1. Creating a Great
Value Proposition
- a guide for startups
This guide is meant to help startups create a value proposition that
your developers/engineers and marketing can all rally around
By Brian Groth, May 2013 - Contact me @BrianGroth on Twitter - www.BrianGroth.com for everything

2. 1. Define your strategy in regards to the
current market
 Combine and summarize the following, which you can call the Market
Opportunity Analysis (MOA) that explains the market’s opportunities and threats
 Figure out who your competitors are and their products, customers, profitability, partner
ecosystem, and market share position and trends
 Identify the market segments and then define your target audience
 Keep track of insights/data points that will help you differentiate your product in
the market (these will be differentiating supporting pillars later on)
 Write up your strategy to win this market and provide guidance so your
developers/engineers know what to build and marketers know what concepts to
research and how to bring it to market

3. 2. Do some research to understand who
your customers are and what they need
 Create your target segments, size of the segments, use-case scenarios per segment, and
customer personas. Do this through:
 Qualitative research: Such as focus groups and interviews
 Quantitative research: Such as online surveys using Kano, MaxDiff, and Choice Modeling methods
 Prioritize these target segments (audiences) based on their needs, attitudes, and
behaviors that you know your product can address
 Use this research to represent your customer as personas (such as Techie Moms or Outdoor
Nerds) for your developers and marketers: (NOTE: If you are a small startup, I suggest
selecting one persona and stay focused on it until you’re ready to expand to another
persona)
 Developers need to build for the scenarios and tasks that the persona will do
 Marketers need to price the product and communicate the value of it to the persona

4. 3. Write up the draft value proposition
statement
 You should now be ready to fill in the <blanks> in this sentence,
which is your value proposition:
 For <the persona> who want to <meet some need>, <your product name> is the
<generic descriptor> that <primary benefit of your product>. Unlike <the competition>,
<our product name> is <differentiating support pillars>
 And you should be able to fill in the <blanks> regarding what you
want your customers to think:
 I believe it will [meet some need] for me, which is worth more to me than [price, effort]
 I believe it’s better than alternatives because it’s better at [differentiating support
pillars]
 Note that the customer-facing messaging might be worded differently (aka, your
messaging statements), but for now this should keep everyone on track

5. 4. Test the concept and value of your
solution with your target audience
 Before bringing the solution to market, make sure you’re on the right
track through more research by showing mockups or demos. Get
answers for:
 Does it do what they need or want?
 Is it different enough from the competition?
 Would they purchase it, and at what price?
 How well do they like it? (excited or, just OK)
 If you need to modify the product or target audience after this,
then make sure to also modify the value proposition

6. 5. Make sure your company can
articulate your value proposition
Make sure everyone at the company can clearly
repeat the value proposition
And that they can have a conversation about:
 Who the product is for
 What needs it meets
 The primary benefit
 How it is different from the competition

7. For more help, see these articles
 What is your value proposition: http://startupowl.com/resources/before-you-
start/value-proposition/ which refers to a very good Value Proposition Worksheet:
http://www.rocketwatcher.com/blog/2012/08/startu-value-proposition-
worksheet.html (by @AprilDunford)
 Useful value proposition examples and how to create a good one:
http://conversionxl.com/value-proposition-examples-how-to-create/ (by
@peeplaja)
 How to create a compelling value proposition: Do it yourself in 3 steps:
http://www.bbmarketingplus.com/blog/2010/10/18/how-to-create-a-
compelling-value-proposition-do-it-yourself-in-3-steps/ (by @bbmarketingplus)