What makes a customer buy into a new idea (or a product)?

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The answer is – solving an immediate, known pain-point for the customer.

This is all about the connection between pain point of a customer and the solution that your idea or product offers to solve it.

The psychology behind the human pain

At the most basic level, people typically spend money on two things:

  • First, they readily spend money to combat pain.
  • Second, they spend money to pursue pleasure.

Pain and pleasure, are listed in that order for a reason. All things being equal, the acuter the pain or problem, the more likely it is that customer will pay to buy a solution.

Unless you solve one of the top problems your target customer is experiencing you’re scre*ed!

From an entrepreneur’s perspective, this means that it’s often better to be in a “pain business” than a “pleasure business.” There is simply more staying power in pain-solving businesses.

Painkillers, Vitamins, Oxygen Or Vaccines: Which One Is Your Product?

Painkiller products:  Two words…  “MUST HAVES”, yep, these type of products fall under the essentials category.  And another common characteristic of them is that they provide an almost immediate relief.

Vitamin products: The main alternative to painkiller-products?  Vitamins (aka “as nice to have”).  Said differently, this kind of products are not bought out of sheer necessity but rather because of a desire to fulfill some non-critical individual preferences.  Such examples could be things like jewelry, watches, productivity tools, dating apps, etc.

Vaccine products: Which as you might imagine are goods with strong preventive nature such as insurance products or health check-ups.

Oxygen products: Not hard to guess what’s that about, right?  That’s correct. Are products that, as ‘the experts’ put it, “you can NOT live without”…  Insulin (for diabetics), revenues (for companies), or air-conditioning (for ‘Middle Eastern people’ during summer) could be some examples here.

Why do users pay?

All (or most) money made by a business, by fair means, comes from real users.  Users only pay for something that solves a problem, they have, in a really good way.  It’s not enough to get users to pay once – for a business to really grow users has to pay again & again and they should spread the word about you. The only way to accomplish this is to create a high-quality solution for a problem that’s important for users.  And, that’s possible only when you have a high-quality understanding about the pain point in the first place.

However, there is one more thing. Just because a problem is painful, urgent and on top of peoples’ minds don’t make it a winner.  Maybe the competition effectively addresses that problem and people are happy with what’s out there.  For many people, even painful and urgent problems don’t justify the decision to open up their wallet.

Implications for building solution

To create a high-quality solution,  you really need to care deeply about a problem. You should care so deeply that you want to solve it not only for yourself but for everyone in the world. You should care so much that “you get joy in your customer’s joy” and “you feel pain if your customer is in pain”. Without that connection, it won’t work.

Try to articulate the pain point that you want to solve in less than half a sentence. If you can articulate the pain point that you are solving, the more odds are that you will get to know more about it as you start working on it. Founders who need paragraphs to describe this demonstrate that they haven’t got this right yet.

To you want to take that test to see if know the pain of your customers?

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Get your startup idea funded!

1 One key ingredient to raise funds for your idea.jpg

Fundraising as such is tough and when you do not have a full product or when you are just an idea stage, it is all the more tough, if not impossible. This free webinar is about giving you some insights on one single most important ingredient – traction, to make it possible.

Registration @ http://bit.ly/2IkNHJZ

 

 

Will you jump in?

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The idea is the most critical and fundamental element of a new business and for many, the new business starts when there is some great idea to execute.

Many wait for good ideas to happen to them. Many ask around for suggestions on good ideas.

In many of such situations; it is not that they do not have any idea.

It is just that they are not happy with the ideas in hand and would rather wait for great ones.

In many other situations, some founders just get started with half-baked, crappy ideas. It almost like, we want to tell them not to hasten the decision.

What is worse?  Jumping in with a crappy idea or not jumping In while waiting for a great idea?

Jumping in with a crappy idea

Most companies are usually founded on half-baked, crappy ideas. People just don’t realize because all they hear about are the mega-success stories of Facebook and the likes, where some genius had a brilliant idea that took off incredibly fast.

It takes customer feedback, iteration, and grinding it out to figure out what you actually need to do as a company.

With a “hungry, but humble” approach, founders converge on sustainable business ideas, regardless of their starting point.

Customers and users will tell you what they want and will pay for, but it’s important to sift out false positives by listening to actions, not simple words.

You just need to be ready to work incredibly hard, work with humility, be sensitive to market feedback and push through all the times you want to throw in the towel.

