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How to Create Compelling Value 
Propositions That Turn 
Prospects into Customers 
October 2014 Presentation 
Alex Osterwal...
Join the conversation on Twi!er 
@ThueLMadsen #KISSwebinar
Alexander Osterwalder - Strategyzer.com - @alexosterwalder 
Alex is an entrepreneur, speaker and business model innovator....
Join Alex on Twi!er 
@AlexOsterwalder #KISSwebinar
WATCH WEBINAR RECORDING NOW
10m 
or 1b+ 
The Business Model Canvas 
Designed for: Designed by: Date: Version: 
The Business Model Canvas 
Designed for...
6
4y+4y+5y=13y
zoom out 
zoom in 
Canvas Design 
customers want and then keeping them aligned with customers want in Post-Search. 
Value ...
canvas
1 
1.0 Context 
1.1 Customer Profile 
1.2 Value Map 
1.4 Fit
1.0 
Context: Business 
Model Canvas
The Business Model Canvas 
Designed for: Designed by: Date: Version: 
Key Partners Key Activities Value Propositions Custo...
The Business Model Canvas 
Designed for: Designed by: Date: Version: 
Key Partners Key Activities Value Propositions Custo...
The Business Model Canvas 
Designed for: Designed by: Date: Version: 
Key Partners Key Activities Value Propositions Custo...
The Business Model Canvas 
Designed for: Designed by: Date: Version: 
Key Partners Key Activities Value Propositions Custo...
The Business Model Canvas 
Designed for: Designed by: Date: Version: 
Key Partners Key Activities Value Propositions Custo...
The Business Model Canvas 
Designed for: Designed by: Date: Version: 
Key Partners Key Activities Value Propositions Custo...
Outcome 
If a Pain reliever or Gain creator doesn't Fit 
anything, it may not be creating customer 
value. Don't worry if ...
A VALUE PROPOSITION … 
describes the benefits 
customers can expect from 
your products and services
Create Observe 
The set of value proposition benefits that you design to attract customers. 
The set of customer character...
1.1 
Customer 
Profile
customer jobs 
what customers are trying 
to get done in their work 
and in their lives 
task to perform, problem to solve...
“ ” 
Jobs-to-be-done offers a 
clear way to innovate 
– Clay Christensen, HBS
The focus should be on 
what jobs customers 
are trying to get done. 
– Tony Ulwick, Founder Strategyn 
“ 
”
Job context 
Customer context may impose example, when are driving kids is Job importance 
It is important not all importa...
The can customer ǃɲ What does much ǃɲ What are that ǃɲ How your missing, annoy ǃɲ What your getting certain ǃɲ What custom...
The can customer ǃɲ What does much ǃɲ What are that ǃɲ How your missing, annoy ǃɲ What your getting certain ǃɲ What custom...
The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What se...
The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What se...
The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What se...
The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What se...
Your Customer 
Profile
! REMEMBER 
your solution is not part 
of the customer profile!
com 
Gain Creators 
Gains 
Pain Relievers Pains 
Products 
& Services 
Customer 
Job(s) 
The Value Proposition Canvas 
Val...
1.2 
Value Map
products & services 
A list of all the products 
and services a value 
proposition is built around
The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What se...
pain relievers 
describe how your 
products and services 
alleviate customer pains
The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What se...
gain creators 
describe how your 
products and services 
create customer gains
The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What se...
1.3 
Fit
will 
for 
Customers expect and desire a lot from products 
and services. Yet, they also know they can’t have 
it all. Foc...
will 
for 
Customers expect and desire a lot from products 
and services. Yet, they also know they can’t have 
it all. Foc...
Design, Test, Repeat 
design 
test
design 
ASSESSMENT 
OBSERVATION 
PROTOTYPING 
TO 
TESTING 
FAIL ED 
FROM 
TESTING 
STARTING POINTS 
BUSINESS MODEL 
7 QUES...
def. 
prototyping 
(pro·to·typ·ing) 
* the process of building quick, 
cheap, and rough study models 
* to learn about the...
? ? 
? 
? 
? 
? 
? 
-Zoom +Zoom 
Zoom out to the 
bigger picture to 
analyze if you can 
profitably create, 
deliver, and ...
? ? 
? 
? 
? 
? 
? 
-Zoom +Zoom 
Zoom out to the 
bigger picture to 
analyze if you can 
profitably create, 
deliver, and ...
Design, Test, Repeat 
design 
test
test 
SUCCESS 
HYPOTHESIS
Why do businesses fail ? 
. Test those first!
2014 
http://media.100firsthits.com/2013/11/Startup-Mistakes-Infographics.png
n 
customer development & lean startup 
en-re 
customers 
ou 
customer 
discovery 
customer 
validation 
customer 
creatio...
