A Value Proposition Canvas Example

In a previous video we talked about what is a value proposition anyway. Today we’ll talk about a tool that you can use to capture your own value proposition for your business idea. Hi I’m Steve Morris. And the topic today is a value proposition canvas example. What we’ll do is first of all talk
about what exactly is the value proposition canvas but very importantl, why? Why would you want to spend time filling one out. I’ll argue it’s a very important
thing for you to do if you want to be successful. We’ll go through then how to fill one out within the context of a very simple example that will make it a little less abstract a little more concrete and easy to understand. And then of course we’ll talk about the real why – the next step – which is you can go test all of those assumptions that you just
documented. We’ll come back to that idea. An earlier video talked about the example – the milkshake example
– as a way of defining what is a value proposition anyway. If you haven’t checked that one out
yet you might want to use the link up in the corner to go view that video first and then come back and we’ll talk more about the value
proposition canvas. So let’s start with what – what is a value proposition canvas. The value proposition canvas is
simply a tool for you to capture what you believe about what value you’re going to deliver to a customer. That starts with the jobs to be done. What does the customer believe are the jobs they need to get done and what’s the customer pain. In other words what pain does the customer want to ovoid and what gain is the customer seeking to obtaint. The job to be done comes down to the concrete “it needs to do a, b, and c”, but that doesn’t address the why – why is this compelling. A value proposition is compelling because it either gets rid of a pain or delivers on a gain. So again it’s just a tool to capture those assumptions. But it doesn’t stop there. It also talks about the beliefs that you have about your solution. Your solution is a product or service. It has certain
capabilities which you believe address the job to be done and you believe that part of what
it’s delivering involves things – attributes, features – that will relieve pain and that will create gain, and that those map on to the pain relief the customer wants and the gain that they’d like to obtain. So to summarize, the value proposition canvas is a tool where you’re documenting what
you believe. Now looking ahead you’re going to document what you believe hopefully in the form of testable hypotheses but will come back to that. It’s what you believe, on the one hand starting from the customer side. What is the job the customer or jobs the customer wants to get done. What is the gain they hope to
realize or the pain that they hope to avoid. On the other hand what is your
solution. What do you believe is the product with the collection of
capabilities that will deliver on the job to be done and what are the gain creators implicit in that product capability that will deliver on the gain the customer wants to
receive and what are the the pain reliever capabilities the product
will deliver that will address the pain that the customer wants to have go
away. Okay so that’s what the canvas is and basically what it looks like. But the other big question though is why? Why Spend time filling out a value proposition canvas. And the answer really is very
simple. Way too often what you believe about the value proposition ends up being wrong. And there are so many things that you could get wrong about it. You could not understand what the
job is to be done. You think you do but maybe a customer looks at it
differently. You might not really understand what
the pain is they want to avoid or the gain they want to get
delivered. But even if you right on all of that
you might believe that your product delivers
on the job but the customers disagree. There’s something missing. It doesn’t really deliver on the
job. Or the customers might believe it
doesn’t deliver on the gain they want to realize. Or it doesn’t eliminate the pain
they want to avoid it again. It’s a lot of assumptions that you’re making in the value proposition canvas. So the key idea here is that you’re capturing these
assumptions on the canvas. Everything you write down on the
canvas is an assumption it’s a belief. You want to capture those so you can test them, and that’s the real value of the value proposition canvas. Because if you test those customer value position assumptions, if you validate the value proposition before you go build your product or service, your odds of building something that
customers want to buy is much much greater. That’s why the value proposition canvas is an important tool for an entrepreneur. So that leads us to the final
question of OK so how do you fill out a value proposition canvas. Let’s walk through an example. So we’ll start with the customer and for this example we’ll talk
about commuters. Again we’re talking about
the milkshake example from the previous video. So in that video commuters would come to a fast food restaurant early in the morning looking for a
milkshake. And they had a particular job in mind that they wanted that
milkshake to do for them. In particular they wanted something to do you know through their commute because there wasn’t a
lot to do. You know driving through a long
commute. And they wanted something to eat while they were communting. Why did they want that. Well there were some particular
pains they wanted to avoid. They wanted to avoid hunger before noon. This shake was probably their
breakfast. So they wanted something substantial
enough that it would keep them full so they
wouldn’t be hungry until lunch. But also it was a long boring
commute. Having something to do something to
eat through the commute would help deal with the boredom. OK. Those are the pains. What about the gains. Well if they had something to do they’d be more awake and alert through the commute. And that certainly would have some
value. And if they showed up at work more awake and alert and not hungry that would certainly put them in a
better mood. So there is a potential gain delivery. Now remember everything that we just said terms of the job the pains and the gains are assumptions. They are Hypotheses
that we need to go test. But that’s then the customer side in this case
commuter’s the value proposition campus. So how about the solution side. You’re delivering a product or service that hopefully will
deliver on the game creators and deliver on the pain relievers. So in this particular example the product is a commuter milkshake and it has a couple of specific capabilities which are it’s a big thick shake. Now the belief of course is that on the one hand that will be filling and long lasting which will address the pains that the customer had and in addressing those, the belief is that they’ll arrive for a full stomach and they’ll arrive alert and that’ll address both of the gains that the customer hopes to realize. So let’s put all of that together. And here’s the complete value proposition canvas. You’ve got the customer on the one hand the solution on the left side. And the idea is of course that again we believe more assumptions right – more hypotheses – that that commuter milkshake big and thick will address the job to be done: something to do and something to eat. And being big and think it’ll take a long time to eat and that means it’ll fill up the stomach hopefully but also keep the commuter busy all through the entire commute addressing both of the pains that the customer wants to avoid. And in filling up the commuter and lasting a long
time, the belief is that that will result in them arriving at work awake alert and not hungry and that will improve their mood. So very simple example but that is an example of filling out a value proposition canvas. Now if you watched the first
video on what is a value proposition you’ll know that the commuters were just one example of customers that were showing up to buy a
milkshake. Later in the day there were families coming in with kids. They were looking for really an
entirely different job to be done entirely different sort of gains and pains. So you need to keep that in mind if
you’re looking at a situation where you
have different customer segments. It will be a different value
proposition a different process of capturing that value proposition with a canvas and a different process of testing
that value proposition with an entirely different customer set. So that’s what the canvas is, why it’s important to fill it out and a simple example of how to fill it out. The next step of course is to test your assumptions. So your job is to go ahead and fill out your canvas for your business idea and then go through the process of testing all of those different assumptions or beliefs that underlie what you put in to your canvas. And we’ll talk about exactly how to
do that – how to validate your value proposition – in our next video.
That wraps up this presentation on a value proposition canvas example. If this was helpful please click the like below. That helps enormously. And we tried to make it really easy to subscribe to the channel if you
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