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How to define the value your business provides

Marta Przyłęcka

Jun 02, 20233 min read

Startups

Table of Content

  • What to look out for when defining your value proposition

  • Value proposition should fit the user segment it addresses

  • A well defined value proposition keeps your business going

Every product should provide value to the people who use it. After all, there is no other way of generating income than by exchanging value for money. And as with all forms of business, startups must at some point also be profitable. 

Value proposition is the foundation of every startup. It should define in the simplest way what kind of value its products or services generate for the user. The simplicity of this communication is as important for users as it is for investors and other stakeholders. A well formulated value proposition makes it easy to understand what the startup actually does, what the base of its business is, and how it differentiates itself from the competition.

It may seem that there are infinite ways to describe a value proposition, however in reality, there is only a limited number of ways in which a startup can improve people's lives (and/or their businesses, as in the case of a B2B business model).

What to look out for when defining your value proposition

When it comes to digital products, there are so many alternatives to choose from, it often seems impossible to come up with something different; something that will catch a user’s attention. But new startups are created and invested in daily. Take a look below to learn how your business can be differentiated from others.

Novelty

Sometimes users have a need that isn’t being addressed by any solutions that currently exist on the market. However, by keeping your finger on the pulse, you can start noticing which trends will gain traction next. One effective way of doing this is to do user research – for example, in-depth interviews. See for yourself what other market research methods you can use to spot a user need first and gain advantage over your competitors. . 

Example: BeReal, a Generation Z-targeted app  that makes it easier to connect with friends more authentically and in real time. 

Efficiency, lower costs & lower risk

Someone else solving a user problem doesn’t mean your business can’t solve it better. Any service can be improved in terms of efficiency, cost and risk. A certain set of features can save users’ time and money.

Example: Slack, a messaging platform for professionals and organizations.

Personalisation

With so many different products and services on the market, users strive to find ones that make their experience feel unique. Not only can the product itself be customized, but also its communication and the content it addresses to users – for example, newsletters or ads targeted to specific groups of clients.

Example: Styles, an app enabling users to share their style inspiration and outfits, making it more personal thanks to its communication and available features.

Accessibility

Sometimes value is created when a business gives access to a service that for whatever reason was previously inaccessible to users. For example, people nowadays have access to at least three devices. For some businesses, prioritizing access to services on as many devices as possible can undoubtedly be a winning strategy.

Example: Notion, available on desktop and via mobile app.

User Experience

Some apps and services designed some time ago may still be functioning, but their user experience feels noticeably outdated by users. In such cases,  enhanced user experience may be all it takes to differentiate a business from its competitors. Learn more about why top notch UX is what your product needs.

Example: Around, making video calls more fun and exciting to attend.

Value proposition should fit the user segment it addresses

When building a product, it’s crucial that you consider all target groups and stakeholders you’re addressing.

Users

For example, Miro creates different pricing strategies based on its users’ needs. Each subscription is connected to a different value proposition. For consultants, Miro offers access to separate boards (each for an individual project), given the importance of protecting clients’ data and intellectual property. For teams, Miro offers a set of special features that make it easier to run meetings and share knowledge.

Investors

Every startup must prove its value to investors if it hopes to secure funding. What’s important is scalability and market value. When sharing your value proposition with investors, focus on market size, why the time to invest in your venture is ‘right now’, and how you differ from the competition.

A well defined value proposition keeps your business going

Value proposition should be centered on your core business. It should be clear, understandable to users, and show them how you’re different from the competition. Remember also to display your value proposition on your website and use it when communicating with the target audience.

Sources: Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder and Yves Pigneur 

How to define the value your business provides

Published on June 02, 2023

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Marta Przyłęcka Junior Project Manager

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