How to design Value Proposition for a ‘’Startup’’ using Business Model Canvas.

The fundamental element of value propositions (VP) describes both the set of products and services that create value to specific customer segments and the benefits customers may expect from said products and services.

Basic principles of VP :

The value proposition is the reason customers choose one company over another. Every value proposition includes a selected number of product or services that meet the requirements of specific customer segments. In this sense, the value proposition is an addition, a package, or a benefit the company offers to customers.

Some value propositions can be innovative and represent a new or disruptive offer. Others can be similar to existing market offers but with additional features or better quality. We must always keep in mind these major questions:

· What value are we delivering to our customer? 

·  Which of our customer’s problems are we helping solve?

·  Which customer needs are we satisfying?

·  Which product or service package are we offering to each customer segment?

 These are the main challenges a company will face to use this methodology:

· Get access or authorization from its management

· Obtain access to existing resources to develop its value proposition

· Overcome risk aversion

· Get over strict and slow processes

· Manage change

 Tools or capacities you must develop:

A value proposition has two sides:

The main objective is matching a customer profile to the value map. This is known as FIT.

Some value propositions meet a completely new set of customer needs. Increasing the performance of a product or service has traditionally been a way to create value.

Adapting products and services to specific customer segments’ needs is creating value.

Value can be created simply by helping a customer do certain jobs.

Design is an important element. However, it is difficult to measure. A product can stand out because of its superior design.

Customers can find value just by wearing or using a specific brand.

Another way to meet customer needs is by offering a similar value for a lower price to customers that are sensitive to prices. Nevertheless, low-price or low-value propositions have major implications to the rest of the business model.

Also, Helping customers reduce costs is an important form of value creation.

Customers value minimizing the risk they take when buying products or services.

Making products or services available to customers, especially when they had no previous access to them, is a way to create value. This can be solved through innovation of the business model, new technologies, or the combination of both.

Making things easier or more convenient to use is another form to create substantial value.

What is the value map?

A value map describe the value proposition’s characteristics and it has three components:

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