The Elusive Value Proposition
Our current processes don't have the language for user value.
The Minimum Viable Product (MVP) is the fundamental starting block for most if not every startup. According to Startup Genome (2019), 11/12 startups fails. You would have thought that once they’ve reached “viable product”, the success rate would be guaranteed or at least be higher. Maybe HBR’s definition of an MVP is more appropriate: “The simplest possible offering that yields reliable customer feedback”, and we should maybe call it an “MRFP”, because viable it isn’t.
The Value Proposition
I have always wondered why it is that Business and Product found it hard to define the value proposition. Three conditions that might contribute to this problem came to mind. The “Agile mindset”, the “One-Ring assumption” and the “New Business lens”.
The Agile Mindset
In my previous post I spoke about the problem with the Agile approach (as practised by many businesses, irrespective of the theory), and that is that they do not know what “user value” is. They iterate towards a point that increases users and turnover and at best, infer user value.
The “One-Ring” Assumption
It worked for that one now famous / successful / large growth business, so it will work for our business. People love simple answers. I won’t bore you with the classic “Why you can’t copy Amazon”, so how about Microsoft (Windows and the Windows Phone") or Google (Google search and Google Talk / Voice / Wave / Buzz / Plus / Hangouts / Spaces / Allo / Duo / Chat)? These companies had the same leadership, which your company don’t have, and they couldn’t repeat their previous success. Why do you think that you can, if you follow one of their many processes or mantras? By doing that, you will be ignoring factors like market conditions, change in market competition, change in user expectations, market timing and luck, to name a few.
Life is a system and building products for users requires the same level of respect and pursuit of understanding the complexity of how the parts interact and contribute to the final value. If we believe that it is about sticking to a process is the answer to everything instead of the value of the process contributes to the user value, we are nothing more than Captain-less boats on the ocean rowing in two-week sprints and at the mercy of our environment and lady luck.
The New Business Lens
“We need to increase our deposits.” “We need more sign-ups.” “We need users to buy more.” Sounds familiar? Obviously, a business needs to be successful, but if you start with business requirements, you will be building a very different product compared to starting with people. Not only will we be adding features, being unaware of how every feature changes the underlying experiences and contributing to the user value, our product will end up being too complicated and a few million dollars later, get disrupted by a startup with a simpler and maybe even valued experience. In the end, with so much already invested, our “agile mindset” slowly turns into a very non-agile future and our focus turns towards Hook models, incentive schemes and selling user data.
An alternative to the value proposition
Instead of starting the conversation from your business’ perspective, think about the people perspective and ask yourself; “What is the minimum value my business can add towards a user’s success?” Let’s call it the “Minimum Value Add” (MVA) and by definition, it is something that is valued.
So how can we determine our potential customer’s MVA? It starts with a simple seven-word question asked of your potential customer: “How does success looks like for you?”, in context of the industry / category your product will be in.