■ Value Props - Create Product People Will Actually

Buy

Value Props - Create product People will actually Buy

The reason why companies fail, is they ain't solving a valuable enough problem, therefore they don't
create value that is worth investing & therefore they fail in their basic form of meeting

a need.

3-Step Framework

Define

Evaluate

Build

We want to get rid of the "idea" - its too penny.

Value Prop Statement

For (target customer segments)

dissatisfied with (existing solution)

due to (key unmet needs)

(Venture name) offers a (product category)

that provides (key benefits of your solution)

1 Define - for who...

WHO - children

**- marginalised

• x basic digital literacy

• x equipment**

e.g. Compra Facil Value Prop Statement

For (target customer segments) *they didn't say for who? - this is a massive terrible mistake. you don't
know who your customer is.

dissatisfied with current with current credit products available

due to high interest rates

Compra Facil offers a credit marketplace

that provides a comparison capabilities

Value Prop Statement

For (Target customer segments)

who is your customer?

everyone?

Segment?

how do you define that segment?

"...see the Coda Workbook to learn how to define a Minimum Viable Segment (MVS)"

By this you def gon fail, trying to boil the ocean and sell to the world at large is very big

**User vs Customer? on WHO?

if the user ain't getting any value then we're in the wrong class

[startupsecret class - Personas] - l love YT channel**

MVS? - a specific audience that has been targeted with same needs

MVP? - All potential buyers with different needs

*Startup Secret: Look at everything through the eyes of your customer.

if the user can find out the product that you're selling, you're

■ on the right track.

how do you find out? You ASK!!!

1 Define - the problem

"A problem well stated is half solved." - Charles Kettering

the truth is if you can clearly identify what the pain, opportunity you can address, it becomes easier to
coordinate the team to solve the problem.

that's why most startups fail, they can't define the exact hell on fire pain point they are to solve

the question is, who do you do that?

■ here are a few frameworks:

Problems worth solving are usually "4 Us"

Unworkable

Unavoidable

Urgent

Underserved

Unworkable

Startup Secret: If the consequences are costly or painful, so much the better. Who gets fired if this
doesn't work?

e.g.

Broken business process

Security risk

Consequences

Impractical, impossible or far too expensive

When the first iPhone was released, a lot of people bought it, but all the icloud services to download
their contacts & staff weren't working properly. A lot off people got fired.

You have to go to the user and ask the USER, they'll tell you the pain.

Unavoidable

Is the problem so fundamental you can't avoid it and just have to comply?

examples, -Taxes, Aging

Urgent
If you're not at the top of the list, are you at least in the top three? If not, will you get moved up or down
overtime. Why?

Relative to other needs

Priority, which determines resources allocated or choices consumers have to spend their money

e.g. cyber security, finding a job, getting vaccinated/ treated for covid

the best way to find the priorities of Users is to ASK.

Underserved

You will compete in a zero-sum game

You're competing for finite resources

Money

Time

People

Attention

e.g. local coffee is expensive in Kenya, people adopt the China coffee

3 min Breakout: Is it 4 U?

Unworkable, Unavoidable, Urgent, Underserved

there are problems that can be solved by the gvt simply by putting a policy in place.

■ B2C

typically for connections

Examples: Social - Find, connect, communicate, meet, share, entertain, date

Define the Market Need

Is it BLAC & white?

---

Blatant

Latent
Aspirational

Critical

(all in 4 square matrix)

Aspirational x Latent - nice to have

Blatant x Critical - must have

Is it addressing a "white space" in the market?

an open area of opportunity

which you can capture

uniquely well

Does the market need Have DEBT?

What Dependencies are involved? e.g. smartphone without apps Would you face an backlash?

Cutting through the noise

Startup Opportunity? (everyone s saying theirs are faster, cheaper, better)

David's idea is in the travel space.

he is thinking of making it way cheaper by 30-90%

(faster, better, cheaper) is not right because there are well established brands out there like KAYAK, etc
with a lot of resources than me.

Define the Solution

3D - a breakthrough that COMPELS people to ACT!

if you can get to this 3D breakthrough, then as a startup you have a chance.