3 3.1 What to test 
3.2 Testing step-by-step 
3.4. Testing library (in the book) 
3.4 Bringing it all together
3.1 
What to Test 
TEST 
214 
215
Testing the circle 
Provide evidence 
showing “what” 
customers care 
about (the circle) 
before focusing on 
“how” to hel...
Provide evidence 
showing that your 
customers care 
about how your 
products and 
services kill pains 
and create gains 
...
Testing the rectangle 
Business Model Canvas 
Key Partnerships 
Cost Structure 
Key Activities Value Propositions Customer...
HYPOTHESIS 
3.2 
Testing 
Step-by-Step 
TEST 
222 
223
Test Card 
+ 
- 
Extract Hypotheses Prioritize Hypotheses Design Test 
TESTING VALUE PROPOSTIONS
Learning Card 
+ 
! 
- 
Prioritize Tests Run Tests Capture Learnings Make Progress
Write Your Own 
Test Card
What needs to be true 
for this feature to work 
and create value? -> 
Hypotheses 
com 
Gain Creators 
SAVE 20% SALES Gain...
customer segment X wants to 
save 20% on sales process 
talk to 40 potential customers and give 
them a trackable link wit...
SUCCESS 
3.3 
Experiment 
Library 
TEST 
240 
241
A mix of experiments 
Scientist 
DIRECT CONTACT with customers 
Learn why and how to improve 
INDIRECT OBSERVATION of cust...
A mix of experiments 
Scientist 
DIRECT CONTACT with customers 
Learn why and how to improve 
INDIRECT OBSERVATION of cust...
A mix of experiments 
Scientist 
DIRECT CONTACT with customers 
Learn why and how to improve 
INDIRECT OBSERVATION of cust...
A mix of experiments 
Scientist 
DIRECT CONTACT with customers 
Learn why and how to improve 
INDIRECT OBSERVATION of cust...
A mix of experiments 
Scientist 
DIRECT CONTACT with customers 
Learn why and how to improve 
INDIRECT OBSERVATION of cust...
A mix of experiments 
Scientist 
DIRECT CONTACT with customers 
Learn why and how to improve 
INDIRECT OBSERVATION of cust...
A mix of experiments 
Scientist 
DIRECT CONTACT with customers 
Learn why and how to improve 
INDIRECT OBSERVATION of cust...
A mix of experiments 
Scientist 
DIRECT CONTACT with customers 
Learn why and how to improve 
INDIRECT OBSERVATION of cust...
3.4 
Bringing it 
all Together 
ASSESSMENT 
OBSERVATION 
PROTOTYPING 
TO 
TESTING 
FAIL ED 
TEST 
FROM 
TESTING 
STARTING ...
The 
testing 
process 
2 
Extract 
your 
Hypotheses 
3 
Design 
Your 
Tests 
Test Card 
4 
Enter 
the Learning 
Loop 
5A 
...
3 
Design 
Your 
Tests 
4 
Enter 
the Learning 
Loop 
5 
Capture 
Learnings 
and Next 
Actions 
6 
Measure 
Progress 
Lear...
Test Card 
Test Name 
Assigned to 
We believe that 
Deadline 
Duration 
To verify that, we will 
And measure 
We are right...
#VPDesign Strategyzer.com
zoom out 
zoom in 
Canvas Design 
customers want and then keeping them aligned with customers want in Post-Search. 
Value ...
Start Your Free KISSmetrics Trial 
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Questions? 
Alexander Osterwalder 
Entrepreneur and business model innovator 
Strategyzer 
@AlexOsterwalder 
Thue Madsen 
...
How to Create Compelling Value Propositions That Turns Prospects into Customers
How to Create Compelling Value Propositions That Turns Prospects into Customers
How to Create Compelling Value Propositions That Turns Prospects into Customers
How to Create Compelling Value Propositions That Turns Prospects into Customers
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How to Create Compelling Value Propositions That Turns Prospects into Customers

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How to Create Compelling Value Propositions That Turns Prospects into Customers

  1. 1. How to Create Compelling Value Propositions That Turn Prospects into Customers October 2014 Presentation Alex Osterwalder, Co-Founder strategyzer.com
  2. 2. Join the conversation on Twi!er @ThueLMadsen #KISSwebinar
  3. 3. Alexander Osterwalder - Strategyzer.com - @alexosterwalder Alex is an entrepreneur, speaker and business model innovator. Together with Professor Yves Pigneur he invented the Business Model Canvas, a practical tool to visualize, challenge and (re-) invent business models. The Canvas is used by leading organizations around the world, like GE, P&G, Ericsson, and 3M. Alex is a frequent keynote speaker and has held guest lectures in top universities around the world, including Stanford, Berkeley, MIT, IESE and IMD.
