Pre-Initial Validation of Business Ideas Supported by Value Proposition Canvas
A short guide to assessing ideas efficiently since the very beginning.
Oh, the sweet taste of finding a solution. The pleasant buzz between the ears, when things start coming together and formulating a concept. The excitement for the future and the feeling of the dots finally connecting. It’s like the universe was aligning. If you ever came up with ‘the idea’, a business concept or anything like it, you know exactly what I am talking about.
Oh, how I wish it could stop here. How I wish, it would be enough just to come up with stuff and move on right away. How I wish, all the ideas were good and reality-proof.
Unfortunately, the sad truth is very different. Ideas are delicate, and yet, extremely dangerous creatures — not because what they are themselves, but because of our own selves and the temptations we so eagerly fall for. It often happens that we kill ideas off too early, without offering them a chance to spread their wings. Why? Because we are afraid to challenge the status quo. Because we are comfortable with how things are.
Sometimes, of course, because they are essentially bad ideas. But it also happens that we let ourselves to get carried away. We fall in love with the idea at hand. And when we fail spectacularly, we are left heartbroken. All because of things that could have been easily predicted, if only we used what’s left of our reason.
And, if it’s a business idea we are talking about — no wonder if we are left broke.
Harnessing the Immense Power of an Idea
Luckily, since we, as humans, possessed the ability of abstract thinking, we are not powerless against the brute force of our temptations. Since the rise of exchange trade and civilisation in general, we’ve been testing out a vast pool of versatile business models (before we even knew what a ‘business model’ is).
Last hundred years bred generations of business theorists and practitioners, having different, sometimes extremely diverse opinions on how businesses should be launched and managed; how ideas should be nurtured to grow and thrive; how to turn the ideas into scalable businesses.
It hasn’t been more than 20 years from today, however, when a team under the aegis of Mr. Alexander Osterwalder, a Swiss consultant and author, released what is today known as Business Model Canvas. And so, made him a silent hero of the start-up revolution
BMC, in the shortest words possible, is an easy-to-use structure, that allows you to test run your business idea through controlled and limited exposure to the business environment. In other words — it makes you think, how would your idea cope with the real world.
Source: Strategyzer
I believe this chart is quite well known and eagerly used, not only in the start-up environment. It offers a process of conceptualisation and development of a new business idea (or documenting an existing one). It’s smooth and elegant enough to have widely spread across the globe over past two decades.
The Main Question: Who Is Your Idea for?
Simply put, for a business idea to scale, it’s required to find people who are ready to pay for it. Stepping on the verge of psychology of trade for a second, your idea needs to present enough added value, that it makes your audience give up some other value, that they currently hold, and willingly exchange it for whatever it is, that you have to offer. It can be anything, really, but for the sake of clarity let’s stick to good ol’ dollars.
While bringing a revolutionary idea to discussion, start with:
- Who does it serve?
- What kind of value does it present to them?
Now, there is a really interesting model, that’s complimentary to BMC, called Value Proposition Canvas (or sometimes Customer Value Map). It’s designed to deepen the understanding of customers’ needs and design products and services the customers want. Usually, it works in conjunction with BMC. Perhaps that’s why it’s so often forgotten and fades away in the shade of its more popular big brother.
I believe, it can be employed as a pre-initial test run for any idea for product/service/feature/etc. Do it before you spend too much time on developing a complex business model for a product, that apparently has no market need. Stop for a little while and think who are the people that might be interested in what you are planning to offer.
How to do Value Proposition Canvas in a few simple steps:
- Define the portfolio of your products and/or services.
- Define your customer - target groups (separate maps for each target group).
- Define what each of these groups want to achieve? What are the outcomes they are looking for? (Customer Jobs)
- What are the things that the customers want to avoid while trying to get their job done? What worries and annoys them? (Customer Pains)
- What measures the success of your customers trying to get the job done? (Customer Gains)
- What does your product/service do to help the customers avoid/get rid of their Pains? (Pain Relievers)
- What does your product/service do to help the customers maximize their Gains? (Gain Creators)
- Iterate until you achieve fit between the Value Map and the Customer Profile.
The Life After Value Proposition Canvas
Finding the fit at this stage is a good sign. It means, it’s possible, that there is someone in the world who might want to pay you for delivering your idea to the market. It’s important, though, to keep challenging your way of thinking and assumptions. So it’s merely a first iteration. Definitely, a good next step is to run your Value Proposition through BMC and see where it goes. And then keep doing it as you understand more about your customers and your product/service.
Maybe using these models is not something that has a 100% chance of saving us from our own temptations. Perhaps, we will still be killing our own ideas off when they are young and immature. Maybe, we can still get carried away and unthinkingly fall in love with them, become obsessed about them and then painfully fail in the end.
But maybe applying reason to the process will help us see through them. Give these ideas a chance when it does seem to be making sense. Or else, tell them “Let’s just be friends”, when they don’t really seem to be a good fit.
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About the Author
Piotr is Sales Specialist at EL Passion. You can find him on LinkedIn.
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