Assemble Your Value Proposition

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Now we put it all together. The value proposition statement is literally built from every framework we’ve been through, and it takes this form (it’s essentially a simplified Geoffrey Moore positioning statement):

For [target customers] who are dissatisfied with [the current alternative], we offer [product] that provides [key differentiated benefit], unlike [the existing alternative], because we [do something uniquely well].

Map the frameworks onto the statement:

• “For [target customers]” comes from your 4U/MVS work: define the minimum viable segment, the set of users with the same needs you can serve with one product, so you don’t get pulled in every direction.
• “who are dissatisfied with [the current alternative]” comes from the problem definition: name what’s unworkable, unavoidable, urgent, and underserved. If it’s truly unworkable, they won’t put up with it; if they’re underserved, they can’t get the coffee, comfort, travel access, safety, or health they need.
• Check that the need is blatant and critical (a must-have), ideally, rather than latent and aspirational. If it starts latent and aspirational, be clear how you’ll move it to mission-critical (Victor’s iPad question: from a basic platform to a must-have).
• “unlike [the alternative]… provides [benefit]”: don’t say faster/better/cheaper. Say why it’s disruptive and discontinuous (it went digital where it used to be analog; it’s now online and accessible).
• “because we do X uniquely well,” with an order-of-magnitude benefit: use the Gain/Pain ratio to declare not “it’s X” but “it’s 10x, and here’s why,” so that even with the pain of adoption, the gain is compelling.

I built this statement live, on the spot, with several companies. With Apperian I deliberately drew it out through dialogue (which shows how hard it is to say what you do uniquely well for who in the little time you get, the classic elevator pitch between floors): “For mobile enterprises who are unable to deliver apps to users who bring their own devices (the BYOD shift since the iPhone and iPad), Apperian provides an enterprise app environment that lets those users securely access corporate apps and information (security being their number one worry), unlike MDM (mobile device management, which locks the device down). Our patented, cloud-based approach is a new category: the solution is instantly turned on and scales to tens of thousands.” The “unlike… uniquely” clause is the killer: without it you get dragged into an endless “are you slightly better here or there” argument. And there was a very real consequence behind it: one enterprise couldn’t keep its salesforce’s price lists and product information current, so reps were selling the wrong product at the wrong price, hurting the top line. Fix that and you affect revenue directly.

With Disqus, in the same template: it’s for publishers, bloggers, and readers, but if you had to pick the primary audience it’s the users, because Disqus is 100% user-centric, and that’s how it grew its install base (any consumer product that first satisfies the user has a chance; satisfy only the publisher and users have a bad experience, and the network never forms). The key word in their value prop is “loyal”: on the internet you’re one click from losing a customer, but once someone posts a comment they’re engaged and come back to see the replies. And they define themselves not as a SaaS tool or a white-label widget but as a network built around publisher sites, so you never leave the publisher’s site, which is what makes them both more publisher-centric and more user-centric than the alternatives.

Akiban shows the power of the “unlike” clause carrying a disruptive innovation while keeping adoption non-disruptive. The statement is roughly: for teams whose applications need to run SQL queries far faster, Akiban provides 10x to 100x performance, unlike the “NoSQL” alternatives that would require you to rewrite your application, because Akiban plugs in alongside your existing database via replication (you just redirect the problem queries), with no re-architecture and fitting the 24/7 operational environment. That “unlike NoSQL, no rewrite” is what took all the pain and risk out of adoption. The results filled the benefit clause: Name Media (the wholesale domain-name service behind registrars like 1&1 and GoDaddy) drove revenue up about 200% by eliminating a performance bottleneck; Citrix could take a new collaboration platform viral because Akiban ran its security queries 40 to 100 times faster.

uTest’s statement anchors on the “unlike” too: for companies with public-facing web and mobile apps, uTest provides testing in the wild by a global crowd of profiled, rated testers, unlike in-house labs or offshore outsourcing that can’t replicate real users on real devices in real locations, delivering better time to market, quality, and cost.

The whole exercise is really a set of questions to go ask your customers. Entrepreneurs love to ask “would you buy this?” (an easy yes) but skip “will you pull out your checkbook?” (often a no). If you work the value-prop statement backwards into customer questions, you’ll discover whether the Gain/Pain is real before you’ve hired salespeople and started paying bills.