Obviously, this won’t guarantee you not to fail, but it will increase your chances of success. So, what are you waiting for?

Not jumping in while waiting for a great idea

Even when you do come up with a great idea, there is no guarantee that it is going to work. Future is not guaranteed and all ideas get changed. Very rarely does a startup actually start with the idea that makes them the next big thing.

Stop waiting for the great idea. The great idea isn’t coming. You just have to pick a problem you are passionate about and start working on it. Over time, you will evolve your startup into the next big thing

Your idea isn’t the real value, it’s you. The greatness lies in your ability to learn from potential customers, iterate based on those learnings. Those iterations will determine whether or not your startup will be successful, not the initial idea

Get your prototype out there as soon as you can. Don’t spend months evaluating, contemplating on your idea. It’s going to fall flat. Instead, get a prototype into the hands of your potential customers as soon as you can. You need to learn as quickly as possible what’s wrong with the idea so you can fix it.

Your initial startup idea isn’t the great thing and that’s okay. Just get out there and start working on a big problem that you’re passionate about and you may eventually turn it into the great thing.

What’s your take on this?

What is worse?  Jumping in with a crappy idea or not jumping In while waiting for a great idea? Will you jump in?

Register Now: Founders Companion Program – Idea to MVP

WEDDING PHOTOGRAPHY _ PORTRAITS _ EVENTS

Hey,

There are many new developments happening at Climb Lean School of Starting Up and you should hear about a few new courses and a webinar that will be of some help to boost your work in building new business.

But, there is this one thing that I am quite excited to work on, and it is that thing that I wanted to get to you right away ..

Founders struggle to move from ideas to startups, at the right time. Sometimes ideas remain ideas for way too long. At other times they become startups prematurely, without validation. Running experiments is the missing step. It’s a distinct unit or phase of work. Running the right experiments is hard for many. In an environment where the problem is not known and its solution too is not known, product development is no simpler.  Lean startup process helps you in validating and invalidating your assumptions as quickly as possible through small, inexpensive experiments, to discover and deliver what people want. It favors experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. Lean startup principles prescribe to build something just enough to test the critical assumption, run tests and gather data – through a learn-build-test loop.

So, my question is, how are you progressing on moving from idea to MVP and beyond?

If you have indeed progressed well or if you are happy with the progress you are making, you can safely ignore the rest of this email and delete it and forget about it forever.

But, if you are looking for better results, this email is for you.

We just got into an act of putting together a new Founders Companion Program – Idea to MVP …

The companion program will give you everything that it takes for you to take your journey from idea to MVP, and beyond.

What is happening currently is the content of the program is being fine-tuned, though the outline of this content based on the current thinking is out there. We will be happy to have your words on including any new topics or area that you don’t see.

In fact, the new companion program is launched and is open for a pre-launch registration.

You can register for the program here.

Register Now: Founder Companion Program – Idea to MVP

The current offer price offer is at a 50% discount to the price after the launch of the program.

If getting your idea into reality faster and efficient way is what you desire, explore the new companion.

So, click here and check it out.

Do write back if you have any questions in this regard.

To your success,

~Shashank

7 Close cousins of value proposition

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Essentially, the value proposition is the #1 thing that determines whether people will bother to invest more time and energy to know more about your product or hit the back button. In the early stage of a start-up when you are not yet known popularly, it becomes even more critical that you have a better value proposition.

If you are familiar with lean business model canvas by Ash Maurya, the value proposition is one of the 9 blocks of a business model that you sketch when you get started to put your idea onto a paper.  It is one of the most important elements of the business model and therefore critical for start-ups to get it right. One of the reasons as to why most start-ups fail to define their value proposition well before they launch their products is that founders tend to give too much credence to the ‘idea’ they have and run with it as opposed to exploring how this idea would actually perform in the market.

“Unique Value Proposition: A single, clear compelling message that states why you are different and worth buying.”

– Steve Blank, The Four Steps to the Epiphany

In other words, a value proposition is a clear statement of the tangible results a customer gets from using your products or services. It is outcome focused and stresses the value of your offering.

How people do it wrong?

On the surface, value propositions seem incredibly straightforward.  A lot of founders tend to mistake it for what it is not.  There are 7 commonly wrong ways of understanding and using value proposition and they are:

Slogan

DefinitionA brief attention-getting phrase used in advertising or promotion.

