Businesses are started off the back of that eureka light bulb moment. I remember very clearly that day for me with our first business, SafeText. It was Saturday in September back in 2009. I had woken up with a splitting hangover and scraped myself together for a brass quintet rehearsal we were having that morning in the apartment Liam and I were living in at the time. The rehearsal came and went and then Liam, who had been working on this idea for the previous few weeks, asked if I wanted to join him to go down to his aunt’s house who was going to help him to understand the start-up’s value proposition.
Nursing my head I agreed to go down with him and see what all this fuss was about. 5 hours later we left and the light bulb had been turned on for me. After this we went to the pub and plotted our plans for world domination in to the small hours.
I can remember the excitement of having the idea and believing that this was going to be the thing that takes us to the top.
Invariably, it wasn’t nor could it ever be.
The reason for this when I look back is because a good idea is the inferior cousin of a more significant element: a start-up’s value proposition.
To understand your value proposition makes founders ask the question why would someone care about the idea. Below are 5 reasons why understanding your start-up’s value proposition is vital to success:
1.) Who is the target audience for this – identifying buyer personas should be central to all aspects of the start-up. Everything from their age to what they like to do on a Friday night will help you get in to the mindset of the target group which will help inform your product and marketing decisions. This is similar to point 1 we wrote about here.
2.) What problem are we solving for the customer – the bigger the problem the better. Showing you understand the problem through your brand messaging shows that you empathize with the target audience which can then bring them to through the process of understanding the value of your solution.
3.) What value does your solution bring – why will your solution solve their problem and how much value does it create in solving it. Further still, how much would someone be willing to pay to remove the problem.
4.) How urgent is it for people to find a solution to this problem – in sales, timing is everything. If the problem isn’t currently imposing on the audience then, while they might think your start-up is a nice idea, they won’t want to part with their cash.
5.) What are the alternative options to solving this problem and how are we better – having something unqiue over the competition is important however another important alternative you’ll have to consider is the alternative of living with the problem and not doing anything. Ideally you want to show your audience that buying your product or service is more valuable than the not doing anything and saving their money.
We’ve all been guilty of thinking we’ve made it with just a good idea and I don’t regret a drop of the Guinness that night celebrating the new found idea. Just be aware that its when you understand your start-up’s value proposition is when you really might have a good idea on your hands.