Looking Behind the Value-Prop Canvas
If you're familiar with the value proposition canvas you know that parts of the canvas are filled out with answers to yield an idea's (or business's) value proposition. We've all gone through the exercise. What are the tasks for the user....what are the pains....what are the gains....etc. I can't tell you how many times I've been asked about a business or my own business, "What pain is it solving?" Herein lies the problem, as if the entrepreneur's answer is going to be, "There's an outcry of millions of people for my product or service!" I don't know of any product or service where the answer was that obvious. The real question we should all be asking is, "What is the opportunity to address a pain/limitation in the market you're going after and how big is the gap between the current standard and your product/service?" Let's look at some examples:
The Apple iPod. At the time the iPod was invented it wasn't the first "pocket" music player. The Rio led the way as a compact mp3 player and could hold about 12 songs. I know, because I had one. It was great. However, was I clamoring for more? No. I had no idea that it could be more. I was simply going about my life, listening to my 12 songs and then changing them out as needed. Was there a "problem"? Not really. So what did Steve Jobs see that no one else saw. He simply looked at the mp3 player, as constituted at that time, and said there's an opportunity to increase the value of what defines a portable music player. Customers don't know what they don't know. If you tell me I can heat up water in a pot on the stove in about 7 minutes, I don't know anything different until you tell me that I can use a thing called a microwave oven and heat up water in 60 seconds. Steve Jobs improved on the existing technology and increased the customers value. The iPod allowed storage of 1,000 songs, an easier interface and a better physical design. It was an easy choice at that point. I'll take more and easier.
Uber. Uber entered a market where once again, there was not an outcry for change. Again, no one person or group was marching on Washington demanding that taxis be forced to give people a better experience. We as humans accept (and continued to expect) what the service was - regardless of its shortcomings. Uber simply said let's improve the experience so that we can give the customer a choice of better value. In doing so, they took advantage of a huge technological change in landscape from the, "I'll call a taxi" to "I'll get on the uber app on my mobile device" to arrange for a ride. It's interesting to think about why taxi companies didn't think of that - simply getting a little tech into the process of ordering a taxi. They might of staved off uber as such a cultural game changer. One reason companies don't innovate, especially companies that are "standards" in our culture, is that they don't have to. We all live with being let down every day and accepting it! Our TV is not big enough, our washing machine doesn't clean clothes well enough, our car needs an oil changes regularly, and on and on. Again, people complained silently or to one another but for the most part we all accepted how ordering, riding and paying for a taxi has been done since the early 1900's. If you think about it, all uber really did, which is all you should do with your idea/service, is to identify where improvement can be made using the tools of today. Taxis used the phone - a tool of yesteryear. Uber used the smart phone, a tool of today.
The bottom line is this. When thinking about your value proposition and the "pain" your potential customers are experiencing, don't look for some wide-sweeping movement or outcry. Instead, look for how your product/service can improve on what is currently there.
Whether it be aesthetically, functionally, or technologically. Don't ask your customers whether they want the thing you are selling. Instead, ask them if they would want a better way to do things they already do and how your product/service can improve their lives and make the thing they are doing easier or more fun. Look for the opportunity to improve some aspect of a product/service and the delta value of that opportunity vs. the current method. That will ultimately tell you how big the business opportunity is.
Rusty Shaffer is an entrepreneur and mentor in the Reno/Tahoe area and is currently the CEO of Seat Amigo a new app designed to make it more fun to fly by letting you pick your seatmate.