Use Slogans are used with the brand name and logo of a product or service. Though name and logo are often recognizable, they usually don’t have an embedded germ of a communicable idea. Since slogans do carry ideas, they are received, remembered and then played back, complete with all the associated emotions and claims a given slogan evokes. This repeatability makes well-written slogans powerful and far-reaching.

Examples  – Save Money, Live Better (Wal-Mart); I’m lovin’ it (McDonald’s);  Just Do It (Nike)

Structure Because slogans are meant to be remembered and repeated, effective taglines employ elements known to increase retention like rhymes, puns, hyperbole, and simile.

Catchphrase

Definition A catchphrase is a phrase or expression recognized by its repeated utterance. Such phrases often originate in popular culture and in the arts and typically spread through word of mouth and a variety of mass media

UseCatch attention for your brand

Examples  – “Beer, now cheaper than gas. Drink, don’t drive”; “It’s lonely at the top, but you eat better”; “We repair what your husband fixed” (From a plumber’s truck); “7 days without pizza makes one weak” (From a pizza shop)

Structure Principles of a good catchphrase are – it must be short and simple (usually around 10 words or less), must be memorable and pleasant to the ear and must evoke some kind of emotion or agreement. A catchphrase is meant to stick in the head of the audience so that when they see it, they can mentally repeat it to themselves.

Positioning statement

DefinitionA positioning statement is a one- or two-sentence statement that articulates your product or service’s unique value to your customers in relation to your chief competition.

Use Positioning is the process of identifying an appropriate market niche for a product (or service or brand) and getting it established in that area. It clearly defines your company’s place in the market and helps you get your marketing in order for higher profits.

Examples –  Volvo: For upscale American families, Volvo is the family automobile that offers maximum safety.

StructureCombine the responses to these 3 questions in a sentence – who is your target market?  what unique value do you provide them? why Should They Believe You?

Mission statement

Definition – It is a formal summary of the aims and values of a company. A written declaration of an organization’s core purpose and focus that normally remains unchanged over time.

UseThe mission statement can serve as a guidebook for the organization, representing lofty goals and aspirations while serving as a barometer against which leaders can measure actions. It is a useful piece of public relations, an attempt to paint a rosy picture of an organization. The process of brainstorming and writing reinforces the purpose of the organization.

Examples –  “We strive to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle!” -Adidas; “We seek to be Earth’s most customer-centric company for four primary customer sets: consumers, sellers, enterprises, and content creators.” –Amazon; “To connect people with their world, everywhere they live and work, and do it better than anyone else.” -AT&T

 StructureA mission statement describes the company’s goals in three ways – it defines what the company does for its customers, it defines what the company does for its employees, it defines what the company does for its owners.

High pitch

DefinitionA high concept pitch distills a startup’s vision into a single sentence.

Use – First, the pitch is the perfect tool for fans who are spreading the word about your company. Investors use the pitch when they tell their partners about your startup. Customers use the pitch when they rave about your product. The press uses the pitch when they cover the company.

Examples“Friendster for dogs.” (Dogster); “Flickr for video.” (YouTube); “We network networks.” (Cisco)

StructureFirst, the pitch should be brief: one short sentence is perfect. The pitch combines the building blocks by using analogy, synthesis, juxtaposition, combination.

Elevator pitch

Definition An elevator pitch is a brief, persuasive speech that you see in use to spark interest in what your organization does.

Use Some people think that this kind of thing is only useful for salespeople who need to pitch their products and services or startup founders who are looking for an attention from investors. But you can also use them in other situations. For example, you can use one to introduce your organization to potential clients or customers.

Examples

 esla-pitch-elon-musk

 Structure –  Your elevator speech should be brief. Restrict the speech to 30 to 60 seconds — that’s the time it takes to ride an elevator. Even though it’s a short pitch, your elevator speech should be persuasive enough to spark the listener’s interest in your idea or organization. Your elevator pitch should explain who you are and what qualifications and skills you have.

Tagline

Definition –  It is a short text which serves to clarify a thought for, or is designed with a form of, dramatic effect. Many tagline slogans are reiterated phrases associated with an individual, social group, or product. As a variant of a branding slogan, taglines can be used in marketing materials and advertising.

Uses The idea behind the concept is to create a memorable dramatic phrase that will sum up the tone and premise of an audio/visual product, or to reinforce and strengthen the audience’s memory of a literary product.

