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Your Startup’s Value Proposition
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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.

Unique Attributes

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.

Novel Product?

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” Example

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.

The Competition

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.

Defining Your Value Proposition

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.

Bryan JaneczkoFounder, Wicked Start
Bryan has successfully launched multiple startups. His latest venture, Wicked Start, provides tools to plan, fund, and launch a new business. Also author of WickedStart: Guide to Starting a New Venture with Passion and Purpose, Bryan is committed to helping small businesses grow and succeed.
www.wickedstart.com | Facebook | @WickedStart | LinkedIn | More from Bryan

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Discussion (2) Comment


  1. Ron TomlinVisitor

    Relevance to the audience may require differentiator tailoring


  2. Liz AlexanderVisitor

    What a terrific article, Bryan. Would that every organization — start up or otherwise — reads it and takes action on your wisdom. You are right in pointing out that most companies need help identifying their value proposition.

    At Leading Thought we’ve recognized that many need help in not just identifying their competition (which is often broader than they think) but how their products and services are differentiated, if at all. After more than a quarter century working with businesspeople at all levels, it’s remarkable to me how many have great difficulty in truly putting themselves in others’ shoes.

    When business was predicated on tangible assets the mantra was “location, location, location.” Today I believe it needs to be “research, research, research.” As you point out, much of this is as simple as having two-way conversations with your target market.

    One of our case studies is a perfect example of this. Sinclair Knight Merz is a global engineering projects firm that packages their thought leadership in such a way to encourage clients to engage in more meaningful conversations. As Dale Bryce of SKM told us: “Our thought leadership content prompts conversations and things that ordinarily don’t get aired…we are amazed at what clients will tell you under those circumstances. What they tell us empowers SKM to empower them. Helping us to maintain positive relationships.”

    I know I’ve veered away from the concept of a “startup” but I believe there is huge value in studying what works across all business stages and industries.

 

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