  4. 4. Join Alex on Twi!er @AlexOsterwalder #KISSwebinar
  5. 5. WATCH WEBINAR RECORDING NOW
  6. 6. 10m or 1b+ The Business Model Canvas Designed for: Designed by: Date: Version: The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Key Partners Customer Relationships Key Activities Value Propositions Customer Segments Channels Gains Revenue Streams This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com Gains Copyright Business Model Foundry AG Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Gains Copyright Business Model Foundry AG Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Gains Copyright Business Model Foundry AG Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Copyright Business Model Foundry AG search execution The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Gains Revenue Streams Key Resources Cost Structure designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com Copyright Business Model Foundry AG design testing The Business Model Canvas Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com com Gain Creators Pain Relievers Pains Products & Services Customer Job(s) The Value Proposition Canvas Value Proposition Customer Segment Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer strategyzer.com com Gain Creators Pain Relievers Pains Products & Services Customer Job(s) The Value Proposition Canvas Value Proposition Customer Segment The makers of Busines Model Generation and Strategyzer strategyzer.com Channels Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com com Gain Creators Pain Relievers Pains Products & Services Customer Job(s) The Value Proposition Canvas Value Proposition Customer Segment The makers of Busines Model Generation and Strategyzer strategyzer.com Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com com Gain Creators Pain Relievers Pains Products & Services Customer Job(s) The Value Proposition Canvas Value Proposition Customer Segment The makers of Busines Model Generation and Strategyzer strategyzer.com The Business Model Canvas Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com com Gain Creators Pain Relievers Pains Products & Services Customer Job(s) The Value Proposition Canvas Value Proposition Customer Segment The makers of Busines Model Generation and Strategyzer strategyzer.com The Business Model Canvas Channels Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com Gains This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com com Gain Creators Pain Relievers Pains Products & Services Customer Job(s) The Value Proposition Canvas Value Proposition Customer Segment The makers of Busines Model Generation and Strategyzer strategyzer.com [Source: design squiggle adapted from Damien Newman, Central]
  7. 7. 6
  8. 8. 4y+4y+5y=13y
  9. 9. zoom out zoom in Canvas Design customers want and then keeping them aligned with customers want in Post-Search. Value Proposition Design shows you how to use the Proposition Canvas to Design and Test great value sitions in an iterative search for what customers want. proposition design is a never-ending process in which need to Evolve your value proposition(s) constantly it relevant to customers. Manage the messy and non-linear process of value proposition design and reduce risk by systematically applying adequate tools and processes. Test Evolve Tools Search Post-Search Progress 1 2 3
  10. 10. canvas
  11. 11. 1 1.0 Context 1.1 Customer Profile 1.2 Value Map 1.4 Fit
  12. 12. 1.0 Context: Business Model Canvas
  13. 13. The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com tells the story of how you create, deliver, and capture value (for your organization) This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com
  14. 14. The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com
  15. 15. The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com
  16. 16. The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com
  17. 17. The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com
  18. 18. The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com
  19. 19. Outcome If a Pain reliever or Gain creator doesn't Fit anything, it may not be creating customer value. Don't worry if not all pains/gains are checked – you can't satisfy them all. Ask yourself, how well does your Value Proposi-tion really fit your Customer? 71 zooming into the value proposition The Business Model Canvas Designed for: Designed by: Date: Version: Key Partners Key Activities Value Propositions Customer Segments Channels Revenue Streams Key Resources Cost Structure Customer Relationships designed by: Business Model Foundry GmbH, Switzerland www.businessmodelgeneration.com This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com
  20. 20. A VALUE PROPOSITION … describes the benefits customers can expect from your products and services
  21. 21. Create Observe The set of value proposition benefits that you design to attract customers. The set of customer characteristics that you assume, observe, and verify in the market. Fit Outcome If a Pain reliever or Gain creator anything, it may not be creating value. Don't worry if not all checked – you can't satisfy yourself, how well does your really fit your Customer? value map customer profile
  22. 22. 1.1 Customer Profile
  23. 23. customer jobs what customers are trying to get done in their work and in their lives task to perform, problem to solve, needs to satisfy Job context Customer context may impose example, when are driving kids is Job importance It is important not all important life because, to significant insignificant other find a or because felt or often, when consequences.
