customers would like to spend less on upgrades,” consider, “customers would like to reduce the cost of upgrades by 20% on cash outlay and 25% of labor costs.”
4. Prioritize all problems, jobs, and gains by the importance to the customer.
Next, you want to sort the problems, jobs, and gains by their importance or priority to the customers. Pay particular attention to the method you use to rate the importance. You can do it in one of two ways: based on assumptions or based on real facts.
Define your main value proposition in one simple and clear sentence.
Now, review the most important jobs, problems, and gains you’ve listed, and think how you could help your customers to:
• achieve their goals and deal with challenges
• save time, money, or effort
• avoid mistakes, failures, and risks
• reduce their pain points
• feel better and look good in other people’s eyes
• make their work or personal life easier
• get better quality and higher performance for their current solutions
• get something specific that they are looking for but can’t find
There are different recommendations for how to write a value proposition, but at the very least, it has to address three main questions:
1. What exact value you will create (it must be unique and hard to copy)?
2. For whom will it be delivered?
3. How will you do this?
Your customer should be able to read and understand your value proposition in about five seconds. So, explain it in one simple sentence that even your grandmother could understand. It has to communicate the concrete results a customer will get from purchasing and using your products or services, and it must differentiate you from competitors. Don’t use jargon, slang, or acronyms! It might be helpful to just start writing the sentence and work iteratively until you are satisfied.
You are free to choose any other methodology for creating your value proposition, but if you want it to be effective, the value you intend to deliver must be important to the customer and unique.
Tomorrow, we will talk how you should make your next most important step: Outline your business model on one page.
Value Proposition Design by Alex Osterwalder, Yves Pigneur, and Greg Bernarda
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