How to create products and services customers want. Get started with… Value Proposition Design strategyzer.com/vpd
Written by Alex Osterwalder Yves Pigneur Greg Bernarda Series Alan Smith
Sequel to Business Model Generation Designed by International Bestseller Trish Papadakos 30+ Languages
1. Canvas 2. Design 3. Test 4. Evolve 1.1 Customer Profile 10 2.1 Prototyping Possibilities 74 3.1 What to Test 188 Create Alignment 260 1.2 Value Map 26 2.2 Starting Points 86 3.2 Testing Step-by-Step 196 Measure & Monitor 262 1.3 Fit 40 2.3 Understanding Customers 104 3.3 Experiment Library 214 Improve Relentlessly 264 2.4 Making Choices 120 3.4 Bringing It All Together 238 Reinvent Yourself Constantly 266 2.5 Finding the Right Business Model 142 Taobao: reinventing (E-)commerce 268 2.6 Designing in Established Organizations 158 CESS SUC VATION TO OBSER TESTING ASSESSMENT 7 QUESTIONS FROM TESTING S TOTYPING STARTING POINT PRO ODEL BUSINESS M HYPOTHESIS FAILED
You’ll love Value Proposition Design if you’ve been… BLAH, BLAH BLAH VI , VII
BLAH… BLAH BLAH INTRO BLAH INTRO OM / VPD / OM / VPD / YZER.C YZER.C G G TE TE STRA STRA Overwhelmed by the task of true Frustrated by unproductive Involved in bold shiny projects value creation meetings and misaligned teams that blew up Disappointed by the failure Sometimes you feel like… You have experienced teams that… You have seen projects that… ǃɲ There should be better tools available to help you create value ǃɲ Lacked a shared language and a shared understanding of ǃɲ Were big bold bets that failed and wasted a lot money. of a good idea. for your customers and your business. customer value creation. ǃɲ Put energy into polishing and refining a business plan until it ǃɲ You might be pursuing the wrong tasks and you feel insecure ǃɲ Got bogged down by unproductive meetings with tons of perpetuated the illusion that it could actually work. about the next steps. unstructured “blah blah blah” conversations. ǃɲ Spent a lot of time building detailed spreadsheets that were Get “From Failure to Success” poster ǃɲ It’s difficult to learn what customers really want. ǃɲ Worked without clear processes and tools. completely made up and turned out to be wrong. ǃɲ The information and data you get from (potential) customers is ǃɲ Were focused mainly on technologies, products, and features ǃɲ Spent more time developing and debating ideas rather than overwhelming and you don’t know how to best organize it. rather than customers. testing them with customers and stakeholders. ǃɲ It’s challenging to go beyond products and features toward a ǃɲ Conducted meetings that drained energy and ended without a ǃɲ Let opinions dominate over facts from the field. deep understanding of customer value creation. clear outcome. ǃɲ Lacked clear processes and tools to minimize risk. ǃɲ You lack the big picture of how all the puzzle pieces fit ǃɲ Were misaligned. ǃɲ Used processes suited for running a business rather than ones together. for developing new ideas.
Value Proposition Design will help you successfully... VIII IX
INTRO INTRO OM / VPD / OM / VPD / YZER.C YZER.C G G New Way TE TE STRA Design, test, STRA Avoid wasting time with ideas that and deliver what won’t work customers want. Leverage the experience and skills Relentlessly test the most important hypotheses underlying of your team your business ideas in order to reduce the risk of failure. This will Get “From Failure to Success” poster allow you to pursue big bold ideas without having to break the Equip your team with a shared language to overcome “blah blah bank. Your processes to shape new ideas will be fit for the task Understand the patterns blah,” conduct more strategic conversations, run creative exer- and complement your existing processes that help you run your of value creation cises, and get aligned. This will lead to more enjoyable meetings business. that are full of energy and produce actionable outcomes beyond Organize information about what customers want in a simple a focus on technology, products, and features toward creating Minimize the risk of a ﬂop. way that make the patterns of value creation easily visible. As value for your customers and your business. a result, you will more effectively design value propositions and profitable business models that directly target your customers’ Get your team aligned. most pressing and important jobs, pains, and gains. Gain clarity.
Helps create Our Value Proposition products and services to You people want Integrates with other business Minimizes risk How to create products and methods of (big) failure services customers want. X The links you see on the Get started with… Value XI
Proposition side of every page point
Design INTRO INTRO strategyzer.com/vpd
Written by Alex Osterwalder to resources in the online Yves Pigneur Apply Integrated with the Helps Business Model Canvas understand what matters Greg Bernarda Series Alan Smith
Sequel to Business Model Generation to customers Designed by International Bestseller Trish Papadakos 30+ Languages Succeed! OM / VPD / companion. VPD Book OM / VPD / Helps Proven and effective + shape ideas suite of business tools YZER.C YZER.C G VPD Online Companion G TE Watch for the Access to advanced TE material and knowledge STRA Strategyzer logo STRA Engaging online and follow the link to 2 3 multimedia content Software- online exercises, supported Practical, visual + methodology enjoyable format tools/templates, Shared language to communicate posters and more. and collaborate Share with and learn from peers Enables practice + skills Note: To gain access to these exclusive online portions of Value Proposition Brief, clear (self-)assessment Design, you'll need to prove you own the book. Keep the book near you to and applicable Instructions help you answer the secret questions and verify your ownership! content avoids to get started confusion Learn Web App + Online Courses Go further with pro tools and courses
The Tools and Process of Value Proposition Design The heart of Value Proposition Design is about applying Tools to the messy Search for value propositions that customers want and then keeping them aligned with what customers want in Post-search. XII Zoom out Value Proposition Design shows you how to use the Value XIII
Proposition Canvas to Design and Test great value propo-
sitions in an iterative search for what customers want. Value INTRO proposition design is a never-ending process in which you INTRO need to Evolve your value proposition(s) constantly to keep it relevant to customers. OM / VPD / OM / VPD / YZER.C YZER.C G G TE TE STRA STRA Progress Manage the messy and nonlinear process of value proposition design and reduce risk by systematically applying adequate tools and processes. Zoom in Canvas Design / Test Evolve Tools Search Post-search Design Squiggle adapted from Damien Newman, Central
An Integrated Zoom out Suite of Tools The Value Proposition Canvas is the The tool at the center of this book. It makes XIV value propositions visible and tangible Environment Map XV
and thus easier to discuss and manage.
It perfectly integrates with the Business helps you understand the context INTRO Model Canvas and the Environment INTRO Map, two tools that are discussed in in which you create. detail in Business Model Generation,* the sister book to this one. Together, OM / VPD / OM / VPD / they shape the foundation of a suite of business tools. YZER.C YZER.C G The G TE TE STRA Business Model Canvas helps you STRA create value for your business. The The Value Proposition Canvas zooms Value Proposition Canvas into the details of two of the building blocks of the Business Model Canvas. helps you create value for your customer. Zoom in * Business Model Generation, Osterwalder and Pigneur, 2010.