  24. 24. “ ” Jobs-to-be-done offers a clear way to innovate – Clay Christensen, HBS
  25. 25. The focus should be on what jobs customers are trying to get done. – Tony Ulwick, Founder Strategyn “ ”
  26. 26. Job context Customer context may impose example, when are driving kids is Job importance It is important not all important life because, to significant insignificant other find a or because felt or often, when consequences. What are the jobs-to-be-done of a potential Tesla buyer? Upper Middle Class Male $100k+ Income commute to work personal mobility be different from others occasional long dist. trip convey an image of success in sync with personal values
  27. 27. The can customer ǃɲ What does much ǃɲ What are that ǃɲ How your missing, annoy ǃɲ What your getting certain ǃɲ What customers afraid ǃɲ What they or awfully ǃɲ What’s E.g. worries? ǃɲ What make? way? ǃɲ What from investment their customer pains describe bad outcomes, risks, and obstacles related to customer jobs
  28. 28. The can customer ǃɲ What does much ǃɲ What are that ǃɲ How your missing, annoy ǃɲ What your getting certain ǃɲ What customers afraid ǃɲ What they or awfully ǃɲ What’s E.g. worries? ǃɲ What make? way? ǃɲ What from investment their What are the pains of Tesla buyer? (i.e. his problems, risks, obstacles, frustrations…) lack of charging stations accident and harm buy before price drop fear of dead battery laughed at lack of space commute to work frequent charging above average maintenance aircon draining battery Upper Middle Class Male $100k+ Income personal mobility be different from others occasional long dist. trip convey an image of success in sync with personal values
  29. 29. The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What searching or ǃɲ What they relief ǃɲ How failure? or ǃɲ What of lower quality? Link xxx customer gains describe the more or less expected benefits the customers are seeking
  30. 30. The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What searching or ǃɲ What they relief ǃɲ How failure? or ǃɲ What of lower quality? Link xxx What are the gains a Tesla buyer wants? (e.g. required or desired outcomes and benefits) design high-end battery tech brand find my way recognition (gps) compliments from friends range of 250km to 350km self-driving seating 4-5 perform like a sports car high safety ratings Upper Middle Class Male $100k+ Income commute to work personal mobility be different from others occasional long dist. trip convey an image of success in sync with personal values lack of charging stations accident and harm buy before price drop fear of dead battery laughed at lack of space frequent charging above average maintenance aircon draining battery
  31. 31. The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What searching or ǃɲ What they relief ǃɲ How failure? or ǃɲ What of lower quality? Link xxx Which jobs REALLY matter to customers? Upper Middle Class Male $100k+ Income commute to work personal mobility be different from others occasional long dist. trip convey an image of success in sync with personal values range of 250km to 350km lack of charging stations accident and harm buy before price drop fear of dead battery laughed at lack of space frequent charging above average maintenance aircon draining battery design high-end battery tech brand find my way recognition (gps) compliments from friends self-driving seating 4-5 perform like a sports car high safety ratings
  32. 32. The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What searching or ǃɲ What they relief ǃɲ How failure? or ǃɲ What of lower quality? Link xxx convey an image of success personal mobility commute to work be different from others in sync with personal values occasional long dist. trip design range of 250km to 350km perform like a sports car high-end battery tech brand recognition compliments from friends high safety ratings frequent charging fear of dead battery accident and harm laughed at lack of space aircon draining battery Upper Middle Class Male $100k+ Income Which jobs REALLY matter to customers?
  33. 33. Your Customer Profile
  34. 34. ! REMEMBER your solution is not part of the customer profile!
  35. 35. com Gain Creators Gains Pain Relievers Pains Products & Services Customer Job(s) The Value Proposition Canvas Value Proposition Customer Segment Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer strategyzer.com
  36. 36. 1.2 Value Map
  37. 37. products & services A list of all the products and services a value proposition is built around
  38. 38. The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What searching or ǃɲ What they relief ǃɲ How failure? or ǃɲ What of lower quality? Link xxx Model S 60-85 kWh 8 year battery warranty options convey an image of success personal mobility commute to work be different from others in sync with personal values occasional long dist. trip design range of 250km to 350km perform like a sports car high-end battery tech brand recognition compliments from friends high safety ratings frequent charging fear of dead battery accident and harm laughed at lack of space aircon draining battery Upper Middle Class Male $100k+ Income
  39. 39. pain relievers describe how your products and services alleviate customer pains
  40. 40. The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What searching or ǃɲ What they relief ǃɲ How failure? or ǃɲ What of lower quality? Link xxx charging: 45-90 km/h 5+2 seats range of 350km to 450km Model S 60-85 kWh how your products and services kill your customer’s pains convey an image of success personal mobility commute to work be different from others in sync with personal values occasional long dist. trip design range of 250km to 350km perform like a sports car high-end battery tech brand recognition compliments from friends high safety ratings frequent charging fear of dead battery accident and harm laughed at lack of space aircon draining battery highest safety ever by NHTSA Upper Middle Class Male $100k+ Income 8 year battery warranty options
