If you were to search the meaning of ‘value proposition’ in Google, you would find countless links to sites that give varying definitions of what a ‘value proposition’ is. To our understanding, in a nutshell, the value proposition of a startup (or any company for that matter) is an explanation of what the company does, who its customers are and how it is distinct from competitors. The Financial Times – assuming that it is a reliable source – defines a company’s value proposition as “The benefits that a product or service provides to customers, especially by being different to or better than a competitor’s products or services.”
At first glance, it may seem relatively straightforward to determine your value proposition when starting a new venture. However, this has been something that we have struggled with ever since we began on our entrepreneurial journey. When we started, our value proposition was clear – at least to us it was. But, as we have progressed over the last few months, we began to question whether or not we were actually delivering what our value proposition promised.
During the last Accelerate Cambridge masterclass, the session was focused on revisiting and revising the value propositions that we (the Acceleratees) had developed during our first session focused on the Business Model Canvas. One important lesson that we took away was that a value proposition changes as a company evolves. As such, it must be revisited on a regular basis to make sure that, as a company, you are actually delivering on what was originally promised. Most (successful) startups pivot at least once, if not two or three times, and with each pivot emerges a potentially new value proposition. Regardless of changing your business model to match your value proposition or changing your value proposition to match your business model, the two need to be in line.
It is easy to get caught up in the chaos, endless admin and overall “getting sh*t done” when founding a startup. This can make it easy to lose sight of initial perspectives and objectives vis-a-vis your customers and your competition. As such, it is important to constantly pose the two questions: “are we providing value to our customers” and “are we delivering what we promised”. If not, then it is time to take a step back, take stock, and revisit the value proposition.