The Value of a Value Proposition

My current project is working with a very early stage startup. They, like all new startups, are working very hard to get what they want and need – a great product, excited users, some press coverage, and investors.

We’ve been discussing how to best define, refine and articulate their unique value proposition, and some very interesting (to me at least) themes emerged from the conversation. While there is considerable and unique value they are building, they, like almost every product team, are struggling a little to find the best way to articulate it. And, not being traditional product managers, they asked a simple and great question: Do we really need a value proposition?

Some team members went on to say things like “After all, the bar is so low to trying free online products, all there needs to be is the slightest hint that it could be useful. And besides, we can’t possibly predict all the values the product will have for all its users”.

At first, all I could think was “oh, brother.” My next thoughts went down two roads. The first was a list of the reasons you do need a well articulated value proposition (is it just a sacred cow?). I’ll share these down the page a bit.

But the other thought train went this way: we are in a phase where the power of emergent behavior (the wisdom of crowds) is newly important and useful online. One of the key values that this team is actually expressing, is that in addition to creating specific new value, they are enabling their users to find and create the value they want, and to use the product as a platform to get done what they want to get done. They are designing this product to allow its users to influence its value and its future.

That is terrifically cool, current and powerful.

Having said that, there are still some pretty good reasons for articulating your value proposition, even if part of your value proposition is dynamic.

A value proposition defines and describes WHAT a thing does and for WHOM.

So – why is this useful.

1. A value proposition helps design the product.

Once you are clear on what your product does, and for whom, your choice of features, navigation, look and feel are much easier, because you have clear criteria to evaluate your choices. (Anybody ever work on a product that did everything for everyone? Was it fun?)

2. A value proposition helps market the product.

A value proposition is not the same thing as a tag line, but its certainly the first step. More over, the what and for whom identifies your target market. (obviously articulating the value proposition is not necessarily the first or only place you’ll be discussing the target market, but it helps reinforce the very deep relationship between the target and the product). Knowing your target is, of course, the first and most important step in finding, targeting, messaging recruiting and building relationships with those people.

3. It helps investors/management/partners get excited.

Hard to get excited about/support/invest in a product where only a couple of passionate guys “get” it.

4. It doesn’t matter how low the barrier is to trying your product, you still need folks to be motivated enough to click, or blink, or inhale or whatever minor action they must take to try it. And, once they’ve tried it, they need to find it useful (or at least highly entertaining). If your users aren’t clear on the value proposition, then they have to “discover” it for themselves. That means they need to think and/or work, and there go those barriers again, shooting upward.

A clear value proposition helps you communicate to the engineers, designers, to investors, advertisers, and most importantly your users. It makes every decision easier because it encapsulates your ultimate goal. Providing something valuable for somebody. Even if the value is that users can participate in creating the value.

We don’t always have the chance to recognize, let alone challenge our fundamental assumptions. I really enjoyed this chance to think about this one.

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