In our blog series “6 Steps To Turn Your Business Idea Into Success” we focus on how to avoid the mistakes of the others by validating them. The previous step was all about getting to know your customer, because: no customer means no business. You have defined the major customer segments you want to address, elaborated on the “job they want to get done” and stated the major pains and needs they have in order to do so.
After validating who your customers are and that their problems really exist, the second step is to build your solution. Now it’s all about asking yourself: “What is my solution? What are the features I need to come up with to address those pains and needs, and to create a benefit?” This will keep you from building features that do not address any customer pains or major needs. In addition, it helps you to elaborate your value proposition, which is key to building a strong business model.
Let’s take a car-sharing service provider, for example. Have a look at this overview of Step 2 in our Innovation Platform:
Focus on the major pains and needs
Start by selecting the pains and needs you aim to address with your solution. As shown in our example of the car-sharing service provider, your customers’ pains and needs could be the high costs of buying and owning a car.
As an entrepreneur at an early stage, you typically have very limited resources. Therefore, it is mandatory that you focus as best as you can on using these resources to address the most critical pains and needs your customers have.
These are pains and needs related to the job to get done (not your product) and could be negative emotions, undesired costs, or risks that your customer experiences before, during, and/or after getting the job done, such as:
- costs, e.g. takes a lot of time, money, effort
- bad feelings, e.g. frustrations, annoyances
- under-performance, e.g. lack of features, malfunctioning, waste
- major difficulties, e.g. understanding how things work, difficult to find solutions
- fears and risks, e.g. loss of case, power, trust, status
Nice-To-Haves – the cherry on top
In addition to the major pains and needs, also define the so-called nice-to-haves you aim to address. These are further benefits your customers might expect, desires your customers may have, or things your customers would be surprised by related to the job to get done.
This includes functional utility, social gains, positive emotions, and cost savings, such as:
- additional savings, e.g. time, money, effort
- outcomes, e.g. quality level, more or less of something
- add-ons, e.g. specific features, design, customer service
- dreams, e.g. big achievements, big reliefs
- positive social consequences, e.g. positive image, power, status
Customer Benefit – what’s the use?
Next, build your solution even further and think about the customer benefit you want to (or often have to) generate. Customers are not looking for features or functionality, but looking to get the best possible support to get their job done. If possible always try to quantify the customer benefit in order to be meaningful for your customers (e.g., a time-saving of 50%). What customer benefit do you create by solving their pains/needs?
The features that deliver
After you are clear about the benefits you want or need to create, think about the major features you need to include in order to create those benefits.
Only focus on features that address the pains and additional needs you selected. A feature which does not address a pain or additional need is not creating any benefit for your customers. Don’t overthink it! Way too often we come up with multiple features which are, in reality, not relevant for our customers.
Value Proposition – build your solution by unfolding its core
Now it’s time to craft your value proposition. It is about the major value you are proposing to your customers, not a list of benefits. A good value proposition is clear, easy to understand and tailored to a specific customer segment. The value proposition is the core of your business model, which you will work on in the next step. The value proposition is not about single benefits. It is the core value you propose to your customers.
It can be about: newness, performance, customization, design, brand/status, price, cost-reduction, risk reduction, accessibility, and/or convenience/usability.
Analyse your customer benefits and derive a one- or two-liner that comprises the major value you propose.
Let’s end this article with another example. Think of washing machines. Often they come with as many as 72 different washing programs. But how many of these do you actually use? Maybe three, maybe four or even five. But do you really need 72 washing programs? Probably not.
So, the challenge is: How do I understand if the solution I have in mind really creates a benefit for my customers? How do I understand if it really creates the core value I propose to my customers?
That’s what the next validation step, Problem Solution Fit, is for. Here it’s all about prototyping. Stay tuned for more!
We wish you all the best for your project, if you have any questions, please shoot us a message: firstname.lastname@example.org