The Value Proposition Statement is much more useful than it appears

The Value Proposition Statement (or VPS, referred to as an Ad-lib by Strategyzer) is one of the outputs of the Value Proposition process. A VPS takes the following form:

Our <products and services>

help(s) <customer segment>

who want to <jobs to be done>

by <verb, e.g. reducing, avoiding><customer pain>

and <verb, e.g. increasing, enhancing><customer gain>

unlike <competitor>

It is intended as a way of quickly shaping alternative directions for the value proposition. In this respect it can seem somewhat ‘throwaway’. However, it is also intended to force startups to pinpoint exactly how they are going to create value. This makes it invaluable, particularly the <products and services> and <jobs to be done> part.

The reason it is so powerful is that, during the Value Proposition Workshop, startups are only allowed as many words as will fit on one Post-it note for any of the sections in the statement. This means that with the VPS they are trying to sum up both the problem and the solution in approximately 50cm2 paper (with large handwriting!). The advantage it has for the facilitator is that it exposes the biggest implicit assumptions of the founders, which makes it a perfect tool for challenging those assumptions.

Take the case of AskWinston, the virtual concierge. Their initial version of the <jobs to be done> description was:

Seamless delivery of high quality services (without being at home)

It was the word “seamless” that stood out for me. I asked them whether they had mapped out the workflow involved in delivering all of the services they intended to provide, including accounting for issues and problems when things don’t go according to plan. The answer was “no”. In that case, I asked, how can the delivery of those services be seamless? As a result, a top priority for them has been to map out these workflows. This not only to supports their vision but also helps them to expand their business by creating a process manual to give to their employees/franchisees that explains how to do things the ‘AskWinston way’.

In the process of selecting the <jos to be done> an alternative that was considered was:

Trusted delegation of responsibility

This also struck a chord because up until this point they had been talking about how much time/money they would save customers. Their discussions had implied that this was a big issue for potential customers. However, when they asked existing customers what they liked about the service the response was:

You just get stuff done

There was, apparently, no mention of the time/money saved but rather the peace of mind in delegating the responsibility. This was significant because it shapes the way they describe their service. Rather than saying:

Use AskWinston because it saves you time and money

they can now say:

Use AskWinston because we get stuff done. Oh, and we also save you time and money

This is likely to be much more resonant for potential customers.

Another example is Watchkeeper International. Their initial version of <products and services> was:

Mapping platform integrating in-house systems with third-party risk data for situational awareness

On seeing this it immediately became clear to me that this could not be their business, not in the next 6-12 months anyway. So I asked:

Which of these are you? Are you a mapping platform, a systems integrator or a provider of situational awareness?

The answer was that they were not a mapping platform so much as a platform that included a map. Neither did they provide situational awareness services but rather data to support situational awareness. In fact, they are systems integrators. This is incredibly significant in shaping their operational strategy going forward and in determining the experiments to be done.

The nature of their target customers is such that systems integration will only be possible once they have established their credibility. To this end, they first concentrated on providing data to support situational awareness by building their Stormwatch system. This provides a more easily attainable route that will ultimately allow them to integrate with their customers’ systems.

I’ve heard the criticism that the VPS is too constraining, but I believe this is unfair. You can make multiple VPSs, each of which expresses a different aspect of your product or service. The VPS is simply a tool for exploring and for challenging your thinking.