Refresher: The Business Model Canvas The Business Model Canvas Designed for: Designed by: Date: Version: XVI Key Partners Key Activities Value Propositions Customer Relationships Customer Segments XVII
Embed your value proposition in a Customer Segments Segment. It is how an organization INTRO viable business model to capture value are the groups of people and/or orga- captures value with a price that INTRO for your organization. To do so, you nizations a company or organization customers are willing to pay. can use the Business Model Canvas, a aims to reach and create value for tool to describe how your organization with a dedicated Value Proposition. Key Resources OM / VPD / OM / VPD / creates, delivers, and captures value. are the most important assets The Business Model, and Value Propo- Value Propositions required to offer and deliver the previ- YZER.C YZER.C G sition Canvas perfectly integrate, with are based on a bundle of products ously described elements. G Key Resources Channels TE the latter being like a plug-in to the and services that create value for a TE former that allows you to zoom into Customer Segment. Key Activities STRA STRA the details of how you are creating are the most important activities an value for customers. Channels organization needs to perform well. describe how a Value Proposition is The refresher of the Business Model communicated and delivered to a Key Partnerships Canvas on this spread is sufficient to Customer Segment through commu- shows the network of suppliers work through this book and create nication, distribution, and sales and partners that bring in external great value propositions. Go to the Channels. resources and activities. Cost Structure Revenue Streams online resources if you are interested in more or get Business Model Genera- Customer Relationships Cost Structure tion,* the sister publication to this book. outline what type of relationship is describes all costs incurred to oper- established and maintained with ate a business model. each Customer Segment, and they explain how customers are acquired Proﬁt and retained. is calculated by subtracting the total of all costs in the Cost Struc- designed by: Business Model Foundry AG The makers of Business Model Generation and Strategyzer This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: Revenue Streams ture from the total of all Revenue http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com result from a Value Proposition Streams. successfully offered to a Customer * Business Model Generation (2010), Osterwalder and Pigneur Download detailed Business Model Canvas Explanation and the Business Model Canvas pdf
Unit C Unit B Value Proposition Unit A Design works for… Are you creating something from scratch on your own or New Ventures Established are you part of an existing organization? Some things will Individuals or teams setting out to Organizations XVIII be easier and some harder depending on your strategic create a great value proposition Teams within existing companies XIX
playground. and business model from scratch setting out to improve or invent value
A start-up entrepreneur deals with different constraints than a project propositions and business models INTRO P leader for a new venture within an existing organization. The tools presented rocess INTRO in this book apply to both contexts. Depending on your starting point you will Get “Innovating in Established execute them in a different way to leverage different strengths and overcome Organizations” poster different obstacles. OM / VPD / OM / VPD / Main challenges Main opportunities Main opportunities Main challenges ǃɲ Produce proof that your ideas can ǃɲ Use speedy decision making and ǃɲ Build on existing value proposi- ǃɲ Get buy-in from top management. YZER.C YZER.C G work on a limited budget. agility to your advantage. tions and business models. ǃɲ Get access to existing resources. G TE ǃɲ Manage involvement of investors ǃɲ Leverage the motivation of owner- ǃɲ Leverage existing assets (sales, ǃɲ Manage cannibalization. TE (if you scale your ideas). ship as a driver for success. channels, brand, etc.). ǃɲ Overcome risk aversion. STRA STRA ǃɲ Risk running out of money before ǃɲ Build portfolios of business ǃɲ Overcome rigid and slow processes. finding the right value proposition models and value propositions. ǃɲ Produce big wins to move the needle. and business model. ǃɲ Manage career risk of innovators.
Use Value Proposition Design to… invent and improve value propositions. The tools we will study work for managing and renewing value propositions XX (and business models) just as much as for creating new XXI
ones. Put the Value Proposition and Business Model to work
to create a shared language of value creation in your orga- INTRO nization. Use them to continuously invent and improve value INTRO propositions that meet customer profiles, which is an under- taking that never ends. OM / VPD / OM / VPD / YZER.C YZER.C G G TE TE STRA STRA Unit C Unit B Unit A Process Invent Improve Invent new value propositions that people want Manage, measure, challenge, improve, and renew with business models that work. existing value propositions and business models.
Assess Your Value Proposition XXII Design Skills XXIII
Complete our online test and assess INTRO whether you have the attitude and INTRO skills required to systematically be successful at value proposition design. Take the test before and after working OM / VPD / OM / VPD / through Value Proposition Design to measure your progress. YZER.C YZER.C G G TE Take your skills test online TE STRA STRA Entrepreneurial Tool Design Thinking Customer Experimentation Knowledge Skills Skills Empathy Skills
You enjoy trying out new things. You don’t see the You systematically use the Value Proposition You explore multiple alternatives before pick- You relentlessly take a customer perspective and You systematically seek evidence that supports risk of failing as a threat but an opportunity to Canvas, Business Model Canvas, and other tools ing and refining a particular direction. You are are even better at listening to customers then your ideas and tests your vision. You experiment learn and progress. You easily navigate between and processes in your search for great value prop- comfortable with the nonlinear and iterative selling to them. at the earliest stages to learn what works and the strategic and the tactical. ositions and business models. nature of value creation. what doesn’t.
Sell Your Colleagues on concerned that we don’t have a methodology to track our Value Proposition Design progress on the development of that new value proposition So, what if and business model. we tried out the XXIV XXV
INTRO CC nv anv s a ( s (an dB B s usin s e s ss INTRO worried that we focus too much on astonished at how poorly Model Canvas) in our products and features instead of aligned product development, Mo C v s) o r creating value for customers. sales, and marketing are when surprised at how often we OM / VPD / next project? OM / VPD / it comes to developing new make stuff nobody wants, xt proj ct? value propositions. despite our good ideas and YZER.C YZER.C G good intentions. G TE TE STRA I am… STRA really disappointed by The Value Proposition Canvas how much we talked blown away by how Value Proposition Customer Segment about value propositions unclear that last amazed by how many Gain Creators and business models at presentation on that resources we wasted when Gains Products our last meeting without new value proposi- that great idea in that last & Services Customer Job(s) really getting tangible tion and business business plan turned out to be Pain Relievers Pains results. model was. a flop because we didn’t test it. Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer strategyzer.com Designed by: Date: Version: Designed for: The Business Model Canvas Customer Segments Value Propositions Customer Relationships Key Activities Key Partners Channels Key Resources Revenue Streams Cost Structure concerned that our product surprised that we invest designed by: Business Model Foundry AG The makers of Business Model Generation and Strategyzer strategyzer.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: development process doesn’t so much in research and not sure if everybody in http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. use a more customer-focused development (R&D), but fail our team has a shared methodology. to invest in developing the understanding of what a good right value propositions and value proposition actually is. business models. Get a slide deck with 10 arguments to use the Value Proposition and Business Model Canvases
The Value Proposition Canvas has two sides. With the Customer Profile p. 10 you clarify your customer understanding. With the Value Map p. 26 you describe how you intend to create value for that customer. You achieve Fit p. 40 between the two when one 1 meets the other.
6 7 1.0 1.0 / / S S A A V V N N A A C C OM / VPD / OM / VPD / YZER.C YZER.C G G TE F it TE STRA STRA Create Value Observe Customers The set of value proposition benefits that you design to attract customers. The set of customer characteristics that you assume, observe, and verify in the market. DEF·I·NI·TION VALUE PROPOSITION Describes the beneﬁts customers can expect from your products and services.