• Disruptive? Google using advertising instead of selling software

• Discontinuous*?

• Defensible?

(* = Different enough - evaluate in next section)

■ DISRUPTIVE:
■ Examples:

A technology like multi-touch

A business model like Airnb - changed the travel industry

they didn't even own the homes or the places you gon visit.

they created a means to connect people and give them experiences by sharing resources people were
not using. GENIUS!

Disruptive: Change the game...

was Amazon a breakthrough?

they became bigger, faster, at a large scale, better, cheaper.

it was a breakthrough.

■ DISCONTINOUS:

Something you could not do before this...?

Cloud computing - AWS

■ DEFENSIBLE: MOATS

Defensibility from the outset

• Proprietary IP

• Gvt license (e.g. wireless spectrum)

• Favorable location (e.g. retail)

• Favorable long-term contract

• Minimum efficient scale facility (market can't support more)

• Access to (proprietary) data (e.g. Google, FB, Bloomberg)

Defensibility with scale

• Network effects

• Switching Costs*

• Cost advantages due to scale - e.g. "economies of scale"

• Brand loyalty
• i.e. You can get to another University but it doesn't teach you a course, even if it's easier to get to, or
cheaper, it doesn't teach what you need.

• Also social networks, if i decide to build Instagram replica where nobody is on the network, it won't
work, fb & Instagram have a huge defensibility.

■ 2 EVALUATE - GAIN | PAIN

Here you can check weather you have a business that is worth perusing.

your value props needs to be sustainable, endure, last

What was the situ before your product and after your prod.

Acute pain or Absolute joy?

EX: Taste of Kenya Value Prop Statement

For coffee farmers

dissatisfied with earning low profits

due to middlemen

Taste of Kenya offers a direct sales

that provides increased profits

■ VS

For Kenyan coffee farmers

dissatisfied with existing freshly roasted coffee options

due to high prices

Taste of Kenya offers high quality coffee

that provides affordable prices

VITAMIN or PENICILLIN

always use this T diagram

The GAIN/PAIN Ratio

The gain delivered to the customer vs The pain and cost for the customer to adopt
put on a scale balance Gain vs Pain

always ask why the customer wont buy you product.

• they might not really need it badly

• due to cost

• training, how do you deliver the training for the customer

Inertia to adoption

Do i really need this?

Can't i use my mobile banking app?

or split the bill with 2 credit cards?

RISK using a startup for money transfer!

■ Venmo ex:

■ GAIN | INERTIA, RISK | PAIN

What's the ratio of PAIN & GAIN before someone takes a risk on you.

■ > 10 (Fulcrum) to overcome:

• inertia

■ - RISK

If a customer has something they are comfortable with, and you're really not improving anything

Customer View: GAIN/PAIN Ratio

■ GAIN

Revenue

Cost savings

Time

People

Competitive advantage

Reputation
etc

■ PAIN

Find (see)

Try

Buy

Implement

Deploy

Own - e.g. TCO

■ INERTIA/RISK

Switching costs?

Default = do nothing

Alternatives?

Good enough = good enough!

RISK on startup

■ * YOU HAVE TO EVAULATE OTHERWISE YOULL BE THINKING YOU HAVE A GREAT

IDEA

■ 3 BUILD

Bring it all together.

For (target customers - your Minimum Viable Segment - MVS)

• with (BLAC problem or need)

• that is (4U)

Who are dissatisfied with (the current Unworkable & Underserved alternative)

Our product is a (3D new product - MVP)

That provides (compelling problem- solving - Gain)

• that overcomes (switching costs Gain/Pain Ratio > 10x)

Unlike (the Unworkable product alternative that Underserves the need or opportunity)

■ BUILD AROUND YOU

■ WHAT PROBLEMS DO YOU UNDERSTAND WELL?

■ WHAT SOLUTION CAN YOU DELIVER UNIQUELY WELL?

■ WHAT KIND OF DISRUPTIVE BUSINESS MODEL CAN YOU BRING?

■ = FOUNDER MARKET FIT!

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