Example – “Tools to Grow Your Website’s Traffic.”  SumoMe

Structure – The #1 best way to create a tagline for your business is to describe what you do in the shortest space possible. This process is like trying to cram a large thought into a single Tweet.

Summing up

Value propositions play an integral role in defining your startup’s purpose and validating ideas among your target audience. Directly correlating with the business plan, they quantify the intended market position of your startup and demonstrate the fundamental value of your product offerings in the mind of your target audience.

The inability to communicate your purpose and value to your target audience, in a clear and concise manner, is a death sentence for even the best ideas. Often times, it is one of the root causes in the failure startups.

Ensure you are not one of them.

Find a pain worth your time

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I get so many questions on Quora and I’m truly flattered that so many of aspiring entrepreneurs ask my opinion and ask for my help.

I’ve always been very happy to offer my thoughts on all aspects of starting up and how to go about how pain point is the starting point of a new business and how to get started from there. However, my schedule has become increasingly busy this the past few weeks and as such, I just don’t get as much time as I would like to answer every question in Quora in as much detail as I would like.

So I’ve put together a short course for aspiring entrepreneurs.

This is going to be an online training resource for wannabe founders, aspiring entrepreneurs,  people looking to do some side hustle projects, and student entrepreneurs or even first-time startup founders who have just started. I really hope it will become an invaluable one-stop site for learning and improving every aspect of your pain point, the starting point for a new business.

Probably the most common question I’ve been asked is  ‘How do I know if the pain point is worth my time to work on?’

So in response to all the questions and indeed so that I don’t let any of you down by not replying fully to a question I’ve created an online course called “Find a pain point that is worth your time” which is going to teach you, well how to get going when you want to startup!

So, click on this link  and you get started right away.

In this course, you will learn how to spot a pain point worth engaging with and in the process you’ll also discover if your new business idea is indeed worth working on before you start building your product.

Doing a sound foundation leads to building products that would work.

 

 

The 3 Things This Week : 15th February, 2018

Hey,

Happy Thursday!

I am happy to introduce you Climb Lean’s weekly newsletter – “The 3 Things This Week” to you.

Here are this week’s 3 things!

This week’s theme is lean startup methods and practices.

Thing # 1:  Intuition vs. Rationality: Where One Stops the Other Starts

 

1As human beings, we have two amazing gifts – the ability to think rationally and the ability to think intuitively.  The conclusion that rational and intuitive thinking is often in a state of conflict and are often misapplied.  We use my rational mind to solve problems that in reality, only intuitive thinking can solve, and vice-versa, when rational thinking is better suited for the problem at hand, we often deny what the rational brain is telling me and grope instead for an intuitive solution.

The rational thinking is most appropriate when a life situation has presented all the facts and there is a clear understanding of the consequences of a word or deed – there is no ambiguity or unknown.  The rational mind can clearly say “if A, then B.”  Because the world has a certain order and predictability, the rational mind can make reasoned decisions founded on the trust of this external order and predictability.   However, when faced with the unknowable, the rational mind refuses to let go–it struggles to “rationalize” an action by seeking more and more information that might help in making a decision based on the facts that it gathers.

Intuitive thinking is most appropriate when the consequences of our words and actions are unknown, where the intuitive mind makes an inner journey into the soul, becomes vulnerable and open to insights whose conclusions rest on the foundation of an inner sense of trust.

This is a thought-provoking article that has lessons in entrepreneurship when you are building a new business. You need to use both your intuitive mind and the rational mind in this, but you should know which one to use in what situations of your startup building.

Thing # 2:  Choice, happiness and spaghetti sauce

2In this TEDx talk, “Tipping Point” author Malcolm Gladwell gets inside the food industry’s pursuit of the perfect spaghetti sauce — and makes a larger argument about the nature of choice and happiness.

His talk has a few lessons for a startup building process when it comes to customer discovery on what people want.  Assumption number one, typically we have, is that the way to find out what people want, what will make people happy, is to ask them. The lesson is that people don’t know what they want! “The mind knows not what the tongue wants.” It’s a mystery!  And a critically important step in understanding our own desires is to realize that we cannot always explain what we want, deep down.

 

 

Thing # 3:  How great leaders inspire action? 