Gain Creators describe how Gains describe the outcomes your products and services customers want to achieve or create customer gains. the concrete benefits they are seeking. 8 1.0 1.0 / Value Customer 9 / S S A A V V N N A A C Map Profile C The Value (Proposition) Map describes The Customer (Segment) Profile describes the features of a specific value proposition a specific customer segment in your OM / VPD / OM / VPD / in your business model in a more structured business model in a more structured YZER.C Fit and detailed way. It breaks your value and detailed way. It breaks the customer YZER.C G proposition down into products and services, down into its jobs, pains, and gains. G TE pain relievers, and gain creators. TE STRA STRA This is a list of all the Customer Jobs describe Products and Services what customers are trying a value proposition is to get done in their work and built around. in their lives, as expressed in their own words. Pain Relievers describe how Pains describe bad outcomes, your products and services risks, and obstacles related to alleviate customer pains. customer jobs. You achieve Fit when your value map meets your customer profile — when your products and services produce pain relievers and gain creators that match one or more of the jobs, pains, and gains that are important to your customer.
10 . Customer Profile
Customer Jobs Jobs describe the things your customers are Supporting jobs Job context trying to get done in their work or in their life. Customers also perform supporting jobs in the Customer jobs often depend on the specific 12 A customer job could be the tasks they are trying context of purchasing and consuming value either context in which they are performed. The context 13 to perform and complete, the problems they as consumers or as professionals. These jobs arise may impose certain constraints or limitations. 1.1 are trying to solve, or the needs they are trying from three different roles: For example, calling somebody on the ﬂy is 1.1 / / S to satisfy. Make sure you take the customer’s different when you are traveling on a train than S A A V V N perspective when investigating jobs. What you ǃɲ BUYER OF VALUE: jobs related to buying when you are driving a car. Likewise, going to the N A A C think of as important from your perspective might value, such as comparing offers, deciding which movies with your kids is different than going with C not be a job customers are actually trying to get products to buy, standing in a checkout line, your partner. done.* completing a purchase, or taking delivery of
Distinguish between three main types of a product or service. Job importance OM / VPD / OM / VPD / customer jobs to be done and supporting jobs: It is important to acknowledge + ǃɲ COCREATOR OF VALUE: jobs related to that not all jobs have the same Important YZER.C YZER.C G Functional jobs cocreating value with your organization, such importance to your customer. Some G TE When your customers try to perform or complete as posting product reviews and feedback or matter more in a customer’s work TE a specific task or solve a specific problem, even participating in the design of a product or life because failing to get them STRA STRA for example, mow the lawn, eat healthy as a or service. done could have serious ramiﬁ- cations. Some are insigniﬁcant - Insignificant consumer, write a report, or help clients as a professional. ǃɲ TRANSFERRER OF VALUE: jobs related to the because the customer cares about other things end of a value proposition’s life cycle, such as more. Sometimes a customer will deem a job Social jobs canceling a subscription, disposing of a product, crucial because it occurs frequently or because When your customers want to look good or gain transferring it to others, or reselling it. it will result in a desired or unwanted outcome. power or status. These jobs describe how custom- ers want to be perceived by others, for example, look trendy as a consumer or be perceived as competent as a professional. Personal/emotional jobs When your customers seek a specific emotional * The jobs to be done concept was developed independently state, such as feeling good or secure, for example, by several business thinkers including Anthony Ulwick of the consulting firm Strategyn, consultants Rick Pedi and Bob seeking peace of mind regarding one’s invest- Moesta, and Professor Denise Nitterhouse of Depaul University. ments as a consumer or achieving the feeling of It was popularized by Clay Christensen and his consulting firm Innosight and Anthony Ulwick’s Strategyn. job security at one’s workplace. Download trigger questions to help ﬁnd customer jobs
The following list of trigger questions can help you think of different potential Customer Pains customer pains: ǃɲ How do your customers define too costly? Pains describe anything that annoys your custom- Risks (undesired potential outcomes) Takes a lot of time, costs too much money, ers before, during, and after trying to get a job What could go wrong and have important neg- or requires substantial efforts? 14 done or simply prevents them from getting a job ative consequences (e.g., “I might lose credibility ǃɲ What makes your customers feel bad? What 15 done. Pains also describe risks, that is, potential when using this type of solution,” or e.g. “A security are their frustrations, annoyances, or things 1.1 bad outcomes, related to getting a job done badly breach would be disastrous for us”). that give them a headache? 1.1 / / S or not at all. ǃɲ How are current value propositions underper- S A A V V N Pain severity forming for your customers? Which features N A A C Seek to identify three types of customer pains and A customer pain can be extreme or are they missing? Are there performance issues + C how severe customers find them: moderate, similar to how jobs can Extreme that annoy them or malfunctions they cite? be important or insigniﬁcant to the ǃɲ What are the main difficulties and challenges Undesired outcomes, problems, customer. your customers encounter? Do they understand OM / VPD / OM / VPD / and characteristics how things work, have difficulties getting certain Pains are functional (e.g., a solution doesn’t work, Moderate things done, or resist particular jobs for specific YZER.C YZER.C G - doesn’t work well, or has negative side effects), reasons? G TE social (“I look bad doing this”), emotional (“I feel ǃɲ What negative social consequences do your TE bad every time I do this”), or ancillary (“It’s annoy- customers encounter or fear? Are they afraid of STRA STRA ing to go to the store for this”). This may also Tip: Make pains concrete. a loss of face, power, trust, or status? involve undesired characteristics customers don’t To clearly differentiate jobs, pains, and gains, ǃɲ What risks do your customers fear? Are they like (e.g., “Running at the gym is boring,” or “This describe them as concretely as possible. For afraid of financial, social, or technical risks, or are design is ugly”). example, when a customer says “waiting in line they asking themselves what could go wrong? was a waste of time,” ask after how many minutes ǃɲ What’s keeping your customers awake at night? Obstacles exactly it began to feel like wasted time. That way What are their big issues, concerns, and worries? These are things that prevent customers from you can note “wasting more than x minutes stand- ǃɲ What common mistakes do your customers even getting started with a job or that slow them ing in line.” When you understand how exactly make? Are they using a solution the wrong way? down (e.g., “I lack the time to do get this job done customers measure pain severity, you can design ǃɲ What barriers are keeping your customers from accurately,” or e.g. “I can’t afford any of the exist- better pain relievers in your value proposition. adopting a value proposition? Are there upfront ing solutions”). investment costs, a steep learning curve, or other obstacles preventing adoption? Download trigger questions
The following list of trigger questions can help you think of different potential Customer Gains customer gains: ǃɲ Which savings would make your customers Gains describe the outcomes and benefits your Unexpected gains happy? Which savings in terms of time, money, customers want. Some gains are required, These are gains that go beyond customer expec- and effort would they value? 16 expected, or desired by customers, and some tations and desires. They wouldn’t even come ǃɲ What quality levels do they expect, and what 17 would surprise them. Gains include functional up with them if you asked them. Before Apple would they wish for more or less of? 1.1 utility, social gains, positive emotions, and cost brought touch screens and the App Store to the ǃɲ How do current value propositions delight your 1.1 / / S savings. mainstream, nobody really thought of them as customers? Which specific features do they S A A V V N part of a phone. enjoy? What performance and quality do they N A A C Seek to identify four types of customer gains in expect? C terms of outcomes and benefits: Gain relevance ǃɲ What would make your customers’ jobs or lives A customer gain can feel essential easier? Could there be a ﬂatter learning curve, + Required gains or nice to have, just like pains can more services, or lower costs of ownership? OM / VPD / Essential OM / VPD / These are gains without which a solution wouldn’t feel extreme or moderate to them. ǃɲ What positive social consequences do your work. For example, the most basic expectation customers desire? What makes them look good? YZER.C YZER.C G that we have from a smartphone is that we can What increases their power or their status? G TE make a call with it. Nice to have ǃɲ What are customers looking for most? Are they TE STRA - searching for good design, guarantees, specific STRA Expected gains or more features? These are relatively basic gains that we expect Tip: Make gains concrete. ǃɲ What do customers dream about? What do from a solution, even if it could work without them. As with pains, it’s better to describe gains as they aspire to achieve, or what would be a big For example, since Apple launched the iPhone, we concretely as possible to clearly differentiate relief to them? expect phones to be well-designed and look good. jobs, pains, and gains from one another. Ask how ǃɲ How do your customers measure success and much they’d expect or dream of when a customer failure? How do they gauge performance or cost? Desired gains indicates “better performance” as a desired gain. ǃɲ What would increase your customers’ likelihood These are gains that go beyond what we expect That way you can note “would love an increased of adopting a value proposition? Do they desire from a solution but would love to have if we could. performance of more than x.” When you under- lower cost, less investment, lower risk, or better These are usually gains that customers would stand how exactly customers measure gains (i.e., quality? come up with if you asked them. For example, we outcomes and benefits), you can design better desire smartphones to be seamlessly integrated gain creators in your value proposition. Download trigger questions with our other devices.
