Value Proposition Canvas explained through the Uber example ?

Hello! this is Ana at Railsware. In our
last video we have discovered how does the lean canvas work for validating your
startup business model. Today we will focus on the value your product offers to your
customers by learning how to use the value proposition canvas. We will also
see how the value proposition canvas works for uber back when it was getting
of the ground. If you have any questions or ideas along the way, please, share them
with us in the comments. Both startups and existing businesses fight for their
place in the market by introducing their products and services. However not all of
them are destined to succeed with customers. More than a half of new
propositions fail to meet customers expectations and fade away. You can avoid
failure only if you identify your customers problems and give them the
design, features and functionality they want. And that’s what a value proposition
canvas can help you with. The value proposition canvas originates from the
business canvas. This is a sort of a shortened business plan designed to
create the value of your idea by breaking it down into nine essential
components. Two of them, unique value proposition and customer segments, formed
the value proposition canvas – the tool that allows you to design, test and
visualize the value of your product for customers in a structured way. The value
proposition canvas is divided into two parts: the customer profile (circle) and
the value map (square). Each part consists of three sections that describe specific
features of a customer or product respectively. The circle on the right
refers to the customer segment, describes the motivation to buy the
product, and consists of “jobs to be done”, “gains” and “pains”. This part explains why
the customer needs this product. The square on the left features the
value map by listing products and services, as well as describing pain
relievers and game creators. The best way to understand the practicality of the
value proposition canvas is to investigate it through an example. We’ve
decided to use Uber as an example back in the time of its foundation, and focus on
one customer segment – passengers. So, here we go. Let’s go back in time to when Uber
did not exist yet. How would its founders describe taxi passengers pains
back then? We start with the customer profile and jobs your customers need to
have done. Don’t focus on the functional jobs only. Emotional and social ones are
also essential. We pick the following jobs for taxi service users: contact a
good service, control cost for the ride, wait for the cab for some unknown
amount of time, and pay for the trip. Pains include blockages and problems
your customers may face trying to get the jobs done. In our case, taxi customers
could experience low cab availability, bad drivers can happen, need to book a
cab in advance, and issues with payments for the taxi service (cash or card). The
next step is to specify gains. Those are more than just the opposite of the pains.
Gains describe positive outcomes the customer expects when the job is getting
done. These include benefits, aspirations and
results like a trusted driver, zero time on payments, one-click order or
cancellation, and tracking your cab. Once we have shaped the customer profile,
we can move forward to the value map. Here we begin with products and services
your value proposition offers to get the job’s done.
Our list consists of passengers mobile app, Uber Pop, UberX, and Black Cab. Then we
need to describe how these products or services can minimize or reduce the
mentioned pains, and outline in which way they create the gains. Pain relievers are
meant to improve the customer experience. We chose 24/7/365 availability of cabs,
driver ratings, arrival and travel time prediction, and flawless automatic
payments. As gain creators, an Uber customer can expect a rating system,
automatic credit card payments, the ability to manage all the details on a
single platform, navigating your trip on the map. The value proposition canvas
aims to achieve a fit between what the customer wants and what your product or
service can offer to overcome pains and generate gains. In practice, our customer
profile may have tons of jobs to be done, pains and gains, but the value map
outlines which of them you focus on. The more items from the right part have
matches on the left one, the higher the probability that your product will
strike home. Do not forget that the value proposition canvas is a detailed extract
from the lean canvas or business model canvas. Therefore, the success of your
future product depends on how good the entire canvas is. A holistic approach to
assessing what your customer wants and what you can provide is the path to
success. That was the intro to the value proposition canvas. If you found this
video helpful, press thumbs up and subscribe for the Railsware YouTube
channel. Suggest us ideas on the topics for our next videos in the comments
below. Thank you for watching and stay tuned.


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