OIR_resizer-3Simon Sinek has a simple but powerful model for inspirational leadership. In his TEDx talk, Simon explores how leaders can inspire cooperation, trust, and change. His model for inspirational leadership, involves 3 questions in 3 circles – Why? How? What? This little idea explains why some organizations and some leaders are able to inspire where others aren’t. He defines the terms really quickly. Every single person, every single organization on the planet knows what they do, 100 percent. Some know how they do it, whether you call it your differentiated value proposition or your proprietary process or your USP. But very, very few people or organizations know why they do what they do. And by “why” he doesn’t mean “to make a profit.” That’s a result. It’s always a result. By “why” he means: What’s your purpose? What’s your cause? What’s your belief? Why does your organization exist? Why do you get out of bed in the morning? And why should anyone care? We go from the clearest thing to the fuzziest thing. But the inspired leaders and the inspired organizations — regardless of their size, regardless of their industry –, all think, act and communicate from the inside out.  If you are not clear about and convinced about your and your startup’s “why”,  and if you are still fuzzy about your “why”, its time to spend some energies to get your act right.

 

 

I would love to hear your feedback on 3 Things This Week.

Hope you enjoy, and thanks again for the privilege of emailing you!

Wishing you lots of happy reading,

Shashank

 

P.S. –

1. The 3 Things This Week” is a free, short, curated list of useful articles, tools and other resources for building startup businesses. These 3 things would deal, in a random way, with different aspects of startup building – validation, traction, growth, funding, team, founders.

2. If you think of anyone who might enjoy this email, you can share this with a friend or co-worker.

Web –

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Climb Lean Blog

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Jumping the curve

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The changes happening around would be the most challenging thing for an existing business.

The only thing that is constant is “change”. The changes are all pervasive and no business is immunized against them.

In today’s fast-paced world, success often depends on how quickly your business can adapt to changing conditions. How well versed are you ready to pivot when the market changes?

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In the world of innovation, an S-curve explains the common evolution of a successful new technology or product. At first, early adopters provide the momentum behind uptake. A steep ascent follows, as the masses swiftly catch up. Finally, the curve levels off sharply, as the adoption approaches saturation.

High performance is defined by companies that execute repeated climbs and jumps of the S-curve.

Origins

“Jumping the curve” is a saying that has been around for a few decades. It is traced back to the Irish philosopher and management futurist Charles Handy who said that companies need to become aware of the sigmoid curve.

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The sigmoid curve (or S Curve) is the naturally occurring sloping line that Handy used to show that “companies will come to a natural end if they don’t re-create themselves during good times

What does it take to jump the curve?

You jump to the next curve by breaking old patterns of thinking and behaving. If you keep doing what you have been doing, you’ll keep getting what you have been getting.” So, to get different outcomes, you need to do differently.

Guy Kawasaki, while discussing “The Art of Innovation” at TEDxBerkeley, advises startup founders about the matter of perspective, when it comes to new opportunities. He says, “The perspective is to jump curves and not to stay on the same stupid curve that you’re on while trying to do things 10% better.” A classic example he elaborates is that of the ice business. In this example, he points out how ice making business transformed over past century from being ice harvesters to ice factory and then to refrigerators. The very interesting story about all of these curves is that none of the organizations that were ice harvesters became ice factories and ice factories did not become refrigerator companies because most companies define themselves in terms of what they do, not the benefits they provide. If you define yourself as we cut blocks of ice out of lakes, you remain an ice harvester. If you define yourself as we freeze water centrally, you remain an ice factory. If you define yourself as we make a mechanical gadget called a refrigerator, then you stay on the refrigerator curve. The way to jump the curve is to define your self from the point of view of benefits that your users get, as opposed to what you currently do.

No one can predict the future, but Jack Uldrich can help you prepare for it. Jack Uldrich is a futurist, who helps organizations gain the critical foresight they need to create a successful future. His work is based on the transformational principles of unlearning – or freeing yourself from obsolete knowledge and assumptions – as a strategy to survive and thrive in an era of unparalleled change.

In a short video here, he talks about the importance for entrepreneurs to understand the concept of Jumping the Curve.  He says, if anything is growing exponentially, and if there are nine technologies growing exponentially, you cant just go by the early trends, you have to follow it up with conclusions. The future does not increase linearly, but it grows exponentially.

Great opportunities ion occurs when you jump to the next curve.

When do you jump the curve?