Profile of a “Business Book Reader” get clear leads to recognized We chose to use potential readers of this book to illustrate Gains are benefits, results, and indicators results by team You should know your customers’ can apply the customer profile. We deliberately went beyond jobs, characteristics that custom- to measure (ideally quick social and emotional jobs in addi- progress with 18 pains, and gains merely related to reading books, since we ers require or desire. They are wins) confidence tion to their functional jobs, which look good 19 intended to design an innovative and more holistic value outcomes of jobs or wanted char- easy to buy-in from are usually easier to identify. understand help when connect with with 1.1 proposition for businesspeople in general. leadership acteristics of a value proposition 1.1 / stuck + team like-minded colleagues, / S that help customers get a job people boss, clients S A A V applicable helps me V N The customer profile sketched out on the right is informed by several inter- done well. helps with ideas communicate leads to N A promotion or make things A C views we conducted and thousands of interactions we had with workshop my ideas better improve skill C pay raise people want set + advance participants. However, it is not mandatory to start with preexisting customer clearly collaboration home run career knowledge. You may begin exploring ideas by sketching out a profile based The more tangible and specific concrete Make sure you go beyond a value tips (e.g., to find, learn, on what you believe your potential customers look like. This is an excellent you make pains and gains, the propositions convince improve + apply superficial understanding of jobs. OM / VPD / reduce risk) biz book others about OM / VPD / starting point to prepare customer interviews and tests regarding your better. For example, “examples or build methods Why do customers want to “learn reader preferred a business assumptions about customer jobs, pains, and gains. from my industry” is more (generic) methods new knowledge”? It might be that YZER.C collaborate YZER.C G concrete than “relevant to my too much make they want to bring new methods with others G lack of time TE theory context.” Ask customers how they communicate decisions TE getting stuck or help them in to their organization. Ask “why” + sell ideas with measure gains and pains. Inves- in career or several times to get to the most STRA “translating” confidence STRA tigate how they measure success making jeopardizing run dealing important jobs. things it methods to “day job” or failure of a job they want to with risk + own context nobody stay well uncertainty get done. wants up to date going down lack of management assess + Make sure you deeply under- wrong path boring Make sure you don’t just consider sufficient “not reduce risk stand your customer. If you have budget getting it” content that's jobs, pains, and gains related to only a few sticky notes on your wasting time hard to work a value proposition or product in with ideas through profile, that probably indicates a no clear path mind. Identify those (e.g., “Busi- that don't to applying lack of customer understanding. work ness books are too long”) as well method Unearth as many jobs, pains, and as other extreme pains (e.g., “lack gains as you can. Search beyond of time” or “get boss’s attention”). those directly related to your value proposition.
Ranking Jobs, Job importance Pain severity Gain relevance Pains, and Gains Rank jobs according to their Rank pains according to Rank gains according to importance to customers. how extreme they are in the how essential they are in customers’ eyes. the customers’ eyes. Although individual customer preferences vary, you need to get a sense of customer priorities. Investigate which jobs the + + + 20 majority consider important or insignificant. Find out which Important Extreme Essential 21 pains they find extreme versus merely moderate. Learn which 1.1 gains they find essential and which are simply nice to have. 1.1 / / S getting stuck S A A V in career or helps with V N Ranking jobs, pains, and gains is essential in order to design value proposi- improve skill N A jeopardizing promotion or being A C tions that address things customers really care about. Of course, it’s difficult set + advance it pay raise home run C career look good associated to unearth what really matters to customers, but your understanding will value with with a big buy-in from propositions improve with every customer interaction and experiment. colleagues, going down failure run leadership
It doesn’t matter if you start out with a ranking that is based on what you boss, clients wrong path OM / VPD / “day job” lack of + team leads to OM / VPD / think is important to your potential customers as long as you strive to test well make sufficient results decisions (ideally quick that ranking until it truly reﬂects priorities from the customer’s perspective. budget with management get wins) YZER.C improve YZER.C G confidence “not recognized G or build a getting it” making by team helps me TE TE business things communicate communicate nobody my ideas STRA + sell ideas dealing with wants clearly STRA risk + help when assess and uncertainty stuck clear reduce risk lack of time indicators make things wasting time to measure people want with ideas applicable progress collaborate that don't ideas with others work no clear path leads to or help them convince to applying better others about method collaboration preferred “translating” can apply find, learn, methods methods to with + apply own context boring confidence concrete methods content that's tips (e.g., to stay hard to work reduce risk) up to date too much through easy to theory understand - Insignificant - Moderate Nic - e to have
Step into Your Customer Profile EXERCISE Customers’ Shoes Instructions EXERCISE Map the profile of one of your currently existing customer segments to practice using the customer OBJECTIVE OUTCOME profile. If you are working on a new idea, sketch out Visualize what matters to your 1 page actionable customer profile the customer segment you intend to create value for. 22 customers in a sharable format 23 1. Download the Customer Profile canvas. 1.1 How good is your understanding of your customers’ jobs, 2. Grab a set of small sticky notes. 1.1 / / S S A pains, and gains? Map out a customer profile. 3. Map out your customer profile. A V V N N A A C C OM / VPD / + + + OM / VPD / YZER.C YZER.C G G TE TE STRA STRA - - - 1 2 3 4 5 Select customer Identify customer jobs Identify customer pains Identify customer gains Prioritize jobs, pains segment Ask what tasks your What pains do your What outcomes and and gains Select a customer customers are trying to customers have? Write benefits do your custom- Order jobs, pains and segment that you want complete. Map out all of down as many as you ers want to achieve? gains in a column each to profile. their jobs by writing each can come up with, Write down as many with the most important one on an individual including obstacles and gains as you can come jobs, most extreme pains sticky note. risks. up with. and essential gains on top and the moderate pains and nice to have gains at the bottom. Copyright Business Model Foundry AG Do this exercise online The makers of Business Model Generation and Strategyzer Download the Customer Proﬁle pdf
Best Practices for Mapping Avoid frequently committed mistakes Jobs, Pains, and Gains when profiling a customer, and instead follow these best practices. Pains vs. Gains Ask “why” several times until you 24 C × ommon Mistakes When you get started with the customer profile, really understand your customers’ 25 you might simply put the same ideas in pains and jobs to be done. 1.1 Mixing several Mixing jobs and Focusing on functional Listing jobs, pains, and Identifying few jobs, Being too vague in gains as opposites of each other. For example, Another issue when you get started with the 1.1 / / S customer segments outcomes jobs only and forgetting gains with your value pains, and gains descriptions of pains if one of the customers’ jobs to be done is “earn customer profile is that you might settle with S A A V V N into one profile social and emotional proposition in mind and gains more money,” you might start by adding “salary a superficial understanding of your customer’s N A A C jobs increase to gains” and “salary decrease” to pains. jobs. To avoid this, you need to ask yourself why C a customer wants to perform a certain job to dig Here’s a better way to do it: deeper toward the real motivations. OM / VPD / Best Pr √ actices ǃɲ Find out precisely how much more money the
For example, why might a customer want to OM / VPD / customer expects to earn so it feels like a gain learn a foreign language? Maybe because the Make a Value Proposi- Jobs are the tasks Sometimes social or When you map your A good customer profile Make pains and gains and investigate what decrease would feel like “real” customer job to be done is to improve his YZER.C YZER.C G tion Canvas for every customers are trying to emotional jobs are even customer, you should is full of sticky notes, tangible and concrete. a pain. CV. Why does he want to improve his CV? Maybe G TE different customer perform, the problems more important than the proceed like an anthro- because most customers Rather than just writing ǃɲ In the pains, add the barriers that prevent or because he wants to earn more money. TE segment. If you sell to they are trying to solve, “visible” functional jobs. pologist and “forget” have a lot of pains and “salary increase” in make it difficult to get a job done. In our exam-
