Blog

The Importance of Value Proposition For The Success of Every Startup

Entrepreneurs must be ready to take specific steps to defining and evaluating their ideas in order to validate the potential success of their startup. The value proposition is important at the early stage of the existing of the company because it sets some of the foundations for future business development: it is part of the business plan, of the marketing strategy and defines the future customer relationships. The value proposition is the promise that the entrepreneurs make to their customers that the expected value will be brought to them, that specific problem solutions will be offered and certain needs will be satisfied.

Here comes one very important part of the development of the startup value proposition: The focus must be concentrated not just on the idea and the product, but also on the customer’s needs and the value your product and service provide for them. In the end, even the best ideas don’t become profitable businesses if they don’t attract and keep customers. Your startup’s value proposition defines the business model of your company, how the company will generate profit and revenues and how the customers will reach and experience the value of your product. Investors are always interested in the value propositions of the startups they are willing to invest in and the answer of the following questions can define the future possibility of winning and securing funding.

The product

In the core of the development of your value proposition stand the product and the service that you are going to offer and provide. One of the main questions entrepreneurs need to answer to themselves is: What am I offering? What is the value of my product to the customer?

The customer segments

Who is your customer and does your product have what it takes to satisfy the needs of your target group? It is all about the customer and the satisfaction of their needs and requirements. When entrepreneurs evaluate their startup value propositions, they must be aware of the needs of their customers and how their company will meet these expectations.

The market fit

Once you know why the potential customers need your product, it gets easier to move on to the next step, and evaluate the potential of the market place that you would like to enter. Is there a space in the market for your product?

The competition

Even if you see that the competition is tough and that there are many other businesses that offer similar products and services, you need to define what makes your product better than the existing ones. There must be something that makes your product more attractive for the customers and this advantage will stand in the core of the development of the business model and the action plan.

─ August 11, 2015