VisuALS’ Value Proposition
This is the second story in a series explaining the Startup Strategic Journey.
Yesterday we shared how a team of students at Oklahoma Christian University (OC), inspired by ALS-stricken Weyton, took up the challenge of developing a lower-cost solution for ALS patients to be able to communicate with their loved ones.
The team interacted with Weyton, other ALS patients at a monthly ALS Support Group, and with professionals with the ALS Association, the Muscular Dystrophy Association, and the Neuromuscular Disease Clinic at a local hospital. That team developed an initial prototype and received feedback on what changes were required to make it a viable product.
That first team of students had completed their three-semester project and they were graduating. So they handed the concept off to a new team of four seniors to work as their capstone project. The two teams interacted together with those in the ALS community and then the handoff was complete. More than anything, the new group of students listened to what ALS patients really needed.
The Value Proposition
During the iterative, hypothesis-testing, learning-focused Lean startup process, new ventures typically move through three phases of validation:
- Problem-Solution Fit: You know that potential customers have a specific problem and you have designed a solution that addresses that problem.
- Product-Market Fit: The products and services that make up your solution have demonstrated that they are creating compelling value, resulting in meaningful traction in the market.
- Business Model Fit: You have successfully created a scalable and profitable business model around your solution.
Achieving Problem-Solution Fit can be reflected in a well-documented value proposition.
In Value Proposition Design¹, a value proposition is defined as describing, “the benefits customers can expect from your products and services.” The authors of that book provided a very helpful tool, the Value Proposition Canvas, for developing and capturing a value proposition.
Developing a valid value proposition is not an afternoon brainstorming exercise on a whiteboard in a conference room. Steve Blank’s mantra of “get out of the building” is critical. You need to spend time deeply understanding the customer, and you need to test many different potential value propositions to learn which will actually solve the problem and create value for the customer.
Understanding the customer typically involves observing them and talking to them. A good conversation isn’t a survey where you ask them direct and leading questions about what you think their problem is; instead it may start with asking them what a typical day is like for them. You want to understand the “jobs” they do throughout the day, and which ones are really important. You want to understand why they do what they do — what they hope to get out of the activities they do. You also want to understand what is hard about what they do — what are the problems.
Once you uncover an interesting problem, you want to probe to learn what they’ve previously done to try to solve the problem. For each potential solution they’ve tried (which might be another company’s product, or it might be something they’ve done themselves), you want to understand what was good about that solution and what was disappointing. Assuming they still have the problem (or else it wouldn’t have come up), you want to understand why the solution they tried hasn’t solved the problem.
This is a conversation you want to have as many times as possible with as many different people as possible. From these discussions, you may find that the problem you thought certain people had isn’t really a problem. You might modify your startup strategy to address a different problem (and a different solution). Or you might find that it’s a different group of people with the problem. Or, at this point, you might abandon the new venture altogether.
Testing potential solutions/value propositions also involves getting out of the building and interacting with potential customers. It is critical that value proposition testing not be mixed into the customer exploration process. Once you introduce a potential solution, the customer’s ability to independently describe their situation will be derailed and they will only focus on your potential solution. However, it is possible, at the very end of the same discussion with the customer, once you’ve fully explored their situation, to introduce your potential solution and get their reaction.
In The Startup Mixtape², Elliott Adams advocates using prototypes to learn from customers whether your proposed solution will truly solve their problem and create value. He describes a prototype as “a representation of the final product experience that conveys the value of the solution you plan to offer your customers.” Early prototypes probably won’t be working models of the solution, but may be more like marketing materials — a web page describing the features and benefits or maybe even an explainer video telling the story and walking through what the product will do. Simple mock-ups of what the product might look like can be helpful. If you’re building a physical product, a 3D-printed model may also help the customer envision your solution and be able to react to it.
In the end, you are looking for their honest reaction. Does the solution that you’re proposing help them achieve what they want while eliminating the challenges, roadblocks, and pains that are keeping them from achieving that goal?
Once you have deeply understood and documented the customer, and identified a solution (value proposition) that solves the customer’s problem and creates value for them, then you have achieved Problem-Solution Fit and can move forward.
VisuALS’ Value Proposition
Based on their discussions with the ALS community, and the lessons passed on from the first team, the new team developed a solid understanding of the value proposition and target customer as represented in this Value Proposition Canvas.
Over time, many ALS patients will lose the ability to speak and to use their hands. This makes it almost impossible for them to positively engage with the world around them. Most importantly, they want to communicate with those they love. They want to stay connected with their community. They want to be able to have some level of control over their environment (e.g. turning on lights, changing the TV channel). And at times, they need to get the attention of caregivers.
Sadly, ALS is a degenerative disease and there is not yet a cure. As mentioned in yesterday’s article, there already were solutions on the market, but most of those products seemed priced to maximize payments from insurance companies rather than being affordable for families.
The students knew enough from the work that the first team had done and the additional experimentation that they were doing, to know that they could build a much more affordable solution with off-the-shelf hardware and new software they were developing. Text-to-speech would allow the patient to speak with their loved ones. Simple home automation would further increase independence for the patients. Controlling a web browser and e-mail client likely could be developed in the future to enable staying connected with distant friends and family.
Based on their discussions, the team felt ready to take it to the next step — the Minimal Viable Product.
Sources:
¹Osterwalder, Alexander, Yves Pigneur, Gregory Bernarda, and Alan Smith. Value Proposition Design. Hoboken, NJ: Wiley, 2014.
²Adams, Elliott. The Startup Mixtape: The Guide to Building and Launching A High-Growth Tech Startup. San Francisco, CA: Startup Mixtape Media, 2017.