Don’t settle until you really understand the STRA STRA companies, ask yourself or the needs they are “Looking good in front of what you are offering. expect or desire a lot of gains, specify how ple the pain might be “my employer doesn’t underlying jobs to be done that really drive if you have different trying to satisfy, whereas others” might be more For example, a business gains. Map out all your much of an increase a give raises.” customers. types of customers gains are the concrete important than finding a publisher should not (potential) customers’ customer is seeking. ǃɲ In the pains, add the risks related to not getting within each company outcomes they want to great technical solution map jobs, pains, and important jobs, extreme Rather than writing the job done. In our example the pain could be (e.g., users, buyers). achieve — or avoid and that helps complete the gains merely related to pains, and essential “takes too long” in pains, “might not be able to afford my child’s future eliminate in the case of job effectively. books, because a reader gains. indicate how long “too college tuition.” pains. has the choice between long” actually is. This will business books, consul- allow you to understand tants, YouTube videos, or how exactly customers even completing an MBA measure success and program or training. Go failure. beyond the jobs, pains, and gains you intend or hope to address with your value proposition.
26 .2 Value Map
Products and Services 28 This is simply a list of what you offer. Your value proposition is likely to be composed 29 Think of it as all the items your cus- of various types of products and services: 1.2 tomers can see in your shop window 1.2 / / S S A — metaphorically speaking. It’s an Physical/tangible A V V N enumeration of all the products and Goods, such as manufactured products. N A A C services your value proposition builds C on. This bundle of products and services Intangible helps your customers complete either Products such as copyrights or services such functional, social, or emotional jobs or as after-sales assistance. OM / VPD / OM / VPD / helps them satisfy basic needs. It is crucial to acknowledge that products Digital YZER.C YZER.C G and services don’t create value alone Products such as music downloads or services G TE only in relationship to a specific cus- such as online recommendations. TE tomer segment and their jobs, pains, STRA STRA and gains. Financial Products such as investment funds and Your list of products and services may insurances or services such as the financing also include supporting ones that of a purchase. help your customers perform the roles of buyer (those that help customers Relevance compare offers, decide, and buy), It is essential to acknowledge that + co-creator (those that help customers Essential not all products and services have co-design value propositions), and the same relevance to your custom- transferrer (those that help customers ers. Some products and services are dispose of a product). essential to your value proposition, Nice to have some are merely nice to have. -
Pain Relievers Pain relievers describe how exactly The following list of trigger questions can help you Relevance your products and services alleviate think of different ways your products and services A pain reliever can be more or less + 30 specific customer pains. They explicitly may help your customers alleviate pains. valuable to the customer. Make sure Essential 31 outline how you intend to eliminate or you differentiate between essential 1.2 reduce some of the things that annoy Ask yourself: Could your products and services… pain relievers and ones that are 1.2 / / S S A your customers before, during, or after nice to have. The former relieve A V V N they are trying to complete a job or ǃɲ produce savings? In terms of time, money, or extreme issues, often in a radical Nice to have N A A C way, and create a lot of value. The - that prevent them from doing so. efforts. C ǃɲ make your customers feel better? By killing frus- latter merely relieve moderate pains. Great value propositions focus on pains trations, annoyances, and other things that give that matter to customers, in particular customers a headache. OM / VPD / OM / VPD / extreme pains. You don’t need to come ǃɲ fix underperforming solutions? By introducing new up with a pain reliever for every pain features, better performance, or enhanced quality. YZER.C YZER.C G you’ve identified in the customer pro- ǃɲ put an end to difficulties and challenges your G TE file — no value proposition can do this. customers encounter? By making things easier or TE Great value propositions often focus eliminating obstacles. STRA STRA only on few pains that they alleviate ǃɲ wipe out negative social consequences your extremely well. customers encounter or fear? In terms of loss of face or lost power, trust, or status. ǃɲ eliminate risks your customers fear? In terms of financial, social, technical risks, or things that could potentially go wrong. ǃɲ help your customers better sleep at night? By addressing significant issues, diminishing concerns, or eliminating worries. ǃɲ limit or eradicate common mistakes customers make? By helping them use a solution the right way. ǃɲ eliminate barriers that are keeping your customer from adopting value propositions? Introducing lower or no upfront investment costs, a ﬂatter learning curve, or eliminating other obstacles preventing adoption. Download trigger questions
Gain Creators Gain Creators describe how your The following list of trigger questions can help ǃɲ help make adoption easier? Through lower cost, products and services create customer you think of different ways your products and fewer investments, lower risk, better quality, 32 gains. They explicitly outline how services may help your customers obtain required, improved performance, or better design. 33 you intend to produce outcomes and expected, desired, or unexpected outcomes and ǃɲ help make adoption easier? Through lower cost, 1.2 benefits that your customer expects, benefits. improved investments, lower risk, better quality, 1.2 / / S S A desires, or would be surprised by, improved performance, or better design. A V V N including functional utility, social gains, Ask yourself: Could your products and services… N A A C positive emotions, and cost savings. Relevance C ǃɲ create savings that please your customers? A gain creator can produce more or + As with pain relievers, gain creators In terms of time, money, and effort. less relevant outcomes and beneﬁts Essential don’t need to address every gain ǃɲ produce outcomes your customers expect or for the customer just like we have OM / VPD / OM / VPD / identified in the customer profile. that exceed their expectations? By offering seen for pain relievers. Make sure Focus on those that are relevant to quality levels, more of something, or less of you differentiate between essential YZER.C YZER.C G customers and where your products Nice to have something. and nice to have gain creators. G TE - and services can make a difference. ǃɲ outperform current value propositions and TE delight your customers? Regarding specific STRA STRA features, performance, or quality. ǃɲ make your customers’ work or life easier? Via better usability, accessibility, more services, or lower cost of ownership. ǃɲ create positive social consequences? By making them look good or producing an increase in power or status. ǃɲ do something specific that customers are look- ing for? In terms of good design, guarantees, or specific or more features. ǃɲ fulfill a desire customers dream about? By help- ing them achieve their aspirations or getting relief from a hardship? ǃɲ produce positive outcomes matching your customers’ success and failure criteria? In terms of better performance or lower cost. Download trigger questions
Mapping the Value Proposition of Value Gain creators highlight how exactly helps create proven + your products and services help helps shape products effective share with customers achieve gains. Each gain ideas + services suite of busi- and learn 34 Proposition people want ness tools from peers creator addresses at least one or 35 software- more pains or gains. Don’t add prod- 1.2 step-by-step helps under- supported shared 1.2 / Design ucts or services here. instructions stand what methodology language to / S S A to get matters to communicate A V V N Remarkable value propositions focus started enables customers + collaborate N A Value practice + A C on jobs, pains, and gains that mat- Proposition Book skills (self-) C ter to customers and achieve those Canvas assessment access to exceedingly well. Again, you should not advanced try to address all customer pains and material + OM / VPD / exclusive online exer- OM / VPD / gains. Focus on those that will make a cises, tools, value knowlege online difference for your customer. templates, proposition companion YZER.C community design YZER.C G practical, G TE visual + TE enjoyable STRA Web app online course format STRA It’s okay to aggregate several (upsell) (upsell) minimizes integrates value propositions into one. risk of (big) with other failure business methods “Naked” list of the products integrated engaging and services that your value brief, clear Formal Map with online proposition builds on to + applicable Business multimedia of how we believe content target a specific customer Model Canvas content the products and segment. services around this book create value for customers Pain relievers outline how exactly your products and services kill customer pains. Each pain reliever addresses at least one or more pains or gains. Don’t add products or services here.
