The Flow of a Value Proposition Canvas

The Value Proposition Canvas was created by Alexander Osterwalder to help business builders to be very clear about who a business is for and how it delivers value to them. Used well, it can be a terrific tool for figuring out why anything is valuable. A new business, a new product, a new line extension, an event, your CV… whip out a VPC and lay it all out.

It is also fantastic for figuring out which experiments to run in Upperstory.

I have found that people can get stuck so I’ll walk you through how we get unstuck by making up a new product for mining companies. The secret, to me, is about the flow that connects the different areas. Rather than thinking of each box as a separate list, consider how the lists talk to each other.

Core Utility: Solving Clearly Defined Pains

Our first task is to be very clear about what jobs the customer is trying to get done and where that is painful. Ignore the top of the canvas for now.

  1. Customer: Define the jobs.
  2. Customer: Be clear about why those jobs are painful.
  3. Your product: What features in your product will relieve the pain?

Here’s the job I am interested in exploring and why I think it is painful.

Now I need to map those pains to some pain relievers. Here’s what people can do wrong.

Can you see what I did there? I have just negated the three elements of my pains box but I have not said how. Let’s try again.

The simple tip here is to end your Pain Relievers with a noun to describe a feature of your product. In this case, a subscription, alerts and virtual drills.

Now we have some elements that can be strung together into a sentence.

We help mining prospectors discover deposits faster and cheaper by replacing expensive infrastructure with virtual drills powered by up to date satellite imagery and state of the art machine learning — all for an unbelievably low subscription fee.

A potential customer has something tangible to contemplate now.

Make it ‘No-Brainer’ Value: Boost Value with Gains

In the same way that my first attempt at Pain Relievers just negated the Pains without any sense of how, it is common for people to the same with Gains.

We look at this and feel like we are just duplicating un-actionable information. Let’s try something else. Now I am going to go back to Customer Jobs and I am going to flow from there and not up from Pains.

If you ask a customer about the job they are trying to get done, they should talk about the Pains without your prompting. Gains are different. They can be entirely independent new elements of value that get the job done better. That’s why I like to flow from the Jobs now and not up from Pains.

How can we make prospecting for metal deposits better? How can we create a gain that the customer hasn’t thought of but, if they see it, they will think it is amazing?

I’m thinking that it would be a gain estimate the size of a possible deposit. I added that as a Gain and then proposed a tool that allows them to explore various yield scenarios.

Finally, we give our product a name.

I hope this helps you complete your next Value Proposition Canvas.

I’ve used templates from the Startup Science Toolkit to build this post. Get yours here.

What’s Next?

Well, as usual, the next step is to figure out if this is all just a dream we have for the perfect value proposition, or whether it is anchored on how customers actually behave.

I am going to use Upperstory for this so that I can test my assumptions deliberately with my team.

Create a new GOAL.

First, create a goal. We are going to use this to test what we have assumed in the CUSTOMER UNDERSTANDING circle of the Value Proposition Canvas.

Now add an experiment in the goal.

Create an experiment

Do this for each of the hypothesis you have made in the circle. It can be powerful to do this as a team to challenge yourselves on what experiment design will prove your hypothesis.

Collect field notes as DISCOVERIES:

Take notes

When the test is complete, look to see if the expected outcome happened.

Mark your hypothesis as valid or invalid.

In this case we found that prospecting was not a major task for our target customer. It happens once in new mining companies and then become a smaller background task.

Time to go back to Value Proposition Canvas to reflect on our assumptions and come up with a v2!

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