Very few businesses are one of a kind. Someone, somewhere, has already thought of your concept and implemented it to some extent. The good news is that this has never stopped entrepreneurs! You created your new business around a smart innovation or a unique take on an existing concept.
You started your entrepreneurial journey by noticing a problem and set out to solve it. This problem can take many forms, from a task to physical or emotional need. It can be crucial or trivial. Your product or service thus can have a functional, social, or emotional purpose.
The lean startup concepts provide you with a framework to refine your product fit by experimenting, measuring and adjusting your MVP, based on customers’ feedback, in an effort to make your endeavor less risky. But at the end of the day, you cannot make the decisions for your customers. They ultimately will be the one choosing to buy your solution or not. The following is an excerpt from a class we teach at one of accelerator programs (API2X). We have accelerated hundreds of companies over the past seventeen years so these teachings are not theoretical. By now, we are pretty sure a lot of the advice we give is pretty good. All our programs are geared towards the most promising entrepreneurs who will create jobs today given access to capital, expertise, skills and talent.
How do we make decisions?
No amount of data or analytics can tell you why decisions are made. We can only try to better understand how people make them to provide them with a better overall experience i.e. value, which in turn increases sales.
“My definition of innovative is providing value to the customers.” Mary T. Barra, CEO, General Motors
Understanding how your target customers make their decision is the foundation of your value proposition. Don’t know where to start? A good starting point is to evaluate the series of pros and cons that your customers will contemplate, and attribute weight to each one individually.
The pros are the advantages, the positive outcomes and benefits your customers require, desire, and expect or can be surprised by. They range from a functional gain, to positive emotion and social gain.
Some will address our basic human needs and desires like survival, enjoyment of life, life extension, freedom from fear, pain and danger, social approval, etc. Some will be more relevant than others.
The contras (cons) are anything that annoys your customers before, during or after using your solution to solve their problem. They also cover a wide array from price, risk, steep learning curve, lack of features to negative emotion. They can be severe or light.
This is an exercise that you initially do by researching and observing the market. All of these observations will help you better understand your valuation proposition and map it out by matching keys elements of your product of service either to support their pros or negate their contras.
Carine Dieudé is a Partner & Director of Strategy, and an Entrepreneurship Aficionado, at Altima Business Solutions: Capital Acquisition, Critical Path, Outsourced CFO, Strategic Selling and Advisory Board, for startup, small and medium-sized businesses.