Map How The Value Map EXERCISE Your Products EXERCISE and Services 36 Create Value 37 1.2 1.2 / / S OBJECTIVE OUTCOME S A A V V N Describe explicitly 1 page map of value N A A C how your products creation C and services create value OM / VPD / OM / VPD / Instructions Sketch out the value map of one of your existing + + + YZER.C YZER.C G value propositions. For example, use one that G TE targets the customer segment you profiled in the TE previous exercise. It’s easier to get started with an STRA STRA existing value proposition. However, if you don’t have one yet, sketch out how you intend to create - - - value with a new idea. We will cover the creation of new value propositions more specifically later on in 1 2 3 4 this book. List products and services Outline pain relievers Outline gain creators Rank by order of importance For now: List all the products and services of Outline how your products and Explain how your products and Rank products and services, pain 1. Grab the Customer Profile you previously your existing value proposition. services currently help customers alle- services currently create expected relievers, and gain creators according completed. viate pains by eliminating undesired or desired outcomes and benefits for to how essential they are to customers. 2. Download the Value Map. outcomes, obstacles, or risks. Use one customers. Use one sticky note per 3. Grab a set of small sticky notes. sticky note per pain reliever. gain creator. 4. Map out how you create value for your customers. Copyright Business Model Foundry AG Download the Value Map pdf The makers of Business Model Generation and Strategyzer Do this exercise online
Best Practices for Mapping Value Creation ? 38 39 Pain relievers vs. Gain creators What is the difference with the pains 1.2 Pain relievers and gain creators both create value and gains in the customer profile? 1.2 / / S S A C A V × ommon Mistakes for the customer in different ways. The difference Pain relievers and gain creators are distinctly V N is that the former specifically addresses pains different from pains and gains. You have control N A A C in the customer profile, while the latter specifi- over the former, whereas you don’t have control List all your products and services Add products and services to the pain Offer pain relievers and gain creators Make the unrealistic attempt to C cally addresses gains. It is okay if either of them over the latter. You decide (i.e., design) how you rather than just those targeted at a reliever and gain creator fields. that have nothing to do with the pains address all customer pains and gains. addresses pains and gains at the same time. intend to create value by addressing specific jobs, specific segment. and gains in the customer profile. The main goal of these two areas is to make the pains, and gains. You don’t decide over which OM / VPD / OM / VPD / customer value creation of your products and jobs, pains, and gains the customer has. And no Best Pr √ actices services explicit. value proposition addresses all of a customer’s YZER.C YZER.C G jobs, pains, and gains. The best ones address G TE those that matter most to customers and do so Products and services create value Pain relievers and gain creators are Remember that products and services Realize that great value propositions TE extremely well. only in relationship to a specific explanations or characteristics that don’t create value in absolute terms. are about making choices regard- STRA STRA customer segment. List only the make the value creation of your prod- It is always relative to customers’ jobs, ing which jobs, pains, and gains to bundle of products and services that ucts and services explicit. Examples pains, and gains. address and which to forgo. No value jointly form a value proposition for a include “helps save time”, and “well- proposition addresses all of them. If specific customer segment. designed.” your value map indicates so, it’s prob- ably because you’re not honest about all the jobs, pains, and gains that should be in your customer profile.
40 .3 Fit
Customers expect and desire a lot from products and services, yet they also know they can’t have it all. Focus on those gains that matter most to customers and make a difference. Are you addressing essential 42 customer 43 1.3 1.3 / / S S A A V Fit gains? V N N A A C You achieve fit when customers get Your customers are the judge, C excited about your value proposition, jury, and executioner of your which happens when you address value proposition. They will be important jobs, alleviate extreme merciless if you don’t find fit! OM / VPD / OM / VPD / pains, and create essential gains that customers care about. As we will YZER.C Fit YZER.C G explain throughout this book, Fit is G TE hard to find and maintain. Striving for TE fit is the essence of value proposition STRA STRA design. Are you addressing extreme customer pains? Customers have a lot of pains. No organization can reasonably address all of them. Focus on those headaches that matter most and are insufficiently addressed.
Fit? When we designed the value proposition × get for this book, we strived to address some √ clear leads to √ recognized of the most important jobs, pains, and √ √ √ √ √ helps create proven + indicators results by team helps shape products effective share with to measure can apply gains that potential customers have and (ideally quick ideas + services suite of busi- and learn progress with 44 √ wins) that are insufficiently addressed by current from peers √ confidence × × people want ness tools 45 software- √ easy to buy-in from look good business book formats. √ √ √ 1.3 step-by-step helps under- supported shared understand help when leadership + connect with with methodology 1.3 / stuck instructions stand what language to √ team like-minded colleagues, / S people boss, clients S A to get matters to communicate √ A V × √ √ √ enables applicable V N √ √ started customers + collaborate helps with helps me √ N A practice + ideas communicate leads to Value promotion or make things A C skills (self-) my ideas better improve skill Proposition Book C pay raise people want √ assessment clearly collaboration set + advance Canvas √ access to home run career concrete × convince advanced value tips (e.g. to √ √ others about √ √ material + propositions OM / VPD / online exer- reduce risk) find, learn, improve exclusive knowlege biz book preferred OM / VPD / apply or build cises, tools, value online reader methods methods a business templates, proposition × companion √ √ (generic) YZER.C community design √ YZER.C G √ √ collaborate practical, too much make with others G TE visual + lack of time theory × communicate decisions √ √ TE enjoyable getting stuck or help them + sell ideas with format in career or STRA Web app online course √ boring √ confidence × STRA √ √ √ making jeopardizing (upsell) (upsell) dealing content that's run × minimizes integrates things it √ with risk + hard to work “day job” × risk of (big) with other nobody stay uncertainty through well failure business wants up to date √ methods √ √ × × going down √ integrated √ engaging lack of management assess + × brief, clear wrong path with online sufficient “not “translating” reduce risk Check marks signify that prod- + applicable Business multimedia budget getting it” methods to Xs show which jobs, pains, content √ Model Canvas content wasting time ucts and services relieve pains √ own context and gains the value proposition with ideas no clear path or create gains and directly that don't does not address. to applying address one of the customersˇ work method jobs, pains, or gains.
