The importance of value propositions in your startup – the “why”
As a startup, there are so many facets of your business which are important as you get your company off the ground and competing in the marketplace. You must have a strong product, and understand your market, your customers, and why your product/platform/solution is necessary. Often, we engage with startups who have a great idea and product but lack the fundamentals to create a need in the marketplace. On many occasions technical founders experience a problem in their day-to-day job or life which is the catalyst for their startup. However, they struggle with converting the idea of their solution to a set of value propositions that speak to the needs of their prospective customer base. They can explain every angle their solution covers and how it solves a problem, but oftentimes struggle with why this is important and why it is necessary for the market.
The “why” is important because in most businesses, the main point of contact or champion who is evaluating the solution is not typically the decision maker or the person who will be spending their budget on the solution. Additionally, unless your champion is the decision maker, it will be hard to garner enough interest in your solution to even warrant a project within your prospect’s business. Your champion may subconsciously understand the “why” as you are explaining how you solve a particular problem within their organization, but they often have problems translating that value to their boss or decision maker who holds the budget and who can approve a purchase.
This becomes extremely evident when you spend hours on end proving the value of your solution in real world examples with a Proof of Concept (POC) or pilot. But once your main contact attempts to gain approval from the decision maker (approval processes can be another blog post), the deal/project slows down and you are held at bay while they work internally to prove the value of the POC ultimately to get shut down. Now you’ve spent time which you cannot get back.
So, how do you get started creating value propositions for your startup?
To help start the value conversation and alleviate the pain of stalled projects, it is important to ensure you can point to 3-4 true value points of “why” your solution is necessary. One caveat, many solutions can increase toppling revenue or decrease costs. However, oftentimes that is not enough to justify expenditure so you will need other compelling value propositions to prove how it increases topline revenue or decreases cost. For example, these could be:
- Increase top line revenue by n%
- Decrease time spent by n%
- Decrease the threat of a cyber attack
- Improving workflow efficiencies
- Automating processes
- Increase visibility within x, y, z department
There are several ways to uncover these value propositions. First, you can dive into your solution and try to map the problem you are solving to a real-word issue. From there, you can backtrack to get to the root cause to better phrase or define the value proposition. Second, poll your customers and prospects. There is no better way to learn about how your solution solves problems, than by asking your customers and prospects their biggest pains on a day-to-day basis with regards to your industry or market.
Establish how they are currently solving that problem, and the value to the business if they could make that process better (in any number of ways). What would enable their business to take out the checkbook and spend money on improving that process?
Also remember to always ask a customer why they chose your solution. Really dig on this one to uncover the real value behind your solution. Why you win is absolutely critical to know and can be fed back into all the parts of your business – marketing, messaging, prospecting, demos and more.