  41. 41. gain creators describe how your products and services create customer gains
  42. 42. The can customer ǃɲ Which happy? money ǃɲ What would ǃɲ How what ǃɲ What easier? curve, ǃɲ What customers good, ǃɲ What searching or ǃɲ What they relief ǃɲ How failure? or ǃɲ What of lower quality? Link xxx how your products and services create gains your customers expect, want, or desire convey an image of success personal mobility commute to work be different from others in sync with personal values occasional long dist. trip design range of 250km to 350km perform like a sports car high-end battery tech brand recognition compliments from friends high safety ratings frequent charging fear of dead battery accident and harm laughed at lack of space aircon draining battery focus on design & style performance 0-100km/h 4.4s - 6.2s high-tech feel: 17’’ touch screen Upper Middle Class Male $100k+ Income Model S 60-85 kWh 8 year battery warranty options charging: 45-90 km/h 5+2 seats range of 350km to 450km highest safety ever by NHTSA
  43. 43. 1.3 Fit
  44. 44. will for Customers expect and desire a lot from products and services. Yet, they also know they can’t have it all. Focus on those gains that matter most to customers and make a difference. Customers have a lot of pains. No organization can reasonably address all of them. Focus on those “headaches” that matter most and are insufficiently addressed. Your jury value merciless Are you addressing essential customer gains? Are you addressing extreme customer pains? Fit
  45. 45. will for Customers expect and desire a lot from products and services. Yet, they also know they can’t have it all. Focus on those gains that matter most to customers and make a difference. performance 0-100km/h 4.4s - 6.2s Model S 60-85 kWh Customers have a lot of pains. No organization can reasonably address all of them. Focus on those “headaches” that matter most and are insufficiently addressed. Your jury value merciless Are you addressing essential customer gains? Are you addressing extreme customer pains? Fit convey an image of success personal mobility commute to work be different from others in sync with personal values occasional long dist. trip design range of 250km to 350km perform like a sports car high-end battery tech brand recognition compliments from friends high safety ratings frequent charging fear of dead battery accident and harm laughed at lack of space aircon draining battery focus on design & style high-tech feel: 17’’ touch screen 8 year battery warranty options charging: 45-90 km/h 5+2 seats range of 350km to 450km highest safety ever by NHTSA Upper Middle Class Male $100k+ Income
  46. 46. Design, Test, Repeat design test
  47. 47. design ASSESSMENT OBSERVATION PROTOTYPING TO TESTING FAIL ED FROM TESTING STARTING POINTS BUSINESS MODEL 7 QUESTIONS
  48. 48. def. prototyping (pro·to·typ·ing) * the process of building quick, cheap, and rough study models * to learn about the desirability, feasibility and viability of alternative solutions
  49. 49. ? ? ? ? ? ? ? -Zoom +Zoom Zoom out to the bigger picture to analyze if you can profitably create, deliver, and capture value around this particular customer value proposition. Zoom in to the detailed picture to investigate if the customer value proposition in your business model really creates value for your customer. Are you creating value for your business? The Business Model Canvas makes explicit how you are creating and capturing value for your business. Are you creating value for your customer? The Value Proposition Canvas makes explicit how you are creating value for your customers. ? ? ? ? ? ? ? -Zoom +Zoom Zoom out to the bigger picture to analyze if you can profitably create, deliver, and capture value around this particular customer value proposition. Zoom in to the detailed picture to investigate if the customer value proposition in your business model really creates value for your customer. Are you creating value for your business? The Business Model Canvas makes explicit how you are creating and capturing value for your business. Are you creating value for your customer? The Value Proposition Canvas makes explicit how you are creating value for your customers. 169 * Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos ? ? ? ? ? ? ? -Zoom +Zoom Zoom out to the bigger picture to analyze if you can profitably create, deliver, and capture value around this particular customer value proposition. Zoom in to the detailed picture to investigate if the customer value proposition in your business model really creates value for your customer. Are you creating value for your business? The Business Model Canvas makes explicit how you are creating and capturing value for your business. Are you creating value for your customer? The Value Proposition Canvas makes explicit how you are creating value for your customers. * Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos adapt the business model & the value proposition
  50. 50. ? ? ? ? ? ? ? -Zoom +Zoom Zoom out to the bigger picture to analyze if you can profitably create, deliver, and capture value around this particular customer value proposition. Zoom in to the detailed picture to investigate if the customer value proposition in your business model really creates value for your customer. are creating and capturing value for your business. Are you creating value for your customer? describes how you create value for your customer describes how you create value for your business
  51. 51. Design, Test, Repeat design test
  52. 52. test SUCCESS HYPOTHESIS
  53. 53. Why do businesses fail ? . Test those first!
