Unsolicited d**k pics — the ultimate value proposition fail!

You have a product with features that you’re REALLY excited about and once you get it in front of target customers there’ll be no stopping you…right?

Unfortunately your customer’s pains and gains don’t necessarily directly equate with the features you are excited about. A lot of startups fail for the same reason these guys fail — despite having a team of highly skilled professionals working day and night creating the great product.

The leap for many entrepreneurs is to be able to distinguish between what excites them about the technology and what value the product actually brings to the customer. Eric Ries.

You see it all the time in startups because customer development is hard work. You need to get right out of your comfort zone — and that means objectively examining your customer’s tasks, pains & gains without filtering them so that they match your product’s value propositions.

Decades of psychology research has shown that expectations affect our perceptions — we tend to see what we expect to see and experience what we expect to experience. This bias is a big stumbling block for any customer developer because it can cause even intelligent, experienced and diverse teams to overlook some startlingly obvious gotchas.

There are plenty examples out there and here a just a few from CB Insights startup failure post mortem that caught my attention:


Beepi could well have suffered from confirmation bias — almost $150M worth of it. Their value proposition was to help people buy and sell used cars in a way that’s economically rewarding and emotionally uplifting. The basis of their business model was that they would offer sellers a price $1000 more than what they’d get from a dealer. From the buyer’s perspective it kind of goes without saying that buyers will therefore be paying $1000 more than they would otherwise have to pay if they were buying directly from a non-dealer. The reason buyers pay more to a dealer is because of the value adds they get from the dealer — like test drives. With Beepi, buyers didn’t see their new ride in person until it arrived in their driveway. While this business model obviously appealed to sellers — buyers were not so into it.


Australian startup Guvera churned thru more than $180M of funding with a business model that customers have been staying away from in droves for more than 5 years. Their original model sounded good — you get free music if you watch targeted ads based on your profile. Everyone wins because artists get paid their royalties …. but unfortunately it seems that no one wants to listen to ads in the middle of their playlist no matter how many millions of dollars you sink into it — people just want to hear the music and they’re prepared to pay for it — hence Spotify’s success with obtaining product-market fit.

Pay By Touch

Pay By Touch who sunk more than $350M into their value proposition that customers really want to pay with their fingertips rather than credit cards. I actually get this and would do it — but apparently I’m in the minority as they spectacularly failed to find product-market fit mainly because of the difficulty with implementing the technical solution. It’s a good idea except when someone else’s finger print is misread as yours and you get charged for their dinner etc — again from the customer’s perspective the pains and gains where not there. Perhaps having to take your credit card with you everywhere is a pain but the gain is that you can be sure that your transactions are secure…

Finally Dealstruck’s explanation for their recent failure struck me as, well ironic:

“Dealstruck closed its doors after more than three years in business. It did not close because the customer base isn’t there or due to a lack of demand for its lending products. It closed because a deal fell through.” Hmmm…

What can you do?

According to Benson Garner, of Strategzer you can fix this by stepping into your customers shoes and make like an anthropologist. You need to forget for a moment what it is that you are offering (or are hoping to offer) to customers:

“Try to think beyond the specific jobs, pains, and gains that you hope to address with your value proposition. Look for the deeper motivations that customers have. We’ve found the ‘Five Whys’ approach particularly helpful in identifying what’s really driving customers to perform certain jobs, avoid certain pains, and to seek certain gains.” Benson Garner.

The Five Whys Garner refers to is a process developed by Toyoda that involves asking why five times to dig down into the root cause of the problem you’re attempting to solve (or gain/motivation your attempting to understand).

Here is an example of how to use The Five Whys to understand a customer’s motivation. At Hostfully, we allow vacation rental managers to create guidebooks for their guests and one of the key value propositions for guests is that they’ll get curated recommendations for their trip:

  • Why do guests want recommendations about places to eat and things to do from their vacation rental managers? It will help them get a better understanding of what is available in the area.
  • Why do they want to do that? So they can decide where to eat and what to do during their holiday.
  • Why do they want to decide that? So they can avoid bad experiences or missing out on great experiences.
  • Why do they want to avoid bad experiences / missing out? Because time on holidays with loved ones is the most important time they spend together all year.
  • Why are holidays so important to the family? Because they make memories that will last a lifetime.

Suddenly rather than just focussing on the task of seeing what is available in the area (ie Google Maps, Yelp and TripAdvisor do this already) you’re now understanding that you’re dealing with “making memories that last a lifetime” — the stakes are a lot higher and so is the potential value this feature can add to them.

Strategzer’s Value Proposition Canvas helps you do this — you can see all about it in their blog.

So back to those unsolicited pics … don’t be that guy!

Originally published on LinkedIN on 3 JUL 2017 as “Unsolicited d**k pics — the ultimate value proposition fail!

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