Creating a Value Proposition

Understanding what is unique about your idea is fundamental to demonstrating to potential customers – and in some cases investors – why they should purchase your product or service.

A key aspect of entrepreneurship theory is the crafting of the Value Proposition (VP). This is a statement which clearly defines your product or service, showcasing how it is different from its competitors. It is also referred to as a Unique Selling Point (USP).

The VP encourages you to consider the following:

• Why should a customer use your service or buy your product over a competitor’s?
• What are you offering that no one else can?
• How can you serve the needs of each individual customer?

Watch this video on the Value Position Canvas, a practical tool which helps you to craft the VP. It describes how to map out the value of your idea to your customer. This is helped by your understanding of your audience obtained in the previous Step. What jobs or objectives will your idea help them to do? What ‘pain’ will it help them to avoid? What ‘gains’ will it help them achieve?

(Alternatively, you can read the article on creating an effective value proposition in the See Also section below.)

It’s important to remember that a value proposition is not a positioning statement designed to appeal to as many customers as possible, instead, it should be very specific. You need to define your niche (the specific needs of a specific customer) as precisely as possible. Then you will be able to target the market that would be most likely to buy your product.

If you’re interested, you can listen to this optional video containing some examples of Value Propositions from well-known brands such as Netflix and Airbnb.

Once you have identified your VP, you can align it with how you produce and protect your IP.

Learning Journal

Create a draft of your own VP for your idea in your learning journal. You may not have time to complete it during this course, but starting the thought process now will help focus your plans on your customers’ needs and identify areas for further research.