  54. 54. 2014 http://media.100firsthits.com/2013/11/Startup-Mistakes-Infographics.png
  55. 55. n customer development & lean startup en-re customers ou customer discovery customer validation customer creation company building PIVOT SEARCH EXECUTION [Source: based on Startup Owner’s Manual (2013) Blank & Dorf]
  56. 56. 3 3.1 What to test 3.2 Testing step-by-step 3.4. Testing library (in the book) 3.4 Bringing it all together
  57. 57. 3.1 What to Test TEST 214 215
  58. 58. Testing the circle Provide evidence showing “what” customers care about (the circle) before focusing on “how” to help them (the square)
  59. 59. Provide evidence showing that your customers care about how your products and services kill pains and create gains Testing the square
  60. 60. Testing the rectangle Business Model Canvas Key Partnerships Cost Structure Key Activities Value Propositions Customer Relationships Key Resources Channels Customer Segments Revenue Streams 15 Provide evidence showing that the way you intend to create, deliver, and capture value is likely to work
  61. 61. HYPOTHESIS 3.2 Testing Step-by-Step TEST 222 223
  62. 62. Test Card + - Extract Hypotheses Prioritize Hypotheses Design Test TESTING VALUE PROPOSTIONS
  63. 63. Learning Card + ! - Prioritize Tests Run Tests Capture Learnings Make Progress
  64. 64. Write Your Own Test Card
  65. 65. What needs to be true for this feature to work and create value? -> Hypotheses com Gain Creators SAVE 20% SALES Gains ON PROCESS Pain Relievers Pains Products & Services Customer Job(s) The Value Proposition Canvas Value Proposition Customer Segment Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer strategyzer.com
  66. 66. customer segment X wants to save 20% on sales process talk to 40 potential customers and give them a trackable link with more information how many of the interviewees clicked on the follow-up link 50% clicked the link
  67. 67. SUCCESS 3.3 Experiment Library TEST 240 241
  68. 68. A mix of experiments Scientist DIRECT CONTACT with customers Learn why and how to improve INDIRECT OBSERVATION of customers Learn how many and how much Lab studies ǃɲ Learning prototype/MVP → p. 222 ǃɲ Life-size prototypes → p. 226 ǃɲ Wizard of Oz → p. 223 Anthropologist → p. 114 For field studies Sale actions ǃɲ Mock sales → p. 236 ǃɲ Pre sales → p. 237 ǃɲ Crowdfunding → p. 237 Tracking actions ǃɲ Ad and link tracking → p. 220 ǃɲ Landing page → p. 228 ǃɲ Split testing → p. 230 Participatory design and evaluation ǃɲ Illustrations, storyboards, and scenarios → p. 224 ǃɲ Speedboat → p. 233 ǃɲ Product box → p. 234 ǃɲ Buy a feature → p. 235 Journalist → p. 110 For interviews Detective → p. 108 For data analysis WHAT CUSTOMERS DO Observe their behaviors WHAT CUSTOMERS SAY Observe their attitudes
  69. 69. A mix of experiments Scientist DIRECT CONTACT with customers Learn why and how to improve INDIRECT OBSERVATION of customers Learn how many and how much Lab studies ǃɲ Learning prototype/MVP → p. 222 ǃɲ Life-size prototypes → p. 226 ǃɲ Wizard of Oz → p. 223 Anthropologist → p. 114 For field studies Sale actions ǃɲ Mock sales → p. 236 ǃɲ Pre sales → p. 237 ǃɲ Crowdfunding → p. 237 Tracking actions ǃɲ Ad and link tracking → p. 220 ǃɲ Landing page → p. 228 ǃɲ Split testing → p. 230 Participatory design and evaluation ǃɲ Illustrations, storyboards, and scenarios → p. 224 ǃɲ Speedboat → p. 233 ǃɲ Product box → p. 234 ǃɲ Buy a feature → p. 235 Journalist → p. 110 For interviews Detective → p. 108 For data analysis WHAT CUSTOMERS DO Observe their behaviors WHAT CUSTOMERS SAY Observe their attitudes
  70. 70. A mix of experiments Scientist DIRECT CONTACT with customers Learn why and how to improve INDIRECT OBSERVATION of customers Learn how many and how much Lab studies ǃɲ Learning prototype/MVP → p. 222 ǃɲ Life-size prototypes → p. 226 ǃɲ Wizard of Oz → p. 223 Anthropologist → p. 114 For field studies Sale actions ǃɲ Mock sales → p. 236 ǃɲ Pre sales → p. 237 ǃɲ Crowdfunding → p. 237 Tracking actions ǃɲ Ad and link tracking → p. 220 ǃɲ Landing page → p. 228 ǃɲ Split testing → p. 230 Participatory design and evaluation ǃɲ Illustrations, storyboards, and scenarios → p. 224 ǃɲ Speedboat → p. 233 ǃɲ Product box → p. 234 ǃɲ Buy a feature → p. 235 Journalist → p. 110 For interviews Detective → p. 108 For data analysis WHAT CUSTOMERS DO Observe their behaviors WHAT CUSTOMERS SAY Observe their attitudes