If we view the first curve as a technology beginning to die out, and the second curve as a

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newer and more promising alternative, their first point of intersection shows continued improvements to the old system alongside the short-term upstart costs of investing in new methodologies. The best time to change is therefore when there is no immediate benefit to doing so, whereas sticking with successful practices eventually ensures their failure.

Lessons for startups

In today’s environment, there are rapid changes happening everywhere – markets, technologies and that continues to build big challenge for a startup founder.

As a founder, the most critical skill that you probably need today, irrespective of the startup stage, is to be able to jump your curve, generate a huge number of ideas,  run efficient experiments to test assumptions underlying those ideas and launch new businesses as quickly as possible.

This can happen by seeing and pursuing the “big enough” market insights that can take a startup business to the top of an industry and by creating strategy “from the edge”  to find and capture the next winning business idea.

Jumping the curve is not just relevant for the startups already in business but also for wannabe founders who are looking for the next business idea!

This skill is a core of entrepreneurship today.

Strong opinions, weakly held

balance

When building something, we need to balance between what we feel strongly about and getting users to validate it. How do we balance our act?

We do it with strong opinions, held weekly.

Bob Sutton describes the origin and power of this phrase “Strong opinions, weakly held” in more detail:

”Perhaps the best description I’ve ever seen of how wise people act comes from the amazing folks at Palo Alto’s Institute for the Future. A couple years ago, I was talking the Institute’s Bob Johansen about wisdom, and he explained that – to deal with an uncertain future and still move forward – they advise people to have ‘strong opinions, which are weakly held’. . . .

Bob explained that weak opinions are problematic because people aren’t inspired to develop the best arguments possible for them or to put forth the energy required to test them. Bob explained that it was just as important, however, to not be too attached to what you believe because, otherwise, it undermines your ability to ‘see’ and ‘hear’ evidence that clashes with your opinions. This is what psychologists sometimes call the problem of ‘confirmation bias.’”

– Bob Sutton, Strong Opinions, Weakly Held

When dealing with the complex new product development in an uncertain and changing environment, wise founders keep their strong opinions, weakly held.

Strong opinions

Let’s begin by exploring the idea of strong opinions. Strong opinions are not fundamental truths. Rather opinions are a working hypothesis used to guide your thinking, decisions, and actions. Dictionary definition of an opinion –

 An opinion  is:

“a belief or judgment that rests on grounds insufficient to produce complete certainty.”

A strong opinion is one based on the current best available information and knowledge. It’s a belief for which you have some evidence and one that you’re prepared to defend. Strong opinions are supported by strong arguments that validate your point of view.

Consider the alternative – weak opinions. When you have weak opinions:

You don’t develop robust arguments to support weak opinions.

Weak opinions don’t challenge people to debate and test the validity of the supporting argument.

Weak opinions don’t inspire the confidence necessary for you to take action, commit resources and accept the risk.

Weakly held

Holding an opinion weakly means:

You’ll listen to contradictory views and opinions.

You’re looking for evidence that may contradict your strong opinion.

You’re open changing your mind and your actions.

The strong opinions you hold today are based on your past experience. While strong opinions encourage you to develop strong arguments if your opinions are too strongly held you are much less likely to consider contradictory evidence and new information.

Wise founders act, whilst being open to change

Founders with strongly held opinions invest too much time and energy, supporting their existing beliefs. They fail to consider new information and ignore contradictory feedback.  As a result, they continue to make decisions and take action based on outdated ideas.

Wise founders are willing to be wrong. Rather than defending their ideas and opinions until death, they understand that being wrong makes room for change.

Wise founders take action as a way to gain the feedback necessary to validate their ideas.

Take action “as if” your strong opinions are true.

Acting “as if” reminds you that you’re taking action on the best available information.

Acting “as if” reminds you that you may be wrong.

Acting “as if” keeps you open to learning and changing direction.

Instead of seeking to find the right answers, acting “as if” means you focus on chipping away at the various ways that you may be wrong, resulting in you becoming more right over time.

Balancing act

The fastest way of moving into the future is through defining and validating a series of hypotheses. Formulate a hypothesis based on the best available information – adopt a strong opinion. Then act, seeking feedback, adjusting as you go – weakly held.

Why do you want to give shit about value proposition at an idea stage?

val prop

When a new wannabe founder is excitedly sharing his new business idea and how it is going to revolutionise the world, all goes well right through when he is talking about the problems his startup aims to solve.  Technology, product, target audience, and growth plans.