Check EXERCISE Your Fit EXERCISE OBJECTIVE OUTCOME Verify if you are Connection between 46 addressing what mat- your products and 47 ters to customers services and customer 1.3 jobs, pains, and gains 1.3 / / S S A A V V N Do this exercise online N A A C C 1 2 Instructions Outcome OM / VPD / OM / VPD / Bring in the Value Proposition Map and Customer If a Pain reliever or Gain creator doesn’t Fit Segment Profile you completed earlier. Go through anything, it may not be creating customer value. YZER.C YZER.C G Pain Relievers and Gain Creators one by one, and Don’t worry if you haven’t checked all pains/ G TE check to see whether they fit a customer job, pain, gains — you can’t satisfy them all. Ask yourself, TE or gain. Put a check mark on each one that does. how well does your Value Proposition really fit STRA STRA your Customer? Download the Value Proposition Canvas pdf
3 Business Model Fit 48 Three Kinds of Fit On Paper In the Market In the Bank 49 1.3 1.3 / / S S A Searching for Fit is the process of 1. Problem-Solution Fit 2. Product-Market Fit 3. Business Model Fit A V V N designing value propositions around Problem-solution fit takes place when you Product-market fit takes place when you Business model fit takes place when you N A A C products and services that meet jobs, ǃɲ Have evidence that customers care about ǃɲ Have evidence that your products and services, ǃɲ Have evidence that your value proposition C pains, and gains that customers really certain jobs, pains, and gains. pain relievers, and gain creators are actually can be embedded in a profitable and scalable care about. Fit between what a com- ǃɲ Designed a value proposition that addresses creating customer value and getting traction in business model. pany offers and what customers want OM / VPD / 2 those jobs, pains and gains. the market. OM / VPD / is the number one requirement of a A great value proposition without a great busi- successful value proposition. Product-Market Fit At this stage you don’t yet have evidence that During this second phase, you strive to validate or ness model may mean suboptimal financial YZER.C YZER.C G customers actually care about your value propo- invalidate the assumptions underlying your value success or even lead to failure. No value prop- G TE Fit happens in three stages. The first sition. proposition. You will inevitably learn that many osition — however great — can survive without a TE occurs when you identify relevant
This is when you strive to identify the jobs, of your early ideas simply don’t create customer sound business model. STRA STRA customer jobs, pains, and gains you pains, and gains that are most relevant to value (i.e., customers don’t care) and will have to
The search for business model fit entails a believe you can address with your customers and design value propositions accord- design new value propositions. Finding this second laborious back and forth between designing a value proposition. The second occurs ingly. You prototype multiple alternative value type of fit is a long and iterative process; it doesn’t value proposition that creates value for customers when customers positively react to propositions to come up with the ones that happen over night. and a business model that creates value for your your value proposition and it gets produce the best fit. The fit you achieve is not organization. You don’t have business model fit traction in the market. The start-up yet proven and exists mainly on paper. Your next until you can generate more revenues with your movement calls these problem-solu- steps are to provide evidence that customers care value proposition than you incur costs to create tion fit and product-market fit, respec- about your value proposition or start over with and deliver it (or “them” in the case of platform tively. The third occurs when you find designing a new one. models with more than one interdependent value a business model that is scalable and propositions). profitable. Get “Fit” poster 1 Problem-Solution Fit
Design, Test, Repeat The search for value propositions that meet customer jobs, pains, and gains is a continuous back and forth 62 between designing prototypes and 63 testing them. The process is iterative 1.3 rather than sequential. The goal of 1.3 / / S S A Value Proposition Design is to test A V V N ideas as quickly as possible in order to N A A C learn, create better designs, and test design C again. OM / VPD / OM / VPD / YZER.C YZER.C G G TE TE STRA STRA test
Kick-start value proposition design with Prototyping Possibilities p. 74 for one of your Starting Points p. 86. Shape your value propositions by Understanding Customers p. 104, then select which ones you want to further explore by Making Choices p. 120 2 and Finding the Right Business Model p. 142. If you are an existing company, discover the particularities of Designing in an Established Organization p. 158.
VATION TO OBSER TESTING ASSESSMENT 7 QUESTIONS FROM TESTING S TOTYPING STARTING POINT PRO ODEL BUSINESS M FAILED
What’s Prototyping? Tips ǃɲ Spend a maximum of 5 to 15 minutes on sketching out your early prototypes. Use the activity of making quick and rough study models of ǃɲ Always use a visible timer and stick to a your idea to explore alternatives, shape your value proposi- predefined time frame. tion, and find the best opportunities. Prototyping is common ǃɲ Don’t discuss too long which one of several in the design professions for physical artifacts. We apply possible directions to prototype. Prototype 76 it to the concept of value propositions to rapidly explore several of them quickly and then compare. 77 possibilities before testing and building real products and ǃɲ Remember constantly that prototyping is 1 1 2. services. an exploratory tool. Don’t spend time on the 2. / / N details of a prototype that is likely to change N IG IG S radically anyway. S E E D D OM / VPD / OM / VPD / DEF·I·NI·TION YZER.C YZER.C G Prototyping G TE The practice of building quick, Our ______ help(s) ______ who TE inexpensive, and rough study STRA STRA models to learn about the desir- want to _______ by _______ and ability, feasibility and viability of alternative value propositions _______ . ( unlike _______ ) and business models. Napkin Sketches Ad-libs Value Proposition Canvases Representation of Minimum Viable Product → p. 80 → p. 82 → p. 84 a Value Proposition → p. 223 Quickly explore radically → p. 234 different directions for the Make alternatives tangible with napkin Pinpoint how different alternatives Flesh out possible directions with the Build a minimum feature set that same idea with the following sketches. Use a single sketch for every create value by filling in the blanks in Value Proposition Canvas. Understand Help customers and partners under- brings your value proposition to life prototyping techniques before potential direction your idea could short ad-libs. which jobs, pains, and gains each stand potential value propositions and allows testing it with customers refining one in particular. take. alternative is addressing. by bringing them to life — yet without and partners. building them. More in section 3. Test, → p. 172
Tip The Journalist: Capture your biggest insights from all the EXERCISE Interview Your Customers EXERCISE interviews. OBJECTIVE OUTCOME Gain a better customer understanding First lightly validated customer 2 3 7 110 profile(s) Create an Conduct interview Synthesize 111 interview outline Conduct the inter- Make a separate 2.3 Talk to customers to gain insights relevant to your context. Ask yourself what view by following the synthesized customer 2.3 / / N Use the Value Proposition Canvas to prepare interviews and you want to learn. interview ground rules profile for every N IG IG S organize the chaotic mass of information that will be coming Derive the interview outlined on the next customer segment S E E D at you during the interviews process. questions from your page. that emerges from D customer profile. all your interviews. Ask about the most Write down your most important jobs, pains, important insights on OM / VPD / OM / VPD / and gains. sticky notes. YZER.C YZER.C G G TE TE STRA 10 x STRA 1 Create a 5 4 6 Customer Profile Sketch out the jobs, Review interview Capture Search for patterns
pains, and gains you Assess if you need to Map out the jobs, Make sure you also Can you discover Why are they similar believe characterize review the interview pains, and gains you capture business similar jobs, pains, or different? Can you the customer you are questions based on learned about in the model learnings. and gains? What detect specific (recur- targeting. Rank jobs, what you learned. interview on an empty Write down your most stands out? What is ring) contexts that pains, and gains in customer profile. important insights. similar or different inﬂuence jobs, pains, order of importance. among interviewees? and gains?
