One of the most important things to consider as you refine the idea for your new business is your startup’s value proposition. Think about what makes your idea special. Consider why anyone should buy your product, or visit your website, or eat at your restaurant, or hire you as a consultant instead of using the alternatives. This is your value proposition.
Your business idea should include something beyond what everyone else in the marketplace already offers. Which unique attributes will your business will bring to the table: customer service, technology, a special process, better taste, lower price, faster delivery, or a combination of things? This is what will set you apart from your competition and make your product or service more appealing to your potential customers. Even something as simple as more attractive packaging could make the difference for many consumers.
Even brand-new concepts may fulfill the same function as older ones, so you’ll have to be clear on what you are providing that makes it worthwhile for people to break their habits and loyalties. If your concept is extremely cutting-edge, you may have to introduce your product by demonstrating why it’s game-changing to help people see how it can help them.
Square is an online/mobile payment technology that has revolutionized who and how credit card payments can be processed. Until Square, if you were a merchant wanting to accept credit cards, you had to get expensive equipment, complete onerous signup forms, and pay high fees. Square developed a little plug to insert into your iPhone/iPad that allows vendors to run credit card transactions immediately with easy and low cost setup options. Now, millions of small business owners can accept mobile payments on the go, like food vendors at a fair, admission fees for a concert, or joining a club. This technology has brought real novelty and innovation to the payments market which desperately needed to be more efficient. Congratulations to founder Jack Dorsey for a great value proposition.
As you think about what differentiates your business from all of the other options in the marketplace, you’ll want to consider the competition. Ask yourself who else is providing products or services that could meet your potential customers’ needs. Are there many or just a few companies vying for the same customers? What value proposition (similar to the “unique selling proposition” or USP by many marketers) does each of your competitors represent? I recommend that you do some basic market research by searching the Internet for the keywords you would use to describe your business. In addition to online research, you may want to conduct in-person research such as interviews or surveys. Try talking to people who buy your competitors’ goods or services. Find out what they like and dislike, what they wish were different, and what would make them switch to something new.
It is worth spending some time to articulate exactly what your startup’s value proposition will be. Need some help? Wicked Start offers many examples of value proposition statements for businesses in a variety of industries, including the food service, social media, and retail products. Mind Tools offers a 4-step process designed to help you create a short statement that clearly communicates the benefits that your potential client gets by using your product, service or idea. And Conversion XL presents specific ideas about what is – and what isn’t – a good statement of your value proposition.