  71. 71. A mix of experiments Scientist DIRECT CONTACT with customers Learn why and how to improve INDIRECT OBSERVATION of customers Learn how many and how much Lab studies ǃɲ Learning prototype/MVP → p. 222 ǃɲ Life-size prototypes → p. 226 ǃɲ Wizard of Oz → p. 223 Anthropologist → p. 114 For field studies Sale actions ǃɲ Mock sales → p. 236 ǃɲ Pre sales → p. 237 ǃɲ Crowdfunding → p. 237 Tracking actions ǃɲ Ad and link tracking → p. 220 ǃɲ Landing page → p. 228 ǃɲ Split testing → p. 230 Participatory design and evaluation ǃɲ Illustrations, storyboards, and scenarios → p. 224 ǃɲ Speedboat → p. 233 ǃɲ Product box → p. 234 ǃɲ Buy a feature → p. 235 Journalist → p. 110 For interviews Detective → p. 108 For data analysis WHAT CUSTOMERS DO Observe their behaviors WHAT CUSTOMERS SAY Observe their attitudes
  72. 72. A mix of experiments Scientist DIRECT CONTACT with customers Learn why and how to improve INDIRECT OBSERVATION of customers Learn how many and how much Lab studies ǃɲ Learning prototype/MVP → p. 222 ǃɲ Life-size prototypes → p. 226 ǃɲ Wizard of Oz → p. 223 Anthropologist → p. 114 For field studies Sale actions ǃɲ Mock sales → p. 236 ǃɲ Pre sales → p. 237 ǃɲ Crowdfunding → p. 237 Tracking actions ǃɲ Ad and link tracking → p. 220 ǃɲ Landing page → p. 228 ǃɲ Split testing → p. 230 Participatory design and evaluation ǃɲ Illustrations, storyboards, and scenarios → p. 224 ǃɲ Speedboat → p. 233 ǃɲ Product box → p. 234 ǃɲ Buy a feature → p. 235 Journalist → p. 110 For interviews Detective → p. 108 For data analysis WHAT CUSTOMERS DO Observe their behaviors WHAT CUSTOMERS SAY Observe their attitudes
  73. 73. A mix of experiments Scientist DIRECT CONTACT with customers Learn why and how to improve INDIRECT OBSERVATION of customers Learn how many and how much Lab studies ǃɲ Learning prototype/MVP → p. 222 ǃɲ Life-size prototypes → p. 226 ǃɲ Wizard of Oz → p. 223 Anthropologist → p. 114 For field studies Sale actions ǃɲ Mock sales → p. 236 ǃɲ Pre sales → p. 237 ǃɲ Crowdfunding → p. 237 Tracking actions ǃɲ Ad and link tracking → p. 220 ǃɲ Landing page → p. 228 ǃɲ Split testing → p. 230 Participatory design and evaluation ǃɲ Illustrations, storyboards, and scenarios → p. 224 ǃɲ Speedboat → p. 233 ǃɲ Product box → p. 234 ǃɲ Buy a feature → p. 235 Journalist → p. 110 For interviews Detective → p. 108 For data analysis WHAT CUSTOMERS DO Observe their behaviors WHAT CUSTOMERS SAY Observe their attitudes
  74. 74. A mix of experiments Scientist DIRECT CONTACT with customers Learn why and how to improve INDIRECT OBSERVATION of customers Learn how many and how much Lab studies ǃɲ Learning prototype/MVP → p. 222 ǃɲ Life-size prototypes → p. 226 ǃɲ Wizard of Oz → p. 223 Anthropologist → p. 114 For field studies Sale actions ǃɲ Mock sales → p. 236 ǃɲ Pre sales → p. 237 ǃɲ Crowdfunding → p. 237 Tracking actions ǃɲ Ad and link tracking → p. 220 ǃɲ Landing page → p. 228 ǃɲ Split testing → p. 230 Participatory design and evaluation ǃɲ Illustrations, storyboards, and scenarios → p. 224 ǃɲ Speedboat → p. 233 ǃɲ Product box → p. 234 ǃɲ Buy a feature → p. 235 Journalist → p. 110 For interviews Detective → p. 108 For data analysis WHAT CUSTOMERS DO Observe their behaviors WHAT CUSTOMERS SAY Observe their attitudes
  75. 75. A mix of experiments Scientist DIRECT CONTACT with customers Learn why and how to improve INDIRECT OBSERVATION of customers Learn how many and how much Lab studies ǃɲ Learning prototype/MVP → p. 222 ǃɲ Life-size prototypes → p. 226 ǃɲ Wizard of Oz → p. 223 Anthropologist → p. 114 For field studies Sale actions ǃɲ Mock sales → p. 236 ǃɲ Pre sales → p. 237 ǃɲ Crowdfunding → p. 237 Tracking actions ǃɲ Ad and link tracking → p. 220 ǃɲ Landing page → p. 228 ǃɲ Split testing → p. 230 Participatory design and evaluation ǃɲ Illustrations, storyboards, and scenarios → p. 224 ǃɲ Speedboat → p. 233 ǃɲ Product box → p. 234 ǃɲ Buy a feature → p. 235 Journalist → p. 110 For interviews Detective → p. 108 For data analysis WHAT CUSTOMERS DO Observe their behaviors WHAT CUSTOMERS SAY Observe their attitudes
  76. 76. 3.4 Bringing it all Together ASSESSMENT OBSERVATION PROTOTYPING TO TESTING FAIL ED TEST FROM TESTING STARTING POINTS BUSINESS MODEL 7 QUESTIONS SUCCESS HYPOTHESIS 264 265
  77. 77. The testing process 2 Extract your Hypotheses 3 Design Your Tests Test Card 4 Enter the Learning Loop 5A UNCERTAIN test more Learn Measure Build 1 (6) (re)Shape your ideas 5 Capture Learnings and Next Actions 5C INVALIDATED iterate or pivot Learning Card