Then I hit the wall when he is asked a question: “What’s your value proposition for this target audience?”

And, he gives a blank look.

He either starts describing the pain point of the audience or starts listing out a few features of the product offering, as a response.

These things are not your value proposition.

Many founders don’t comprehend the exact meaning of value propositions, and their crucial importance to startups, particularly early stage ones.

What is a value proposition?

Essentially, the value proposition is the #1 thing that determines whether people will bother to invest more time and energy to know more about your product or hit the back button. In the early stage of a start-up when you are not yet known popularly, it becomes even more critical that you have a better value proposition.

“Unique Value Proposition: A single, clear compelling message that states why you are different and worth buying.”

– Steve Blank, The Four Steps to the Epiphany

Value proposition & lean canvas

If you are familiar with lean business model canvas by Ash Maurya, the value proposition is one of the 9 blocks of a business model that you sketch when you get started to put your idea onto a paper.  It is one of the most important elements of the business model and therefore critical for start-ups to get it right, or at least note what your hunch is about the value proposition is, right from the time you write your first canvas.

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The good news is you don’t have to get this perfect right away. Like everything on the business model canvas, you start with the best guess and then iterate from there.  The point is, you cant ford to put it blank for a long time and you better know sooner what you want to fill it with.

Why does it matter to you?

There are several benefits of (or reasons as to why) as to why you should give a shit to the articulated value proposition, right when you are working on your first few lean canvases and here are some, not necessarily in the order of importance.

An idea in your head alone is not great!

As an entrepreneur, one of the most important tasks you are required to perform in the early days is getting your idea(s) out from your head into a tangible format so that you can communicate that with others.  What will your startup do? Who will it serve, and how will you be different or unique? You need to answer these are questions clearly, effectively and quickly. If not, target audiences (prospects, partners, investors, and media) move on because they’re time-strapped.

It is the core of your business model

Your value proposition is like the CORE of your business. It defines to the customer, exactly what solution you can provide for the problem they have, what makes your solution better than other available options and what value do they get out of this product from you.  At its core, it is the reason for your startup’s existence.  If this is so the core of what you intend to do, it is critical that you have as much clarity about is as possible, sooner than later.

Reason for charging what you get paid by customers

A more scientific description is that value proposition is ‘the promise of value that will be delivered to your customer’. A value proposition defines the benefits your company’s products and services offer to the customer. This short statement, based on your business concept statement, should express the essence of your business in a way that compels the customer to buy.

Clarity to yourself

It helps you because it keeps you, the entrepreneur, in check, so that you always keep in mind exactly what goals you hope to achieve while making your product offering. And hence you don’t veer off your course and you easily your targets.  Value propositions can also serve as the basis for your product development strategy.

Direct connect with customers

Value proposition enables prospects to see what you are up to and if it resonates well with their life situation and pains or aspirations, they connect with you. They get that you empathise with them and care about them. They are willing to think that you can possibly build something that will solve their problem if you understand their pain so well.

Allows customers to choose you against other alternatives

It gives a reason to be chosen over your competitors. It creates a strong differentiation between you and your competitors.  Your value proposition delivers a synopsis of what you are offering to customers and why they should choose it.

You are able to attract right customers

It increases not only the probability of quantity and also the quality of prospective leads. If your value proposition is clear and strong it would attract the right profile of customers so you are able to derive relevant learning from your experiments when you test the value proposition.

More conviction

The biggest benefit you get from understanding your value proposition is a strengthened belief in your own offering.  If you truly understand the value you bring to customers from a business perspective, you’ll work harder.

Presentations to investors

Whenever you have an opportunity to tell your potential investors about your start-up, your value proposition is an essential part of the package that you will have to explain the whole game plan quickly and clearly.

Attract partners

This will come into play when you want to get partners and attract key employees.  The sooner you have clarity on your value proposition (or a hunch about it), the easier it would be for you to visualise what kind of partnerships you want to target.

Summing up

Value propositions play an integral role in defining your startup’s purpose and validating ideas among your target audience. Directly correlating with the business plan, they quantify the intended market position of your startup and demonstrate the fundamental value of your product offerings in the mind of your target audience.

The inability to communicate your purpose and value to your target audience, in a clear and concise manner, is a death sentence for even the best ideas. Often times, it is one of the root causes in the failure startups.

Ensure you are not one of them and give a shit to value proposition from today!