Reduce the risk and uncertainty of your ideas for new and improved value propo- sitions by deciding What to Test p. 188. Then, get started with Testing Step by Step p. 196 and drawing from the Experiment Library p. 214 before Bringing it All Together p. 238 and 3 measuring your progress.
CESS SUC HYPOTHESIS
Overview of the Testing Process 198 199 3.2 3.2 / / TEST + + TEST OM / VPD / OM / VPD / Test Card Learning Card YZER.C YZER.C G G TE TE STRA ! STRA - - Extract Hypotheses Prioritize Hypotheses Design Test Prioritize Tests Run Tests Capture Learnings Make Progress → p. 200 → p. 202 → p. 204 → p. 205 → p. 205 → p. 206 → p. 242–245 Design Testing Get “Testing Process Overview” poster
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Rank the Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer Define a target Time Required: Tip most critical hypotheses highest, but threshold to validate Consider testing the most critical hypoth- prioritize cheap and quick tests to be or invalidate the tested Indicate how long it eses with several experiments. Start with done early in the process, when uncer- step 4: criteria hypothesis. We are right if takes until this test cheap and quick tests. Then follow-up tainty is at its maximum. Increase your if we can achieve a click-through rate (CTR) Caveat: Consider produces results. with more elaborate and reliable tests if spending on experiments that produce following up with addi- necessary. 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Use the Value Proposition and Business Model Canvas as a shared language to Create Alignment p. 260 throughout every part of your organization while it continuously evolves. Make sure you constantly Measure and Monitor p. 262 your 4 value propositions and business models in order to Improve Relentlessly p. 264 and Reinvent Yourself Constantly p. 266.
Glossary 276 (Business) Hypothesis Customer Insight Fit Minimum Viable Product (MVP) Value Map 277 Something that needs to be true for your idea to Minor or major breakthrough in your customer When the elements of your Value Map meet A model of a value proposition designed specifically Business tool that constitutes the left-hand side work partially or fully but that hasn't been vali- understanding helping you design better value relevant jobs, pains, and gains of your Customer to validate or invalidate one or more hypotheses. of the Value Proposition Canvas. Makes explicit ORD ORD dated yet. propositions and business models. Segment and a substantial number of customers how your products and services create value by “hire” your value proposition to satisfy those jobs, Pain Relievers alleviating pains and creating gains. AFTERW Business Model Customer Pains pains, and gains. Describes how products and services alleviate AFTERW Rationale of how an organization creates, delivers Bad outcomes, risks, and obstacles that custom- customer pains by eliminating or reducing bad Value Proposition and captures value. ers want to avoid, notably because they prevent Gain Creators outcomes, risks, and obstacles that prevent Describes the benefits customers can expect from them from getting a job done (well). Describes how products and services create gains customers from getting a job done (well). your products and services. OM / VPD / OM / VPD / Business Model Canvas and help customers achieve the outcomes and Strategic management tool to design, test, build, Customer Profile benefits they require, expect, desire, or dream of Products and Services Value Proposition Canvas YZER.C YZER.C G and manage (profitable and scalable) business Business tool that constitutes the right-hand side by getting a job done (well). The items that your value proposition is based Strategic management tool to design, test, build, G TE models. of the Value Proposition Canvas. Visualizes the on that your customers can see in your shop and manage products and services. Fully inte- TE jobs, pains, and gains of a customer segment (or Jobs to be done window — metaphorically speaking. grates with the Business Model Canvas. STRA STRA Call to Action (CTA) stakeholder) you intend to create value for. What customers need, want, or desire to get done Prompts a subject to perform an action; used in their work and in their lives. Progress Board Value Proposition Design in an experiment in order to test one or more Environment Map Strategic management tool to manage and The process of designing, testing, building, and hypotheses. Strategic foresight tool to map the context in Lean Start-up monitor the business model and value proposition managing value propositions over their entire which you design and manage value propositions Approach by Eric Ries based on the Customer design process and track progress towards a lifecycle. Customer Development and business models. Development process to eliminate waste and successful value proposition and business model. Four-step process invented by Steve Blank to uncertainty from product development by continu- Get Glossary pdf reduce the risk and uncertainty in entrepreneur- Evidence ously building, testing, and learning in an iterative Prototyping (low/high fidelity) ship by continuously testing the hypotheses Proves or disproves a (business) hypothesis, fashion. The practice of building quick, inexpensive, and underlying a business model with customers and customer insight, or belief about a value proposi- rough study models to learn about the desirabil- stakeholders. tion, business model, or the environment. Learning Card ity, feasibility and viability of alternative value Strategic learning tool to capture insights from propositions and business models. Customer Gains Experiment/Test research and experiments. Outcomes and benefits customers must have, A procedure to validate or invalidate a value Test Card expect, desire, or dream to achieve. proposition or business model hypothesis that Strategic testing tool to design and structure your produces evidence. research and experiments.
Core Team Prereaders We practice what we preach and tested our ideas before releasing them. More than 100 selected people from around the world participated as pre-readers to scrutinize our raw creations. More than 60 actively contributed by reviewing ideas, concepts and spreads. They offered suggestions, meticulously proof-read and 280 pointed out ﬂaws and inconsistencies without pity. We iterated the book title 281 several times with prereaders before testing various alternatives in the market. Yves Pigneur Trish Papadakos Gabrielle Benefield Jay Jayaraman Johan Rapp Supervising Author Designer Phil Blake Shyam Jha Christian Saclier Jasper Bouwsma Greg Judelman Andrea Schrick Frederic Briguet James King Gregoire Serikoff Karl Burrow Hans Kok Aron Solomon Manuel Jose Carvajal Ryuta Kono Peter Sonderegger Tegan Mierle Sarah Kim Pål Dahl Jens Korte Lars Spicker Olesen Christian Doll Jan Kyhnau Matt Terrell Joseph Dougherty Michael Lachapelle James Thomas Todd Dunn Ronna Lichtenberg Paris Thomas Reinhard Ematinger Justin Lokitz Patrick Van Der Pijl Brandon Ainsley Matt Mancuso Sven Gakstatter Ranjan Malik Emanuela Vartolomei Greg Bernarda Alex Osterwalder Alan Smith Jonas Giannini Deborah Mills-Scofield Mauricio Author Lead Author Author + Creative Director Pilot Interactive Claus Gladyszak Nathan Monk Reiner Walter Strategyzer Co-Founder Strategyzer Co-Founder Illustration Team Boris Golob Mario Morales Matt Wanat Dave Gray Fabio Nunes Lu Wang Gaute Hagerup Jan Ondrus Marc Weber Natasha Hanshaw Aloys Osterwalder Judith Wimmer Chris Hill Matty Paquay Shin Yamamoto Luke Hohmann Olivier Perez Kennedy Strategyzer Content Team Strategyzer Product Team Benson Garner, Nabila Amarsy Dave Lougheed, Tom Phillip, Joannou Ng, Chris Hopkins, Matt Bullock, Federico Galindo
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