  78. 78. 3 Design Your Tests 4 Enter the Learning Loop 5 Capture Learnings and Next Actions 6 Measure Progress Learn Customer Discovery Customer Validation Customer Creation Company Building 5C INVALIDATED iterate or pivot 5A UNCERTAIN test more 5B VALIDATED progress towards next element Measure Build 2 Extract your Hypotheses 1 (6) (re)Shape your ideas Learning Card Test Card The testing process
  79. 79. Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: The makers of Busines Model Generation Copyright Business Model Foundry AG and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer Test Card Test Name Assigned to We believe that Deadline Duration To verify that, we will And measure We are right if Critical: Test Cost: Data Reliability: Time Required: Copyright Business Model Foundry AG The makers of Busines Model Generation and Strategyzer invalidated backlog build measure learn done learn more validated back to the drawing board: iterate or pivot your design Learning Card Insight Name Person Responsible step 1: hypothesis We believed that Date of Learning step 2: observation We observed step 3: learnings and insights From that we learned that step 4: decisions and actions Therefore we will Data Reliability: Action Required: Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer Learning Card Insight Name Person Responsible step 1: hypothesis We believed that Date of Learning step 2: observation We observed step 3: learnings and insights From that we learned that step 4: decisions and actions Therefore we will Data Reliability: Action Required: Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer Learning Card Insight Name Person Responsible step 1: hypothesis We believed that Date of Learning step 2: observation We observed step 3: learnings and insights From that we learned that step 4: decisions and actions Therefore we will Data Reliability: Action Required: Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer Learning Card Insight Name Person Responsible step 1: hypothesis We believed that Date of Learning step 2: observation We observed step 3: learnings and insights From that we learned that step 4: decisions and actions Therefore we will Data Reliability: Action Required: Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer Learning Card Insight Name Person Responsible step 1: hypothesis We believed that Date of Learning step 2: observation We observed step 3: learnings and insights From that we learned that step 4: decisions and actions Therefore we will Data Reliability: Action Required: Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer Learning Card Insight Name Person Responsible step 1: hypothesis We believed that Date of Learning step 2: observation We observed step 3: learnings and insights From that we learned that step 4: decisions and actions Therefore we will Data Reliability: Action Required: Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer Learning Card Insight Name Person Responsible step 1: hypothesis We believed that Date of Learning step 2: observation We observed step 3: learnings and insights From that we learned that step 4: decisions and actions Therefore we will Data Reliability: Action Required: Copyright Business Model Foundry AG The makers of Business Model Generation and Strategyzer advance to next step: move on in your quest to turn your idea into reality 3 Tests Learning Learning Test Card Card Card Learning Card Learning Card Learning Card Learning Card Learning Card Test Card Test Card Test Card Test Card Test Card Test Card Test Card Test Card Test Card Test Card Test Card 4 Insights & Actions 5 Measure Progress 2H ypotheses 1 (5) (re)Shape your ideas Progress board (Kanban)
  80. 80. #VPDesign Strategyzer.com
  81. 81. zoom out zoom in Canvas Design customers want and then keeping them aligned with customers want in Post-Search. Value Proposition Design shows you how to use the Proposition Canvas to Design and Test great value sitions in an iterative search for what customers want. proposition design is a never-ending process in which need to Evolve your value proposition(s) constantly it relevant to customers. Manage the messy and non-linear process of value proposition design and reduce risk by systematically applying adequate tools and processes. Test Evolve Tools Search Post-Search Progress 1 2 3
  82. 82. Start Your Free KISSmetrics Trial LOG IN WITH GOOGLE
  83. 83. Questions? Alexander Osterwalder Entrepreneur and business model innovator Strategyzer @AlexOsterwalder Thue Madsen Marketing Associate KISSmetrics @ThueLMadsen

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