How you can use the Value Proposition Canvas to understand your customers
Now, most of you have heard about the Business Model Canvas, made famous by Strategyzer AG. It is an amazing tool that allows you to visualise every aspect of your business from your revenue and cost structures to your customer segments and key partners. A macro-level view of your business model can keep your company, especially startups on track of achieving the bigger picture.
Fundamentally, however, your customers do not care about your business model. Instead, they care about what your business can provide for them. How your product or service can add value to their lives. This is where the Value Proposition Canvas comes in. Working in conjunction with the Business Model Canvas, Strategyzer’s Value Proposition Canvas (VPC) allows businesses to visualise customers’ pain points and build a product/service that is in line with what your customer requires. You can find out more here.
While bringing clarity to businesses, The Startup Buddy’s Team wanted to make the traditional VPC better. We found the VPC difficult to grasp for first-time users. And while segregating value propositions into gains creators and pain relievers, there was no way to determine what a customer would absolutely need from a business's product/service before being willing to use it because let’s face it, no startup is going to come up with the perfect product from the get-go.
The Startup Buddy’s Value Proposition Canvas thus aims to allow founders to prioritize the features that they should be building in order to eventually build a product/service that will achieve the perfect product-market fit.
On The Startup Buddy, in toolkit VPC, you will find our version of the Value Proposition Canvas that we love to call VPC because it is so much shorter! And to make it easier for you to follow, here are the steps you should take to build a business centred around a product/service that has product-market fit.
Step 1: Start out by inputting the specific customer type that you would like to focus on first. For a ridesharing company like Grab or Uber, an example of a customer type could be ‘Late-Night Commuters’.
Step 2: Focusing on the ‘Customer’ side, you can input the ‘Job’ that customers have to do. For ‘Late-Night Commuters’ it would be ‘To get home’.
Step 3: Once a ‘Job’ has been inputted, you can move on the inputting the needs and wants that customers would require to complete the job.
Needs would be inputs that are required absolutely for a customer to complete the job. For ‘Late-Night Commuters’ a need could be ‘A quick mode of transport’ ‘To get home’.
Wants are inputs that customers would like to have to able to complete the job. For ‘Late-Night Commuters’ a want could be ‘A cost-efficient mode of transport’ ‘To get home’.
Step 4: Once Wants and Needs have been inputted, you are able to ‘Create Feature’ to input a feature that will correspond to providing a Need/Want to the customer in the Product/Service side.
For example, a feature created from the want, ‘A cost-efficient mode of transport’ could be ‘Private cars for hire at a cheaper rate than traditional cab services’.
Step 5: Input the Product/Service you would like to offer to ‘Late-Night Commuters’. For ridesharing companies, it could be ‘ On-demand rides at cheap rates’.
Step 6: It is unlikely that any business would have only one customer type and each customer type would require a separate value proposition. By simply clicking on ‘Add Customer Type’, you would be able to create a fresh Value Proposition Canvas for ‘Drivers’ in the case of ridesharing companies.
With a visual representation of the features required to create product-market fit, your company will be able to prioritize the features to build based on whether it corresponds to a need or want.
If you are ready to achieve product-market fit, head on over to The Startup Buddy to create your Value Proposition Canvas and don’t worry there is a 14-day free trial for you to play around to your heart's content.
And the VPC is not all, on The Startup Buddy you can log your goals and achievements, build your funding profile and even connect with mentors that can help you in your startup! Plus, stay tuned because we are always working on new toolkits so that we can achieve product-market fit 💪
